VERU INC

Note1 – Nature of Business and Significant Accounting Policies

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, Veru International Holdco Inc., Aspen Park Pharmaceuticals, Inc. (APP) and The Female Health Company Limited; The Female Health Company Limited’s wholly owned subsidiary, The Female Health Company (UK) plc (The Female Health Company Limited and The Female Health Company (UK) plc, collectively, the “U.K. subsidiary”); The Female Health Company (UK) plc’s wholly owned subsidiary, The Female Health Company (M) SDN.BHD (the “Malaysia subsidiary”); and Veru International Holdco Inc.’s wholly owned subsidiaries, Veru Biopharma UK Limited, Veru Biopharma Europe Limited, and Veru Biopharma Netherlands B.V. 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 metabolic diseases, oncology, and ARDS. Our drug development program includes enobosarm, an oral selective androgen receptor modulator, to augment fat loss and to prevent lean mass loss in combination with a GLP-1 RA, and for the management of advanced breast cancer and sabizabulin, a microtubule disruptor, for the treatment of hospitalized patients with viral-induced ARDS. The Company also has theFC2 FemaleCondom/FC2 Internal Condom® (FC2), an FDA-approved commercial product for the dual protection against unplanned pregnancy and sexually transmitted infections. The Company 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 Note15* for additional information. Most of the Company’s net revenues during fiscal2024 and2023 were derived from sales ofFC2.

FC2 has been distributed in either or both commercial (private sector) and public health sector markets in 150 countries. It is marketed to consumers in various countries through distributors, public health programs, and/or retailers and in the U.S. by prescription.

Reclassifications: Certain prior period amounts in the accompanying consolidated financial statements have been reclassified to conform with the current period presentation. The reclassifications hadno effect on the results of operations or financial position for any period presented.

Use of estimates: The preparation of financial statements in conformity with accounting principles generally accepted in the United States (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.

Segments: We regularly review our operating segments and the approach used by management to evaluate performance and allocate resources. The Company operates as a single operating segment. Our determination that we operate as a single segment is consistent with the financial information regularly reviewed by the chief operating decision maker (CODM) for purposes of evaluating performance, allocating resources, setting incentive compensation targets, and planning and forecasting for future periods. Our CODM allocates resources and assesses financial performance on a consolidated basis.

Cash and cash equivalents and concentration: Cash and cash equivalents, which primarily consist of cash on deposit with financial institutions and highly liquid money market funds, are recorded in the consolidated balance sheets at cost, which approximates fair value. The Company treats short-term, highly liquid funds that are readily convertible to known amounts of cash and have original maturities ofthree months or less as cash equivalents. The Company’s cash is maintained primarily inthree financial institutions, located in Chicago, Illinois; London, England; and Kuala Lumpur, Malaysia.

Investments in equity securities: Investments in equity securities consist of 142,749 shares of common stock (“ONCO Common Stock”) of Onconetix, Inc., formerly known as Blue Water Vaccines Inc. (“ONCO”). The Company has elected to measure the ONCO Common Stock using the fair value option, as provided for by FASB Accounting Standards Codification (ASC)825, Financial Instruments, which allows entities to make an irrevocable election of fair value as the initial and subsequent measurement attribute for certain eligible financial assets and liabilities. Under the fair value option, related gains and losses on the financial instrument will be reflected in non-operating income (expenses) in the Company’s statements of operations. The decision to elect the fair value option is determined on an instrument-by-instrument basis and must be applied to an entire instrument and is irrevocable once elected. Pursuant to this guidance, the carrying value will be adjusted to estimated fair value at the end of each quarter. The value of the ONCO Common Stock is $0.7 million as of* September 30, 2024and is included in prepaid expenses and other current assets on the accompanying consolidated balance sheet. See Note3* for additional discussion.

F-8

Accounts receivable and concentration of credit risk: Accounts receivable are carried at original invoice amount less an estimate made for returns, discounts, and credit losses based on a review of all outstanding amounts on a periodic basis.

Inventories: Inventories are valued at the lower of cost or net realizable value. The cost is determined using thefirst-in,first-out (FIFO) method. Inventories are also written down for management’s estimates of product which willnot sell prior to its expiration date. Write-downs of inventories establish a new cost basis which isnot increased for future increases in the net realizable value of inventories or changes in estimated obsolescence.

The Company capitalizes inventory costs associated with its drug products following regulatory approval when future commercialization is considered probable and the future economic benefit is expected to be realized. Prior to an initial regulatory approval for our drug products under clinical development, we expense costs relating to the production of inventory as research and development expense in the Company’s consolidated statements of operations, in the period incurred.

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, over the estimated useful lives of the 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 assets.

Leases: Leases are classified as either operating or finance leases at inception. A right-of-use (ROU) asset and corresponding lease liability are established at an amount equal to the present value of fixed lease payments over the lease term at the commencement date. The ROU asset includes any initial direct costs incurred and lease payments made at or before the commencement date and is reduced by lease incentive payments. The Company has electednot to separate the lease and nonlease components for all classes of underlying assets. The Company uses its incremental borrowing rate as the discount rate to determine the present value of the lease payments for leases that donot have a readily determinable implicit discount rate. The incremental borrowing rate is the rate of interest that the Company would be charged to borrow on a collateralized basis over a similar term and amount in a similar economic environment. The Company determines the incremental borrowing rates for its leases by adjusting the risk-free interest rate with a credit risk premium corresponding to the Company’s credit rating.

Operating lease costs are recognized for fixed lease payments on a straight-line basis over the term of the lease. Finance lease costs are a combination of the amortization expense for the ROU asset and interest expense for the outstanding lease liability using the applicable discount rate. Variable lease payments are recognized when incurred based on occurrence or usage. Short-term leases with an initial term of12 months or less arenot recorded on the balance sheet; we recognize lease expense for short-term leases on a straight-line basis over the lease term.

Patents and trademarks: The costs for patents and trademarks are expensed when incurred.

Goodwill and intangible assets: The Company’s goodwill and intangible assets, primarily developed technology and in-process research and development (IPR&D), arose from the acquisition of APP (the “APP Acquisition”) on* October 31, 2016.Goodwill and indefinite-lived intangible assets arenot* amortized. IPR&D was accounted for as indefinite-lived intangible assets until the underlying projects were discontinued, at which point the intangible assets were written off. Goodwill and indefinite-lived assets are subject to an impairment review annually, in thefourth quarter of each fiscal year, and more frequently when indicators of impairment exist. An impairment of goodwill could occur if the carrying amount of a reporting unit exceeded the fair value of that reporting unit. An impairment of indefinite-lived intangible assets would occur if the fair value of the intangible asset is less than the carrying value. Intangible assets with finite lives were tested for impairment when events or changes in circumstances indicate that the carrying amount of such assets* may**not* be recoverable. These intangible assets were carried at cost less accumulated amortization.

Goodwill consists of the cost of an acquired business in excess of the fair value of the net assets acquired. The Company’s goodwill is assigned to the reporting unit that is expected to benefit from the synergies of a business combination. The Company has identifiedtwo reporting units within itssingle operating segment. The Company tests goodwill and indefinite-lived intangible assets for impairment byfirst assessing qualitative factors to determine whether it is more likely thannot that the fair value is less than its carrying amount. If the Company concludes it is more likely thannot that the fair value is less than its carrying amount, a quantitative impairment test is performed. For its quantitative impairment tests, the Company uses an estimated future cash flow approach that requires significant judgment with respect to future volume, revenue and expense growth rates, changes in working capital use, the selection of an appropriate discount rate, asset groupings and other assumptions and estimates. The estimates and assumptions used are consistent with the Company's business plans and a market participant's views. The use of alternative estimates and assumptions could increase or decrease the estimated fair value of the assets and potentially result in different impacts to the Company's results of operations. Actual results* may*differ from the Company's estimates. The fair value of the reporting unit is compared with its carrying amount and an impairment charge would be recognized for the amount by which the carrying value exceeds the reporting unit’s fair value.

F-9

Regarding goodwill, the estimated fair value of a reporting unit is highly sensitive to changes in projections and assumptions; therefore, in some instances changes in these assumptions could potentially lead to impairment. We perform sensitivity analyses around our assumptions in order to assess the reasonableness of the assumptions and the results of our testing. Changes in these assumptions* mayimpact the estimated fair value of a reporting unit and cause the fair value of the reporting unit to be below its carrying value. We believe that our estimates are consistent with assumptions that marketplace participants would use in their estimates of fair value; however, if actual results arenot* consistent with our estimates and assumptions, we* may*be exposed to an impairment charge that could be material.

Intangible assets are highly vulnerable to impairment charges, particularly IPR&D. These assets are initially measured at fair value and therefore any reduction in expectations used in the valuations could potentially lead to impairment. Some of the more common potential risks leading to impairment include competition, earlier than expected loss of exclusivity, pricing pressures, adverse regulatory changes or clinical trial results, delay or failure to obtain regulatory approval, additional development costs, inability to achieve expected synergies, higher operating costs, changes in tax laws and other macro-economic changes. The complexity in estimating the fair value of intangible assets in connection with an impairment test is similar to the initial valuation. During fiscal2023, the Company recorded an impairment charge of $3.9 million related to IPR&D. The charge was primarily a result of the Company’s strategic decision to refocus its drug development efforts on those drug candidates that it believes to have the best opportunity to lead to long-term success and shareholder value creation, which led the Company to indefinitely cease development of sabizabulin for prostate cancer and zuclomiphene. See Note8 for additional information. The Company’s intangible asset balance for IPR&D at* September**30,* 2024 and2023, after the impairment charge was recorded, is zero.

Deferred financing costs: Costs incurred in connection with the common stock purchase agreements and the at-the-market sale agreement discussed in Note10 have been included in other assets on the accompanying consolidated balance sheets at* September 30, 2024and2023*. When shares of the Company’s common stock are sold under the common stock purchase agreement or at-the market sale agreement, a pro-rata portion of the deferred costs is recorded to additional paid-in-capital.

Fair value measurements: Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) Topic820 –* Fair Value Measurements and Disclosures,* defines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. FASB ASC Topic820 requires disclosures about the fair value of all financial instruments, whether ornot recognized, for financial statement purposes. Disclosures about the fair value of financial instruments are based on pertinent information available to us as of the reporting dates. Accordingly, the estimates presented in the accompanying consolidated financial statements arenot necessarily indicative of the amounts that could be realized on disposition of the financial instruments. See Note3 for a discussion of fair value measurements.

The carrying amounts reported in the accompanying consolidated balance sheets for cash, accounts receivable, accounts payable and other accrued liabilities approximate their fair value based on the short-term nature of these instruments. The carrying value of the residual royalty agreement liabilities, taking into consideration the related derivative instruments, is estimated to approximate fair value.

Derivative instruments: The Company doesnot use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. The Company reviews the terms of debt instruments it enters into to determine whether there are embedded derivative instruments, which are required to be bifurcated and accounted for separately as derivative financial instruments. Embedded derivatives that arenot clearly and closely related to the host contract are bifurcated and are recognized at fair value with changes in fair value recognized as either a gain or loss in earnings. Liabilities incurred in connection with an embedded derivative are discussed in Note9.

Revenue recognition: Revenue is recognized when control of the promised goods is transferred to the customer in an amount that reflects the consideration to which the Company expects to be entitled in exchange for those products. See Note4 for further discussion on revenue.

Research and development costs: Research and development costs are expensed as they are incurred and include salaries and benefits, costs to conduct clinical trials, and contract services. Nonrefundable advance payments made for goods or services to be used in research and development activities are deferred and capitalized until the goods have been delivered or the related services have been performed. If the goods areno longer expected to be delivered or the services areno longer expected to be performed, the Company would be required to expense the related capitalized advance payments. The Company didnot have any material capitalized nonrefundable advance payments as of* September 30, 2024* or2023.

F-10

The Company records estimated costs of research and development activities conducted bythird-party service providers, which include the conduct of preclinical studies and clinical trials and contract manufacturing activities. These costs are a significant component of the Company’s research and development expenses. The Company accrues for these costs based on factors such as estimates of the work completed and in accordance with agreements established with itsthird-party service providers under the service agreements. The Company makes significant judgments and estimates in determining the accrued liabilities balance in each reporting period. As actual costs become known, the Company adjusts its accrued liabilities. The Company hasnot experienced any material differences between accrued costs and actual costs incurred. However, the status and timing of actual services performed, number of patients enrolled and the rate of patient enrollments* may*vary from the Company’s estimates, resulting in adjustments to expense in future periods. Changes in these estimates that result in material changes to the Company’s accruals could materially affect the Company’s results of operations.

Share-based compensation: The Company recognizes share-based compensation expense in connection with its share-based awards, based on the estimated fair value of the awards on the date of grant, on a straight-line basis over the vesting period. Calculating share-based compensation expense requires the input of highly subjective judgment and assumptions, including estimates of the expected life of the share-based award, stock price volatility and risk-free interest rate.

Advertising: The Company's policy is to expense advertising costs as incurred. Advertising costs were $0.8 million and $0.9 million for the years ended* September 30, 2024and2023*, respectively.

Income taxes: The Company files separate income tax returns for its foreign subsidiaries. FASB ASC Topic740 requires recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been included in the financial statements or tax returns. Under this method, deferred tax assets and liabilities are determined based on the differences between the financial statements and tax bases of assets and liabilities using enacted tax rates in effect for the year in which the differences are expected to reverse. Deferred tax assets are also provided for carryforwards for income tax purposes. In addition, the amount of any future tax benefits is reduced by a valuation allowance to the extent such benefits arenot expected to be realized.

Foreign currency translation and operations: Effective* October**1,* 2009, the Company determined that there were significant changes in facts and circumstances, triggering an evaluation of its subsidiaries’ functional currency, resulting in the adoption of the U.S. dollar as the functional currency for all foreign subsidiaries. The consistent use of the U.S. dollar as the functional currency across the Company reduces its foreign currency risk and stabilizes its operating results. The cumulative foreign currency translation loss included in accumulated other comprehensive loss was $0.6 million as of* September 30, 2024and September 30, 2023*. Assets located outside of the U.S. totaled approximately $9.2 million and $10.5 million at* September 30, 2024and September 30, 2023*, respectively.

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 consolidated balance sheets, these items, along with net loss, are components of other comprehensive loss.

The U.S. parent company and its U.K. subsidiary routinely purchase inventory produced by its Malaysia subsidiary for sale to their respective customers. These intercompany trade accounts are eliminated in consolidation. The Company’s policy and intent is to settle the intercompany trade account on a current basis. Since the U.K. and Malaysia subsidiaries adopted the U.S. dollar as their functional currencies effective* October**1,* 2009, no foreign currency gains or losses from intercompany trade are recognized. In fiscal2024 and2023, comprehensive income (loss) is equivalent to the reported net income (loss).

Recent accounting pronouncementsnot yet adopted: In* November2023,* the FASB issued Accounting Standards Update (ASU)2023-07, Segment Reporting (Topic280*): Improvements to Reportable Segment Disclosures*. The ASU expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly reviewed by the CODM and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. The ASU also allows, in addition to the measure that is most consistent with U.S. GAAP, the disclosure of additional measures of segment profit or loss that are used by the CODM in assessing segment performance and deciding how to allocate resources. All disclosure requirements under ASU2023-07 are also required for public entities with a single reportable segment. ASU2023-07 is effective for the Company’s Annual Report on Form10-K for the fiscal year ending* September30,* 2025, and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU2023-07 on its consolidated financial statements and disclosures.

F-11

In* December 2023,the FASB issued ASU2023*-09, Income Taxes (Topic740*): 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. ASU2023-09 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 ASU2023-09 on its disclosures.

In* November 2024,the FASB issued ASU2024*-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic220*-40): Disaggregation of Income Statement Expenses,* which requires more detailed disclosures about specified categories of expenses (including employee compensation, depreciation, and selling expenses) included in certain expense captions presented on the face of the statement of operations. ASU2024-03 is effective for the Company's annual reporting periods beginning fiscal year ending* September 30, 2028,and subsequent interim periods, with early adoption permitted. The Company is currently evaluating the impact of adopting ASU2024*-03 on its consolidated financial statements and disclosures.

We have reviewed all other recently issued accounting pronouncements and have determined that such standards that arenot yet effective willnot have a material impact on our financial statements or donot otherwise apply to our operations.

Note2 – Going Concern

The Company isnot 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 thetwelve 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 oftwelve 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 butnot 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 ASC205-40, 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 leasttwelve months subsequent to the issuance date of these financial statements.

Note3 – Fair Value Measurements

FASB ASC Topic820 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.

Thethree levels of the fair value hierarchy are as follows:

Level1 – Quoted prices for identical instruments in active markets.

Level2 – Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that arenot active; and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level3 – Instruments with primarily unobservable value drivers.

There wereno transfers between Level1, Level2 and Level3 during fiscal2024 and2023.

Amounts capitalized as IPR&D are subject to impairment testing until the completion or abandonment of the associated research and development efforts. We use probability-adjusted discounted cash flow calculations using Level3 fair value measurements and inputs including estimated revenues, costs, probability of technical and regulatory success and discount rates to measure impairment, if any. During thesecond quarter of fiscal2023, we recognized an impairment charge of $3.9 million associated with IPR&D intangible assets due to their meeting the criteria for abandonment under the accounting standards. See Note8 for additional information.

F-12

As of* September 30, 2024and2023*, the Company’s financial liabilities measured at fair value on a recurring basis, which consisted of embedded derivatives, are also classified within Level3 of the fair value hierarchy.

The Company determines the fair value of hybrid instruments based on available market data using appropriate valuation models, considering all of the rights and obligations of each instrument. The Company estimates the fair value of hybrid instruments using various techniques (and combinations thereof) that are considered to be consistent with the objective of measuring fair value. In selecting the appropriate technique, the Company considers, among other factors, the nature of the instrument, the market risks that it embodies and the expected means of settlement. Estimating the fair value of derivative financial instruments requires the development of significant and subjective estimates that* may,*and are likely to, change over the duration of the instrument with related changes in internal and external market factors. Increases in fair value during a given financial quarter result in the recognition of non-cash derivative expense. Conversely, decreases in fair value during a given financial quarter would result in the recognition of non-cash derivative income.

The following table provides a reconciliation of the beginning and ending liability balance associated with embedded derivatives measured at fair value using significant unobservable inputs (Level3) for the years ended* September 30, 2024and2023*:

The expense or income associated with the change in fair value of the embedded derivatives is presented as a separate line item in the accompanying consolidated statements of operations.

The liabilities associated with embedded derivatives represent the fair value of the change of control provisions in the Residual Royalty Agreement. See Note9 for additional information. There isno current observable market for these types of derivatives. The Company estimates the fair value of the embedded derivative within the Residual Royalty Agreement by using a scenario-based method, whereby different scenarios are valued and probability weighted. The scenario-based valuation model incorporates transaction details such as the contractual terms of the instrument and assumptions including projectedFC2 revenues, expected cash outflows, probability and estimated dates of a change of control, risk-free interest rates and applicable credit risk. 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 increase in the fair value of derivative liabilities in fiscal2024 was driven by an increase in the probability of a change of control and decreases in the discount rates used, due primarily to external market factors. The decrease in the fair value of derivative liabilities in fiscal2023 was driven by a decrease in the expected cash outflows under the Residual Royalty Agreement, due to decreases in projectedFC2 net revenues in future periods, and increases in the discount rates used, due primarily to external market factors.

The following table presents quantitative information about the inputs and valuation methodologies used to determine the fair value of the embedded derivatives classified in Level3 of the fair value hierarchy as of* September 30, 2024and2023*:

F-13

The Company also has an investment in equity securities consisting of 142,749 shares of ONCO Common Stock. The Company received 3,000 shares of Series A Convertible Preferred Stock (the “ONCO Preferred Stock”) of ONCO on* October3,* 2023 as part of a settlement of the receivable due on* September30,* 2023 related to the sale of ENTADFI. See Note15 for additional information. The Company elected to measure the ONCO Preferred Stock at fair value in accordance with ASC825. The investment in the ONCO Preferred Stock was classified within Level3 of the fair value hierarchy because there isno market for the ONCO Preferred Stock and the fair value was determined using significant unobservable inputs. The fair value of the ONCO Preferred Stock was determined on the date received using a probability-weighted bond plus call option model, which incorporated the stock price of ONCO on the valuation date, expected volatility of 79%, expected term of 3 years, and a discount rate of 35%. The Company also applied a 15% discount for lack of marketability due to the fact that there isno market for the preferred stock and a 60% probability of dissolution. The valuation was determined to be $0.9 million at* October 3, 2023.*

On* September 24, 2024,the Company converted all of the shares of ONCO Preferred Stock it holds into 142,749 shares of ONCO Common Stock. Following this conversion, the ONCO Common Stock is classified within Level1* of the fair value hierarchy and the valuation is determined based on the closing price of the ONCO Common Stock. The value of the ONCO Common Stock is $0.7 million as of* September 30, 2024*, which is included in prepaid expenses and other current assets on the accompanying consolidated balance sheet, and the Company recognized a loss from the change in fair value of securities of $0.2 million during the year ended* September 30, 2024* on the accompanying consolidated statement of operations. Subsequent to* September 30, 2024,*the Company sold all of the shares of ONCO Common Stock it held for net proceeds of $0.4 million.

Note4 – Revenue from Contracts with Customers

The Company generates all its revenue from direct product sales. Revenue from direct product sales is generally recognized when the customer obtains control of the product, which occurs at a point in time, and* may*be upon shipment or upon delivery based on the contractual shipping terms of a contract. Sales taxes and other similar taxes that the Company collects concurrent with revenue-producing activities are excluded from revenue.

The amount of consideration the Company ultimately receives varies depending upon sales discounts, and other incentives that the Company* mayoffer, which are accounted for as variable consideration when estimating the amount of revenue to recognize. The estimate of variable consideration requires significant judgment. The Company includes estimated amounts in the transaction price to the extent it is probable that a significant reversal of cumulative revenue recognized willnot* occur when the uncertainty associated with the variable consideration is resolved. The estimates of variable consideration and determination of whether to include estimated amounts in the transaction price are based largely upon an assessment of current contract sales terms and historical payment experience.

Product returns are typicallynot significant because returns are generallynot allowed unless the product is damaged at time of receipt.

The Company’s revenue is primarily from sales ofFC2 in the U.S. prescription channel and direct sales ofFC2 in the global public health sector, and also included sales of ENTADFI through the date the ENTADFI assets were sold on* April**19,* 2023. The following table presents net revenues by product and sector for the years ended* September 30, 2024and2023*:

F-14

The following table presents net revenue by geographic area for the years ended* September 30, 2024and2023*:

Less than10%* of total net revenues

The Company’s performance obligations consist mainly of transferring control of products identified in the contracts which occurs either when: i) the product is made available to the customer for shipment; ii) the product is shipped via common carrier; or iii) the product is delivered to the customer or distributor, in accordance with the terms of the agreement. Some of the Company’s contracts require the customer to make advanced payments prior to transferring control of the products. These advanced payments create a contract liability for the Company. The balances of the Company’s contract liability, included in accrued expenses and other current liabilities on the accompanying consolidated balances sheets, was approximately $0.4 million and $0.1 million at* September 30, 2024and2023*, respectively. The opening balance of the Company's contract liabilities at* October 1, 2022*was $0.3 million.

The amount of revenue recognized that was included in the contract liabilities and unearned revenues balance at the beginning of the period was $0.1 million and $0.3 million during the years ended* September 30, 2024and2023*, respectively, after satisfying its contract obligations and transferring control.

Note5 – Accounts Receivable and Concentration of Credit Risk

The Company’s standard credit terms vary from30 to120 days, depending on the class of trade and customary terms within a territory, so accounts receivable is affected by the mix of sales within the period. As is typical in the Company’s business, extended credit terms* mayoccasionally be offered as a sales promotion or for certain sales. For sales to the Company’s distributor in Brazil, the Company has agreed to credit terms of up toone* year.

The components of accounts receivable consist of the following at* September 30, 2024and2023*:

The opening balance of the Company's net accounts receivable at* October 1, 2022*was $3.6 million.

No customer had a current accounts receivable balance that represented10% of current assets at* September 30, 2024and2023*.

At* September 30, 2024*, two customers had an accounts receivable balance greater than10% of net accounts receivable, representing 64% of net accounts receivable in the aggregate. At* September 30, 2023*, three customers had an accounts receivable balance greater than10% of net accounts receivable, representing 71% of the Company’s net accounts receivable in the aggregate.

For the year ended* September 30, 2024*, there were four customers whose individual net revenue to the Company exceeded10% of the Company’s net revenues, representing 60% of the Company’s net revenues in the aggregate. For the year ended* September 30, 2023*, there weretwo customers whose individual net revenue to the Company exceeded10% of the Company’s net revenues, representing 47% of the Company’s net revenues in the aggregate, including The Pill Club that represented 24% of the Company’s net revenues.

F-15

The Company maintains an allowance for credit losses for estimated losses resulting from the inability of its customers to make required payments on accounts receivable. Management determines the allowance for credit losses by identifying troubled accounts and by using historical experience applied to an aging of accounts. Management also periodically evaluates individual customer receivables and considers a customer’s financial condition, credit history, and the current economic conditions. Accounts receivable are charged-off when deemed uncollectible. During the year ended* September30,* 2023, the Company recorded a provision for credit losses of $3.9 million related to the total amount of receivables due from The Pill Club due to its Chapter11 bankruptcy, filed on* April18,* 2023.

The table below summarizes the change in the allowance for credit losses on trade receivables for the years ended* September 30, 2024and2023*:

Recoveries of accounts receivable previously charged-off are recorded when received. In the global public health sector, the Company’s customers are primarily health care distributors, large global agencies, non-government organizations, ministries of health and other governmental agencies which purchase and distributeFC2 for use in HIV/AIDS prevention and family planning programs. In the U.S. prescription channel, the Company’s customers include primarily telemedicine providers.

Note6 – Inventories

Inventories consisted of the following at* September 30, 2024and September 30, 2023*:

The Company recorded a provision for obsolete inventory of $1.6 million and $0.2 million during the years ended* September 30, 2024and2023*, respectively, which is included in cost of sales on the accompanying consolidated statements of operations.

Note7 – Property and Equipment

Property and equipment consisted of the following at* September 30, 2024and2023*:

F-16

Depreciation expense for the years ended* September 30, 2024and2023* was approximately $0.3 million and $0.2 million, respectively. Property and equipment included $0.2 million at* September 30, 2023* for deposits on equipment, furniture, and leasehold improvements, which hadnot been placed into service; therefore, the Company hadnot started to record depreciation expense. Deposits on equipment, furniture, and leasehold improvements at* September 30, 2024*were immaterial.

**Note8 **–Intangible Assets and Goodwill

Intangible Assets

Intangible assets included IPR&D and covenantsnot-to-compete. As of* September 30, 2024,*the net book value of intangible assets was zero.

The gross carrying amounts and net book value of intangible assets, which is included in other assets on the accompanying consolidated balance sheet, were as follows at* September 30, 2023*:

Amortization was recorded on a straight-line basis over seven years for the covenantsnot-to-compete. The amortization expense was recorded in selling, general and administrative expenses in the accompanying consolidated statements of operations. Amortization expense was approximately $71,000 for the year ended* September 30, 2023.Amortization expense recorded for the year ended September 30, 2024*was immaterial.

In* March 2023,the Company announced its strategic decision to refocus its drug development efforts on those drug candidates that it believes have the best opportunity to lead to long-term success and shareholder value creation. As part of this strategic decision, the Company has indefinitely ceased development of sabizabulin for prostate cancer and zuclomiphene. The Company hasno* current plans that would invest funds in the development of thesetwo assets or that would lead to the Company deriving value from thesetwo assets, which has met the criteria for abandonment under the accounting standards. This resulted in writing off the carrying amount of thesetwo acquired in-process research and development assets and recording an impairment charge of $3.9 million for the year ended* September**30,* 2023.

Goodwill

The carrying amount of goodwill at* September 30, 2024and2023* was $6.9 million. There wasno change in the balance during the years ended* September 30, 2024and2023*. The Company’s goodwill is assigned to the Research and Development reporting unit, which had a negative carrying amount as of* September 30, 2024*.

Note9 – Debt

SWK Residual Royalty Agreement

On* March5,* 2018, the Company entered into a Credit Agreement (the “Credit Agreement”) with the financial institutions party thereto from time to time (the “Lenders”) and SWK Funding LLC, as agent for the Lenders (the “Agent”), for a synthetic royalty financing transaction. On and subject to the terms of the Credit Agreement, the Lenders provided the Company with a term loan of $10.0 million, which was advanced to the Company on the date of the Credit Agreement. The Company repaid the loan and return premium specified in the Credit Agreement in* August2021,* and as a result hasno further obligations under the Credit Agreement. The Agent has released its security interest in Company collateral previously pledged to secure its obligations under the Credit Agreement.

F-17

In connection with the Credit Agreement, the Company and the Agent also entered into a Residual Royalty Agreement, dated as of* March**5,* 2018 (as amended, the “Residual Royalty Agreement”), which provides for an ongoing royalty payment of 5% of product revenue from net sales ofFC2. The Residual Royalty Agreement will terminate upon (i) a change of control or sale of theFC2 business and the payment by the Company of the amount due in connection therewith pursuant to the Residual Royalty Agreement, or (ii) mutual agreement of the parties. If a change of control or sale of theFC2 business occurs, the Agent will receive a payment that is the greater of (A) $2.0 million or (B) the product of (x)5% of the product revenue from net sales ofFC2 for the most recently completed12-month period multiplied by (y) five.

For accounting purposes, the $10.0 million advance under the Credit Agreement was allocated between the Credit Agreement and the Residual Royalty Agreement on a relative fair value basis. A portion of the amount allocated to the Residual Royalty Agreement, equal to the fair value of the change of control provision, was allocated to an embedded derivative liability. The derivative liability is adjusted to fair market value at each reporting period.

At* September 30, 2024and2023*, the Residual Royalty Agreement liability consisted of the following:

As the Company has repaid the original principal of $10.0 million advanced in connection with the Credit Agreement and the Residual Royalty Agreement, payments under the Residual Royalty Agreement are classified as interest payments and included in operating activities on the accompanying consolidated statements of cash flows. The short-term portion of the Residual Royalty Agreement liability represents the aggregate of the estimated quarterly royalty payments payable during the12-month period subsequent to the balance sheet dates.

Interest expense on the accompanying consolidated statements of operations relates to the accretion of the liability for the Residual Royalty Agreement. The accretion of the liability is based on projectedFC2 revenues.

Premium Finance Agreement

On* November1,* 2022, the Company entered into an agreement to finance $1.4 million of its directors and officers liability insurance premium at an annual percentage rate of 6.3%. The financing agreement was payable ineleven monthly installments of principal and interest, which began on* December1,* 2022. The balance of the insurance premium liability is $0.1 million as of* September 30, 2023* and is included in accrued expenses and other current liabilities on the accompanying consolidated balance sheet. The last payment was made in* October 2023and there isno balance outstanding as of September 30, 2024.*

Note10 – Stockholders’** Equity**

Preferred Stock

The Company has 5,000,000 shares designated as Class A Preferred Stock with a par value of $0.01 per share. There are 1,040,000 shares of Class A Preferred Stock – Series1 authorized;1,500,000 shares of Class A Preferred Stock – Series2 authorized;700,000 shares of Class A Preferred Stock – Series3 authorized; and 548,000 shares of Class A Preferred Stock – Series4 authorized. There wereno shares of Class A Preferred Stock of any series issued and outstanding at* September 30, 2024and September 30, 2023*. The Company has 15,000 shares designated as Class B Preferred Stock with a par value of $0.50 per share. There wereno shares of Class B Preferred Stock issued and outstanding at* September 30, 2024and September 30, 2023*.

F-18

Common Stock

We are authorized to issue up to 308,000,000 shares of common stock, $0.01 par value per share. Holders are entitled toone vote for each share of common stock.

Shelf Registration Statement

In* March2023,* the Company filed a shelf registration statement on Form S-3 (FileNo. 333-270606) with a capacity of $200 million, which was declared effective by the SEC on* April14,* 2023. As of* September 30, 2024,$109 million remains available under that shelf registration statement. As a result of the Company’s failure to timely file the Quarterly Report on Form10*-Q for the quarter ended* December31,* 2023 and a Current Report on Form8-K that was due on* February27,* 2024, the Company isnot eligible to use its current effective shelf registration statement on Form S-3 (FileNo. 333-270606) or file new registration statements on Form S-3 untilno earlier than* March 1, 2025,which could impair its ability to raise capital. See Part I, Item1A,* “Risk Factors.”

Common Stock Offering

On* December**18,* 2023, we completed an underwritten public offering of 52,708,332 shares of our common stock, which included the exercise in full of the underwriters’ option to purchase additional shares, at a public offering price of $0.72 per share. Net proceeds to the Company from this offering were approximately $35.2 million after deducting underwriting discounts and commissions and costs incurred by the Company. All of the shares sold in the offering were by the Company. The offering was made pursuant to the Company’s shelf registration statement on Form S-3 (FileNo. 333-270606).

Aspire Capital Purchase Agreement

On* June**26,* 2020, the Company entered into a common stock purchase agreement (the “Aspire Purchase Agreement”) with Aspire Capital Fund, LLC (“Aspire Capital”) which provided that, upon the terms and subject to the conditions and limitations set forth therein, the Company had the right, from time to time in its sole discretion during the 36-month term of the Aspire Purchase Agreement, to direct Aspire Capital to purchase up to $23.9 million of the Company’s common stock in the aggregate.

During the year ended* September 30, 2023,*we sold 2,779,713 shares of common stock to Aspire Capital under the Aspire Purchase Agreement resulting in proceeds to the Company of $3.4 million. As a result of these sales, we recorded approximately $105,000 of deferred costs to additional paid-in capital.

During the 36-month term of the Aspire Purchase Agreement, we sold 4,424,450 shares of common stock to Aspire Capital resulting in proceeds to the Company of $8.4 million. On* June**26,* 2023, the term of the Aspire Purchase Agreement expired andno additional shares of common stock will be sold under the agreement.

In consideration for entering into the Aspire Purchase Agreement, concurrently with the execution of the Aspire Purchase Agreement, the Company issued to Aspire Capital 212,130 shares of the Company’s common stock. The shares of common stock issued as consideration were valued at $0.7 million, based on the closing price per share of the Company’s common stock on the date the shares were issued. This amount and related expenses, which totaled approximately $0.7 million, were recorded as deferred costs. The unamortized amount of deferred costs related to the Aspire Purchase Agreement remaining when the agreement terminated was $0.5 million and was expensed at the time of termination. It is included in selling, general and administrative expenses on the accompanying consolidated statement of operations for the year ended* September**30,* 2023.

Private Investment in Public Equity

On* April**12,* 2023, the Company entered into a stock purchase agreement (the “Stock Purchase Agreement”) with Frost Gamma Investments Trust (“FGI”), pursuant to which, on the date thereof, the Company issued and sold 5,000,000 shares of the Company’s common stock to FGI at a price of $1.00 per share, for a total investment of $5.0 million, through a private investment in public equity financing. Proceeds were recorded net of issuance costs of $31,000. The shares of common stock issued to FGI pursuant to the Stock Purchase Agreement werenot registered under the Securities Act.

F-19

Lincoln Park Capital Fund LLC Purchase Agreement

On* May2,* 2023, the Company entered into a purchase agreement (as amended, the “Lincoln Park Purchase Agreement”) with Lincoln Park Capital Fund, LLC (“Lincoln Park”), which provides that, upon the terms and subject to the conditions and limitations set forth therein, the Company* maysell to Lincoln Park up to $100.0 million of shares (the “Purchase Shares”) of the Company’s common stock over the 36 month term of the Lincoln Park Purchase Agreement. The Lincoln Park Purchase Agreement maybe terminated by the Company at any time, at its sole discretion, without any cost or penalty, by givingone* business day notice to Lincoln Park. Lincoln Park has covenantednot to in any manner whatsoever enter into or effect, directly or indirectly, any short selling or hedging of the Company’s common stock. On* December13,* 2023, the Company entered into an amendment (the “Lincoln Park Amendment”) with Lincoln Park to reduce the amount of shares of common stock subject to the registration from $100.0 million to $50.0 million until the Company has sold at least $50.0 million of shares of common stock under the Lincoln Park Purchase Agreement. The issuance of shares of common stock pursuant to the Lincoln Park Purchase Agreement up to $50.0 million have been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (FileNo. 333-270606), and a related prospectus supplement that was filed with the SEC on* May3,* 2023, as further supplemented on* December13,* 2023 to reflect the Lincoln Park Amendment.

Under the Lincoln Park Purchase Agreement, the Company has the right, butnot the obligation, on any business day selected by the Company (the “Purchase Date”), provided that on such day the closing sale price per share of the Company’s common stock is above the Floor Price, as defined in the Lincoln Park Purchase Agreement, to require Lincoln Park to purchase up to 225,000 shares of the Company’s common stock (the “Regular Purchase Amount”) at the Purchase Price (as defined below) per purchase notice (each such purchase, a “Regular Purchase”) provided, however, that (1) the limit on the Regular Purchase Amount will be increased to 250,000 shares, if the closing sale price of the Company’s common stock on the applicable Purchase Date isnot below $6.00 and to 275,000 shares, if the closing sale price of the Company’s common stock on the applicable Purchase Date isnot below $8.00. Lincoln Park’s committed obligation under each Regular Purchase shallnot exceed $2,500,000 or 2,000,000 Purchase Shares per each Regular Purchase. The purchase price for Regular Purchases (the “Purchase Price”) shall be equal to the lesser of: (i) the lowest sale price of the Company’s common stock during the Purchase Date, or (ii) the average of thethree lowest closing sale prices of the Company’s common stock on the10 consecutive business days ending on the business day immediately preceding such Purchase Date. The Company shall have the right to submit a Regular Purchase notice to Lincoln Park as often as every business day. A Regular Purchase notice is delivered to Lincoln Park after the market has closed (i.e., after4:00 P.M. Eastern Time) so that the Purchase Price is always fixed and known at the time the Company elects to sell shares to Lincoln Park.

In addition to Regular Purchases and provided that the Company has directed a Regular Purchase in full, the Company in its sole discretion* mayrequire Lincoln Park on each Purchase Date to purchase on the following business day (“Accelerated Purchase Date”) up to the lesser of (i)three (3) times the number of shares purchased pursuant to such Regular Purchase or (ii)30% of the trading volume on the Accelerated Purchase Date (the “Accelerated Purchase”) at a purchase price equal to the lesser of 97% of (i) the closing sale price on the Accelerated Purchase Date, or (ii) the Accelerated Purchase Date’s volume weighted average price (the “Accelerated Purchase Price”). The Company may*also direct Lincoln Park, on any business day on which an Accelerated Purchase has been completed and all of the shares to be purchased thereunder have been properly delivered to Lincoln Park in accordance with the Lincoln Park Purchase Agreement, to make additional purchases upon the same terms as an Accelerated Purchase (an “Additional Accelerated Purchase”).

The purchase price of Regular Purchases, Accelerated Purchases and Additional Accelerated Purchases and the minimum closing sale price for a Regular Purchase will be adjusted for any reorganization, recapitalization, non-cash dividend, stock split or other similar transaction occurring during the business days used to compute the purchase price. The aggregate number of shares that the Company can sell to Lincoln Park under the Lincoln Park Purchase Agreement* mayinno* case exceed 17,678,502 shares (subject to adjustment as described above) of the Company’s common stock (which is equal to approximately 19.99% of the shares of the Company’s common stock outstanding immediately prior to the execution of the Lincoln Park Purchase Agreement) (the “Exchange Cap”), unless (i) shareholder approval is obtained to issue Purchase Shares above the Exchange Cap, in which case the Exchange Cap willno longer apply, or (ii) the average price of all applicable sales of the Company’s common stock to Lincoln Park under the Lincoln Park Purchase Agreement equals or exceeds $1.26 per share (subject to adjustment as described above) (which represents the Minimum Price, as defined under Nasdaq Listing Rule5635(d), on the Nasdaq Capital Market immediately preceding the signing of the Lincoln Park Purchase Agreement, such that the transactions contemplated by the Lincoln Park Purchase Agreement are exempt from the Exchange Cap limitation under applicable Nasdaq rules).

F-20

In consideration for entering into the Lincoln Park Purchase Agreement, concurrently with the execution of the Lincoln Park Purchase Agreement, the Company issued 800,000 shares of the Company’s common stock to Lincoln Park. The shares of common stock issued as consideration were valued at $1.0 million, based on the closing price per share of the Company’s common stock on the date the shares were issued. This amount and related expenses of $57,000, which total approximately $1.1 million, were recorded as deferred costs. We are obligated to issue $1.0 million of shares of the Company’s common stock at the time Lincoln Park’s purchases cumulatively reach an aggregate amount of $50.0 million of Purchase Shares.

We sold 1,800,000 and 1,225,000 shares of common stock to Lincoln Park under the Lincoln Park Purchase Agreement during the years ended* September 30, 2024and2023*, respectively, resulting in proceeds to the Company of $1.7 million and $1.4 million, respectively. As a result of these sales, we recorded approximately $0.2 million and $30,000, respectively, of deferred costs to additional paid-in capital. The unamortized amount of deferred costs related to the Lincoln Park Purchase Agreement is $0.9 million and $1.0 million at* September 30, 2024and2023*, respectively, and is included in other assets on the accompanying consolidated balance sheets. Until* March 1, 2025,we willnot* be able to sell any securities pursuant to the Lincoln Park Purchase Agreement.

At-the-Market Sale Agreement

On* May 12, 2023,the Company entered into an Open Market Sale Agreement℠ (the “Jefferies Sales Agreement”) with Jefferies LLC (“Jefferies”), as sales agent, pursuant to which the Company mayissue and sell, from time to time, through Jefferies, shares of the Company’s common stock, with an aggregate value of up to $75 million (not to exceed the lesser of 39,609,072 shares of common stock or the number of authorized, unissued and available shares of common stock at any time). Shares of common stock offered and sold pursuant to the Jefferies Sale Agreement have been registered pursuant to the Company’s effective shelf registration statement on Form S-3 (FileNo.* 333-270606), and a related prospectus supplement that was filed with the SEC on* May 12, 2023.On August 19, 2024,the Company delivered notice to Jefferies to terminate the Jefferies Sales Agreement, which was effective on September 3, 2024.Pursuant to the terms of the Jefferies Sales Agreement, the Company could issue and sell, from time to time through or to Jefferies, shares of its common stock as set forth in the Jefferies Sales Agreement with an aggregate value of up to $75 million. As a result of the termination of the Jefferies Sales Agreement, the Company willnot* issue or sell any additional shares of common stock under the Jefferies Sales Agreement.

We sold 90,156 and 1,277,259 shares of common stock under the Jefferies Sales Agreement during the years ended* September 30, 2024and2023*, respectively, resulting in net proceeds to the Company of $0.1 million and $1.0 million, respectively.

The Company incurred issuance costs related to the Jefferies Sales Agreement of $0.2 million, which were recorded as deferred costs. The unamortized amount of deferred costs remaining when the agreement terminated was $0.2 million and was expensed at the time of termination. It is included in selling, general and administrative expenses on the accompanying consolidated statement of operations for the year ended* September**30,* 2024. The deferred costs were $0.2 million at* September 30, 2023*and were included in other assets on the accompanying consolidated balance sheet.

Note11 – Share-based Compensation

We allocate share-based compensation expense to cost of sales, selling, general and administrative expense and research and development expense based on the award holder’s employment function. We recorded income tax benefits for share-based compensation expense of approximately $3.1 million and $4.0 million during the years ended* September 30, 2024and2023*, respectively. During the years ended* September 30, 2024and2023* we recorded share-based compensation expenses as follows:

We have issued share-based awards to employees and non-executive directors under the Company’s approved equity plans. Upon the exercise of share-based awards, new shares are issued from authorized common stock.

F-21

Equity Plans

In* June 2022,the Company’s board of directors adopted the Company’s2022* Employment Inducement Equity Incentive Plan (the “Inducement Plan”). The Inducement Plan is a non-shareholder approved stock plan adopted pursuant to the “inducement exception” provided under Nasdaq listing rules. The Inducement Plan is used exclusively for the issuance of equity awards to new hires who satisfy the requirements to be granted inducement grants under Nasdaq listing rules as an inducement material to the individual’s entry into employment with the Company. The terms of the Inducement Plan are substantially similar to the terms of our2018 Plan. The Company has reserved 4,000,000 shares of common stock under the Inducement Plan and as of* September 30, 2024*,3,967,083 shares remain available for issuance.

In* March 2018,the Company’s stockholders approved the Company's2018* Equity Incentive Plan (the*“2018* Plan”). On* March**29,* 2022, the Company’s stockholders approved an increase in the number of shares that* maybe issued under the2018* Plan to 18.5 million. As of* September 30, 2024*,1,817,159 shares remain available for issuance under the2018 Plan.

In* July 2017,the Company’s stockholders approved the Company's2017* Equity Incentive Plan (the*“2017* Plan”). A total of 4.7 million shares are authorized for issuance under the2017 Plan. As of* September 30, 2024*,11,085 shares remain available for issuance under the2017 Plan. The2017 Plan replaced the Company's2008 Stock Incentive Plan (the*“2008* Plan”), andno further awards will be made under the2008 Plan.

Stock Options

Each option grants the holder the right to purchase from usone share of our common stock at a specified price, which is generally the closing price per share of our common stock on the date the option is issued. Options generally vest on a pro-rata basis on each anniversary of the issuance date within three years of the date the option is issued. Options* maybe exercised after they have vested and prior to the specified expiry date provided applicable exercise conditions are met, if any. The expiry date can be for periods of up toten years from the date the option is issued. The fair value of each option is estimated on the date of grant using the Black-Scholes option pricing model based on the assumptions established at that time. The Company accounts for forfeitures as they occur and doesnot* estimate forfeitures as of the option grant date. The Company recognized a reduction in share-based compensation expense of $1.9 million during each of the years ended* September 30, 2024and2023*.

The following table outlines the weighted average assumptions for options granted during fiscal2024 and2023:

During the years ended* September 30, 2024and2023*, the Company used historical volatility of our common stock over a period equal to the expected life of the options to estimate their fair value. The dividend yield assumption is based on the Company’s recent history and expectation of future dividend payouts on the common stock. The risk-free interest rate is based on the implied yield available on U.S. treasuryzero-coupon issues with an equivalent remaining term.

F-22

The following table summarizes the stock options outstanding and exercisable at* September 30, 2024*:

The aggregate intrinsic values in the table above are before income taxes and represent the number of in-the-money options outstanding or exercisable multiplied by the closing price per share of the Company’s common stock on the last trading day of the year ended* September 30, 2024* of $0.77, less the respective weighted average exercise price per share at period end.

The total intrinsic value of options exercised was approximately $0.5 million during the year ended* September 30, 2023*. Cash received from options exercised was $0.4 million in the year ended* September 30, 2023*. The intrinsic value of and cash received from options exercised during the year ended* September 30, 2024* were immaterial.

As of* September 30, 2024*, the Company had unrecognized compensation expense of approximately $11.7 million related to unvested stock options. This expense is expected to be recognized over a weighted average period of 1.6 years.

Stock Appreciation Rights

In fiscal2017, the Company issued stock appreciation rights based on 50,000 shares of the Company’s common stock to an employee that vested on* October**31,* 2018. The stock appreciation rights have aten-year term and an exercise price per share of $0.95. Upon exercise, the stock appreciation rights will be settled in common stock issued under the2017 Plan. As of* September 30, 2024and2023*, vested stock appreciation rights based on 50,000 shares of common stock remain outstanding.

Note12 – Leases

The Company has operating leases for its office, manufacturing and warehouse space, and office equipment. The Company has a finance lease for office equipment, furniture, and fixtures.

Corporate Headquarters

In* June2021,* the Company executed a lease for its new corporate headquarters in Miami, Florida. The Company is leasing approximately 12,000 square feet of office space for aneight year term, which commenced on* March1,* 2022. The space replaced the Company’s previous corporate headquarters in Miami, Florida when the lease terminated at the end of* February**2022.* Annual base rent payments are $58.00 per square foot and are subject to a 3% annual escalation. Based on the terms of the lease agreement, the Company paid a security deposit of approximately $117,000, which is included in other assets on the accompanying consolidated balance sheet as of* September 30, 2024and2023*.

F-23

Chicago Lease

The Company leased approximately 6,600 square feet of office space located in Chicago, Illinois. The Company executed the lease for this office in* May 2016,for aseven-year period commencing on November1,* 2016 and ending on* October31,* 2023. The lease granted the Company aseven-month lease holiday beginning* November1,* 2016, afive-month lease abatement beginning* June1,* 2017, and provided a tenant improvement allowance. Annual base rent payments were $14.00 per square foot in yearone and increase on an annual basis to $17 per square foot in the final year of the lease. The lease also required payment of related expenses, including real estate taxes, common area maintenance, utilities and insurance expenses from* June1,* 2017 to* October31,* 2023. Based on the terms of the lease agreement, the Company paid a security deposit of $55,000. Effective* September 1, 2017,the Company entered into a sublease for this office space through October 31, 2023.Monthly sublease payments of approximately $15,200 commenced in January 2018and ended August 2023.The monthly sublease payment was subject to annual increases in Septemberof each year and increased to approximately $17,300 per month in the final year of the sublease. Sublease income was recognized as a reduction to operating lease costs as the sublease was outside of the Company’s normal business operations. This is consistent with the Company’s recognition of sublease income prior to the adoption of FASB ASC Topic842.* The tenant under the sublease provided a security deposit of $30,000 to the Company. The Company continued to be responsible for performance under the lease until it expired on* October**31,* 2023.

International Leases

The Company leases approximately 6,400 square feet of office space located in London, England. The lease was effective in* August 2020with afive year term and a tenant’s option to cancel after three years withno* penalty to the Company. At the time the lease was commenced, it was reasonably certain that the Company will exercise that option. The option to exercise required 6 months notice on* February 28, 2023.At that time, the Company determined that it wouldnot* exercise the option to cancel and recorded an adjustment of $265,000 to its lease liabilities and right-of-use asset to reflect the additional lease term. The Company maintains a security deposit of approximately $58,000. The lease requires quarterly payments of approximately $41,100.

The Company leases 45,800 square feet of manufacturing and warehouse space in Selangor D.E., Malaysia. The Company executed the lease for this space in* August 2019,for athree-year term commencing September 1, 2019and ending August 31, 2022.The Company had an option to extend the term of the lease for a period ofthree years, which was executed so that the lease is effective through August**31,* 2025. The lease requires monthly payments of approximately $15,400. Based on the terms of the lease agreement, the Company maintains a security deposit of approximately $46,000.

Certain of our lease agreements include variable lease payments for common area maintenance, real estate taxes, and insurance or based on usage for the office equipment leases. The components of the Company’s lease cost were as follows for the years ended* September 30, 2024and2023*:

The Company paid cash of $1.0 million and $0.9 million for amounts included in the measurement of operating lease liabilities during the year ended* September 30, 2024and2023*, respectively. The Company’s operating lease ROU assets and related lease liabilities are presented as separate line items on the accompanying consolidated balance sheet as of* September 30, 2024and2023*.

Other information related to the Company’s leases as of* September 30, 2024and2023* was as follows:

F-24

The Company’s lease agreements donot provide a readily determinable implicit rate. Therefore, the Company estimates its incremental borrowing rate based on information available at lease commencement in order to discount lease payments to present value.

As of* September 30, 2024*, maturities of lease liabilities were as follows:

The Company doesnot have any leases that havenot yet commenced as of* September 30, 2024*.

The lease liabilities presented above donot include variable lease payments for common area maintenance, real estate taxes, and insurance or based on usage for the office equipment leases. These amounts arenot fixed and can fluctuate from year to year.

Note13 – Contingent Liabilities

The testing, manufacturing and marketing of consumer products by the Company entail an inherent risk that product liability claims will be asserted against the Company. The Company maintains product liability insurance coverage for claims arising from the use of its products. The coverage amount is currently $10.0 million.

Litigation

On* December 5, 2022,a putative class action complaint was filed in federal district court for the Southern District of Florida (Ewing v. Veru Inc., et al., CaseNo.* 1:22-cv-23960) against the Company and Mitchell Steiner, its Chairman, CEO and President, and Michele Greco, its CFO (the “Ewing Lawsuit”). The First Amended Class Action Complaint, filed on* September 15, 2023by purported stockholders Dr. Myo Thant and Karen Brounstein, alleges that certain public statements about sabizabulin as a treatment for COVID-19 between March 1, 2021and March 2, 2023violated Sections10*(b) and20(a) of the Securities Exchange Act of1934 and Rule10b-5 promulgated thereunder, and seeks monetary damages.

On* July 7, 2023,Anthony Maglia, a purported stockholder, filed a derivative action in the Circuit Court for the Eleventh Judicial Circuit, Miami-Dade County, Florida (Maglia v. Steiner et al., CaseNo.* 2023-019406-CA-01), against the Company as a nominal defendant, and Company officers and directors Mitchell S. Steiner, Michele Greco, Harry Fisch, Mario Eisenberger, Grace S. Hyun, Lucy Lu and Michael L. Rankowitz (the “Maglia Lawsuit”). The Maglia lawsuit asserts claims for breach of fiduciary duty, waste of corporate assets, and unjust enrichment primarily in connection with the issues and claims asserted in the Ewing Lawsuit. The Maglia Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and also seeks monetary damages, injunctive relief, restitution, and an award of reasonable fees and expenses.

On* September1,* 2023, Anthony Franchi, a purported stockholder, filed a derivative action in the United States District Court for the Eastern District of Wisconsin (Franchi v. Steiner et al., CaseNo. 2:23-CV-01164), against the Company as a nominal defendant, and Company officers and directors Mitchell S. Steiner, Mario Eisenberger, Harry Fisch, Michael L. Rankowitz, Grace Hyun, Lucy Lu, and Michele Greco (the “Franchi Lawsuit”). The Franchi lawsuit asserts claims for breach of fiduciary duty and unjust enrichment primarily in connection with the issues and claims asserted in the Ewing Lawsuit. The Franchi Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and also seeks monetary damages, restitution, and an award of reasonable fees and expenses. On* November8,* 2023, this action was consolidated with the Renbarger action, discussed below.

F-25

On* September**28,* 2023, Philip Renbarger, a purported stockholder, filed a derivative action in the United States District Court for the Eastern District of Wisconsin (Renbarger v. Steiner et al., CaseNo. 2:23-CV-01291), against the Company as a nominal defendant, and Company officers and directors Mitchell Steiner, Mario Eisenberger, Harry Fisch, Michael L. Rankowitz, Grace S. Hyun, Lucy Lu, and Michele Greco (the “Renbarger Lawsuit”). The Renbarger lawsuit asserts claims for breach of fiduciary duty, aiding and abetting, gross mismanagement, waste of corporate assets, and unjust enrichment primarily in connection with the issues and claims asserted in the Ewing Lawsuit. The Renbarger Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and also seeks monetary damages and an award of reasonable fees and expenses. On* November 8, 2023,*the Renbarger Lawsuit was consolidated with the Franchi Lawsuit, discussed above.

On* October**9,* 2023, Mohamed Alshourbagy, a purported stockholder, filed a derivative action in the United States District Court for the Southern District of Florida (Alshourbagy v. Steiner et al., CaseNo. 1:23-cv-23846), against the Company as a nominal defendant, and Company officers and directors Mitchell S. Steiner, Mario A. Eisenberger, Harry D. Fisch, Michael L. Rankowitz, Grace S. Hyun, Lucy Lu, and Michele Greco (the “Alshourbagy Lawsuit”). The Alshourbagy lawsuit asserts claims for breach of fiduciary duty and contribution primarily in connection with the issues and claims asserted in the Ewing Lawsuit. The Alshourbagy Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and also seeks monetary damages, injunctive relief, restitution, and an award of reasonable fees and expenses.

On* September 30, 2024,** JuneOvadias, a purported stockholder, filed a derivative action in the United States District Court for the Western District of Wisconsin (Ovadias v. Steiner et al., CaseNo.* 3:24-cv-00676), against the Company as a nominal defendant, and Company officers and directors Mitchell S. Steiner, Michele Greco, Mario A. Eisenberger, Harry D. Fisch, Grace S. Hyun, Lucy Lu, and Michael L. Rankowitz (the “Ovadias Lawsuit”). The Ovadias lawsuit asserts claims for breach of fiduciary duty, unjust enrichment, abuse of control, gross mismanagement, waste of corporate assets, and contribution primarily in connection with the issues and claims asserted in the Ewing Lawsuit. The Ovadias Lawsuit seeks to direct the Company to improve its corporate governance and internal procedures, and also seeks monetary damages, restitution, and an award of reasonable fees and expenses.

The Ewing Lawsuit, Maglia Lawsuit, Franchi Lawsuit, Renbarger Lawsuit, Alshourbagy Lawsuit and Ovadias Lawsuit are collectively referred to as the “Shareholder Litigation.” At this time, the Company is unable to estimate potential losses, if any, related to the Shareholder Litigation.

License and Purchase Agreements

From time to time, we license or purchase rights to technology or intellectual property fromthird parties. These licenses and purchase agreements require us to pay upfront payments as well as development or other payments upon successful completion of preclinical, clinical, regulatory or revenue milestones. In addition, these agreements* mayrequire us to pay royalties on sales of products arising from the licensed or acquired technology or intellectual property. Because the achievement of future milestones isnot* reasonably estimable, we havenot recorded a liability in the accompanying consolidated financial statements for any of these contingencies.

Collaborative Arrangements

On* January 31, 2022,the Company entered into a Clinical Trial Collaboration and Supply Agreement (the “Lilly Agreement”) with Eli Lilly and Company (“Lilly”). The Company was sponsoring a clinical trial in which both the Company’s enobosarm compound and Lilly’s compound were being dosed in combination. Under the Lilly agreement, the Company conducts the research at its own cost and Lilly contributes its compound towards the study atno* cost to the Company. The parties continue to hold exclusive rights to all intellectual property relating solely to their own respective compounds. The Company would provide to Lilly copies of clinical data relating to the clinical trial and certain rights to use the clinical data. Veru maintains full exclusive, global commercialization rights to the enobosarm compound. As the ENABLAR-2 clinical trial is currently suspended, on* August 22, 2024*Lilly sent Veru a notice of expiration effectively terminating the Lilly Agreement.

The terms of the Lilly Agreement met the criteria under ASC Topic808, Collaborative Arrangements (“ASC808”), as both parties were active participants in the activity and were exposed to the risks and rewards dependent on the commercial success of the activity. ASC808 doesnot provide guidance on how to account for the activities under the collaboration, and the Company determined that Lilly didnot meet the definition of a customer under ASC606, Revenue from Contracts with Customers. The Company has concluded that ASC730, Research and Development, should be applied by analogy. There isno financial statement impact for the Lilly Agreement as the value of the drug supply received from Lilly would be offset against the drug supply cost within research and development expense.

F-26

Resolution of Commercial Dispute

A supplier claimed that we owed approximately $10 million for products and services relating to our efforts to commercialize sabizabulin under an EUA. We disputed the amount owed and on* February29,* 2024, we entered into an agreement with the supplier, which resolves the dispute by modifying the payment terms under the original agreement. The Company agreed to pay $8.3 million, with $2.3 million payable upon execution of the agreement, $3.5 million payable in equal monthly installments over 48 months, and $2.5 million payable (the “Balance”) on or prior to* December31,* 2025 out of the proceeds of certain payments that* maybe received by the Company from ONCO on promissory notes due in April 2024and September 2024.If all or any portion of the Balance remains unpaid as of December**31,* 2025, the Company shall pay the amount of the unpaid Balance in equal monthly installments over 24 months, commencing in* January 2026.The agreement resulted in a reduction in research and development expense for the year ended September 30, 2024* of $0.6 million. $0.9 million is included in accounts payable and $4.5 million is included in other liabilities related to this agreement as of* September 30, 2024* on the accompanying consolidated balance sheet.

Note14 – Income Taxes

The Company accounts for income taxes using the liability method, which requires the recognition of deferred tax assets or liabilities for the tax-effected temporary differences between the financial reporting and tax bases of its assets and liabilities, and for net operating loss (NOL) and tax credit carryforwards.

Within the calculation of the Company’s annual effective tax rate the Company has used assumptions and estimates that* may*change as a result of future guidance, interpretations, and rule-making from the Internal Revenue Service, the SEC, the FASB and/or various other taxing jurisdictions. For example, the Company anticipates that state jurisdictions will continue to determine and announce their conformity to the Tax Act which would have an impact on the annual effective tax rate. The Company’s calculations are based on the information available, prepared or analyzed (including computations) in reasonable detail.

The Company completes a detailed analysis of its deferred income tax valuation allowances on an annual basis or more frequently if information comes to its attention that would indicate that a revision to its estimates is necessary. In evaluating the Company’s ability to realize its deferred tax assets, management considers all available positive and negative evidence on a country-by-country basis, including past operating results, forecasts of future taxable income, and the potential Section382 limitation on the NOL carryforwards due to a change in control. In determining future taxable income, management makes assumptions to forecast U.S. federal and state, U.K. and Malaysia operating income, the reversal of temporary differences, and the implementation of any feasible and prudent tax planning strategies. These assumptions require significant judgment regarding the forecasts of the future taxable income in each tax jurisdiction and are consistent with the forecasts used to manage the Company’s business. The Company had a cumulative pretax loss in the U.S. for fiscal2024 and thetwo preceding fiscal years. Forming a conclusion that a valuation allowance isnot needed is difficult when there is significant negative evidence such as cumulative losses in recent years. Management has projected future pretax losses in the U.S. driven by the investment in research and development and based on our analysis, concluded that a full valuation allowance should be recorded related to federal and state NOL carryforwards as of* September 30, 2024*. The valuation allowance against U.S. deferred tax assets was increased by $7.3 million during the year ended* September 30, 2024*. As of* September 30, 2024and2023* respectively, the Company has recorded a valuation allowance of $69.0 million and $61.7 million against U.S. deferred tax assets. In addition, the Company’s U.K. holding company for the non-U.S. operating companies, The Female Health Company Limited, continues to have a full valuation allowance of $3.2 million as of* September 30, 2024and2023*. The operating U.K. subsidiary, The Female Health Company (UK) plc doesnot have a valuation allowance due to projections of future taxable income. The Company projects that the deferred tax assets of The Female Health Company (UK) plc will be realized over a significant period of time, which* mayexceed20* years. Veru Biopharma UK Limited has a full valuation allowance of $0.4 million and $0.3 million as of* September 30, 2024and2023*, respectively.

F-27

As of* September 30, 2024*, the Company had U.S. federal and state NOL carryforwards of approximately $164.2 million and $70.0 million, respectively, for income tax purposes with $28.6 million and $35.6 million, respectively, expiring in fiscal years2025 to2044 and $135.6 million and $34.4 million, respectively, which can be carried forward indefinitely. The Company also has U.S. federal research and development tax credit carryforwards of $7.6 million, expiring in fiscal years2038 to2044. The Company’s U.K. subsidiary and Veru Biopharma UK Limited have U.K. NOL carryforwards of approximately $61.2 million as of* September 30, 2024*, which can be carried forward indefinitely to be used to offset future U.K. taxable income.

Loss before income taxes was taxed by the following jurisdictions for the years ended* September 30, 2024and2023*:

A reconciliation between the effective tax rate and the U.S. statutory rate and the related income tax expense is as follows:

The federal and state income tax expense (benefit) for the years ended* September 30, 2024and2023* is summarized below:

F-28

Significant components of the Company’s deferred tax assets and liabilities are as follows:

The deferred tax amounts have been classified in the accompanying consolidated balance sheets as follows:

ASC Topic740 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. ASC Topic740 developed atwo-step process to evaluate a tax position and also provides guidance on de-recognition, classification, interest and penalties, accounting in interim periods, disclosure, and transition. The Company hasnot recorded a reserve for any tax positions for which the ultimate deductibility is highly certain but for which there is uncertainty about the timing of such deductibility.

F-29

The Company files tax returns in all appropriate jurisdictions, including foreign, U.S. federal and state tax returns. The following summarizes open tax years in the relevant jurisdictions:

The fiscal2024 tax returns for all jurisdictions havenot been filed as of the date of this filing. As of* September 30, 2024and2023*, the Company hasno recorded liability for unrecognized tax benefits.

The Company recognizes interest and penalties related to uncertain tax positions as income tax expense as incurred.No material expense for interest and penalties was recognized for the years ended* September 30, 2024and2023*.

Note15 – Sale of ENTADFI

On* April 19, 2023,the Company entered into an asset purchase agreement (the “Asset Purchase Agreement”) to sell substantially all of the assets related to ENTADFI® (finasteride and tadalafil) capsules for oral use, a new treatment for benign prostatic hyperplasia that was approved by the FDA in December 2021,with ONCO. The transaction closed on April19,* 2023. The purchase price for the transaction was $20.0 million, consisting of $6.0 million paid at closing, $4.0 million payable pursuant to a promissory note due on* September 30, 2023,$5.0 million payable pursuant to a promissory note due on April19,* 2024 (the* “April 2024Promissory Note”), and $5.0 million payable pursuant to a promissory note due on September 30, 2024 (the “September 2024Promissory Note” and, together with the April 2024*Promissory Note, the “ONCO Promissory Notes”), plus up to $80.0 million based on ONCO’s net revenues from ENTADFI after closing (the “Milestone Payments”). The Company believes the probability of receiving any Milestone Payments is remote.

On* September 29, 2023,the Company entered into an Amendment to the Asset Purchase Agreement (the “Amendment”) providing that the promissory note for the $4.0 million installment of the purchase price due September 30, 2023would be deemed paid and fully satisfied upon (1) the payment to the Company of the sum of $1.0 million in immediately available funds on September 29, 2023and (2) the issuance to the Company by October3,* 2023 of 3,000 shares of ONCO Preferred Stock. The Company received payment of $1.0 million on* September 29, 2023and the ONCO Preferred Stock on October3,* 2023, which the Company determined had a fair value as of* October**3,* 2023 of $0.9 million. The ONCO Preferred Stock was convertible by the Company at any time and from time to time from and afterone year from the date of issuance of the ONCO Preferred Stock into that number of shares of the Purchaser’s common stock determined by dividing the stated value of $1,000 per share by the Conversion Price of $0.5254 per share. The ONCO Preferred Stock issued to the Company was initially convertible into an aggregate of approximately 5,709,935 shares of ONCO’s common stock, subject to certain shareholder approval limitations. ONCO agreed in the Amendment to use commercially reasonable efforts to obtain such shareholder approval by* December 31, 2023.Shareholder approval was obtained on September 5, 2024.Effective September 24, 2024,ONCO effected a reverse stock split of all the outstanding shares of its issued and outstanding common stock at a ratio ofone-for-forty (1:40). Proportional adjustments were made to the number of shares of common stock issuable upon conversion of the ONCO Preferred Stock, such that the ONCO Preferred Stock was convertible into 142,749 shares of ONCO's common stock. On September 24, 2024,*the Company converted all of the ONCO Preferred Stock into 142,749 shares of ONCO Common Stock.

On* April24,* 2024, the Company entered into a Forbearance Agreement (the "Forbearance Agreement") with ONCO, relating to certain defaults under the ONCO Promissory Notes. Pursuant to the Forbearance Agreement, (a) ONCO agreed to make a payment of $50,000 of the principal payable under the* April 2024Promissory Notenot* later than* April29,* 2024, which was paid on* April**25,* 2024, and (b) the Company agreed, subject to the terms and conditions set forth in the Forbearance Agreement, to forbear from exercising its rights and remedies on account of the failure by ONCO to pay the amounts due under the* April 2024Promissory Note on the due date of April 19, 2024,and on account of any failure by ONCO to make any mandatory repayment under the ONCO Promissory Notes that mayhave become due or maybecome due in connection with certain transactions relating to ONCO’s acquisition of Proteomedix AG, in each case for a period (the “Forbearance Period”) commencing on April 24, 2024and ending on the earlier of (a) March 31, 2025and (b) the occurrence of an Event of Default (as defined in the Forbearance Agreement). The Company also agreed that during the Forbearance Period the default provision in the ONCO Promissory Notes relating to insolvency of ONCO willnot* apply.

F-30

ONCO agreed in the Forbearance Agreement to make the following required payments during the Forbearance Period towards the remaining principal balance of the* April 2024*Promissory Note: (1) monthly payments equal to 15% of cash receipts of ONCO or its subsidiaries from certain sale or licensing revenues or payments; and (2) payment of 10% of the net proceeds from certain financing or other transactions outside the ordinary course of business completed by ONCO or any of its subsidiaries during the Forbearance Period.

On* September**19,* 2024, the Company entered into an Amended and Restated Forbearance Agreement and Amendment to* September 2024*Note (the “Amended Forbearance Agreement”) with ONCO. The Amended Forbearance Agreement amends and restates the entirety of the Forbearance Agreement.

Pursuant to the Amended Forbearance Agreement, the forbearance period relating to the Company’s agreement to forbear from exercising its rights and remedies on account of the failure by the Borrower to pay the amounts due under the* April 2024Promissory Note on the due date of April19,* 2024 continues to end on the earlier of (a)* March31,* 2025 and (b) the occurrence of an Event of Default (as defined in the Amended Forbearance Agreement) (such period, the* “April 2024Forbearance Period”). The Amended Forbearance Agreement extends the due date for the SeptemberPromissory Note until the earlier to occur of: (i) June**30,* 2025 or (ii) the occurrence of any Event of Default under the Amended Forbearance Agreement. The Amended Forbearance Agreement also effected certain modifications to the payment terms in the Forbearance Agreement and amended certain terms of the* September 2024*Promissory Note as summarized below.

The Borrower agreed in the Amended Forbearance Agreement to make the following required payments (the “Required Payments”) during the* April 2024Forbearance Periodfirst* to accrued and unpaid interest under the* April 2024Promissory Note and then any remainder to the outstanding principal amount of the April 2024*Promissory Note:

The remaining balance of the* April 2024Promissory Note will be due at the end of the April 2024*Forbearance Period.

The Borrower and the Company also agreed to the following amendments to the* September 2024*Promissory Note in the Amended Forbearance Agreement:

F-31

The Company and ONCO entered into a Waiver and AmendmentNo. 1 to the Forbearance Agreement, dated* November 26, 2024,*that (x) extended the time for the payment by ONCO of the monthly payment of a percentage of its cash receipts referenced above and conditioned the payment of those amounts upon ONCO being able to raise capital of at least $97,000 and (y) increased the percentage of the net proceeds from certain financings payable to the Company from 20% to 25%.

The Company received payments of $0.3 million during the year ended* September 30, 2024and $0.4 million subsequent to September 30, 2024*under the Forbearance Agreement and the Amended Forbearance Agreement.

The Company determined that it wasnot probable, at the time of the transaction and at* September 30, 2024,that substantially all of the consideration promised under the Asset Purchase Agreement would be collected. Therefore, the Company recognized the difference between the nonrefundable consideration received and the carrying amount of the assets as a gain. The Company recorded a gain of approximately $5.7 million on the transaction during fiscal2023.* The Company recognized a gain on sale of $1.2 million during year ended* September 30, 2024*based on the determination of the fair market value of the ONCO Preferred Stock when received and the cash received from ONCO under the Forbearance Agreement and the Amended Forbearance Agreement. Additional gain could be recognized in future periods if additional consideration is received or when it is deemed probable that substantially all of the consideration promised will be collected. The Company will continue to evaluate the collectability of the ONCO Promissory Notes for future installments of the purchase price.

Note16 – Loss per Share

Basic net loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding for the period. Diluted net loss per share is computed by dividing net income by the weighted average number of common shares outstanding during the period after giving effect to all dilutive potential common shares that were outstanding during the period. Dilutive potential common shares consist of the incremental common shares issuable upon the exercise of stock options and stock appreciation rights as determined under the treasury stock method. Due to our net loss for the periods presented, all potentially dilutive instruments were excluded because their inclusion would have been anti-dilutive. See Note11 for a discussion of our potentially dilutive common shares.

Note17 – Employee Benefit Plans

Effective* January 1, 2018,the Company established a401*(k) plan in which substantially all U.S. employees are eligible to participate. Contributions made by employees are limited to the maximum allowable for U.S. federal income tax purposes. The Company matched employee contributions at a rate of 100% of applicable contributions up to 6% of included compensation. Effective* January 1, 2024,the Company discontinued matching contributions for U.S. employees. Company contributions to the401*(k) plan were approximately $0.6 million for the year ended* September 30, 2023* and $42,000 for the year ended* September 30, 2024.The Company plans to reinstate matching contributions for U.S. employees effective January 1, 2025*at up to 4% of included compensation.

In* March 2014,the Company elected to contribute 3% of eligible employee compensation into the personal pension schemes of certain senior U.K. employees. Effective January 1, 2019,this contribution amount was increased to 4%. Company contributions were approximately $29,000 for each of the years ended September 30, 2024and2023*.