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Note 3 - Discontinued Operations | 6 Months Ended
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Mar. 31, 2026
Notes to Financial Statements |
Disposal Groups, Including Discontinued Operations, Disclosure [Text Block] | Note 3 – Discontinued Operations On December 30, 2024, the Company and PCHC Limited (collectively, the “Sellers”) entered into a Stock and Asset Purchase Agreement (the “Purchase Agreement”) with Clear Future, Inc. (the “Purchaser”). Pursuant to, and subject to the terms and conditions of, the Purchase Agreement, the Purchaser purchased substantially all of the assets (the “FC2 Business Sale”) related to the Company’s FC2 business, including the stock of The Female Health Company (UK) plc and the Malaysia subsidiary. The Purchaser assumed certain liabilities relating to the FC2 business that are specified in the Purchase Agreement. The transaction closed on December 30, 2024. The Sellers and the Purchaser made customary representations and warranties, and agreed to certain customary covenants, in the Purchase Agreement. Subject to certain exceptions and limitations, each party agreed to indemnify the other for breaches of representations, warranties and covenants and for certain other matters. The Purchase Agreement also specifies that, subject to a $54,000 retention amount, a representations and warranties insurance policy issued to the Purchaser would be the sole and exclusive remedy for breach of representations and warranties (other than certain specified representations and warranties) by the Sellers except in the case of fraud. Pursuant to an Escrow Agreement entered into under the terms of the Purchase Agreement, the $54,000 retention amount is being held in escrow as of March 31, 2026 and is classified as restricted cash, included within cash, cash equivalents, and restricted cash on the accompanying condense consolidated balance sheet. The purchase price for the FC2 Business Sale was $18.0 million in cash, subject to adjustment as set forth in the Purchase Agreement, which included a customary working capital adjustment subsequent to closing based on the amount by which certain working capital items at closing are greater or less than a target set forth in the Purchase Agreement. Net proceeds from the FC2 Business Sale were $16.5 million, which is the $18.0 million purchase price per the Purchase Agreement, net of costs incurred of $1.4 million, and amounts allocated to the related transition services agreement of $150,000 but excluding the change of control payment pursuant to the Residual Royalty Agreement of $4.2 million (see Note 8 for additional information). The loss on sale of the FC2 business was $4.1 million, which is the difference between net proceeds of $16.5 million and the total carrying value of the FC2 business of $20.6 million. The carrying value of the FC2 business at December 30, 2024 primarily included deferred income tax assets of $12.3 million, accounts receivable of $4.6 million, and inventory of $3.4 million, partially offset by accrued expenses and other current liabilities of $1.5 million. The Purchase Agreement contains a provision for an adjustment to the purchase price, including an adjustment based on the working capital of the FC2 business as of the closing date. The Purchaser was required to deliver its purchase price adjustment calculation within 90 days after the closing date. The Purchaser delivered its calculation in April 2025 and we disputed the calculation. This dispute was submitted to an accounting firm for binding resolution, and in September 2025 the accounting firm delivered its final determination, resolving all disputed matters in favor of the Company. As a result of the final determination, the Purchaser paid additional purchase price of approximately $150,000 to us and approximately $300,000 was released from escrow. During the three months ended March 31, 2026, the Company recognized an additional gain on sale of the FC2 business of $351,000, which is for net proceeds received from the Purchaser in the settlement of a dispute related to a pre-closing tax receivable and liability. The FC2 Business Sale represented a strategic shift, which had a major effect on our operations and financial results. We classified all direct revenues, costs and expenses related to the FC2 business within loss from discontinued operations, net of tax, in the condensed consolidated statements of operations for the six months ended March 31, 2025. We did not allocate any amounts for shared general and administrative operating support expense to discontinued operations. We did not have any discontinued operations during the three and six months ended March 31, 2026. The assets and liabilities sold as part of the FC2 Business Sale were written off upon the closing of the FC2 Business Sale, and therefore there are no assets and liabilities of discontinued operations in our condensed consolidated balance sheets as of March 31, 2026 or September 30, 2025. The following table presents results of discontinued operations for the three and six months ended March 31, 2026 and 2025:
|  | Three Months Ended |  |  | Six Months Ended |
|  | March 31, |  |  | March 31, |
|  | 2026 |  |  | 2025 |  |  | 2026 |  |  | 2025 |
Net revenues |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 4,484,591 |
Cost of sales |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 2,900,514 |
Gross profit |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 1,584,077 |
Operating expenses |  |  | — |  |  |  | 9,410 |  |  |  | — |  |  |  | 1,111,397 |
Gain (loss) on sale of FC2 business |  |  | 351,418 |  |  |  | (39,816 | ) |  |  | 351,418 |  |  |  | (4,244,251 | )
Operating income (loss) |  |  | 351,418 |  |  |  | (49,226 | ) |  |  | 351,418 |  |  |  | (3,771,571 | )
Non-operating expenses: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (164,270 | )
Change in fair value of derivative liabilities |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,138,316 | )
Other expense, net |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (31,960 | )
Total non-operating expenses |  |  | — |  |  |  | — |  |  |  | — |  |  |  | (3,334,546 | )
Income (loss) before income taxes |  |  | 351,418 |  |  |  | (49,226 | ) |  |  | 351,418 |  |  |  | (7,106,117 | )
Income tax expense |  |  | — |  |  |  | — |  |  |  | — |  |  |  | 78,553 |
Net income (loss) from discontinued operations, net of taxes |  | $ | 351,418 |  |  | $ | (49,226 | ) |  | $ | 351,418 |  |  | $ | (7,184,670 | )
The cash flows related to discontinued operations have not been segregated and are included in the consolidated statements of cash flows. Total operating and investing cash flows, which includes net proceeds from the sale of FC2, from discontinued operations for the six months ended March 31, 2026 and 2025 are comprised of the following:
|  | Six Months Ended |
|  | March 31, |
|  | 2026 |  |  | 2025 |
Total net cash used in operating activities from discontinued operations |  | $ | — |  |  | $ | (334,864 | )
Total net cash provided by investing activities from discontinued operations |  | $ | 351,418 |  |  | $ | 16,330,432 |

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