aibioVeru faces fraud and warranty suit from the buyer of its FC2 business
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Clear Future, Inc. sued Veru Inc. in Delaware Superior Court after buying the FC2 female condom business for $18.0 million in cash. Veru is the defendant named in the 10-Q and says it cannot estimate losses.
Key facts
- Company
- Veru Inc. (NASDAQ: VERU)
- News type
- Legal
- Primary source
- Veru Inc. 10-Q for the quarter ended June 30, 2026 (SEC EDGAR)
Veru Inc. (Nasdaq: VERU) said in its 10-Q filed Aug 10, 2026 that Clear Future, Inc., the buyer of its FC2 female condom business, is suing it in the Superior Court of the State of Delaware. The case is Clear Future, Inc. v. Veru Inc., Case No. N25C-08-066 EMD. Clear Future filed the complaint on August 5, 2025 and an amended complaint on October 2, 2025.
Veru is the only defendant the 10-Q names. The Purchase Agreement was signed by Veru and PCHC Limited as the sellers, but the 10-Q does not say whether PCHC Limited is a party to the suit, and it names no individual defendants. Veru says it cannot estimate potential losses.
The case
The amended complaint alleges that Veru breached certain representations and warranties in the Purchase Agreement for the FC2 Business Sale and otherwise made false representations relating to a customer relationship. It makes claims for fraud, breach of representations and warranties, and a declaratory judgment for indemnification.
The dispute once included another claim. Veru's 10-K for the fiscal year ended September 30, 2025 said the amended complaint also alleged that Veru was responsible to indemnify the buyer for a pre-closing tax liability of approximately $137,000. The 10-Q says the parties settled that claim during the three months ended March 31, 2026. It does not give the settlement terms. It does say Veru recognized an additional gain on sale of the FC2 business of $351,000 in the nine months ended June 30, 2026, for net proceeds received from the Purchaser in the settlement of a dispute related to a pre-closing tax receivable and liability.
Defendants
Veru Inc. is the defendant named in the 10-Q. The buyer, Clear Future, Inc., is the plaintiff, and the filing refers to it as the Purchaser.
The sale behind the suit
Veru and PCHC Limited signed a Stock and Asset Purchase Agreement with Clear Future, Inc. on December 30, 2024, and the deal closed that day. The Purchaser bought substantially all of the assets of the FC2 business, including the stock of The Female Health Company (UK) plc and the Malaysia subsidiary. The purchase price was $18.0 million in cash, subject to adjustment. Net proceeds to Veru were $16.5 million.
Each party agreed to indemnify the other for breaches of representations, warranties and covenants and for certain other matters. The agreement also says 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 by the sellers, with exceptions for certain specified representations and for fraud. The retention amount was held in escrow as of June 30, 2026.
The two sides also disagreed over a price adjustment. The Purchaser delivered its calculation in April 2025 and Veru disputed it. An accounting firm delivered its final determination in September 2025 and resolved all disputed matters in favor of Veru. The Purchaser then paid additional purchase price of approximately $150,000, and approximately $300,000 was released from escrow.
Where it stands
The 10-Q reports no ruling, hearing or trial date in the Delaware case. Its only update is the settlement of the tax-liability claim. Of the rest, it says: "At this time, the Company is unable to estimate potential losses, if any, related to the Clear Future Lawsuit."
Why it matters to shareholders
The filing gives no estimate of what the suit could cost Veru. The amended complaint includes a fraud claim, and the Purchase Agreement's limit on warranty remedies makes an exception for fraud, as the 10-Q summarizes the terms.
Veru's financial statements in the same 10-Q say substantial doubt exists about its ability to continue as a going concern for at least twelve months from the issuance date.
Veru separately reports a securities class action and five derivative suits over statements about sabizabulin.