SEC Info - Female Health Co - ‘SB-2’ on 9/6/02

SEC Info℠

Home

My Interests

Help

Please Sign In

Female Health Co – ‘SB-2’ on 9/6/02

On: Friday, 9/6/02, at 4:49pm ET · Accession #: 1042167-2-129 · File #: 333-99285

Previous ‘SB-2’: ‘SB-2/A’ on 3/19/02 · Next & Latest: ‘SB-2/A’ on 10/18/02 · 22 References:

  As Of                Filer                Filing    For·On·As Docs:Size              Issuer               Agent

 9/06/02  Female Health Co                  SB-2                   4:270K                                   Reinhart Boerner … SC/FA

Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: SB-2        Registration of Securities by a Small-Business        88    469K 
                          Issuer                                                 
 2: EX-3.3      Articles of Incorporation/Organization or By-Laws      1      7K 
 3: EX-5        Opinion re: Legality                                   1      7K 
 4: EX-23.1     Consent of Experts or Counsel                          1      6K

SB-2 — Registration of Securities by a Small-Business Issuer
Document Table of Contents

Page	(sequential)	\|	(alphabetic)	Top
			Alternative Formats (Word, et al.) Business Capitalization Class A Preferred Stock Class A Preferred Stock -- Series 1 Cost of products sold Description of Capital Stock Determination of Offering Price Dividend Policy Exhibits. The following exhibits are filed as part of this Registration Statement Experts Female Health Company Index to Consolidated Financial Statements, The Forward-Looking Statements May Prove To Be Inaccurate Indemnification of Directors and Officers Legal Matters Management Management's Discussion and Analysis of Financial Condition and Results of Operations Net loss per common share outstanding Offering, The Other Expenses of Issuance and Distribution Plan of Distribution Price Range of Common Stock Principal Shareholders Prospectus Summary Recent Sales of Unregistered Securities Related Party Transactions Risk Factors Selling Stockholders The Female Health Company Index to Consolidated Financial Statements The Offering Total Undertakings Use of Proceeds Wisconsin Anti-Takeover Provisions
1	1st Page - Filing Submission
5	Prospectus Summary
6	The Offering
"	Risk Factors
13	Forward-Looking Statements May Prove To Be Inaccurate
"	Use of Proceeds
14	Price Range of Common Stock
"	Dividend Policy
"	Determination of Offering Price
15	Capitalization
16	Management's Discussion and Analysis of Financial Condition and Results of Operations
20	Business
25	Management
30	Principal Shareholders
32	Related Party Transactions
34	Description of Capital Stock
"	Class A Preferred Stock
"	Class A Preferred Stock -- Series 1
35	Wisconsin Anti-Takeover Provisions
37	Selling Stockholders
39	Plan of Distribution
40	Legal Matters
"	Experts
41	The Female Health Company Index to Consolidated Financial Statements
44	Cost of products sold
45	Total
64	Net loss per common share outstanding
73	Item 24. Indemnification of Directors and Officers
74	Item 25. Other Expenses of Issuance and Distribution
"	Item 26. Recent Sales of Unregistered Securities
79	Item 27. Exhibits. The following exhibits are filed as part of this Registration Statement
86	Item 28. Undertakings

SB-2 1st Page of 88 TOC ↑Top Previous Next ↓Bottom Just 1st
As filed with the Securities and Exchange Commission on September 6, 2002

Registration No. 333-
________________________________________________________________________________

SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________

FORM SB-2
REGISTRATION STATEMENT
UNDER THE
SECURITIES ACT OF 1933
_________________________

THE FEMALE HEALTH COMPANY
(Name of Small Business Issuer in its Charter)
_________________________

Wisconsin 3069 39-1144397
--------- ---- ----------
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification No.)

O.B. Parrish, Chairman
of the Board and Chief
Executive Officer
515 North State Street 515 North State Street
Suite 2225 Suite 2225
Chicago, Illinois 60610 Chicago, Illinois 60610
(312) 595-9123 (312) 595-9123
(Address and Telephone Number (Name, Address and Telephone
of Principal Executive Offices Number of Agent for Service)
and Principal Place of Business)

Copies to:

James M. Bedore, Esq.
Reinhart Boerner Van Deuren s.c.
1000 North Water Street, Suite 2100
Milwaukee, WI 53202
(414) 298-1000

Approximate date of proposed sale to the public: As soon as practicable after
the effective date of this Registration Statement.

If any of the securities being registered on this form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. [X]

If this form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]

If this form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]

If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]

SB-2 2nd Page of 88 TOC 1st Previous Next ↓Bottom Just 2nd
CALCULATION OF REGISTRATION FEE

[Enlarge/Download Table]

_________________________________________________________________________________________________________________

PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE PROPOSED MAXIMUM OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER SHARE OFFERING PRICE REGISTRATION FEE
_________________________________________________________________________________________________________________

Common Stock, $0.01 par value 1,970,000 $ 1.89 (1) v $ 3,723,300 (1) $ 343 (1)
_________________________________________________________________________________________________________________

<FN>

(1) Calculated in accordance with Rule 457(c) based on the average of the bid
and asked prices of the Common Stock as reported on the Over the Counter
Bulletin Board on September 5, 2002 solely for the purposes of calculating
the amount of the registration fee.

The registrant hereby amends this registration statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this registration statement
shall thereafter become effective in accordance with section 8(a) of the
Securities Act of 1933 or until the registration statement shall become
effective on such date as the Commission, acting pursuant to said section 8(a),
may determine.

SB-2 3rd Page of 88 TOC 1st Previous Next ↓Bottom Just 3rd
PROSPECTUS PRELIMINARY PROSPECTUS
SUBJECT TO COMPLETION-DATED SEPTEMBER 6, 2002

THE FEMALE HEALTH COMPANY

1,970,000 SHARES OF COMMON STOCK

This prospectus may be used only by the stockholders listed under the
section entitled "Selling Stockholders" in the prospectus for their resale of up
to 1,970,000 shares of our common stock. We will not receive any proceeds from
the sale of the shares by the selling stockholders.

Our common stock is quoted on the Over the Counter Bulletin Board under the
symbol "FHCO." On September 5, 2002, the closing sale price of the common stock
was $1.89 per share.

YOU SHOULD CONSIDER THE "RISK FACTORS" BEGINNING ON PAGE 6 BEFORE PURCHASING OUR
COMMON STOCK.

NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR PASSED UPON THE
ADEQUACY OR ACCURACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

_______, 2002

SB-2 4th Page of 88 TOC 1st Previous Next ↓Bottom Just 4th
TABLE OF CONTENTS

[Download Table]

PAGE
----

Prospectus Summary. . . . . . . . . . . . . . . . . . 3
Risk Factors. . . . . . . . . . . . . . . . . . . . . 6
Forward-Looking Statements May Prove to be Inaccurate 11
Use of Proceeds . . . . . . . . . . . . . . . . . . . 11
Price Range of Common Stock . . . . . . . . . . . . . 12
Dividend Policy . . . . . . . . . . . . . . . . . . . 12
Determination of Offering Price . . . . . . . . . . . 12
Capitalization. . . . . . . . . . . . . . . . . . . . 13
Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . 14
Business. . . . . . . . . . . . . . . . . . . . . . . 18
Management. . . . . . . . . . . . . . . . . . . . . . 23
Principal Shareholders. . . . . . . . . . . . . . . . 28
Related Party Transactions. . . . . . . . . . . . . . 30
Description of Capital Stock. . . . . . . . . . . . . 32
Selling Stockholders. . . . . . . . . . . . . . . . . 35
Plan of Distribution. . . . . . . . . . . . . . . . . 37
Legal Matters . . . . . . . . . . . . . . . . . . . . 38
Experts . . . . . . . . . . . . . . . . . . . . . . . 38
The Female Health Company Index to Consolidated
Financial Statements. . . . . . . . . . . . . . . . . F-1

SB-2 5th Page of 88 TOC 1st Previous Next ↓Bottom Just 5th
PROSPECTUS SUMMARY

THIS SUMMARY PROVIDES AN OVERVIEW OF THE MATERIAL INFORMATION CONTAINED
ELSEWHERE IN THIS PROSPECTUS. YOU SHOULD READ THIS SUMMARY TOGETHER WITH THE
MORE DETAILED INFORMATION IN THIS PROSPECTUS, ESPECIALLY THE "RISK FACTORS"
SECTION AND OUR FINANCIAL STATEMENTS, BEFORE DECIDING TO INVEST IN SHARES OF OUR
COMMON STOCK.

OUR BUSINESS

The Female Health Company manufactures, markets and sells the female
condom. We were incorporated in Wisconsin in 1971 and established in our
current form as The Female Health Company on February 1, 1996.

Initially, we expended significant time and resources in the development of
the female condom and securing FDA approval to market the female condom in the
United States. During this time, we also operated our original recreational
products business. After considering various alternatives, in 1995 our Board of
Directors selected the female condom as the central focus for our strategic
direction. As a result, in January 1996, we sold our recreational products
business, changed our name to The Female Health Company and devoted ourselves
solely to the commercialization of the female condom.

As part of this restructuring, on February 1, 1996, we acquired the stock
of Chartex Resources Limited, the manufacturer and owner of worldwide rights to,
and our then sole supplier of, the female condom. As a result of these
transactions, our sole business now consists of the manufacture, marketing and
sale of the female condom. We own global intellectual property rights for the
female condom, including:

- patents in the United States, the European Union, Japan and various other
countries;

- a Pre-Market Approval granted by the United States Food and Drug
Administration (FDA) approving and permitting marketing of the female
condom in the United States;

- a CE mark in the European Union representing that the product, as a medical
device, has been approved by the European Union for marketing in the member
countries of the European Union;

- regulatory approvals in various other countries, including Japan; and

- proprietary manufacturing technology.

We also lease a state of the art manufacturing facility in London, England,
capable of producing 60 million female condoms per year. The facility has been
inspected and approved by the FDA and the European Union.

Our principal executive offices are located at 515 North State Street,
Suite 2225, Chicago, Illinois 60610, and our telephone number is 312-595-9123.

SB-2 6th Page of 88 TOC 1st Previous Next ↓Bottom Just 6th
THE OFFERING

Common stock offered by the selling stockholders . . 1,970,000 shares (1)

Common stock outstanding as of August 30, 2002 . . . 6,503,329 shares (2)

Over the Counter Bulletin Board symbol . . . . . . FHCO

Risk Factors. . . . . . . . . . . . . . . . . . . . An investment in our
common stock involves a
high degree of risk. See
"Risk Factors."
_________________

(1) Includes:

- Up to 1,000,000 shares of common stock issuable upon exercise of warrants
currently owned by three selling stockholders. The warrants are exercisable
in the aggregate to purchase the number of shares of our common stock equal
to $500,000 divided by the warrant purchase price as of the date of
exercise. The warrant purchase price is the price per share equal to 70% of
the market price of our common stock at the time of exercise, but in no
event will the warrant purchase price be less than $0.50 per share or more
than $1.00 per share. These warrants have been pledged to a bank to secure
guarantees executed by these selling stockholders on our behalf;

- 100,000 shares of common stock issuable upon exercise of a warrant
currently owned by one selling stockholder. This warrant has been pledged
to a bank to secure guarantees executed by this selling stockholder on our
behalf;

- 570,000 shares of common stock owned by six selling stockholders; and

- 300,000 shares of common stock issuable upon exercise of a warrant
currently owned by one selling stockholder.

(2) Does not include:

- 10,053,500 shares of common stock issuable upon exercise of warrants
outstanding as of August 30, 2002;

- 2,917,500 shares of common stock issuable upon exercise of stock options
outstanding as of August 30, 2002;

- 660,000 shares of common stock issuable upon conversion of outstanding
preferred stock; and

- 900,000 shares issuable upon conversion of $450,000 of convertible
debentures outstanding.

SB-2 7th Page of 88 TOC 1st Previous Next ↓Bottom Just 7th
SUMMARY FINANCIAL INFORMATION

The summary financial information below is derived from our financial
statements appearing elsewhere in this prospectus. You should read this
information in conjunction with those financial statements, including the notes
to the financial statements, and with "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

[Enlarge/Download Table]

YEAR ENDED SEPTEMBER 30, NINE MONTHS ENDED
1999 2000 2001 JUNE 30, 2002
------------ ------------ ---------- -----------------

STATEMENTS OF OPERATIONS DATA: (unaudited)

Net revenues . . . . . . . . . . $ 4,715,477 $ 5,766,868 $ 6,716,174 $ 5,921,756
Cost of products sold. . . . . . 4,598,747 5,184,735 5,337,830 3,390,849
Net loss . . . . . . . . . . . . (3,750,309) (3,690,163) (1,171,256) (3,139,215)
Net loss attributable to common
stockholders . . . . . . . . (3,884,228) (3,822,358) (1,304,256) (3,237,949)
Net loss per common share
outstanding. . . . . . . . . $ (0.36) $ (0.30) $ (0.09) $ (0.20)

[Download Table]

SEPTEMBER 30, 2001 JUNE 30, 2002
-------------------- ---------------

(unaudited)
CONSOLIDATED BALANCE SHEET DATA:
Working capital . . . . . . . . . $ 702,985 $ 509,961
Total assets. . . . . . . . . . . 4,330,778 5,174,503
Long-term debt. . . . . . . . . . 1,107,131 1,529,626
Stockholders' equity (deficit). . 52,323 (833,596)

SB-2 8th Page of 88 TOC 1st Previous Next ↓Bottom Just 8th
RISK FACTORS

You should carefully consider the following risk factors, as well as the
other information contained in this prospectus, before purchasing our common
stock.

IF WE ARE NOT BE ABLE TO RAISE SUFFICIENT AMOUNTS OF ADDITIONAL CAPITAL, WE MAY
NOT BE ABLE TO CONTINUE OUR OPERATIONS.

Historically, we have experienced cash operating losses relating to
expenses to develop, manufacture and promote the female condom. However, during
the nine months ended June 30, 2002, our sales were sufficient to cover our
fixed manufacturing, overhead, advertising and general and administrative costs.
We can make no assurance that future sales will continue to exceed these costs.
Consequently, we may need to secure additional capital to fund potential
deficiencies. For the nine months ended June 30, 2002, our cash burn rate, with
revenues, was less than $0.1 million. If additional capital is required in
fiscal 2003, we do not anticipate it to exceed $0.5 million.

We can make no assurance that we will be successful in raising additional
capital if needed and that any amount, if raised, will be sufficient to meet our
cash requirements. If we are not able to raise additional capital when needed,
we may be forced to sharply curtail our efforts to promote the female condom, to
attempt to sell all or part of our assets and rights or to curtail our
operations and may ultimately be forced to cease operations. Currently, we are
focused on growing our business and, therefore, we have made no plans to sell
any assets nor have we identified any assets to be sold or potential buyers.

IF WE DO RAISE ADDITIONAL CAPITAL FROM THE SALE OF DEBT OR EQUITY SECURITIES,
THE TERMS OF THE DEBT OR EQUITY SECURITIES MAY BE COSTLY AND ADVERSELY AFFECT
THE MARKET PRICE OF OUR COMMON STOCK.

If we are able to raise additional capital, it will likely be through the
sale of debt or equity securities. The terms of future debt or equity
financings may involve the following risks to us and our shareholders:

- the holdings of our shareholders may be diluted if we sell shares of our
common stock at a discount to the market price of our common stock or issue
warrants with an exercise price or convertible securities with a conversion
rate less than the market price of our common stock;

- we may issue equity securities with dividend rights, liquidation
preferences, voting rights or other rights and preferences superior to
those of our common stock; or

- we may issue debt securities with substantial debt service requirements,
high interest rates or other terms that limit our ability to obtain
additional financing or to take advantage of business opportunities.

The completion of any of these financing alternatives may depress the
market price of our common stock or have a material adverse effect on our
business and financial condition.

OUR SUCCESS IS DEPENDENT UPON THE SUCCESS OF THE FEMALE CONDOM.

We expect to derive virtually all of our future revenues from sales of the
female condom. For us to continue generating cash from operations, sales of the
female condom will have to reach approximately 12 to 13 million per year based
upon the current average selling price per unit, which would represent 20 to 22%
of our manufacturing capacity. During the nine months ended June 30, 2002, our
production was at an annualized level of nearly 12 million units and at 20% of
our manufacturing capacity. Although sales of the female condom have increased
in recent periods, the ultimate level of consumer demand for the female condom
is uncertain. We also depend on public sector agencies around the world to
continue to include female condoms in their programs to prevent STDs, including
AIDS, and on our commercial sector distribution partners to successfully market
and distribute the female condom. If demand for the female condom decreases, we
may not be able to reach a break even level in future periods and we may
continue to have operating losses.

SB-2 9th Page of 88 TOC 1st Previous Next ↓Bottom Just 9th
WE HAVE A HISTORY OF SIGNIFICANT LOSSES AND, DUE TO THAT AND OTHER FACTORS, OUR
INDEPENDENT AUDITOR HAS ISSUED A QUALIFIED OPINION ON OUR FINANCIAL STATEMENTS.

We had a net loss attributable to common stockholders of $3.2 million for
the first nine months of fiscal 2002, $1.3 million for fiscal 2001, $3.8 million
for fiscal 2000 and $3.9 million for fiscal 1999. As of June 30, 2002, we had
an accumulated deficit of $53.5 million, working capital of $0.5 million and
stockholders' deficit of $0.8 million. Historically, we have experienced cash
operating losses relating to expenses to develop, manufacture and promote the
female condom. We can make no assurance that we will achieve a profitable level
of operations in the near term or at all.

Our independent auditor's reports on our consolidated financial statements
for the fiscal years ended September 30, 2001, 2000 and 1999 were qualified as
to our ability to continue as a going concern. While many factors are
considered by the auditor in reaching its opinion, the primary reason for the
going concern opinion was due to our continued deficit cash flows from
operations, driven largely by continued operating losses. Our net cash used in
operations was less than $0.1 million for the first nine months of fiscal 2002,
$0.6 million for fiscal 2001, $1.0 million for fiscal 2000 and $2.8 million for
fiscal 1999.

BECAUSE OUR PRODUCT FACES SIGNIFICANT COMPETITION FROM OTHER PRODUCTS, SUCH AS
THE MALE CONDOM, WE MAY NOT BE ABLE TO ACHIEVE ANTICIPATED GROWTH LEVELS OR
PROFIT MARGINS.

We may be unable to compete successfully against current and future
competitors, and competitive pressures could have a negative effect on our
revenues, cash flows and profit margins. Although we believe that there is
currently no other female condom sold in the world, other parties may seek to
develop an intravaginal pouch which does not infringe our patents. These
products, if developed, could be distributed by companies with greater financial
resources and customer contacts than us. In addition, there are a number of
other products currently marketed which have a higher degree of accepted
efficacy for preventing pregnancy than does the female condom. These products
include male condoms, birth control pills, Norplant and Depo Provera. However,
other than the female condom, only the latex male condom is generally recognized
as being efficacious in preventing unintended pregnancies and sexually
transmitted diseases. Companies manufacturing these competing products are
generally much larger than we are and have access to significantly greater
resources than we do. In addition, the female condom is generally sold at
prices comparatively greater than the price of the latex male condom.
Accordingly, the female condom will not be able to compete with the latex male
condom solely on the basis of price.

FUTURE SALES OF OUR COMMON STOCK IN THE PUBLIC MARKET MAY REDUCE THE STOCK'S
TRADING PRICE.

A large number of our shares of common stock which are currently
outstanding or which we may issue in the near future may be immediately resold
in the public market. Sales of our common stock in the public market or the
perception that sales may occur, could cause the market price of our common
stock to decline even if our business is doing well. Virtually all of the
16,503,329 shares of our common stock and 660,000 shares of our convertible
preferred stock outstanding as of August 30, 2002 may be immediately resold in
the public market, although sales of our shares by our directors, executive
officers or other persons who may control us may be subject to restrictions
under Rule 144, including limitations on the number of shares that may be sold.
Further, as of August 30, 2002, we have issued options and warrants to purchase
12,971,000 shares of common stock and convertible debentures convertible into
900,000 shares of common stock. We have filed or intend to file registration
statements under the Securities Act to register the sale of the shares
underlying these options and warrants and, accordingly, any shares received upon
exercise of these options or warrants will also be freely tradable, except for
shares received by our directors, executive officers or other persons who may
control us which are subject to the restrictions under Rule 144.

SB-2 10th Page of 88 TOC 1st Previous Next ↓Bottom Just 10th
OUTSTANDING WARRANTS EXERCISABLE AT 70% OF THE MARKET PRICE OF OUR COMMON STOCK
MAY DEPRESS THE STOCK'S TRADING PRICE.

In May 2001, we issued warrants to a bank lender to purchase the number of
shares of our common stock equal to $500,000 divided by the warrant purchase
price as of the date of exercise and we issued warrants to five guarantors of
our bank loan to purchase the number of shares of our common stock equal to a
total of $1,500,000 divided by the warrant purchase price as of the date of
exercise. In December 2001 and February 2002, we issued warrants to three
additional guarantors of our bank loan to purchase the number of shares equal to
$500,000 divided by the warrant purchase price as of the date of exercise.
These warrants issued in May 2001, December 2001 and February 2002 may be
exercised to purchase a maximum of up to 5,000,000 shares of our common stock.
The warrant purchase price for all of these warrants is the price per share
equal to 70% of the market price of our common stock at the time of exercise,
but in no event will the warrant purchase price be less than $0.50 per share or
more than $1.00 per share. These warrants may depress the market price of our
common stock even if they are not exercised because the holders of the warrants
may have the right to exercise them at a discount to the market price of our
common stock. The market price of our common stock may also decline if we issue
additional common stock, warrants or other securities in the future at a
discount to the market price of our common stock.

WE HAVE ENTERED INTO NUMEROUS TRANSACTIONS WITH OUR DIRECTORS, OFFICERS AND
SIGNIFICANT SHAREHOLDERS THAT MAY CAUSE CONFLICTS OF INTEREST.

Our directors, officers and significant shareholders have been an important
source of financing for us in the past. Stephen M. Dearholt, a member of our
board of directors, holds a $1,000,000 promissory note due March 25, 2003 and
Richard E. Wenninger, a member of our board of directors, holds a $250,000
convertible debenture due March 30, 2004. Mr. Dearholt recently extended the
due date of his $1,000,000 promissory note from March 25, 2002 to March 25, 2003
and, in connection with this extension, we issued to Mr. Dearholt warrants to
purchase 300,000 shares of our common stock at an exercise price of $1.18 per
share, which equaled 80% of the market price of our common stock on the date of
issuance. We also sold 1,000,000 shares to Mr. Wenninger in August 2001 for a
total purchase price of $500,000 and 400,000 shares to a trust for which Mr.
Dearholt is co-trustee in June 2000 for a total purchase price of $200,000. We
also issued warrants to five guarantors of our bank loan, including to Stephen
M. Dearholt, Richard E. Wenninger, James R. Kerber, all members of our board of
directors, and a trust of which O.B. Parrish, our Chairman of the Board and
Chief Executive Officer, is beneficiary. The warrant purchase price for all of
these warrants is the price per share equal to 70% of the market price of our
common stock at the time of exercise, but in no event will the warrant purchase
price be less than $0.50 per share or more than $1.00 per share. Although we
believe that these transactions were on terms no less favorable to us than could
be obtained from unaffiliated third parties, we can make no assurance that
conflicts of interest did not affect the terms of these transactions. We may
enter into additional transactions with our directors, officers and significant
shareholders in future periods. Potential conflicts of interest in transactions
with our directors, officers and significant shareholders may result in terms
that are detrimental to us and our shareholders, or the appearance of such
terms, which may adversely affect our business and financial condition and the
market price of our common stock.

SINCE OUR COMMON STOCK IS LISTED ON THE OTC BULLETIN BOARD, YOU MAY HAVE
DIFFICULTY BUYING AND SELLING OUR COMMON STOCK.

Since February 10, 1999, our common stock has been quoted on the OTC
Bulletin Board under the symbol "FHCO." You may find it more difficult to obtain
accurate quotations of the price of the our common stock and to sell the common
stock on the open market than would be the case if the common stock was listed
on Nasdaq, the New York Stock Exchange or the American Stock Exchange. In
addition, companies whose stock is listed on Nasdaq, the New York Stock Exchange
or the American Stock Exchange must adhere to the rules of that market. These
rules include various corporate governance procedures which, among other items,
require a company to obtain shareholder approval prior to completing various
types of important transactions including issuances of common stock equal to 20%
or more of the company's then outstanding common stock for less than the greater
of book or market value or most issuances of stock options. Since our stock is
quoted on the OTC Bulletin Board, we are not subject to those or any comparable
rules.

OUR STOCK PRICE HAS BEEN EXTREMELY VOLATILE AND, AS A RESULT, THE PRICE COULD BE
DOWN AT A TIME WHEN YOU DESIRE TO SELL YOUR SHARES.

The market price of our common stock has been and may continue to be
affected by quarter-to-quarter variations in our operating results,
announcements by our competitors and other factors. In addition, the stock
market has from time to time experienced extreme price and volume fluctuations,
particularly among the stock of emerging growth companies, which have often been
unrelated to the operating performance of particular companies. Factors not
directly related to our performance, such as governmental regulation or negative
industry reports, may also have a significant adverse impact on the market price
of our common stock.
8

SB-2 11th Page of 88 TOC 1st Previous Next ↓Bottom Just 11th
BECAUSE OUR COMMON STOCK IS A "PENNY STOCK," TRADING IN IT IS SUBJECT TO THE
PENNY STOCK RULES WHICH COULD AFFECT YOUR ABILITY TO RESELL THE STOCK IN THE
MARKET.

The Securities Enforcement and Penny Stock Reform Act of 1990 imposes
restrictions when making trades in any stock such as our common stock which is
defined as a "penny stock." The SEC's regulations generally define a penny stock
as an equity security that has a price of less than $5.00 per share, other than
securities which are traded on markets such as the New York Stock Exchange, the
American Stock Exchange or the Nasdaq Stock Market. As a result of being a penny
stock, the market liquidity for our common stock may be adversely affected since
the regulations on penny stocks could limit the ability of broker-dealers to
sell our common stock and thus your ability to sell our common stock in the
secondary market. The regulations restricting trades in penny stock include:

- a requirement that stock brokers deliver to their customers, prior to any
transaction involving a penny stock, a disclosure schedule explaining the
penny stock market and the risks associated with the penny stock market;
and

- a requirement that broker-dealers who recommend penny stocks to persons
other than their established customers and a limited class of accredited
investors must make a special written suitability determination for the
purchaser and receive the purchaser's written agreement to the transaction
prior to the sale of the securities.

AS A MANUFACTURER AND MARKETER OF A CONSUMER PRODUCT, WE COULD EXPERIENCE
PRODUCT LIABILITY CLAIMS.

The nature of our product may expose us to significant product liability
risks. We maintain product liability insurance with coverage limits of $5
million per year on the female condom. We can make no assurance that we will be
able to maintain this insurance on acceptable terms or that the insurance will
provide adequate coverage against product liability claims. While no product
liability claims on the female condom have been brought against us to date, a
successful product liability claim against us in excess of our insurance
coverage could be extremely damaging to us.

SINCE WE SELL PRODUCT IN FOREIGN MARKETS, WE ARE SUBJECT TO FOREIGN CURRENCY AND
OTHER INTERNATIONAL BUSINESS RISKS THAT COULD ADVERSELY AFFECT OUR OPERATING
RESULTS.

We manufacture the female condom in a leased facility located in London,
England. In addition, a material portion of our future sales are likely to be in
foreign markets. Manufacturing costs and sales to foreign markets are subject to
inherent risks and challenges that could adversely affect our revenues, cash
flows and profit margins, including:

- normal currency risks associated with changes in the exchange rate of
foreign currencies relative to the United States dollar;

- unexpected changes in international regulatory requirements and tariffs;

- difficulties in staffing and managing foreign operations;

- political or economic changes, especially in developing nations; and

- price controls and other restrictions on foreign currency.

To date, we have not used currency hedging strategies to manage our
currency risks. On an ongoing basis, we will continue to evaluate our
commercial transactions and will consider employing currency hedging strategies
if appropriate.

SB-2 12th Page of 88 TOC 1st Previous Next ↓Bottom Just 12th
OUR PRODUCT IS SUBJECT TO SUBSTANTIAL GOVERNMENT REGULATION WHICH EXPOSES US TO
RISKS THAT WE WILL BE FINED OR EXPOSED TO CIVIL OR CRIMINAL LIABILITY, RECEIVE
NEGATIVE PUBLICITY OR BE PREVENTED FROM SELLING OUR PRODUCT.

The female condom is subject to regulation by the FDA under the Food, Drug
and Cosmetic Act, and by other state and foreign regulatory agencies. Under the
Food, Drug and Cosmetic Act, medical devices must receive FDA clearance before
they can be sold. FDA regulations also require us to adhere to "Good
Manufacturing Practices," which include testing, quality control and
documentation procedures. Our compliance with applicable regulatory
requirements is monitored through periodic inspections by the FDA and other
foreign regulatory agencies. If we fail to comply with applicable regulations,
we could:

- be fined or exposed to civil or criminal liability;

- face suspensions of clearances, seizures or recalls of products or
operating restrictions;

- receive negative publicity; or

- be prevented from selling our product in the United States or in foreign
markets.

OUR SHAREHOLDERS MAY BE PERSONALLY LIABLE FOR UP TO THE PAR VALUE FOR EACH SHARE
HELD IF WE FAIL TO REPAY OUR DEBTS TO OUR EMPLOYEES FOR UNPAID COMPENSATION.

Since we are a Wisconsin corporation, our shareholders may be personally
liable for our debts to our employees for services performed. Wisconsin law
limits the potential amount of our shareholders' liability to the par value of
our shares for each share held. The stated par value of our common stock is
$0.01 per share. However, certain Wisconsin courts have interpreted "par value"
to mean the full amount paid upon purchase of our common stock. Potential
liability is also limited to debts for a maximum of six months' services.

A LIMITED NUMBER OF OUR SHAREHOLDERS CAN EXERCISE SUBSTANTIAL INFLUENCE OVER OUR
COMPANY.

As of August 30, 2002, our directors and executive officers and their
affiliates beneficially own in the aggregate approximately 45.6% of our
outstanding shares of common stock. If these shareholders were to vote together
as a group, they would have the ability to exert significant influence over our
board of directors and policies. For instance, these shareholders would be able
to exert a significant influence over the outcome of all shareholder votes,
including votes concerning director elections, by-law amendments and possible
mergers, corporate control contests and other significant corporate
transactions. See "Principal Shareholders" for more information.

ANTI-TAKEOVER PROVISIONS IN OUR CHARTER DOCUMENTS, WISCONSIN LAW AND CHANGE OF
CONTROL AGREEMENTS WITH OUR OFFICERS COULD PREVENT OR DELAY A CHANGE IN CONTROL
OF OUR COMPANY.

We are subject to a number of provisions in our charter documents,
Wisconsin law and change of control agreements that may discourage, delay or
prevent a merger or acquisition that a shareholder may consider favorable.
These anti-takeover provisions include the following:

- the authority provided to our board of directors in our Amended and
Restated Articles of Incorporation to issue preferred stock without further
action by our shareholders;

- change of control agreements we have entered into with four of our officers
which provide for up to three years of compensation following a change of
control as defined in the agreements;

- the provision under Wisconsin law that permits stockholders to act by
written consent only if such consent is unanimous; and

- the anti-takeover provisions under Wisconsin law specifically applicable to
potential mergers or acquisitions as described in more detail under
"Description of Capital Stock - Wisconsin Anti-Takeover Provisions."

SB-2 13th Page of 88 TOC 1st Previous Next ↓Bottom Just 13th
FORWARD-LOOKING STATEMENTS MAY PROVE TO BE INACCURATE

We have made forward-looking statements in this prospectus that are subject
to risks and uncertainties. When we use the words "believes," "expects,"
"anticipates" or similar expressions, we are making forward-looking statements.
Because many factors can materially affect results, including those listed under
"Risk Factors," you should not regard our inclusion of forward-looking
information as a representation by us or any other person that our objectives or
plans will be achieved. Our assumptions relating to budgeting, research, sales,
results and market penetration and other management decisions are subjective in
many respects and thus are susceptible to interpretations and periodic revisions
based on actual experience and business developments. The impact of any of these
factors may cause us to alter our capital expenditures or other budgets, which
may in turn affect our business, financial position, results of operations and
cash flows. Therefore, you should not place undue reliance on forward-looking
statements contained in this prospectus, which speak only as of the date of this
prospectus. Factors that might cause actual results to differ from those
anticipated in the forward-looking statements include, but are not limited to,
those described in "Risk Factors."

USE OF PROCEEDS

The proceeds from the sale of the shares offered by this prospectus will be
received directly by the selling stockholders. We will not receive any proceeds
from the sale of the shares.

The shares offered by this prospectus include up to 1,200,000 shares of our
common stock issuable upon exercise of outstanding warrants. If these warrants
are exercised in full, we would receive up to $891,000 in proceeds. We intend
to use any proceeds from the exercise of these warrants to repay outstanding
indebtedness and for general corporate purposes, including working capital. Our
outstanding indebtedness as of August 30, 2002 includes the following:

- a $2,000,000 credit facility, all of which was outstanding, due May 18,
2004 and bearing interest at the rate of 10% per year;

- a $1,000,000 promissory note to Stephen M. Dearholt, a member of our board
of directors, due March 25, 2002 and bearing interest at the rate of 12%
per year;

- a $250,000 convertible debenture held by Richard E. Wenninger, a member of
our board of directors, due March 30, 2004 and bearing interest at the rate
of 12% per year; and

- $200,000 of convertible debentures held by two non-affiliated third
parties, due May 30, 2004 and bearing interest at the rate of 10% per year.

SB-2 14th Page of 88 TOC 1st Previous Next ↓Bottom Just 14th
PRICE RANGE OF COMMON STOCK

Our common stock is currently quoted on the OTC Bulletin Board under the
symbol "FHCO." As of August 30, 2002, there were approximately 456 holders of
record of our common stock. The following table lists the historical high and
low sale prices of a share of our common stock.

COMMON STOCK SALE PRICE
--------------------------
HIGH LOW
----- ----

2000 Fiscal Year
Quarter ended:
December 31, 1999 $1.50 $0.81
March 31, 2000 1.25 0.88
June 30, 2000 1.06 0.50
September 30, 2000 0.72 0.41
2001 Fiscal Year
Quarter ended:
December 31, 2000 $0.84 $0.38
March 31, 2001 0.66 0.41
June 30, 2001 0.58 0.34
September 30, 2001 0.80 0.41
2002 Fiscal Year
Quarter ended:
December 31, 2001 $0.79 $0.38
March 31, 2002 1.50 0.70
June 30, 2002 2.09 1.24

The sale price quotations above reflect inter-dealer prices, without
retail mark-ups, mark-downs or commissions.

DIVIDEND POLICY

We have not paid a dividend on our common stock and do not anticipate
paying any dividends in the foreseeable future.

DETERMINATION OF OFFERING PRICE

The common stock offered by this prospectus may be offered for sale by the
selling stockholders from time to time in transactions on the OTC Bulletin
Board, in negotiated transactions, or otherwise, or by a combination of these
methods, at fixed prices which may be changed, at market prices at the time of
sale, at prices related to market prices or at negotiated prices. As such, the
offering price is indeterminate as of the date of this prospectus. See "Plan of
Distribution."

SB-2 15th Page of 88 TOC 1st Previous Next ↓Bottom Just 15th
CAPITALIZATION

The following table includes information regarding our short-term and
long-term indebtedness and stockholders' deficit as of June 30, 2002.

[Download Table]

JUNE 30, 2002
---------------
(unaudited)

Short-term indebtedness:
Notes payable, related party, net
of unamortized discount. . . . . . . . . . . . . . . . . . . . $ 805,085

Long-term indebtedness:
Note payable, bank, net
of unamortized discount. . . . . . . . . . . . . . . . . . . . 1,079,626
Convertible debentures . . . . . . . . . . . . . . . . . . . . . 450,000
---------------
Total long-term indebtedness . . . . . . . . . . . . . . . . 1,529,626
---------------

Stockholders' deficit:
Class A Convertible Preferred Stock-Series 1, par value $.01 per
share, 5,000,000 shares authorized, 660,000 shares issued and
outstanding as of June 30, 2002. . . . . . . . . . . . . . . . 6,600
Common stock, par value $.01 per share, 27,000,000 shares
authorized, 16,053,329 shares issued and outstanding as of
June 30, 2002. . . . . . . . . . . . . . . . . . . . . . . . . 160,535
Additional paid-in capital . . . . . . . . . . . . . . . . . . . 52,509,595
Unearned consulting fees . . . . . . . . . . . . . . . . . . . . (79,501)
Accumulated other comprehensive income . . . . . . . . . . . . . 145,918
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . (53,544,667)
Treasury stock, at cost. . . . . . . . . . . . . . . . . . . . . (32,076)
---------------
Total stockholders' deficit. . . . . . . . . . . . . . . . . (833,596)

SB-2 16th Page of 88 TOC 1st Previous Next ↓Bottom Just 16th
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS

The following discussion is intended to provide an analysis of our
financial condition and results of operations and should be read in conjunction
with our financial statements and the notes to our financial statements
contained elsewhere in this prospectus. The discussion also includes
forward-looking statements. As indicated in "Forward-Looking Statements May
Prove To Be Inaccurate," you should not place undue reliance on forward-looking
statements.

OVERVIEW

Over the past few years, we have completed significant aspects of the
development and commercialization of the female condom. These initiatives have
resulted in our attainment of proprietary manufacturing technology and product
design patents, necessary regulatory approvals and the development of
significant manufacturing capacity. These steps, taken as part of our plan to
develop and sell a product with global commercial and humanitarian value, have
required the expenditure of significant amounts of capital and resulted in
significant operating losses including the period 1996 through the present.

We have begun the process of developing the market for the female condom
around the world. As part of this plan, we have entered into a number of
distribution agreements and are pursuing other arrangements for the marketing
and sale of the female condom. We believe that as the number of markets in
which the female condom is sold increases, sales will grow and, if our sales
increase significantly, we will become profitable. However, we can make no
assurance that we will achieve profitability in the near term or at all.

The former holders of the $1,500,000 convertible debentures issued on May
19, 1999 and June 3, 1999 had alleged that we were in default with respect to
the perfection of the former holders' security interest in our assets. The
former holders demanded the issuance of 1,500,000 shares of our common stock to
the investors due to this alleged default. On July 23, 2002, we settled this
dispute out of court. We agreed to issue 450,000 shares of our common stock to
the former convertible debenture holders and to extend the expiration dates of
2,250,000 warrants held by the former holders to 2007. The former convertible
debenture holders agreed to release their security interest in our assets and
they agreed not to sell, offer or make any short sale of the 450,000 shares
without our prior written consent. The issuance of the shares and the extension
of the expiration date of the warrants have been recorded in accordance with
Financial Accounting Standards Board No. 5. In accounting for the litigation
settlement, we designated the value of the newly issued shares and extended
warrants at $1,289,397. These non-cash costs are recorded as litigation
settlement on the consolidated statement of operations for the nine months ended
June 30, 2002, and as accrued expenses and other current liabilities on the
consolidated balance sheet as of June 30, 2002.

In September 2001, the holders of exercisable stock options to purchase a
total of 2,659,800 shares of our common stock waived their rights to exercise
their options until we amended our Amended and Restated Articles of
Incorporation to increase the number of shares of common stock authorized for
issuance. To obtain this waiver, we agreed to re-price these options at $0.56
per share once the amendment was approved. Our common stock was trading at less
than $0.56 per share when the waivers were obtained. On May 8, 2002, our
shareholders approved an amendment to our Amended and Restated Articles of
Incorporation to increase the total number of authorized shares of our common
stock from 27,000,000 to 35,500,000 shares. Since the amendment was approved,
the stock options have been re-priced to $0.56 per share. We will continue to
account for all of our stock options in accordance with variable plan accounting
guidance provided in APB 25 and related interpretations. This accounting
treatment requires us to record expense with respect to stock options on a
periodic basis based upon the amount, if any, by which the fair market value of
the common stock exceeds the exercise price of the stock options. The reduction
in the exercise price of the re-priced options and the increase in the stock
price of our common stock as of June 30, 2002 resulted in us recording
$1,341,858 of stock compensation expense related to the stock options under
variable plan accounting for the nine months ended June 30, 2002.

RESULTS OF OPERATIONS

NINE MONTHS ENDED JUNE 30, 2002 COMPARED TO NINE MONTHS ENDED JUNE 30, 2001

We had net revenues of $5,921,756 and a net loss attributable to common
stockholders of $(3,237,949) for the nine months ended June 30, 2002 compared to
14

SB-2 17th Page of 88 TOC 1st Previous Next ↓Bottom Just 17th
net revenues of $4,959,512 and a net loss attributable to common stockholders of
$(1,076,133) for the nine months ended June 30, 2001. Without the non-cash
charges for the litigation settlement and compensation related to stock options
in the nine months ended June 30, 2002, the net loss attributable to common
stockholders would have been $(606,694).

Net revenues for the nine months ended June 30, 2002 increased $962,244, or
19%, compared with the nine months ended June 30, 2001. The higher net revenues
occurred because of higher unit sales shipped to global public sector customers.
For the fifth consecutive quarter global unit shipments surpassed one million
units.

Cost of products sold increased $132,081 to $3,390,849 for the nine months
ended June 30, 2002 from $3,258,768 for nine months ended June 30, 2001. The
cost of products sold increase of 4% on a 19% sales increase resulted in a
improvement in costs of products sold as a percentage of sales from 57% for the
nine months ended June 30, 2002 compared to 66% for the nine months ended June
30, 2001. As unit sales increase, fixed manufacturing costs do not require
additional costs to be incurred, enabling us to produce at a lower cost of goods
sold per unit. Due to this change and the sales increase, gross profit
increased $830,163, or 49%, to $2,530,907 for the nine months ended June 30,
2002 from $1,700,744 for the nine months ended June 30, 2001. As a percentage
of sales, gross profit was 43% for nine months ended June 30, 2002 compared to
34% for the nine months ended June 30, 2001.

Advertising and promotional expenditures decreased $76,355 to $33,800 for
the nine months ended June 30, 2002 from $110,155 for the nine months ended June
30, 2001. The decline resulted from a reduction in advertising costs between
these periods and an elimination of promotional expenses during the nine months
ended June 30, 2002.

Selling, general and administrative expenses increased $201,955, or 10%, to
$2,225,084 for the nine months ended June 30, 2002 from $2,023,129 for the nine
months ended June 30, 2001. The change reflects increases in insurance, legal
and global selling expenses partially offset by a reduction in consulting
expenses. As a percent of sales, selling, general and administrative expenses
were 38% during the nine months ended June 30, 2002 compared to 41% during the
nine months ended June 30, 2001.

Total operating expenses increased $2,750,451 to $4,963,673 for the nine
months ended June 30, 2002 from $2,213,222 for the nine months ended June 30,
2001. $2,631,255, or 96%, of this increase represents non-cash costs for the
litigation settlement and stock option expenses incurred during the nine months
ended June 30, 2002.

We had an operating loss of $(2,432,766) for the nine months ended June 30,
2002. Without the non-cash charges for the litigation settlement and
compensation related to stock options, we would have had operating income of
$198,489.

Net interest and other expenses increased $242,523 to $706,449 for the nine
months ended June 30, 2002 from $463,926 for the nine months ended June 30,
2002. The increase occurred because we had a larger amount of non-cash expenses
incurred from the amortization of discounts on note payable and credit facility.

FISCAL YEAR ENDED SEPTEMBER 30, 2001 COMPARED TO FISCAL YEAR ENDED SEPTEMBER 30,
2000

We had net revenues of $6.7 million and a net loss attributable to common
stockholders of $(1.3) million or $(0.09) per share in fiscal 2001 compared to
net revenues of $5.8 million and a net loss attributable to common stockholders
of $(3.8) million or $(0.30) per share in fiscal 2000.

Our operating loss for fiscal 2001 was $(602,855) compared to $(2,392,631)
for fiscal 2000 for a decrease of 75%. As discussed in more detail in the
following paragraphs, the decrease in our operating loss was a result of
improvements in gross profit and operating expenses. The decline in our net
loss was smaller (68%), however, due to the decrease in non-operating expenses
not declining at the same proportion (56%).

Net revenues increased $0.9 million or 16% in fiscal 2001 over the prior
fiscal year. The higher net revenues primarily resulted from increased unit
sales shipped to global and domestic public sector customers.

Cost of products sold increased $153,095, or 3%, to $5,337,830 for fiscal
2001 from $5,184,735 for fiscal 2000. The increase was not in proportion with
the sales increase due to a reduction of fixed costs per unit which resulted
from the increased unit sales. Costs of products sold as a percentage of sales
decreased from 90% in fiscal 2000 to 79% in fiscal 2001.

SB-2 18th Page of 88 TOC 1st Previous Next ↓Bottom Just 18th
Advertising and promotion expenses relate exclusively to the U.S. market
and includes the costs of print advertising, trade and consumer promotions,
product samples and other marketing costs incurred to increase consumer
awareness and purchases of the female condom. As a result of an agreement we
entered into with Mayer Laboratories, Inc. to distribute the female condom to
the wholesale retail trade in the United Sates effective October 1, 2000, we
were able to reduce our advertising and promotion expenses from $0.2 million in
fiscal 2000 to $0.1 million in fiscal 2001.

Selling, general and administrative expenses declined $875,498, or 32%,
from $2.7 million in fiscal 2000 to $1.9 million in fiscal 2001. As a
percentage of net revenues, selling, general and administrative expenses were
28% in fiscal 2001 compared with 47% in fiscal 2000. These expenses declined as
a result of reductions of sales, financial and administrative personnel,
research and development, investor relations and consulting costs in fiscal
2001.

Our strategy is to act as a manufacturer supplying the public sector and
commercial partners throughout the world. Ours partners pay for all marketing
and shipping costs. Consequently, as our sales volume increases our operating
expenses will not increase significantly.

Non-cash amortization of debt issuance costs decreased from $245,676 in
fiscal 2000 to $0 in fiscal 2001. The reduction was a result of the completion
in fiscal 2000 of the amortization period of debt issuance costs relating to the
issuance of convertible debentures in May and June 1999. See Note 4 of the
Notes to Consolidated Financial Statements for further detail regarding the May
and June 1999 convertible debentures.

Net interest and non-operating expenses decreased $483,455, or 46%, to
$568,401 for fiscal 2001 compared to $1,051,856 for fiscal 2000. The decrease
exists because we had a lower level of debt outstanding during fiscal 2001 than
fiscal 2000 due to the issuance of convertible debentures during May and June
1999. The result is a smaller amount of non-cash expenses incurred from the
amortization of discounts on convertible debentures than the twelve months of
the prior year.

We were able to cover fixed manufacturing overhead costs and exceeded
break-even at the gross profit level. However, we must achieve cumulative
annual unit sales of approximately 18 million female condoms based upon the
current average selling price per unit in order to cover operating and
non-operating expenses or approximately 30% of manufacturing capacity.

LIQUIDITY AND SOURCES OF CAPITAL

Historically, we have incurred cash operating losses relating to expenses
to develop, manufacture and promote the female condom. Cash used in continuing
operations was less than $0.1 million in the first nine months of fiscal 2002,
$0.6 million in fiscal 2001 and $1.0 million in fiscal 2000. During the nine
months ended June 30, 2002, we used $60,000 of net proceeds from the issuance of
shares of our common stock and $0.5 million of additional borrowings under our
credit facility to fund cash used in operations, capital expenditures, payment
of preferred stock dividends and an increase in our cash position.

During fiscal 2001, we received $0.45 million in proceeds from newly-issued
convertible debentures, and $0.8 million from the issuance of common stock. We
used these amounts to help fund our current operations and to repay existing
liabilities including $0.3 million of notes payable.

At June 30, 2002, we had current liabilities of $3.2 million including a $1.0
million note payable due March 25, 2003 to Mr. Dearholt, one of our directors.
As of June 30, 2002, Mr. Dearholt beneficially owned 4,439,412 shares of our
common stock.

On March 30, 2001, we issued a $250,000 convertible debenture to one accredited
investor. The debenture is due March 30, 2004, bears interest payable at a rate
of 12% per year, and is convertible into our common stock based on a price of
$0.50 per share. We did not issue warrants in connection with the issuance of
the convertible debenture.

On May 18, 2001, we entered into an agreement with Heartland Bank providing
for a $2,000,000 credit facility. The unpaid balances on the credit facility
are due May 18, 2004 and bear interest payable at a rate of 10% per year. The
agreement contains certain covenants which include restrictions on the payment

SB-2 19th Page of 88 TOC 1st Previous Next ↓Bottom Just 19th
of dividends and distributions and on the issuance of warrants. We may borrow
under the credit facility from time to time subject to a number of conditions,
including obtaining personal guarantees of 125% of the amount outstanding under
the credit facility. In connection with the credit facility, we issued warrants
to Heartland Bank to purchase the number of shares of our common stock equal to
$500,000 divided by the warrant purchase price as of the date of exercise. The
warrant purchase price is equal to 70% of the market price of our common stock
as of the day immediately prior to the date the exercise notice is given to us,
but in no event shall the per share price be less than $0.50 or more than $1.00.
The warrants are valued at $270,800 and are recorded as additional paid in
capital and a discount on the credit facility.

As of June 30, 2002, we had borrowed all $2.0 million under the credit
facility. Eight persons provided guarantees equal in total to the $2.0 million
outstanding under the loan. Each guarantor may be liable to Heartland Bank for
up to 125% of the guarantor's guarantee amount if we default under the loan. We
issued warrants to the guarantors to purchase the number of shares of our common
stock equal to the guarantee amount of such guarantor divided by the warrant
purchase price as of the date of exercise. The warrant purchase price is the
price per share equal to 70% of the market price of the our common stock at the
time of exercise, but in no event will the warrant purchase price be less than
$0.50 or more than $1.00. We also issued additional warrants to purchase a
total of 300,000 shares of our common stock at an exercise price of $0.50 per
share to three of the guarantors.

On June 1, 2001, we issued a total of $200,000 of convertible debentures to
two accredited investors. The debentures are due May 30, 2004, bear interest
payable at a rate of 10% per year, and are convertible into our common stock
based on a price per share equal of $0.50. We did not issue warrants in
connection with the issuance of the convertible debentures.

We believe that net revenue from sales of the female condom will eventually
exceed our operating costs, and that, ultimately, our operations will generate
sufficient funds to meet our capital requirements as they did on a cash basis
during the third quarter of fiscal year 2002. However, we can make no assurance
that we will achieve such level of operations again. Likewise, we can make no
assurance that we will be able to source all or any portion of our required
capital through the sale of debt or equity or, if raised, the amount will be
sufficient to operate until sales of the female condom generate sufficient net
revenues to fund our operations. In addition, any funds we raise may be costly
to us and/or dilutive to our shareholders. If we are unable to raise adequate
financing when needed, we may be required to sharply curtail our efforts to
promote the female condom, to attempt to sell certain of our assets and rights
or to curtail certain of our operations and may ultimately be forced to cease
operations. Currently, we are focused on growing our business and, therefore,
we have made no plans to sell any assets nor has we identified any assets to be
sold or potential buyers.

As of August 22, 2002, we had approximately $1.1 million in cash, net trade
accounts receivable of $0.8 million and current trade accounts payable of $0.9
million. We estimate that our cash burn rate, with revenues, is less than $0.1
million per year. Our anticipated debt service obligations for scheduled
interest and principal payments are approximately $0.3 million in the remainder
of fiscal 2002, $1.3 million in fiscal 2003 and $2.6 million in fiscal 2004. As
of the date of this prospectus, we were in compliance with all of the covenants
relating to our outstanding debt.

SB-2 20th Page of 88 TOC 1st Previous Next ↓Bottom Just 20th
BUSINESS

GENERAL

We manufacture, market and sell the female condom around the world. The
female condom is the only FDA-approved product under a woman's control which can
prevent unintended pregnancy and sexually transmitted diseases ("STDs"),
including HIV/AIDS.

The product is currently sold or available in various venues including
commercial sector outlets, public sector clinics and research programs in over
80 countries. It is commercially marketed in 17 countries by various country
specific partners, including the U.S., the U.K., Japan, Canada, Holland, France,
Venezuela, Denmark, South Korea, Brazil and India.

In the U.S., the product is marketed to city and state public health
clinics as well as not-for-profit organizations such as Planned Parenthood.
Under an agreement with the Joint United Nations Programme on AIDS ("UNAIDS"),
UNAIDS facilitates the availability and distribution of the female condom in the
developing world and we sell the product to developing countries at a reduced
price based on our cost of production. The current price is 38 pence sterling,
or approximately $0.58 per unit. Currently over 80 developing countries
purchase the female condom under the terms of our agreement with UNAIDS.

PRODUCT

The female condom is made of polyurethane, a thin but strong material which
is resistant to rips and tears during use. The female condom consists of a
soft, loose fitting sheath and two flexible O rings. One of the rings is used
to insert the device and helps to hold it in place. The other ring remains
outside the vagina after insertion and lines the vagina, preventing skin from
touching skin during intercourse. The female condom is prelubricated and
disposable and is intended for use during only one sex act.

RAW MATERIALS

Polyurethane is the principal raw material we use to produce the female
condom. We have entered into a supply agreement with Deerfield Urethane, Inc.
for the purchase of all of our requirements of polyurethane. Under this
agreement, the parties negotiate pricing on an annual basis. The original term
of the agreement extended to December 31, 1995 and thereafter automatically
renews for additional one year periods unless either party gives at least 12
months prior written notice of termination.

GLOBAL MARKET POTENTIAL

HIV/AIDS is the most devastating pandemic that humankind has faced in
recorded history. UNAIDS and the World Health Organization ("WHO") estimate
that more than 60 million people have been infected with the virus and that, at
the end of 2001, 40 million people globally were living with HIV. AIDS is not
the only sexually transmitted disease that the global public health community is
battling. In the United States, the Center for Disease Control noted that one
in five Americans over the age of 12 has Herpes and one in every three sexually
active people will get an STD by age 24. Globally, women are currently the
fastest growing group infected with HIV and are expected to comprise the
majority of the new cases in the coming year.

Currently there are only two products that prevent the transmission of
HIV/AIDS through sexual intercourse -- the latex male condom and the female
condom.

Male condom market: It is estimated the global annual market for male
condoms is close to 5 billion units. However, the majority of all acts of
sexual intercourse, excluding those intended to result in pregnancy, are
completed without protection. As a result, it is estimated the potential market
for barrier contraceptives is much larger than the identified male condom
market.

SB-2 21st Page of 88 TOC 1st Previous Next ↓Bottom Just 21st
ADVANTAGES VERSUS THE MALE CONDOM

The female condom is currently the only available barrier contraceptive
method controlled by women which allows them to protect themselves from
unintended pregnancy and STDs, including HIV/AIDS. The most important advantage
is that a woman can control whether or not she is protected as many men do not
like to wear male condoms and may refuse to do so.

The polyurethane material that is used for the female condom offers a
number of benefits over latex, the material that is most commonly used in male
condoms. Polyurethane is much stronger than latex, reducing the probability
that the female condom sheath will tear during use. Unlike latex, polyurethane
quickly transfers heat, so the female condom immediately warms to body
temperature when it is inserted, which may result in increased pleasure and
sensation during use. The product offers an additional benefit to the 7% to 20%
of the population that is allergic to latex and who, as a result, may be
irritated by latex male condoms. To our knowledge, there is no reported allergy
to date to polyurethane. The female condom is also more convenient, providing
the option of insertion hours before sexual arousal and as a result is less
disruptive during sexual intimacy than the male condom which requires sexual
arousal for application.

COST EFFECTIVENESS

A study entitled "Cost-effectiveness of the female condom in preventing HIV
and STDs in commercial sex workers in South Africa" was reported in the Journal
of Social Science and Medicine in 2001. This study shows that making the female
condom available is highly cost effective in reducing public health costs in
developing countries as well as in the U.S.

WORLDWIDE REGULATORY APPROVALS

The female condom received PMA approval as a Class III Medical Device from
the FDA in 1993. The extensive clinical testing and scientific data required
for FDA approval laid the foundation for approvals throughout the rest of the
world, including receipt of a CE Mark in 1997 which allows us to market the
female condom throughout the European Union. In addition to the United States
and the European Union, several other countries have approved the female condom
for sale, including Canada, Russia, Australia, Japan, South Korea and Taiwan.

We believe that the female condom's PMA and FDA classification as a Class
III Medical Device create a significant barrier to entry. We estimate that it
would take a minimum of four to six years to implement, execute and receive FDA
approval of a PMA to market another type of female condom.

We believe there are no material issues or material costs associated with
our compliance with environmental laws related to the manufacture and
distribution of the female condom.

STRATEGY

Our strategy is to act as a manufacturer, selling the female condom to the
global public sector, United States public sector and commercial partners for
country-specific marketing. The public sector and commercial partners assume
the cost of shipping and marketing the product. As a result, as volume
increases, our operating expenses will not increase significantly.

COMMERCIAL MARKETS

We market the product directly in the United Kingdom. We have distribution
agreements with commercial partners in 17 countries, including the United
States, Japan, Canada, Brazil, Venezuela, Denmark, South Korea, Holland, France
and India. The distribution agreements are generally exclusive for a single
country. Under these agreements, each of our partners markets and distributes
the female condom in a single country and we manufacture the female condom and
sell the product to the partner for distribution in that country. On November
29, 2001, we entered into a non-binding memorandum of understanding for a
distribution arrangement with Hindustan Latex Limited, an Indian government
organization and India's largest male condom manufacturer. On December 18,
2001, we entered into an agreement with Total Access Group, Inc. to serve as our
exclusive distributor for public sector sales within a 15 state region in the
western United States.

SB-2 22nd Page of 88 TOC 1st Previous Next ↓Bottom Just 22nd
RELATIONSHIPS AND AGREEMENTS WITH PUBLIC SECTOR ORGANIZATIONS

Currently, it is estimated more than 1.5 billion male condoms are
distributed worldwide by the public sector each year. The female condom is seen
as an important addition to prevention strategies by the public sector because
studies show that the availability of the female condom decreases the amount of
unprotected sex by as much as 25% over male condoms alone.

We have an agreement with UNAIDS to supply the female condom to developing
countries at a reduced price which is negotiated each year based on our cost of
production. The current price per unit is approximately 0.38 (pounds), or
approximately $0.58. Under the agreement, UNAIDS cooperates with us in
education efforts and marketing the female condom in developing countries.
Sales of the female condom are made directly to public health authorities in
each developing country at the price established by the agreement with UNAIDS.
Net revenues relating to sales made at the price established under the agreement
with UNAIDS were $2.7 million for the year ended September 30, 2001, and $3.4
million for the nine months ended June 30, 2002. The term of the agreement
currently expires on December 31, 2002, but automatically renews for additional
one-year periods unless either party gives at least 90 days prior written notice
of termination. The female condom is available in over 80 countries through
public sector distribution.

In the United States, the product is marketed to city and state public
health clinics, as well as not-for-profit organizations such as Planned
Parenthood. Currently significant programs are ongoing in 17 major cities and
states.

STATE-OF-THE-ART MANUFACTURING FACILITY

We manufacture the female condom in a 40,000 square foot leased facility in
London, England. The facility is currently capable of producing 60 million
units per year. With additional equipment, this capacity can be significantly
increased.

GOVERNMENT REGULATION

In the U.S., the female condom is regulated by the FDA. Section 515(a)(3)
of the Safe Medical Amendments Act of 1990 authorizes the FDA to temporarily
suspend approval and initiate withdrawal of the PMA if the FDA finds that the
female condom is unsafe or ineffective, or on the basis of new information with
respect to the device, which, when evaluated together with information available
at the time of approval, indicates a lack of reasonable assurance that the
device is safe or effective under the conditions of use prescribed, recommended
or suggested in the labeling. Failure to comply with the conditions of FDA
approval invalidates the approval order. Commercial distribution of a device
that is not in compliance with these conditions is a violation of the Safe
Medical Amendments Act of 1990.

COMPETITION

The female condom competes in part with male condoms. Latex male condoms
cost less and have brand names that are more widely recognized than the female
condom. In addition, male condoms are generally manufactured and marketed by
companies with significantly greater financial resources than we have. It is
also possible that other parties may develop a female condom. Competing
products could be manufactured, marketed and sold by companies with
significantly greater financial resources than we have.

EMPLOYEES

As of August 25, 2002, we had 121 full-time employees within the U.S. and
the U.K. and no part-time employees. None of our employees are represented by a
labor union. We believe that our employee relations are good.

SB-2 23rd Page of 88 TOC 1st Previous Next ↓Bottom Just 23rd
BACKLOG

At August 25, 2002, we had unfilled orders of $0.6 million. The comparable
amount as of September 30, 2001 was $0.9 million. Unfilled orders can
materially fluctuate from quarter to quarter. We expect current unfilled orders
to be filled during the remainder of fiscal 2002.

PATENTS AND TRADEMARKS

We currently hold product and technology patents in the United States,
Japan, the United Kingdom, France, Italy, Germany, Spain, the European Patent
Convention, Canada, The People's Republic of China, Brazil, South Korea and
Australia. These patents expire between 2005 and 2013. Additional product and
technology patents are pending in Japan. The patents cover the key aspects of
the female condom, including its overall design and manufacturing process. We
terminated our license of the trademark "Reality" in the United States and now
have the registered trademark FC Female Condom in the United States. This
license agreement was with Meijer, Inc., and under the license agreement royalty
expense was $27,102 in fiscal 2001 and $31,761 in fiscal 2000. Because the
license agreement was terminated, we will not be required to pay royalties under
this license in future periods. We hold trademarks on the names "femidom" and
"femy" in a number of foreign countries. We have also secured, or applied for,
13 trademarks in 26 countries to protect the various names and symbols used in
marketing the product around the world. In addition, the experience that has
been gained through years of manufacturing the female condom has allowed us to
develop trade secrets and know-how, including proprietary production
technologies, that further secure our competitive position.

RESEARCH AND DEVELOPMENT

We incurred research and development costs from continuing operations of
$67,099 in fiscal 2000. These expenditures were primarily related to conducting
acceptability studies and analyzing second generation products. We did not have
any research and development costs from continuing operations in fiscal 2001 or
the first nine months of fiscal 2002.

INDUSTRY SEGMENTS AND FINANCIAL INFORMATION ABOUT FOREIGN AND DOMESTIC
OPERATIONS

See Note 11 to Notes to Consolidated Financial Statements, included
elsewhere in this prospectus.

HISTORY

The female condom was invented by a Danish physician who obtained a U.S.
patent for the product in 1988. The physician subsequently sold rights to the
female condom to Chartex Resources Limited. In the years that followed,
Chartex, with resources provided by a nonprofit Danish foundation, developed the
manufacturing processes and completed other activities associated with bringing
the female condom to market in a number of non-U.S. countries. Wisconsin
Pharmacal Company, Inc., which then had a license from Chartex to the female
condom in the U.S., Canada and Mexico, pursued the pre-clinical and clinical
studies and overall development of the product for worldwide use and U.S. FDA
approval of the product.

We are the successor to Wisconsin Pharmacal Company, Inc., a company which
previously manufactured and marketed a wide variety of disparate specialty
chemical and branded consumer products in addition to owning rights to the
female condom described above.

In fiscal 1995, our Board of Directors approved a plan to complete a series
of actions designed, in part, to maximize the potential of the female condom.
First, we restructured and transferred all of our assets and liabilities, other
than those related primarily to the female condom, to a newly-formed,
wholly-owned subsidiary, WPC Holdings, Inc. In January 1996, we sold WPC
Holdings to an unrelated third party. Then, in February 1996, we acquired
Chartex, renamed The Female Health Company - UK in 1997, the manufacturer and
owner of worldwide rights to, and our then sole supplier of, the female condom.
As a result of the sale of WPC Holdings and the acquisition of Chartex, we
evolved to our current state with our sole business consisting of the
manufacture, marketing and sale of the female condom.

The FDA approved the female condom for distribution in 1993 and our
manufacturing facility in 1994. Since that time, we have sold over 54 million
female condoms around the world.

SB-2 24th Page of 88 TOC 1st Previous Next ↓Bottom Just 24th
PROPERTIES

We lease approximately 3,100 square feet of office space at 515 North State
Street, Suite 2225, Chicago, Illinois 60610 under a lease that expires in 2006.
We utilize warehouse space and sales fulfillment services of an independent
public warehouse located near Minneapolis, Minnesota, for storage and
distribution of the female condom. We manufacture the female condom in a 40,000
square foot leased facility located in London, England under a lease that
expires in 2016, with the right to renew through 2027. The FDA-approved
manufacturing process is subject to periodic inspections by the FDA as well as
the European Union quality group. Current capacity at the manufacturing
facility is approximately 60 million female condoms per year. We believe the
properties are adequately insured.

LEGAL PROCEEDINGS

We are not currently involved in any material pending legal proceedings.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

We file reports, proxy statements and other information with the Securities
and Exchange Commission. You may read and copy any reports, proxy statements or
other information we file at the SEC's public reference room at 450 Fifth
Street, N.W., Washington, D.C. 20549. You can obtain information concerning the
operation of the public reference rooms by calling the SEC at 1-800-SEC-0330.
In addition, we have filed the registration statement of which this prospectus
is a part and other filings with the SEC through its EDGAR system, and our
filings are publicly available through the SEC's site on the World Wide Web on
the Internet located at www.sec.gov.

This prospectus does not contain all of the information in the registration
statement of which this prospectus is a part and which we have filed with the
SEC. For further information about us and the securities offered by this
prospectus, you should review the registration statement, including the exhibits
filed as a part of the registration statement, at the public reference rooms.
We may update information about us by filing appendices or supplements to this
prospectus.

SB-2 25th Page of 88 TOC 1st Previous Next ↓Bottom Just 25th
MANAGEMENT

DIRECTORS AND EXECUTIVE OFFICERS

Our directors and executive officers as of August 30, 2002 are as follows:

[Download Table]

NAME TITLE AGE

O.B. Parrish Chairman of the Board, Chief Executive Officer 69
and Director

Mary Ann Leeper, Ph.D. President, Chief Operating Officer and Director 62

Jack Weissman Vice President-Sales 54

Michael Pope Vice President, General Manager of The Female 45
Health Company (UK) Plc.

Mitchell Warren Vice President-International Affairs 36

Robert R. Zic Principal Accounting Officer 39

William R. Gargiulo, Jr. Secretary and Director 74

David R. Bethune Director 62

Stephen M. Dearholt Director 56

Michael R. Walton Director 65

James R. Kerber Director 70

Richard E. Wenninger Director 54

Mr. Parrish has served as our Chief Executive Officer since 1994, and as
our Chairman of the Board and a Director since 1987. Mr. Parish also served as
our acting Chief Financial Officer and Accounting Officer from February 1996 to
March 1999. Mr. Parrish is a shareholder and has served as the President and as
a Director of Phoenix Health Care of Illinois, Inc. since 1987. Phoenix Health
Care of Illinois owns approximately 295,000 shares of our common stock. Mr.
Parrish also is Chairman and a Director of ViatiCare, L.L.C., a financial
services company, Chairman and a Director of MIICRO, Inc., a neuroimmaging
company, and a Director of Amerimmune Pharmaceuticals, Inc. Mr. Parrish is also
a trustee of Lawrence University. From 1977 until 1986, Mr. Parrish was the
President of the Global Pharmaceutical Group of G.D. Searle & Co., a
pharmaceutical/consumer products company. From 1974 until 1977, Mr. Parrish was
the President of Searle International, the foreign sales operation of Searle.
Prior to that, Mr. Parrish was Executive Vice President of Pfizer's
International Division.

Dr. Leeper has served as our President and Chief Operating Officer since
1996, as a Director since 1987, as President and Chief Executive Officer of The
Female Health Company division from May 1994 until January 1996 and as our
Senior Vice President - Development from 1989 until January 1996. Dr. Leeper is
a shareholder and has served as a Vice President and Director of Phoenix Health
Care of Illinois since 1987. From 1981 until 1986, Dr. Leeper served as Vice
President - Market Development for Searle's Pharmaceutical Group and in various
Searle research and development management positions. As Vice President -
Market Development for Searle's Pharmaceutical Group, Dr. Leeper was responsible
for worldwide licensing and acquisition, marketing and market research. In
earlier positions, she was responsible for preparation of new drug applications
and was a liaison with the FDA. Dr. Leeper currently serves on the Board of
23

SB-2 26th Page of 88 TOC 1st Previous Next ↓Bottom Just 26th
Directors of the Temple University School of Pharmacy, the University of
Virginia School of Nursing and the Northwestern University School of Music. She
is on the Board of CEDPA, an international not-for-profit organization working
on women's issues in the developing world and is a director of Influx, Inc., a
pharmaceutical research company. Dr. Leeper is also an adjunct professor at the
University of Virginia Darden School of Business.

Mr. Weissman has served as our Vice President-Sales since June 1995. From
1992 until 1994, Mr. Weissman was Vice President - Sales for Capitol Spouts,
Inc., a manufacturer of pouring spouts for gable paper cartons. From 1989 to
1992, Mr. Weissman acted as General Manager - HTV Group, an investment group
involved in the development of retail stores. Mr. Weissman joined Searle's
consumer products group in 1979 and held positions of increasing responsibility,
including National Account Manager and Military Sales Manager. From 1985 to
1989, Mr. Weissman was Account Manager - Retail Business Development, for the
NutraSweet Company, a Searle subsidiary. Prior to Searle, Mr. Weissman worked
in the consumer field as Account Manager and Territory Manager for Norcliff
Thayer and Whitehall Laboratories.

Mr. Pope has served as our Vice President since 1996 and as General Manager
of The Female Health Company (UK) Plc., formerly Chartex International, Plc.,
since our 1996 acquisition of Chartex. Mr. Pope has also served as a Director
of The Female Health Company, Ltd., formerly Chartex Resources Limited, and The
Female Health Company (UK) Plc. since 1995. From 1990 until 1996, Mr. Pope was
Director of Technical Operations for Chartex with responsibility for
manufacturing, engineering, process development and quality assurance. Mr. Pope
was responsible for the development of the high speed proprietary manufacturing
technology for the female condom and securing the necessary approvals of the
manufacturing process by regulatory organizations, including the FDA. Mr. Pope
was also instrumental in developing and securing Chartex's relationship with its
Japanese marketing partner. Prior to joining Chartex, from 1986 to 1990, Mr.
Pope was Production Manager and Technical Manager for Franklin Medical, a
manufacturer of disposable medical devices. From 1982 to 1986, Mr. Pope was
Site Manager, Engineering and Production Manager, Development Manager and
Silicon Manager for Warne Surgical Products.

Mr. Warren has served as our Vice President - International Affairs since
February 2000 and as our Director of International Affairs from January 1999 to
February 2000. From 1993 to 1998, Mr. Warren was employed by Population
Services International (PSI), an international social marketing and
communications organization, first as Executive Director of PSI/South Africa and
then of PSI/Europe. From 1989 to 1993, Mr. Warren was Program Director of
Medical Education for South African Blacks.

Mr. Zic has served as our Principal Accounting Officer since March 1999.
From 1998 to 1999, Mr. Zic held the dual positions of Acting Controller and
Acting Chief Financial Officer at Ladbroke's Pacific Racing Association. From
1995 to 1998, Mr. Zic served as the Chief Accounting Manager and Assistant
Controller at Argonaut Insurance Company. In this capacity, he was responsible
for the financial and accounting operations at Argonaut's ten divisions and the
external and internal financial reporting of Argonaut and its four subsidiaries.
From 1990 to 1994, Mr. Zic was the Assistant Controller of CalFarm Insurance
Company, where he was responsible for the company's external financial reporting
duties. From 1988 to 1990, Mr. Zic was a Senior Accountant responsible for the
statutory-based financials of Allstate Insurance Company. Mr. Zic's career
began in 1986 as an auditor with Arthur Andersen & Co.

Mr. Gargiulo has served as a Director since 1987, as our Secretary since
1996, as our Vice President from 1996 to September 30, 1998, as our Assistant
Secretary from 1989 to 1996, as Vice President International of The Female
Health Company Division from 1994 until 1996, as our Chief Operating Officer
from 1989 to 1994, and as our General Manager from 1988 to 1994. Mr. Gargiulo
is a Trustee of a trust which is a shareholder of Phoenix Health Care of
Illinois. From 1984 until 1986, Mr. Gargiulo was the Executive Vice President
of the Pharmaceutical Group of G.D. Searle & Co., in charge of Searle's European
operations. From 1976 until 1984, Mr. Gargiulo was the Vice President of
Searle's Latin American operations.

Mr. Bethune has served as a Director since January 1996. Mr. Bethune has
been Chairman and Chief Executive Officer of Atrix Laboratories, Inc. since
1999. From 1997 to 1998, Mr. Bethune held the position of President and Chief
Operating Officer of the IVAX Corporation. From 1996 to 1997, Mr. Bethune was a
consultant to the pharmaceutical industry. From 1995 to 1996, Mr. Bethune was
President and Chief Executive Officer of Aesgen, Inc., a generic pharmaceutical
company. From 1992 to 1995, Mr. Bethune was Group Vice President of American
Cyanamid Company and a member of its Executive Committee until the sale of the
company to American Home Products. He had global executive authority for human
24

SB-2 27th Page of 88 TOC 1st Previous Next ↓Bottom Just 27th
biologicals, consumer health products, pharmaceuticals and opthalmics, as well
as medical research. Mr. Bethune is on the Board of Directors of the Southern
Research Institute, Atrix Laboratories, Inc. and the American Foundation for
Pharmaceutical Education, Partnership for Prevention. He is a founding trustee
of the American Cancer Society Foundation and an associate member of the
National Wholesale Druggists' Association and the National Association of Chain
Drug Stores. He is the founding chairman of the Corporate Council of the
Children's Health Fund in New York City and served on the Arthritis Foundation
Corporate Advisory Council.

Mr. Dearholt has served as a Director since April 1996. Mr. Dearholt is a
co-founder of and has been a partner in Insurance Processing Center, Inc., one
of the largest privately owned life insurance marketing organizations in the
United States, since 1972. He has over 23 years of experience in direct
response advertising and database marketing of niche products. Since 1985, he
has been a 50% owner of R.T. of Milwaukee, a private investment holding company
which operates a stock brokerage business in Milwaukee, Wisconsin. In late
1995, Mr. Dearholt arranged, on very short notice, a $1 million bridge loan
which assisted us in our purchase of Chartex. Mr. Dearholt is also very active
in the nonprofit sector. He is currently on the Board of Directors of
Children's Hospital Foundation of Wisconsin, an honorary board member of the
Zoological Society of Milwaukee, and the national Advisory Council of the
Hazelden Foundation. He is a past board member of Planned Parenthood
Association of Wisconsin, and past Chairman of the Board of the New Day Club,
Inc.

Mr. Walton has served as a Director since April 1999. Mr. Walton is
President and owner of Sheboygan County Broadcasting Co., Inc., a company he
founded in 1972. In addition to its financial assets, Sheboygan County
Broadcasting Co. currently owns four radio stations. The company has focused on
start-up situations, and growing value in underperforming, and undervalued
business situations. It has purchased and sold properties in Wisconsin,
Illinois and Michigan. Prior to 1972, Mr. Walton was owner and President of
Walton Co., an advertising representative firm which he founded in New York
City. He has held sales and management positions with Forbes Magazine, The
Chicago Sun Times and Gorman Publishing Co., a trade magazine publisher
specializing in new magazines which was subsequently sold to a large
international publishing concern. Mr. Walton has served on the Boards of the
American Red Cross, the Salvation Army and the Chamber of Commerce.

Mr. Kerber has served as a Director since April 1999. Mr. Kerber has been
a business consultant to the insurance industry since January 1996. He has over
40 years of experience in operating insurance companies, predominantly those
associated with life and health. From October 1994 until January 1996, he was
Chairman, President, Chief Executive Officer and director of the 22 life and
health insurance companies which comprise the ICH Group. In 1990, Mr. Kerber
was founding partner in the Life Partners Group where he was Senior Executive
Vice President and a director. Prior to that, he was involved with operating
and consolidating over 200 life and health companies for ICH Corporation, HCA
Corporation and US Life Corporation.

Mr. Wenninger has served as a Director since July 2001. Mr. Wenninger
currently serves as Chairman of Wenninger Company, Inc., a mechanical
contracting and engineering company. From 1976 to 2001, Mr. Wenninger served as
President and Chief Executive Officer of Wenninger Company, Inc. He is also
Secretary of Wenn Soft, Inc., a software development, sales and service company
he founded in 1990, and President of WENNREAL, LLC, a real estate company he
founded in 1997. From 1992 to 1999, Mr. Wenninger served as Secretary of
Liftco, Inc. Mr. Wenninger is a current board member of the Boys & Girls Club
of Milwaukee, a former President and board member of the Milwaukee Athletic
Club, a former board member of the Wisconsin Psychoanalytic Foundation, a former
board member of University Lake School, the former President and a current board
member of the Plumbing and Mechanical Contractors Association of Milwaukee, the
former President and a former board member of the Sheet Metal Contractors
Association of Milwaukee and a former board member of the Mechanical Contractors
Association of America.

EXECUTIVE COMPENSATION

SUMMARY COMPENSATION TABLE

The table below gives information for each of our last three fiscal years
regarding all annual, long-term and other compensation paid by us to our chief
executive officer and the only executive officer whose total annual salary and
bonus exceeded $100,000 for services rendered during the fiscal year ended
September 30, 2001. The individuals listed in this table are referred to
elsewhere in this prospectus as the "named executive officers."

SB-2 28th Page of 88 TOC 1st Previous Next ↓Bottom Just 28th
[Download Table]

ANNUAL LONG-TERM COMPENSATION
COMPENSATION AWARDS
------------ -----------------------
RESTRICTED SECURITIES
NAME AND STOCK UNDERLYING
PRINCIPAL FISCAL SALARY AWARDS OPTIONS/SARS
POSITION YEAR ($) ($) (#)
-------- ------ --------- ---------- ------------

O.B. Parrish 2001 90,000 -- --
Chairman and 2000 90,000 -- --
Chief Executive 1999 90,000 -- 200,000
Officer

Mary Ann Leeper, Ph.D. 2001 225,000 -- --
President and 2000 225,000 -- --
Chief Operating 1999 225,000 -- 500,000
Officer

OPTION GRANTS DURING LAST FISCAL YEAR

No stock options were granted to the named executive officers during the
fiscal year ended September 30, 2001.

FISCAL YEAR-END OPTION/SAR VALUES

The following table sets forth the number and value of unexercised options
held by the named executive officers at September 30, 2001:

[Enlarge/Download Table]

NUMBER OF SECURITIES UNDERLYING VALUE OF UNEXERCISED IN-
UNEXERCISED OPTIONS AT THE-MONEY OPTIONS AT
FISCAL YEAR END FISCAL YEAR-END
NAME EXERCISABLE/UNEXERCISABLE EXERCISABLE/UNEXERCISABLE (1)
---------------------- -------------------------------- -----------------------------

O.B. Parrish 0/464,000(2) $ 0/0

Mary Ann Leeper, Ph.D. 0/790,000(2) $ 0/0

_____________________

(1) Values are calculated by subtracting the exercise price from the $0.51 per
share closing price of our common stock on September 28, 2001.

(2) In September 2001, Mr. Parrish and Dr. Leeper each agreed to waive their
rights to exercise outstanding options until we amend our articles of
incorporation to increase the number of shares of common stock authorized
for issuance. As of September 30, 2001, Mr. Parrish held options to
purchase 88,000 shares of common stock that were exercisable but for the
effect of his waiver and Dr. Leeper held options to purchase 96,667 shares
of common stock that were exercisable but for the effect of her waiver. In
consideration for these waivers, we agreed to reduce the exercise price of
these options to $0.56 per share. On May 8, 2002, our shareholders approved
an amendment to our Amended and Restated Articles of Incorporation to
increase the total number of authorized shares of our common stock from
27,000,000 to 35,500,000 shares. Since the amendment was approved, the
stock options have been re-priced to $0.56 per share.

SB-2 29th Page of 88 TOC 1st Previous Next ↓Bottom Just 29th
EMPLOYMENT AGREEMENTS

We entered into an employment agreement with Dr. Leeper effective May 1,
1994. The original term of Dr. Leeper's employment extended to April 30, 1997
and after April 30, 1997 her employment term renews automatically for additional
three-year terms unless notice of termination is given. The employment
agreement has automatically renewed for a term ending on April 30, 2003. We may
terminate the employment agreement at any time for cause. If Dr. Leeper's
employment is terminated without cause, we are obligated to continue to pay Dr.
Leeper her base salary and any bonus to which she would otherwise have been
entitled for a period equal to the longer of two years from date of termination
or the remainder of the then applicable term of the employment agreement. In
addition, we are obligated to continue Dr. Leeper's participation in any of our
health, life insurance or disability plans in which Dr. Leeper participated
prior to her termination of employment. Dr. Leeper's employment agreement
provided for a base salary of $175,000 for the first year of her employment
term, $195,000 for the second year of her employment term and $225,000 for the
third year of her employment term, subject to the achievement of performance
goals established by Dr. Leeper and the Board of Directors. If the employment
agreement is renewed beyond the initial three-year term, it requires her base
salary to be increased annually by the Board of Directors based upon her
performance and any other factors that the Board of Directors considers
appropriate. For fiscal 2000 and 2001, Dr. Leeper's base salary was $225,000
per year. The employment agreement also provides Dr. Leeper with various fringe
benefits including an annual cash bonus of up to 100% of her base salary. The
Board of Directors may award the cash bonus to Dr. Leeper in its discretion. To
date, Dr. Leeper has not been awarded a cash bonus.

CHANGE OF CONTROL AGREEMENTS

In fiscal 1999, we entered into Change of Control Agreements with each of
O.B. Parrish, our Chairman and Chief Executive Officer, Mary Ann Leeper, our
President and Chief Operating Officer, and Michael Pope, our Vice President. In
fiscal 2000, we entered into a Change of Control Agreement with Mitchell Warren,
our Vice President - International Affairs. These agreements essentially act as
springing employment agreements which provide that, upon a change of control, as
defined in the agreement, we will continue to employ the executive for a period
of three years in the same capacities and with the same compensation and
benefits as the executive was receiving prior to the change of control, in each
case as specified in the agreements. If the executive is terminated without
cause or if he or she quits for good reason, in each case as defined in the
agreements, after the change of control, the executive is generally entitled to
receive a severance payment from us equal to the amount of compensation
remaining to be paid to the executive under the agreement for the balance of the
three-year term.

SB-2 30th Page of 88 TOC 1st Previous Next ↓Bottom Just 30th
PRINCIPAL SHAREHOLDERS

The following table provides information regarding the beneficial ownership
of our common stock as of August 30, 2002 by:

- each person known by us to be the beneficial owner of more than 5% of our
common stock;

- each director;

- each named executive officer; and

- all directors and executive officers as a group.

We have determined beneficial ownership in accordance with the rules of the
Securities and Exchange Commission. Unless otherwise indicated, the persons and
entities included in the table have sole voting and investment power with
respect to all shares beneficially owned, except to the extent authority is
shared by spouses under applicable law. Shares of common stock subject to
options or warrants that are either currently exercisable or exercisable within
60 days of August 30, 2002, and shares of common stock subject to the conversion
of preferred stock or convertible debentures outstanding as of August 30, 2002,
are treated as outstanding and beneficially owned by the holder for the purpose
of computing the percentage ownership of the holder. However, these shares are
not treated as outstanding for the purpose of computing the percentage ownership
of any other person.

[Download Table]

SHARES
BENEFICIALLY OWNED
------------------
NAME AND ADDRESS (1) NUMBER PERCENT
--------------------------------------------------- ------ -------

O.B. Parrish (2). . . . . . . . . . . . . . . . . . 1,038,501 6.0%
Mary Ann Leeper, Ph.D. (2). . . . . . . . . . . . . 594,235 3.5
William R. Gargiulo, Jr. (2). . . . . . . . . . . . 398,835 2.4
Stephen M. Dearholt (3) . . . . . . . . . . . . . . 4,449,412 22.8
David R. Bethune (4). . . . . . . . . . . . . . . . 60,000 *
James R. Kerber (5) . . . . . . . . . . . . . . . . 573,710 3.4
Michael R. Walton (6) . . . . . . . . . . . . . . . 539,900 3.2
Richard E. Wenninger (7). . . . . . . . . . . . . . 3,381,161 18.6
Gary O. Benson (8). . . . . . . . . . . . . . . . . 1,821,000 10.1
All directors and executive
officers as a group (12 persons) (2)(3)(4)(5)(6)(7) 10,394,918 45.6

__________
<FN>

* Less than 1%.

(1) Unless otherwise indicated, the address of each beneficial owner is 515
North State Street, Suite 2225, Chicago, IL 60610; the address of Mr.
Dearholt is 759 North Milwaukee Street, Suite 316, Milwaukee, WI 53202; the
address of Mr. Kerber is 8547 East Arapahoe Road, #J217, Englewood, CO
80112; the address of Mr. Walton is 1626 North Prospect Avenue, No. 2310,
Milwaukee, WI 53202; the address of Mr. Wenninger is 855 W. Dean Road,
Milwaukee, WI 53217; and the address of Mr. Benson is Regency Athletic
Club, 1300 Nicollet Mall, Suite 600, Minneapolis, MN 55403

(2) Includes 294,501 shares owned by Phoenix Health Care of Illinois and 60,000
shares under option to Phoenix Health Care of Illinois. Under the rules of
the Securities and Exchange Commission, Messrs. Parrish and Gargiulo and
Dr. Leeper may share voting and dispositive power as to these shares since
Mr. Gargiulo is a trustee of a trust which is a shareholder, and Mr.
Parrish and Dr. Leeper are officers, directors and shareholders, of Phoenix
Health Care of Illinois. For Dr. Leeper, also includes 46,400 shares owned
by her and 193,334 shares under option to her; for Mr. Parrish, also
28

SB-2 31st Page of 88 TOC 1st Previous Next ↓Bottom Just 31st
includes 71,500 shares owned by him, 36,500 shares under warrants to him,
176,000 shares under option to him and 400,000 shares under warrants held
by the Geneva O. Parrish 1996 Living Trust of which Mr. Parrish is
beneficiary and for which Mr. Parrish may be deemed to share voting and
investment power; and for Mr. Gargiulo, also includes 10,500 shares owned
by him and 33,334 shares under option to him.

(3) Includes 687,905 shares owned directly by Mr. Dearholt. Also includes
69,500 shares held by the Dearholt, Inc. Profit Sharing Plan; 9,680 shares
held by Response Marketing Money Purchase Plan; 17,200 shares held in a
self-directed IRA; 186,427 shares held by the Mary C. Dearholt Trust of
which Mr. Dearholt, a sibling and his mother are trustees; 18,100 shares
held by Mr. Dearholt's minor child; 418,100 shares held by the John W.
Dearholt Trust of which Mr. Dearholt is a co-trustee with a sibling; and
60,000 shares of preferred stock held by the Mary C. Dearholt Trust, of
which Mr. Dearholt, a sibling and his mother are trustees, that are
convertible share-for-share into our common stock. Mr. Dearholt shares the
power to vote and dispose of 664,527 shares of common stock (including
60,000 shares of preferred stock convertible into common stock) held by the
Mary C. Dearholt Trust and the John W. Dearholt Trust. Mr. Dearholt has
sole power to vote and dispose of the remaining shares of common stock,
except that North Central Trust has the sole power to vote and dispose of
the 9,680 shares of common stock held by the Response Marketing Money
Purchase Plan. Also includes warrants to purchase 2,922,500 shares of
common stock (of which warrants to purchase up to 1,100,000 shares have
been pledged to a bank to secure a guarantee executed by Mr. Dearholt on
behalf of us) and 60,000 shares under option to Mr. Dearholt.

(4) Consists of 60,000 shares under option to Mr. Bethune.

(5) Includes 200,000 shares of common stock subject to exercise of warrants and
30,000 shares under option to Mr. Kerber. The warrants have been pledged to
a bank to secure a guarantee by Mr. Kerber on our behalf.

(6) Includes 200,000 shares of our common stock owned directly by Mr. Walton,
30,900 shares subject to exercise of warrants held by Mr. Walton, 173,030
shares of preferred stock owned by Mr. Walton and 135,970 shares of
preferred stock held by a trust of which Mr. Walton is trustee.

(7) Includes (a) 500,000 shares of common stock subject to conversion of a
convertible debenture due March 30, 2004 (based upon $250,000 of principal
under such convertible debenture, divided by the conversion rate of $0.50),
(b) 5,000 shares of common stock held by Mr. Wenninger's spouse (Mr.
Wenninger disclaims beneficial ownership of the shares held by his spouse),
(c) 1,100,000 shares of common stock subject to exercise of warrants,
consisting of a warrant to purchase 100,000 shares and a warrant to
purchase a maximum of 1,000,000 shares, and (d) 60,000 shares of preferred
stock held by Mr. Wenninger. The warrants described in (c) above have been
pledged to a bank to secure a guarantee executed by Mr. Wenninger on our
behalf.

(8) Includes warrants to purchase 1,500,000 shares of common stock and 21,000
shares of preferred stock.

SB-2 32nd Page of 88 TOC 1st Previous Next ↓Bottom Just 32nd
RELATED PARTY TRANSACTIONS

On February 18, 1999, we borrowed $50,000 from O.B. Parrish, our Chairman
and Chief Executive Officer. The borrowing was completed through the execution
of a $50,000, one-year promissory note payable by us to Mr. Parrish and a Note
Purchase and Warrant Agreement and Stock Issuance Agreement. Mr. Parrish was
granted warrants to purchase 10,000 shares of our common stock at an exercise
price of $1.35 per share. The exercise price of the warrants equaled 80% of the
average market price of our common stock for the five trading days prior to the
date of issuance. The warrants expire upon the earlier of their exercise or
nine years after the date of their issuance. Effective February 18, 2000, we
extended the due date of the note to February 18, 2001, and in connection with
this extension, we issued to Mr. Parrish warrants to purchase 12,500 shares of
our common stock at an exercise price of $0.72 per share, which equaled 80% of
the average market price of our common stock for the five trading days prior to
the date of issuance. Effective February 18, 2001, we extended the due date of
the note to February 18, 2002, and in connection with this extension, we issued
to Mr. Parrish warrants to purchase 14,000 shares of our common stock at an
exercise price of $0.40 per share, which equaled 75% of the average market price
of our common stock for the fair trading days prior to the date of issuance.
The warrants expire upon the earlier of their exercise or ten years after the
date of their issuance. We also granted Mr. Parrish securities registration
rights for any common stock he receives from us under these warrants or the
Stock Issuance Agreement. We subsequently repaid this note in full.

On February 12, 1999, we borrowed $250,000 from Mr. Dearholt. The
borrowing was completed through the execution of a $250,000, one-year promissory
note payable by us to Mr. Dearholt. As part of this transaction, we entered
into a Note Purchase and Warrant Agreement and a Stock Issuance Agreement. Mr.
Dearholt received a warrant to purchase 50,000 shares of our common stock at an
exercise price of $1.248 per share. The exercise price of the warrants equaled
80% of the average market price of our common stock for the five trading days
prior to the date of issuance. The warrants expire upon the earlier of their
exercise or nine years after the date of their issuance. Effective February 12,
2000, we extended the due date of the note to February 12, 2001, and in
connection with this extension, we issued to Mr. Dearholt warrants to purchase
62,500 shares of our common stock at an exercise price of $0.77 per share, which
equaled 80% of the average market price of our common stock for the five trading
days prior to the date of issuance. Effective February 12, 2001, we extended
the due date of the note to February 12, 2002, and, in connection with this
extension, we issued to Mr. Dearholt warrants to purchase 70,000 shares of our
common stock at an exercise price of $0.40 per share, which equaled 75% of the
average market price of our common stock for the five trading days prior to the
date of issuance. The warrants expire upon the earlier of their exercise or ten
years after the date of their issuance. We also granted Mr. Dearholt securities
registration rights for any common stock he receives from us under these
warrants or the Stock Issuance Agreement. We subsequently repaid this note in
full.

On March 25, 1997, 1998, 1999, 2000, 2001 and 2002, we extended a $1
million, one-year promissory note payable by us to Mr. Dearholt for a previous
loan Mr. Dearholt made to us. The promissory note is now payable in full on
March 25, 2003 and bears interest at 12% annually, payable monthly. The
borrowing transactions were effected in the form of a promissory note from us to
Mr. Dearholt and related Note Purchase and Warrant Agreements and a Stock
Issuance Agreement. Under the 1997, 1998 and 1999 Note Purchase and Warrant
Agreements, we issued to Mr. Dearholt warrants to purchase 200,000 shares of
common stock in 1997 at an exercise price of $1.848 per share, 200,000 shares of
common stock in 1998 at an exercise price of $2.25 per share and 200,000 shares
of common stock in 1999 at an exercise price of $1.16 per share. In connection
with the extension of the note to March 25, 2001, we issued warrants to purchase
280,000 shares of our common stock in 2000 at an exercise price of $0.71 per
share. In connection with the extension of the note to March 25, 2002, we
issued warrants to purchase 250,000 shares of our common stock in 2001 at an
exercise price of $0.45 per share. In connection with the extension of the note
to March 25, 2003, we issued warrants to purchase 300,000 shares of our common
stock in 2002 at an exercise price of $1.18 per share. In each case, the
exercise price of the warrants equaled 80% of the market price of our common
stock on the date of issuance. The warrants expire upon the earlier of their
exercise or on March 25, 2005 for the warrants issued in 1997, March 25, 2007
for the warrants issued in 1998, March 25, 2009 for the warrants issued in 1999,
March 25, 2010 for the warrants issued in 2000, March 25, 2011 for the warrants
issued in 2001 and March 25, 2014 for the warrants issued in 2002. Under the
Stock Issuance Agreement, if we fail to pay the $1 million under the note when
due, we must issue 200,000 shares of our common stock to Mr. Dearholt. This
issuance will not, however, alleviate our liability under the note. We also
granted Mr. Dearholt securities registration rights for any common stock he
receives from us under these warrants or the Stock Issuance Agreement.

SB-2 33rd Page of 88 TOC 1st Previous Next ↓Bottom Just 33rd
On June 14, 2000, we completed a private placement of 400,000 shares of our
common stock to The John W. Dearholt Trust at a price of $0.50 per share,
representing a discount of 6% from the closing price of our common stock on the
Over the Counter Bulletin Board on that date. Stephen M. Dearholt is a
co-trustee of this trust. As part of this private placement, we granted the
investor registration rights which require that we register the investor's
resale of those shares.

We entered into a loan agreement on May 18, 2001, providing for a
three-year loan commitment from a bank of up to $2,000,000. We may borrow under
this loan agreement from time to time subject to a number of conditions,
including obtaining personal guarantees of 125% of the amount outstanding under
the loan. In May 2001, we borrowed a total of $1.5 million under this loan
agreement. Five persons provided guarantees equal in total to the $1.5 million
outstanding under the loan. The guarantors included James R. Kerber, a member
of our board of directors, Stephen M. Dearholt, a member of our board of
directors, Richard E. Wenninger, a member of our board of directors, and a trust
for the benefit of O.B. Parrish, our Chairman of the Board and Chief Executive
Officer. Each guarantor may be liable to the lender for up to 125% of the
guarantor's guarantee amount if we default under the loan. We issued warrants
to the guarantors to purchase the number of shares of our common stock equal to
the guarantee amount of such guarantor divided by the warrant purchase price as
of the date of exercise. The warrant purchase price is the price per share
equal to 70% of the market price of our common stock at the time of exercise,
but in no event will the warrant purchase price be less than $0.50 per share or
more than $1.00 per share. We also issued additional warrants to purchase
100,000 shares of our common stock at an exercise price of $0.50 per share to
each of Stephen M. Dearholt and Richard E. Wenninger because each of them
guaranteed $500,000 under the loan. We granted all of the guarantors
registration rights which require that we register the shares of common stock
underlying the warrants. The registration statement, of which this prospectus
is a part, registers the guarantors' resale from time to time of those shares.

Effective March 30, 2001, we issued a $250,000 convertible debenture to
Richard E. Wenninger. Mr. Wenninger subsequently became a member of our board
of directors in July 2001. The convertible debenture bears interest at 12% per
year and has a three-year term. Mr. Wenninger may convert the convertible
debenture into common stock at any time based on a conversion rate of $0.50 per
share.

In August 2001, we issued 1,000,000 shares of common stock to Richard E.
Wenninger for a total purchase price of $500,000. We granted Mr. Wenninger
registration rights which require that we register the shares of common stock we
issued to Mr. Wenninger. The registration statement, of which this prospectus
is a part, registers Mr. Wenninger's resale from time to time of those shares.

During fiscal 2001, our board of directors elected to extend the terms of
warrants held by Mr. Dearholt, consisting of warrants issued in 1995 and 1996 to
purchase a total of 240,000 shares of our common stock at exercise prices
between $3.00 and $3.10, for an additional five years.

It has been and currently is our policy that transactions between us and
our officers, directors, principal shareholders or affiliates are to be on terms
no less favorable to us than could be obtained from unaffiliated parties. We
intend that any future transactions between us and our officers, directors,
principal shareholders or affiliates will be approved by a majority of the
directors who are not financially interested in the transaction.

SB-2 34th Page of 88 TOC 1st Previous Next ↓Bottom Just 34th
DESCRIPTION OF CAPITAL STOCK

Our authorized capital stock consists of 35,500,000 shares of common stock,
$.01 par value per share and 5 million shares of Class A Preferred Stock, $.01
par value per share. The Class A Preferred Stock may be issued in series, at
any times and with any terms, that the Board of Directors considers appropriate.
To date, the Board of Directors has authorized for issuance 1,040,000 shares of
Class A Preferred Stock--Series 1, of which 660,000 shares are currently
outstanding and 1,500,000 shares of Class A Preferred Stock--Series 2, of which
no shares are currently issued and outstanding since the 729,927 shares of Class
A Preferred Stock--Series 2 which were previously issued have all converted into
a like number of shares of common stock. Our Amended and Restated Articles of
Incorporation provide that any shares of Class A Preferred Stock which are
issued and subsequently converted into common stock may not be reissued.
Accordingly, we currently have 2,460,000 shares of Class A Preferred Stock
authorized and available for issuance in series designated by the Board.

COMMON STOCK

Holders of common stock are entitled to one vote for each share held of
record on all matters to be voted on by the shareholders. Subject to the prior
rights of the holders of Class A Preferred Stock, as described below, holders of
common stock are entitled to receive dividends when and as declared by the Board
of Directors out of funds legally available for the payment of dividends. Upon
liquidation or dissolution, holders of common stock are entitled to share, based
on the number of shares owned, in our remaining assets which may be available
for distribution after payment of our creditors and satisfaction of any accrued
but unpaid dividends on the Class A Preferred Stock and the liquidation
preferences, if any, of the Class A Preferred Stock. Holders of common stock
have no preemptive, subscription or redemption rights. The common stock has no
cumulative voting rights. As a result, holders of more than 50% of the
outstanding shares of common stock can elect all of our directors.

All outstanding shares of common stock are fully paid and nonassessable.
Wisconsin law, however, may make our shareholders personally liable for unpaid
wages due employees for up to six months' services, but not in an amount greater
than the par value of the shares. Certain Wisconsin courts have interpreted
"par value" to mean the full amount paid upon purchase of our common stock.

CLASS A PREFERRED STOCK

The Board of Directors is authorized, subject to the limitations described
below, to issue from time to time, without shareholder authorization, in one or
more designated series, shares of Class A Preferred Stock and to determine the
dividend, redemption, liquidation, sinking fund and conversion rights of each
particular series. No dividends or other distributions will be payable on the
common stock unless dividends are paid in full on the Class A Preferred Stock
and all sinking fund obligations for the Class A Preferred Stock, if any, are
fully funded. Dividends on the Class A Preferred Stock will be cumulative from
the date of issuance. In the event of a liquidation or dissolution, the Class A
Preferred Stock would have priority over the common stock to receive the amount
of the liquidation preference as specified in each particular series, together
with any accrued but unpaid dividends out of our remaining assets. Holders of
shares of Class A Preferred Stock will have the right, at any time on or before
the redemption of the shares, to surrender the certificate evidencing the shares
of Class A Preferred Stock and receive upon conversion of the shares of Class A
Preferred Stock, a certificate evidencing one share of common stock for each
share of Class A Preferred Stock so surrendered. The holders of Class A
Preferred Stock are entitled to cast one vote per share held of record by them
at all meetings of our shareholders.

Class A Preferred Stock--Series 1

As authorized by our Articles of Incorporation, on August 15, 1997, the
Board of Directors by resolution designated the relative rights and preferences
of the first series of Class A Preferred Stock which was designated "Class A
Preferred Stock--Series 1." The Board authorized for issuance 1,040,000 shares
of this Series 1 Preferred Stock and 680,000 shares were issued, 660,000 of
which are currently outstanding. We have no present intention of issuing any
additional shares of Series 1 Preferred Stock. The Series 1 Preferred Stock
accrues dividends on a daily basis at the rate of 8% per year on the
"liquidation value" of the Series 1 Preferred Stock, which currently is $2.50
per share and is subject to adjustment and increase for accrued dividends. The
dividends will accrue through the earliest of the date of repurchase of the
32

SB-2 35th Page of 88 TOC 1st Previous Next ↓Bottom Just 35th
Series 1 Preferred Stock, its conversion into common stock or liquidation.
Dividends on the Series 1 Preferred Stock must be paid in full before dividends
may be paid on any other class of our stock or before any sums may be set aside
for the redemption or purchase of any of the Preferred Stock. Dividends will
accrue whether or not they have been declared and whether or not there are funds
legally available for the payment of dividends. Dividends must be paid on
October 1 of each year to the extent permitted by law. Dividends which are not
paid on the dividend reference date will accrue and be added to the liquidation
value of each share of Series 1 Preferred Stock. No dividends can be declared
and set aside for any shares of common stock unless the Board declares a
dividend payable on the outstanding shares of Series 1 Preferred Stock, in
addition to the dividends which the Series 1 Preferred Stock is otherwise
entitled as described above. Additional dividends on the Series 1 Preferred
Stock must be declared in the same amount per share of Series 1 Preferred Stock
as would be declared payable on the shares of common stock into which each share
of Series 1 Preferred Stock could be converted.

On or after August 1, 1998, each share of Series 1 Preferred Stock is
convertible into one share of common stock. Upon conversion, certificates for
shares of common stock will be issued together with, to the extent legally
available, an amount of cash equal to the remaining accrued but unpaid dividends
on the shares of Series 1 Preferred Stock so converted. We may redeem the
Series 1 Preferred Stock on or after August 1, 2000, unless the holder converts
the shares before our redemption is effective, at a price of $2.50 per share
plus all accrued but unpaid dividends. Upon a liquidation, the Series 1
Preferred Stock is entitled to a liquidation preference equal to $2.50 per share
plus any accrued but unpaid dividends. This amount must be paid prior to any
distribution on shares of common stock. Except as provided above, the Series 1
Preferred Stock will have the same rights, preferences and limitations as any
other series of Preferred Stock to be issued in the future, whenever designated
and issued.

Class A Preferred Stock--Series 2

On December 30, 1997, the Board of Directors by resolution designated the
relative rights and preferences of the second series of Class A Preferred Stock
which is designated "Class A Preferred Stock-Series 2." The Board authorized for
issuance 1,500,000 shares of this Series 2 Preferred Stock and 729,927 shares
were issued. However, as of the date of this prospectus, no shares of Series 2
Preferred Stock are issued and outstanding since they all converted into shares
of common stock on a one-for-one basis on April 3, 1998. The Series 2 Preferred
Stock does not carry any dividend preference. Upon a liquidation, each share of
the Series 2 Preferred Stock outstanding at the time of liquidation is entitled
to a liquidation preference equal to the purchase price paid for each share.
This amount must be paid prior to any distribution on shares of common stock,
however, the liquidation preference on the Series 1 Preferred Stock must be paid
before the liquidation preference on the Series 2 Preferred Stock is paid.

The issuance of one or more series of Class A Preferred Stock could have an
adverse effect on the rights of the holders of common stock, including dividend
rights, rights upon liquidation and voting rights. The Preferred Stock could
also be issued by us to defend against the threat of a takeover, if the Board of
Directors determines that the takeover is not in our best interests or the best
interests of our shareholders. This could occur even if a takeover was favored
by a majority of shareholders and was at a premium to the market price of the
common stock. We have no current plans or intention to issue additional shares
of Class A Preferred Stock.

TRANSFER AGENT

The transfer agent and registrar for the common stock is Fifth Third Bank,
Cincinnati, Ohio.

WISCONSIN ANTI-TAKEOVER PROVISIONS

Section 180.1150 of the Wisconsin Business Corporation Law provides that
the voting power of shares of public corporations, such as us, which are held by
any person holding in excess of 20% of the voting power of our stock shall be
limited to 10% of the full voting power of the shares. This statutory voting
restriction does not apply to shares acquired directly from us, acquired in a
transaction incident to which our shareholders vote to restore the full voting
power of the shares and under other circumstances more fully described in
section 180.1150. In addition, this statutory voting restriction is not
applicable to shares of common stock acquired before April 22, 1986.

SB-2 36th Page of 88 TOC 1st Previous Next ↓Bottom Just 36th
Section 180.1141 of the Wisconsin Business Corporation Law provides that a
"resident domestic corporation," such as us, may not engage in a "business
combination" with a person beneficially owning 10% or more of the voting power
of our outstanding stock for three years after the date the interested
shareholder acquired his 10% or greater interest, unless the business
combination or the acquisition of the 10% or greater interest was approved
before the stock acquisition date by our Board of Directors. After the
three-year period, a business combination that was not so approved can be
completed only if it is approved by a majority of the outstanding voting shares
not held by the interested shareholder or is made at a specified price intended
to provide a fair price for the shares held by noninterested shareholders.
Section 180.1141 is not applicable to shares of common stock acquired by a
shareholder prior to the registration of the common stock under the Securities
Exchange Act of 1934 and shares acquired before September 10, 1987.

INDEMNIFICATION

Our directors and officers are entitled to statutory rights to be
indemnified by us against litigation-related liabilities and expenses if the
director or officer is either successful in the defense of litigation or is
otherwise determined not to have engaged in willful misconduct, knowingly
violated the law, failed to deal fairly with us or our shareholders or derived
an improper personal benefit in the performance of his duties to us. These
rights are incorporated in our By-Laws. To the extent that indemnification for
liabilities arising under the Securities Act may be permitted to our directors,
officers and controlling persons, we have been advised that in the opinion of
the Securities and Exchange Commission, the indemnification provisions are
against public policy as expressed in the Securities Act and are, therefore,
unenforceable.

SB-2 37th Page of 88 TOC 1st Previous Next ↓Bottom Just 37th
SELLING STOCKHOLDERS

Information regarding beneficial ownership of our common stock by the
selling stockholders as of August 30, 2002 follows. The table assumes that the
selling stockholders sell all shares offered under this prospectus. We can make
no assurance as to how many of the shares offered that the selling stockholders
will in fact sell.

[Enlarge/Download Table]

SHARES OWNED SHARES BEING SHARES OWNED
SELLING STOCKHOLDER BEFORE OFFERING OFFERED AFTER OFFERING
-------------------- ---------------- ------------- ---------------
NUMBER PERCENT NUMBER PERCENT
------ ------- ------ -------

Thomas W. Bodine. . . . . . . 900,000 5.3% 500,000(1) 400,000 2.4%
14 Huntleigh Manor
St. Louis, MO 63131

Gerald Stein. . . . . . . . . 706,000 4.2% 200,000(2) 506,000 3.1%
2510 West Dean Road
Milwaukee, WI 53217-2009

Dr. Jerry Kinder. . . . . . . 400,000 2.4% 400,000(3) 0 0%
184 White Oaks Lane
Cape Girardeau, MO 63701

John Koch . . . . . . . . . . 194,000 1.2% 120,000(4) 74,000 *
P.O. Box 140
Heartland, WI 53029

Stephen M. Dearholt . . . . . 4,449,412(5) 22.8% 300,000(6) 4,149,412 21.6%
759 North Milwaukee Street
Suite 316
Milwaukee, WI 53202

Gary O. Benson. . . . . . . . 1,821,000(7) 10.1% 300,000(7) 1,521,000 8.4%
Regency Athletic Club
1300 Nicollet Mall, Suite 600
Minneapolis, MN 55403

Daniel Bishop . . . . . . . . 260,800(8) 1.6% 30,000(8) 230,800 1.4%
17235 Two Mile Road
Franksville, WI 53126

Mike Snow . . . . . . . . . . 456,800(9) 2.7% 60,000(9) 396,800 2.4%
3300 Norwest Center
90 South Seventh Street
Minneapolis, MN 55402

Robert Johander . . . . . . . 180,000(10) 1.1% 30,000(10) 150,000 *
3620 Fort Charles Drive
Naples, FL 34102

W.G. Securities Limited . . . 180,000(11) 1.1% 30,000(11) 150,000 *
Partnership
PMB 452
77 Mays Boulevard, No. 10
Incline Village, NV 89451

Total . . . . . . . . . . . . 1,970,000
==========
____________
<FN>

* less than 1%

(1) Represents 500,000 shares subject to exercise of warrants that have been
pledged to a bank to secure a guarantee executed by Mr. Bodine on our
behalf, including a warrant to purchase up to a maximum of 400,000 shares
of common stock (based on a guarantee amount of $200,000 divided by the
minimum warrant purchase price of $0.50 per share).

(2) Consists of shares of common stock subject to a warrant to purchase up to a
maximum of 200,000 shares of common stock (based on a guarantee amount of
$100,000 divided by the minimum warrant purchase price of $0.50 per share).
This warrant has been pledged to a bank to secure a guarantee executed by
Mr. Stein on our behalf.

SB-2 38th Page of 88 TOC 1st Previous Next ↓Bottom Just 38th
(3) Consists of shares of common stock subject to a warrant to purchase up to a
maximum of 400,000 shares of common stock (based on a guarantee amount of
$200,000 divided by the minimum warrant purchase price of $0.50 per share).
This warrant has been pledged to a bank to secure a guarantee executed by
Dr. Kinder on our behalf.

(4) Represents 120,000 shares purchased from us in November 2001 and offered
for sale by the selling stockholder by this prospectus.

(5) Represents 4,449,412 shares of common stock beneficially owned by the
selling stockholder as of August 30, 2002. Mr. Dearholt is one of our
directors. See "Principal Shareholders."

(6) Represents 300,000 shares subject to exercise of warrants issued to Mr.
Dearholt on March 25, 2002.

(7) Represents 300,000 shares of common stock and 21,000 shares of preferred
stock beneficially owned by the selling stockholder as of August 30, 2002,
and 1,500,000 shares receivable upon exercise of warrants owned by the
selling stockholder. The shares being offered by the selling stockholder
consist of 300,000 shares issued to the selling stockholder in July 2002 to
settle threatened litigation. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

(8) Represents 90,800 shares of common stock and 20,000 shares of preferred
stock beneficially owned by the selling stockholder as of August 30, 2002,
and 150,000 shares receivable upon exercise of warrants owned by the
selling stockholder. The shares being offered by the selling stockholder
consist of 30,000 shares issued to the selling stockholder in July 2002 to
settle threatened litigation. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

(9) Represents 148,800 shares of common stock and 8,000 shares of preferred
stock beneficially owned by the selling stockholder as of August 30, 2002,
and 300,000 shares receivable upon exercise of warrants owned by the
selling stockholder. The shares being offered by the selling stockholder
consist of 60,000 shares issued to the selling stockholder in July 2002 to
settle threatened litigation. See "Management's Discussion and Analysis of
Financial Condition and Results of Operations."

(10) Represents 30,000 shares of common stock beneficially owned by the selling
stockholder as of August 30, 2002, and 150,000 shares receivable upon
exercise of warrants owned by the selling stockholder. The shares being
offered by the selling stockholder consist of 30,000 shares issued to the
selling stockholder in July 2002 to settle threatened litigation. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

(11) Represents 30,000 shares of common stock beneficially owned by the selling
stockholder as of August 30, 2002, and 150,000 shares receivable upon
exercise of warrants owned by the selling stockholder. The shares being
offered by the selling stockholder consist of 300,000 shares issued to the
selling stockholder in July 2002 to settle threatened litigation. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations." William Deters and Graceanne K. Deters are the general
partners of the selling stockholder and share beneficial ownership of these
shares.

We have agreed to bear certain expenses (other than broker discounts and
commissions, if any) in connection with the registration statement.

SB-2 39th Page of 88 TOC 1st Previous Next ↓Bottom Just 39th
PLAN OF DISTRIBUTION

We have been advised by the selling stockholders that the selling
stockholders may sell the shares from time to time in transactions on the OTC
Bulletin Board, in negotiated transactions, or otherwise, or by a combination of
these methods, at fixed prices which may be changed, at market prices at the
time of sale, at prices related to market prices or at negotiated prices. The
selling stockholders may effect these transactions by selling the shares to or
through broker-dealers, who may receive compensation in the form of discounts,
concessions or commissions from the selling stockholders or the purchasers of
the shares for whom the broker-dealer may act as an agent or to whom it may sell
the shares as a principal, or both. The compensation to a particular
broker-dealer may be in excess of customary commissions.

The selling stockholders and broker-dealers who act in connection with the
sale of the shares may be underwriters. Profits on any resale of the shares as
a principal by such selling stockholders or broker-dealers and any commissions
received by such broker-dealers may be underwriting discounts and commissions
under the Securities Act.

Any broker-dealer participating in transactions as agent may receive
commissions from the selling stockholders and, if they act as agent for the
purchaser of the shares, from the purchaser. Broker-dealers may agree with the
selling stockholders to sell a specified number of shares at a stipulated price
per share and, to the extent a broker-dealer is unable to do so acting as agent
for the selling stockholders, to purchase as principal any unsold shares at the
price required to fulfill the broker-dealer commitment to the selling
stockholders. Broker-dealers who acquire shares as principal may resell the
shares from time to time in transactions (which may involve crosses and block
transactions and which may involve sales to and through other broker-dealers,
including transactions of the nature described above) in the over-the-counter
market, in negotiated transactions or otherwise at market prices prevailing at
the time of sale or at negotiated prices, and may pay to or receive from the
purchasers of the shares commissions computed as described above. To the extent
required under the Securities Act, a supplemental prospectus will be filed,
disclosing:

- the name of the broker-dealers;

- the number of shares involved;

- the price at which the shares are to be sold;

- the commissions paid or discounts or concessions allowed to the
broker-dealers, where applicable;

- that broker-dealers did not conduct any investigation to verify the
information in this prospectus, as supplemented; and

- other facts material to the transaction.

Under applicable rules and regulations under the Exchange Act, any person
engaged in a distribution of the shares may not simultaneously engage in market
making activities with the common stock for a period beginning when the person
becomes a distribution participant and ending upon the person's completion of
participation in a distribution, including stabilization activities in the
common stock to effect covering transactions, to impose penalty bids or to
effect passive market making bids. In addition, we and the selling stockholders
will be subject to applicable provisions of the Exchange Act, including Rule
10b-5 and to the extent we and the selling stockholders are distribution
participants, Regulation M. These rules and regulations may affect the
marketability of the shares.

SB-2 40th Page of 88 TOC 1st Previous Next ↓Bottom Just 40th
The Securities Enforcement and Penny Stock Reform Act of 1990 imposes
restrictions when broker-dealers make trades in any stock such as our common
stock which is defined as a "penny stock." The SEC's regulations generally
define a penny stock as an equity security that has a price of less than $5.00
per share, other than securities which are traded on markets such as the New
York Stock Exchange, the American Stock Exchange or the Nasdaq Stock Market.
The regulations restricting trades in penny stocks include a requirement that
broker-dealers deliver to their customers, prior to any transaction involving a
penny stock, a disclosure schedule explaining the penny stock market and the
risks associated with the penny stock market and the compensation of the
broker-dealer and its salesperson in the transaction and provide the customer
with current bid and offer quotations for the penny stock. Broker-dealers who
recommend penny stocks to persons other than their established customers and a
limited class of accredited investors must make a special written suitability
determination for the purchaser and receive the purchaser's written agreement to
the transaction prior to the sale of the securities. Broker-dealers also must
provide each of their customers with monthly account statements showing the
market value of each penny stock held in the customer's account.

The selling stockholders will pay all commissions associated with the sale
of the shares. The shares offered by this prospectus are being registered to
comply with contractual obligations, and we have paid the expenses of the
preparation of this prospectus. We have also agreed to indemnify the selling
stockholders against various liabilities, including liabilities under the
Securities Act, or, if the indemnity is unavailable, to contribute toward
amounts required to be paid.

LEGAL MATTERS

The validity of the securities offered by this prospectus will be passed
upon for us by Reinhart Boerner Van Deuren s.c., Milwaukee, Wisconsin.

EXPERTS

The consolidated financial statements of The Female Health Company at
September 30, 2001 and for the two years in the period ended September 30, 2001
included in this prospectus have been audited by McGladrey & Pullen LLP,
independent auditors, as set forth in their report (which contains an
explanatory paragraph with respect to conditions which raise substantial doubt
about our ability to continue as a going concern), in reliance upon such report
given upon the authority of such firm as experts in accounting and auditing. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
amounts and classification of liabilities that might result from the outcome of
that uncertainty.

SB-2 41st Page of 88 TOC 1st Previous Next ↓Bottom Just 41st
The Female Health Company
Index to Consolidated Financial Statements

[Enlarge/Download Table]

Document Page No.
-------- --------

Audited Consolidated Financial Statements.

Report of McGladrey & Pullen, LLP, Independent Auditors . . . . . . . . . . . F-2

Consolidated Balance Sheet as of September 30, 2001 . . . . . . . . . . . . . F-3

Consolidated Statements of Operations for the years ended
September 30, 2001 and 2000 . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statements of Stockholders' Equity (Deficit) for the
years ended September 30, 2001 and 2000. . . . . . . . . . . . . . . . . . F-5 and F-6

Consolidated Statements of Cash Flows for the years ended
September 30, 2001 and 2000.. . . . . . . . . . . . . . . . . . . . . . . . F-7

Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . F-8 through F-22

Unaudited Condensed Consolidated Financial Statements

Unaudited Condensed Consolidated Balance Sheet
as of June 30, 2002 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-23

Unaudited Condensed Consolidated Statements of Operations
for the Nine Months Ended June 30, 2002 and 2001. . . . . . . . . . . . . . F-24

Unaudited Condensed Consolidated Statements of Cash Flows
for the Nine Months Ended June 30, 2002 and 2001. . . . . . . . . . . . . . F-25

Notes to Unaudited Condensed Consolidated Financial Statements. . . . . . . . F-26 through F-31

F-1

SB-2 42nd Page of 88 TOC 1st Previous Next ↓Bottom Just 42nd
INDEPENDENT AUDITOR'S REPORT

To the Board of Directors and Stockholders
The Female Health Company and Subsidiaries
Chicago, Illinois

We have audited the accompanying consolidated balance sheet of The Female Health
Company and subsidiaries, as of September 30, 2001, and the related consolidated
statements of operations, stockholders' equity (deficit), and cash flows for the
years ended September 30, 2001 and 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with auditing standards generally accepted
in the United States of America. Those standards require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of The Female Health
Company and subsidiaries as of September 30, 2001, and the results of their
operations and their cash flows for the years ended September 30, 2001 and 2000,
in conformity with accounting principles generally accepted in the United States
of America.

The accompanying consolidated financial statements have been presented assuming
that The Female Health Company will continue as a going concern. As more fully
described in Note 14, the Company has experienced slower than expected growth in
revenues from its sole product, which has adversely affected the Company's
current results of operations and liquidity. These conditions raise substantial
doubt about the Company's ability to continue as a going concern. Management's
plans in regard to these matters are also described in Note 14. The
consolidated financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts of classification of liabilities that may result from the outcome of
this uncertainty.

/s/ McGladrey & Pullen, LLP
Schaumburg , Illinois
November 21, 2001 except for
the waiver of a loan covenant
violation discussed in Note 4
as to which the date is
December 28, 2001

F-2

SB-2 43rd Page of 88 TOC 1st Previous Next ↓Bottom Just 43rd
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 2001

[Enlarge/Download Table]

ASSETS
Current Assets
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 469,406
Accounts receivable, net of allowance for doubtful accounts
of $20,000 and allowance for product returns of $7,500 . . . . . . 1,430,643
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 603,665
Prepaid expenses and other current assets. . . . . . . . . . . . . . 119,895
-------------
Total current assets. . . . . . . . . . . . . . . . . . . . . . . 2,623,609
-------------

Other Assets
Certificate of deposit . . . . . . . . . . . . . . . . . . . . . . . 115,000
Intellectual property, net of accumulated amortization of $605,150 . 462,763
Other. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 143,890
-------------
721,653
-------------
Equipment and Furniture and Fixtures
Equipment, furniture and fixtures. . . . . . . . . . . . . . . . . . 3,635,625
Less accumulated depreciation. . . . . . . . . . . . . . . . . . . . 2,650,109
-------------
985,516
-------------
$ 4,330,778
=============

LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Notes payable, related party, net of unamortized discount of $54,600 $ 945,400
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . 459,248
Accrued expenses and other current liabilities . . . . . . . . . . . 382,162
Preferred dividends payable. . . . . . . . . . . . . . . . . . . . . 133,814
-------------
Total current liabilities . . . . . . . . . . . . . . . . . . . . 1,920,624
-------------

Long-Term Liabilities
Note payable, bank, net of unamortized discount of $842,869. . . . . 657,131
Convertible debentures . . . . . . . . . . . . . . . . . . . . . . . 450,000
Deferred gain on sale of facility. . . . . . . . . . . . . . . . . . 1,250,700
-------------
2,357,831
-------------
Stockholders' Equity
Convertible preferred stock, Series 1, par value $.01 per share.
Authorized 5,000,000 shares; issued and outstanding 660,000 shares 6,600
Common stock, par value $.01 per share. Authorized 27,000,000
shares; issued and outstanding 15,692,929 shares.. . . . . . . . . 156,929
Additional paid-in capital . . . . . . . . . . . . . . . . . . . . . 50,264,602
Unearned consulting fees . . . . . . . . . . . . . . . . . . . . . . (60,817)
Accumulated other comprehensive income . . . . . . . . . . . . . . . 23,801
Accumulated deficit. . . . . . . . . . . . . . . . . . . . . . . . . (50,306,716)
-------------
84,399
Treasury Stock, at cost, 20,000 shares of common stock . . . . . . . (32,076)
-------------
52,323
-------------
$ 4,330,778
=============

See Notes to Consolidated Financial Statements.

F-3

SB-2 44th Page of 88 TOC 1st Previous Next ↓Bottom Just 44th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS
YEARS ENDED SEPTEMBER 30, 2001 AND 2000

[Download Table]

2001 2000
------------ ------------

Net revenues . . . . . . . . . . . . . . . . . . . . $ 6,716,174 $ 5,766,868

Cost of products sold. . . . . . . . . . . . . . . . 5,337,830 5,184,735
------------ ------------

Gross Profit. . . . . . . . . . . . . . . . . . 1,378,344 582,133
------------ ------------

Operating expenses:
Advertising and promotion. . . . . . . . . . . . . 129,155 247,222
Selling, general and administrative. . . . . . . . 1,852,044 2,727,542
------------ ------------
Total operating expenses. . . . . . . . . . . . 1,981,199 2,974,764
------------ ------------

Operating (loss). . . . . . . . . . . . . . . . (602,855) (2,392,631)
------------ ------------

Nonoperating income (expense):
Amortization of debt issuance costs. . . . . . . . - (245,676)
Interest expense . . . . . . . . . . . . . . . . . (702,039) (1,231,832)
Interest income. . . . . . . . . . . . . . . . . . 12,669 34,772
Nonoperating income. . . . . . . . . . . . . . . . 120,969 145,204
------------ ------------
(568,401) (1,297,532)
------------ ------------

Net (loss). . . . . . . . . . . . . . . . . . . (1,171,256) (3,690,163)

Preferred dividends, Series 1. . . . . . . . . . . . 133,000 132,195
------------ ------------

Net (loss) attributable to common stockholders. $(1,304,256) $(3,822,358)
============ ============

Net (loss) per common share outstanding . . . . $ (0.09) $ (0.30)

Weighted average common shares outstanding . . . . . 14,630,970 12,764,498

See Notes to Consolidated Financial Statements.

F-4

SB-2 45th Page of 88 TOC 1st Previous Next ↓Bottom Just 45th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED SEPTEMBER 30, 2001 AND 2000

[Enlarge/Download Table]

Accumulated
Additional Unearned Other Cost of
Preferred Common Paid-in Consulting Comprehensive Accumulated Treasury
Stock Stock Capital Fees Income Deficit Stock
------------ --------- ------------ ------------ --------------- ------------- ----------

Balance at September 30, 1999. $ 6,600 $119,296 $46,820,779 $ (201,374) $ 189,847 $(45,180,102) $ (32,076)
Issuance of 197,093 shares
of Common Stock under
the equity line of credit. - 1,971 95,029 - - - -
Issuance of 200,000 shares
of Common Stock for
consulting services. . . . - 2,000 112,055 (114,055) - - -
Issuance of warrants with
convertible debentures . . - - 157,700 - - - -
Forfeiture of 6,000 shares
of Common Stock under
stock bonus plan . . . . . - (60) (17,190) - - - -
Issuance of warrants with
short-term notes payable . - - 193,289 - - - -
Issuance of 20,005 shares
of Common Stock as
payment of interest on
debentures . . . . . . . . - 200 16,356 - - - -
Issuance of 41,352 shares
of Common Stock as
payment of preferred
stock dividends. . . . . . - 413 33,185 - - - -
Preferred Stock dividends. . - - - - - (132,195) -
Issuance of 1,421,669
shares of Common
Stock. . . . . . . . . . . - 14,217 820,783 - - - -
Amortization of unearned
consulting fees. . . . . . . - - - 224,614 - - -
Comprehensive income (loss):
Net (loss) . . . . . . . . . - - - - - (3,690,163) -
Foreign currency
translation adjustment . . - - - - (134,186) - -

Comprehensive income (loss). .
------------ --------- ------------ ------------ --------------- ------------- ----------
Balance at September 30, 2000. $ 6,600 $138,037 $48,231,986 $ (90,815) $ 55,661 $(49,002,460) $ (32,076)
============ ========= ============ ============ =============== ============= ==========

Total
------------

Balance at September 30, 1999. $ 1,722,970
Issuance of 197,093 shares
of Common Stock under
the equity line of credit. 97,000
Issuance of 200,000 shares
of Common Stock for
consulting services. . . . -
Issuance of warrants with
convertible debentures . . 157,700
Forfeiture of 6,000 shares
of Common Stock under
stock bonus plan . . . . . (17,250)
Issuance of warrants with
short-term notes payable . 193,289
Issuance of 20,005 shares
of Common Stock as
payment of interest on
debentures . . . . . . . . 16,556
Issuance of 41,352 shares
of Common Stock as
payment of preferred
stock dividends. . . . . . 33,598
Preferred Stock dividends. . (132,195)
Issuance of 1,421,669
shares of Common
Stock. . . . . . . . . . . 835,000
Amortization of unearned
consulting fees. . . . . . . 224,614
Comprehensive income (loss):
Net (loss) . . . . . . . . . (3,690,163)
Foreign currency
translation adjustment . . (134,186)
------------
Comprehensive income (loss). . (3,824,349)
------------
Balance at September 30, 2000. $ (693,067)
============

See Notes to Consolidated Financial Statements.

F-5

SB-2 46th Page of 88 TOC 1st Previous Next ↓Bottom Just 46th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
YEARS ENDED SEPTEMBER 30, 2001 AND 2000

[Enlarge/Download Table]

Accumulated
Additional Unearned Other Cost of
Preferred Common Paid-in Consulting Comprehensive Accumulated Treasury
Stock Stock Capital Fees Income Deficit Stock
------------ -------- ----------- ------------ --------------- ------------- ----------

Balance at September 30, 2000
(balance forwarded). . . . . . $ 6,600 $138,037 $48,231,986 $ (90,815) $ 55,661 $(49,002,460) $ (32,076)
Issuance of 200,000 shares of
Common Stock for
consulting services. . . . . . - 2,000 91,760 (93,760) - - -
Issuance of warrants with
note payable, bank. . . . . . - - 938,378 - - - -
Issuance of warrants with
short-term notes payable . . . - - 144,813 - - - -
Renewal of expired warrants. . - - 22,661 - - - -
Issuance of 54,322 shares of
Common Stock as payment
of interest on debentures . . - 543 27,353 - - - -
Issuance of 34,908 shares of
Common Stock as payment
of preferred stock dividends. - 349 23,651 - - - -
Preferred Stock dividends. . . - - - - - (133,000) -
Issuance of 1,600,000 shares
of Common Stock . . . . . . . - 16,000 784,000 - - - -
Amortization of unearned
consulting fees . . . . . . . - - - 123,758 - - -
Comprehensive income (loss):
Net (loss) . . . . . . . . . . - - - - - (1,171,256) -
Foreign currency translation
adjustment. . . . . . . . . . - - - - (31,860) - -

Comprehensive income (loss). .
------------ -------- ----------- ------------ --------------- ------------- ----------
Balance at September 30, 2001. $ 6,600 $156,929 $50,264,602 $ (60,817) $ 23,801 $(50,306,716) $ (32,076)
============ ======== =========== ============ =============== ============= ==========

Total
------------

Balance at September 30, 2000
(balance forwarded). . . . . . $ (693,067)
Issuance of 200,000 shares of
Common Stock for
consulting services. . . . . . -
Issuance of warrants with
note payable, bank. . . . . . 938,378
Issuance of warrants with
short-term notes payable . . . 144,813
Renewal of expired warrants. . 22,661
Issuance of 54,322 shares of
Common Stock as payment
of interest on debentures . . 27,896
Issuance of 34,908 shares of
Common Stock as payment
of preferred stock dividends. 24,000
Preferred Stock dividends. . . (133,000)
Issuance of 1,600,000 shares
of Common Stock . . . . . . . 800,000
Amortization of unearned
consulting fees . . . . . . . 123,758
Comprehensive income (loss):
Net (loss) . . . . . . . . . . (1,171,256)
Foreign currency translation
adjustment. . . . . . . . . . (31,860)
------------
Comprehensive income (loss). . (1,203,116)
------------
Balance at September 30, 2001. $ 52,323
============

F-6

SB-2 47th Page of 88 TOC 1st Previous Next ↓Bottom Just 47th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED SEPTEMBER 30, 2001 AND 2000

[Enlarge/Download Table]

2001 2000
------------ ------------

OPERATING ACTIVITIES
Net (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $(1,171,256) $(3,690,163)
Adjustments to reconcile net (loss) to net cash (used in)
operating activities:
Depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . 425,795 425,899
Amortization of intellectual property rights . . . . . . . . . . 106,779 110,025
(Recovery of) provision for inventory obsolescence . . . . . . . (28,623) 40,286
(Recovery of) doubtful accounts, returns and discounts . . . . . (135,593) (224,846)
Amortization of unearned consulting fees . . . . . . . . . . . . 123,758 224,614
Amortization of discounts on notes payable
and convertible debentures . . . . . . . . . . . . . . . . . . 375,541 957,192
Amortization of deferred income realized on U.K. grant . . . . . (25,956) (53,490)
Amortization of deferred gain on sale and leaseback of building. (82,000) (84,495)
Amortization of debt issuance costs. . . . . . . . . . . . . . . - 245,676
Changes in operating assets and liabilities:
Accounts receivable. . . . . . . . . . . . . . . . . . . . . . (466,630) 869,242
Inventories. . . . . . . . . . . . . . . . . . . . . . . . . . (97,696) 438,442
Prepaid expenses and other current assets. . . . . . . . . . . (41,565) 30,676
Accounts payable . . . . . . . . . . . . . . . . . . . . . . . 135,609 (222,543)
Accrued expenses and other current liabilities . . . . . . . . 256,818 (98,352)
------------ ------------
Net cash (used in) operating activities . . . . . . . . . . (625,019) (1,031,837)
------------ ------------

INVESTING ACTIVITIES
Purchase of certificate of deposit. . . . . . . . . . . . . . . . . . (115,000) -
Capital expenditures. . . . . . . . . . . . . . . . . . . . . . . . (57,791) (11,284)
------------ ------------
Net cash (used in) investing activities . . . . . . . . . . (172,791) (11,284)
------------ ------------

FINANCING ACTIVITIES
Proceeds from issuance of common stock. . . . . . . . . . . . . . . 800,000 835,000
Proceeds from issuance of common stock under the
equity line of credit . . . . . . . . . . . . . . . . . . . . . . - 97,000
Proceeds from note payable, bank. . . . . . . . . . . . . . . . . . 1,500,000 -
Proceeds from convertible debentures issued . . . . . . . . . . . . 450,000 -
Dividend paid on preferred stock. . . . . . . . . . . . . . . . . . (107,186) (40,150)
Payments on related party notes . . . . . . . . . . . . . . . . . . (300,000) -
Payments on convertible debenture . . . . . . . . . . . . . . . . . (1,500,000) -
------------ ------------
Net cash provided by financing activities . . . . . . . . . 842,814 891,850
------------ ------------

Effect of exchange rate changes on cash . . . . . . . . . . . . . . . $ (32,720) $ 37,684
------------ ------------

Net increase (decrease) in cash . . . . . . . . . . . . . . 12,284 (113,587)

Cash at beginning of year . . . . . . . . . . . . . . . . . . . . . . 457,122 570,709
------------ ------------

Cash at end of year . . . . . . . . . . . . . . . . . . . . . . . . . $ 469,406 $ 457,122
============ ============

Supplemental Cash Flow Disclosures:
Interest paid . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 650,400 $ 191,634

Supplemental Schedule of Noncash Financing Activities:
Issuance of warrants on convertible debentures and notes payable. . $ 1,105,852 $ 350,989
Common stock issued for payment of preferred stock dividends
and convertible debenture interest. . . . . . . . . . . . . . . . 51,896 50,154
Preferred dividends declared, Series 1. . . . . . . . . . . . . . . 133,000 132,195
Renewal of notes payable with related parties . . . . . . . . . . . 1,300,000 1,300,000

See Notes to Consolidated Financial Statements.

F-7

SB-2 48th Page of 88 TOC 1st Previous Next ↓Bottom Just 48th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES

Principles of consolidation and nature of operations: The consolidated
----------------------------------------------------------
financial statements include the accounts of the Company and its wholly owned
subsidiaries, The Female Health Company - UK and The Female Health Company - UK,
plc. All significant intercompany transactions and accounts have been eliminated
in consolidation. The Female Health Company ("FHC" or the "Company") is
currently engaged in the marketing, manufacture and distribution of a consumer
health care product known as the Reality female condom, "Reality," in the U.S.
and "femidom" or "femy" outside the U.S. The Female Health Company - UK, is the
holding company of The Female Health Company - UK, plc, which operates a 40,000
sq. ft. leased manufacturing facility located in London, England.

The product is currently sold or available in either or both commercial (private
sector) and public sector markets in 80 countries. The product is marketed in
17 countries by various country-specific commercial partners. The Company's
credit terms are primarily on a net 30-day basis.

Use of estimates: The preparation of financial statements requires management
------------------
to make estimates and use assumptions that affect certain reported amounts and
disclosures. Actual results may differ from those estimates.

Significant accounting estimates include the following:

Trade receivables include a provision for sales returns and trade allowances,
which is based on management's estimate of future product returns from customers
in connection with unsold product which has expired or is expected to expire
before it is sold. The estimated costs for product returns, price discounts and
trade allowances are accrued when the initial sale is recorded.

The market value of inventory is based on management's best estimate of future
sales and the time remaining before the existing inventories reach their
expiration dates.

The Company evaluates intellectual property rights for impairment by comparing
the net present value of the asset's estimated future income stream to the
asset's carrying value.

Although management uses the best information available, it is reasonably
possible that the estimates used by the Company will be materially different
from the actual results. These differences could have a material effect on the
Company's future results of operations and financial condition.

Cash: Substantially all of the Company's cash was on deposit with one financial
----
institution.

Cash equivalents: For purposes of determining cash flows, all highly liquid
-----------------
debt instruments with a term of three months or less are considered cash
equivalents.

Inventories: Inventories are valued at the lower of cost or market. The cost
-----------
is determined using the first-in, first-out (FIFO) method. Inventories are also
written down for management's estimates of product which will not sell prior to
its expiration date. Write downs of inventories establish a new cost basis
which is not increased for future increases in the market value of inventories
or changes in estimated obsolescence.

Foreign currency translation: In accordance with Financial Accounting Standards
----------------------------
No. 52, Foreign Currency Translation, the financial statements of the Company's
international subsidiaries are translated into U.S. dollars using the exchange
rate at each balance sheet date for assets and liabilities, the historical
exchange rate for stockholders' equity and a weighted average exchange rate for
each period for revenues, expenses, and gains and losses. Translation
adjustments are recorded as a separate component of stockholders' equity as the
local currency is the functional currency.

F-8

SB-2 49th Page of 88 TOC 1st Previous Next ↓Bottom Just 49th
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Equipment and furniture and fixtures: Depreciation and amortization are computed
------------------------------------
using primarily the straight-line method. Depreciation and amortization are
computed over the estimated useful lives of the respective assets which range as
follows:
Equipment 5 - 10 years
Furniture and fixtures 3 years

Intellectual property rights: The Company holds patents on the female condom in
----------------------------
the United States, the European Union, Japan, Canada, Australia and The People's
Republic of China and holds patents on the manufacturing technology in various
countries. The Company also licenses the trademark "Reality" in the United
States and has trademarks on the names "femidom" and "femy" in certain foreign
countries. Intellectual property rights are amortized on a straight-line basis
over their estimated useful life of twelve years.

Financial instruments: The Company has no financial instruments for which the
----------------------
carrying value materially differs from fair value.

Revenue recognition: Revenues from product sales are recognized as the products
-------------------
are shipped to the customers.

Research and development costs: Research and development costs are expensed as
-------------------------------
incurred. The amount of costs expensed for the year ended September 30, 2000 was
$67,099. There were no research and development costs incurred for the year
ended September 30, 2001.

Stock-based compensation: The value of stock options awarded to employees is
-------------------------
measured using the intrinsic value method prescribed by Accounting Principles
Board Opinion No. 25 (APB 25), Accounting for Stock Issued to Employees. The
Company has provided pro forma disclosures in Note 7 of net income as if the
fair-value-based method prescribed by Financial Accounting Standard No. 123,
Accounting for Stock-Based Compensation (FAS 123), was used in measuring
compensation expense.

Advertising: The Company's policy is to expense production costs in the period
-----------
in which the advertisement is initially presented to consumers.

Income taxes: The Company files separate income tax returns for its foreign
-------------
subsidiaries. Statement of Financial Accounting Standards No. 109, Accounting
for Income Taxes (FAS 109), 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.

F-9

SB-2 50th Page of 88 TOC 1st Previous Next ↓Bottom Just 50th
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

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 are not expected to be realized.

Earnings per share (EPS): Basic EPS is computed by dividing income available to
------------------------
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted EPS is computed 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 conversion
of convertible preferred shares or convertible debt and the exercise of stock
options and warrants for all periods. Fully diluted (loss) per share is not
presented since the effect would be anti-dilutive.

Other comprehensive income: Accounting principles generally require that
----------------------------
recognized revenue, expenses, gains and losses be included in net income.
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 balance sheet, such items, along with net income, are components
of comprehensive income.

New accounting pronouncements: SFAS 140, Accounting for Transfers and Servicing
-----------------------------
of Financial Assets and Extinguishments of Liabilities, a replacement of SFAS
125, Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities, revises the standards for accounting for
securitizations and other transfers of financial assets and collateral and
requires certain disclosures, but it carries over most of SFAS 125's provisions
without reconsideration. SFAS 140 provides consistent standards for
distinguishing transfers of financial assets that are sales from transfers that
are secured borrowings. The provisions of SFAS 140 are effective for transfers
after March 31, 2001. It was effective for disclosures about securitizations
and collateral and for recognition and reclassification of collateral for fiscal
years ending after December 15, 2000. The Company adopted SFAS 140 and the
implementation of this standard did not have a material impact on the Company's
financial statements.

In July 2001, the Financial Accounting Standards Board issued SFAS 141, Business
Combinations, and SFAS 142, Goodwill and Other Intangible Assets. SFAS 141
addresses financial accounting and reporting for business combinations and is
effective for all business combinations initiated after June 30, 2001. SFAS 142
addresses financial accounting and reporting for acquired goodwill and other
intangible assets and is effective for fiscal years beginning after December 15,
2001. The Company has not yet quantified the impact of adopting these
statements on its financial position or results of operations.

In August 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 143, Asset Retirement Obligations.
This Statement addresses financial accounting and reporting for obligations
associated with the retirement of tangible long-lived assets and the associated
retirement costs. SFAS 143 applies to legal obligations associated with the
retirement of long-lived assets that result from the acquisition, construction,
development and (or) the normal operation of a long-lived asset, except for
certain obligations of lessees. As used in this Statement, a legal obligation
is an obligation that a party is required to settle as a result of an existing
or enacted law, statute, ordinance, or written or oral contract or by legal
construction of a contract under the doctrine of promissory estoppel. This
Statement amends FASB Statement No. 19, Financial Accounting and Reporting by
Oil and Gas Producing Companies and is effective for financial statements issued
for fiscal years beginning after

F-10

SB-2 51st Page of 88 TOC 1st Previous Next ↓Bottom Just 51st
NOTE 1. NATURE OF BUSINESS AND SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

June 15, 2002. Management does not anticipate that the adoption of this
Statement will have a significant effect on the Company's financial statements.

In October 2001, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 144, Accounting for the Impairment or
Disposal of Long-Lived Assets. This Statement addresses the financial
accounting and reporting for the impairment or disposal of long-lived assets and
supersedes FASB Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed Of, and the accounting and
reporting provisions of APB Opinion No. 30, Reporting the Results of
Operations-Reporting the Effects of Disposal of a Segment of a Business, and
Extraordinary, Unusual and Infrequently Occurring Events and Transactions, for
the disposal of a segment of a business (as previously defined in that Opinion).
SFAS 144 also amends ARB No. 51, Consolidated Financial Statements, to eliminate
the exception to consolidation for a subsidiary for which control is likely to
be temporary. The provisions of this Statement are effective for financial
statements issued for fiscal years beginning after December 15, 2001.
Management does not anticipate that the adoption of this Statement will have a
significant effect on the Company's financial statements.

NOTE 2. INVENTORIES

The components of inventory consist of the following at September 30, 2001:

[Download Table]

Raw materials . . . . . . . . . $257,303
Work in process . . . . . . . . 248,660
Finished goods. . . . . . . . . 140,897
Less allowance for obsolescence (43,195)
---------
$603,665
=========

NOTE 3. LEASES

The Company had a seven-year operating lease with a third party for office space
which expired September 30, 2001. Subsequent to year-end, the Company entered
into a new lease agreement for office space with an unrelated third party which
expires September 2006. The new lease requires monthly payments of $5,623 plus
real estate taxes, utilities, and maintenance expenses. The Company was
required to make a security deposit of $115,000 to be reduced in subsequent
years. The security deposit is collateralized by an irrevocable letter of
credit from a bank. The Bank required the Company to hold a $115,000
certificate of deposit as collateral for the letter of credit.

The Company guaranteed an affiliate's lease with an unrelated third party which
expired January 31, 2001. On November 1, 1998, the office space was sublet for
the remaining term of the lease. Rental expense under the affiliate lease was
$3,495 and $15,797 in 2001 and 2000, respectively, which is net of sublease
rentals of $9,891 and $39,204 in 2001 and 2000, respectively.

On December 10, 1996, the Company entered into what is in essence a sale and
leaseback agreement with respect to its 40,000 square foot manufacturing
facility located in London, England. The Company received $3,365,000 (1,950,000
pounds) for leasing the facility to a third party for a nominal annual rental
charge and for providing the third party with an option to purchase the facility
for one pound during the period December 2006 to December 2027.

F-11

SB-2 52nd Page of 88 TOC 1st Previous Next ↓Bottom Just 52nd
NOTE 3. LEASES (CONTINUED)

As part of the same transaction, the Company entered into an agreement to lease
the facility back from the third party for base rents of $304,000 (195,000
pounds) per year payable quarterly until 2016. The lease is renewable through
December 2027. The Company was also required to make a security deposit of
$304,000 (195,000 pounds) to be reduced in subsequent years. The facility had a
net book value of $1,398,819 (810,845 pounds) on the date of the transaction.
The $1,966,181 (1,139,155 pounds) gain which resulted from this transaction will
be recognized ratably over the initial term of the lease. Unamortized deferred
gain as of September 30, 2001, was $1,250,700 (868,633 pounds).

The Company also leases various equipment under various lease agreements which
expire at various dates through October 2004. The aggregate monthly rental was
$2,231 at September 30, 2001.

Details of operating lease expense in total and separately for transactions with
related parties are as follows:

[Download Table]

September 30,
2001 2000
-------- --------

Operating lease expense:
Factory and office leases . . . . . . . . $551,039 $614,333
Affiliate lease (net of sublease rentals) 3,495 15,797
Other . . . . . . . . . . . . . . . . . . 20,000 19,063
-------- --------
$574,534 $649,193
======== ========

Future minimum payments under operating leases, including the affiliate lease
guarantee, consisted of the following at September 30, 2001:

[Download Table]

Operating
----------

2002 . . . . . . . . . $ 365,536
2003 . . . . . . . . . 367,223
2004 . . . . . . . . . 365,157
2005 . . . . . . . . . 352,482
2006 . . . . . . . . . 354,292
Thereafter . . . . . . 2,855,924
----------
Total minimum payments $4,660,614
==========

NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT

During 2000, the Company renewed a $1,000,000 note with Mr. Dearholt, a current
director of the Company. The outstanding note payable bears interest at 12
percent. As part of the transaction, the Company issued Mr. Dearholt warrants to
purchase 250,000 shares of the Company's common stock at $0.71 per share which
represented 80 percent of the average trading price for the five trading days
prior to the closing date for the transaction and resulted in an initial
discount on the note of $148,999. Any stock issued under the warrants carries
certain registration rights. The warrants expire in 2010. The discount in
combination with the note's 12 percent coupon resulted in an effective interest
rate of 27 percent on the note.

F-12

SB-2 53rd Page of 88 TOC 1st Previous Next ↓Bottom Just 53rd
NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

Additionally, during 2000 the Company renewed a $250,000 note with Mr. Dearholt
and a $50,000 note with O.B. Parrish, also a current director of the Company.
Each note payable bears interest at 12 percent. As part of the transactions, the
Company issued Mr. Dearholt and Mr. Parrish warrants to purchase 62,500 and
12,500 shares of the Company's common stock at $0.77 and $0.72 per share,
respectively, which represented 80 percent of the average trading price for the
five trading days prior to the closing date for the transaction and resulted in
an initial discount on the notes of $36,853 and $7,437, respectively. Any stock
issued under the warrants carries certain registration rights. The warrants
expire in 2010 for each note. The discount in combination with the notes' 12
percent coupon resulted in an effective interest rate of 27 percent for each
note.

During 2001, the Company renewed the $1,000,000 note with Mr. Dearholt. The
outstanding note payable bears interest at 12 percent and is payable in full in
2002. As part of the transaction, the Company issued Mr. Dearholt warrants to
purchase 280,000 shares of the Company's common stock at $0.40 per share which
represented 80 percent of the average trading price for the five trading days
prior to the closing date for the transaction and resulted in an initial
discount on the note of $113,881. Any stock issued under the warrants carries
certain registration rights. The warrants expire in 2011. In addition, if the
Company defaults on its obligation under the note, the Company is required to
issue an additional 280,000 shares of its common stock to Mr. Dearholt in
addition to all other remedies to which Mr. Dearholt may be entitled. The note
is recorded at September 30, 2001, net of unamortized discount of $54,600. The
discount in combination with the note's 12 percent coupon resulted in an
effective interest rate of 25 percent on the note.

Additionally, during 2001 the Company renewed the $250,000 note with Mr.
Dearholt and the $50,000 note with O.B. Parrish. Each note payable bears
interest at 12 percent and is payable in full in 2002. As part of the
transactions, the Company issued Mr. Dearholt and Mr. Parrish warrants to
purchase 70,000 and 14,000 shares of the Company's common stock at $0.40 per
share, which represented 80 percent of the average trading price for the five
trading days prior to the closing date for the transaction and resulted in an
initial discount on the notes of $25,238 and $5,694, respectively. Any stock
issued under the warrants carries certain registration rights. The warrants
expire in 2011 for each note. The discount in combination with the notes' 12
percent coupon resulted in an effective interest rate of 23 percent for each
note. Both notes were paid off in June 2001.

On May 19 and June 3, 1999, the Company issued an aggregate of $1,500,000 of
convertible debentures and warrants to purchase 1,875,000 shares of the
Company's common stock to five accredited investors. These warrants expire in
2004. Interest on the convertible debentures is due at a rate of 8 percent per
annum, payable quarterly in either cash or, at the investor's option, common
stock of the Company at its then current market value. From December 2, 1999 to
February 11, 2000, interest on the convertible debentures was at the rate of 10
percent annually, and then returned to 8 percent annually. Repayment of the
convertible debentures is collateralized by a first security interest in all of
the Company's assets. In addition, if the Company defaults in payment of the
principal or interest due on the convertible debentures in accordance with their
terms, the Company must immediately issue 1,500,000 shares of its common stock
to the investor at no cost. The issuance of these shares will not affect any of
the outstanding warrants then held by the investor, which warrants will continue
in effect in accordance with their terms.

Additionally, warrants to purchase 337,500 shares of the Company's common stock
were issued to the Company's placement agent in this offering. The warrants have
a term of five years and are exercisable at an exercise price equal to the
lesser of 70 percent of the market price of the common stock at the time of the
exercise or $1.00. The warrants were valued at $224,800 which was recorded as
additional paid-in capital.

The convertible debentures' beneficial conversion feature is valued at $336,400
and the warrants to purchase 1,875,000 shares of the Company's common stock are
valued at $715,100. In accordance with SEC reporting requirements for such
transactions, the Company recorded the value of the beneficial conversion
feature and warrants (a total of $1,051,500) as additional paid-in capital. The
corresponding amount of $1,051,500 was recorded as a discount on convertible
debentures and is amortized over 1 year using the interest rate method. The
discount in combination with the debentures' 8 percent coupon resulted in an
effective interest rate of 159 percent for the debentures.

F-13

SB-2 54th Page of 88 TOC 1st Previous Next ↓Bottom Just 54th
NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

The original principal balance plus any accrued but unpaid interest of the
convertible debentures may be converted into shares of the Company's common
stock at the investor's election, at any time after one year, based on a per
share price equal to the lesser of 70 percent of the market price of the
Company's common stock at the time of conversion or $1.00. The convertible
debentures were originally payable one year after issuance. However, the Company
elected, under the terms of the convertible debentures, to extend the due date
to two years after issuance. As a result of the Company making this election,
the Company issued to the investors at the time of the extension 375,000
additional warrants to purchase shares of the Company's common stock on the same
terms as the previously issued warrants. These warrants expire in 2005. The
warrants were valued at $157,700 and recorded as additional paid-in capital.

Concurrent with obtaining the below credit facility, the Company paid off
$1,500,000 of convertible debentures which were due between May 19 and June 3,
2001.

On May 18, 2001, the Company entered into an agreement with Heartland Bank
providing for a $2,000,000 credit facility. The Company may borrow under this
credit facility from time to time subject to a number of conditions, including
obtaining personal guarantees of 125 percent of the amount outstanding under the
credit facility. The unpaid balances on the credit facility are due May 18,
2004, and bear interest payable at an annual rate of 10 percent. The agreement
contains certain covenants which include restrictions on the payment of
dividends and distributions and on the issuance of warrants. Subsequent to
year-end, the Company paid dividends on the Company's Class A Preferred Stock -
Series 1, which was a covenant violation of the credit facility. This was
waived by the bank on December 28, 2001. For entering into the credit facility,
Heartland Bank was issued warrants to purchase the number of shares of the
Company's common stock equal to $500,000 divided by the warrant purchase price
as of the date of exercise. The warrant purchase price is equal to 70 percent of
the "market price" of the common stock as of the day immediately prior to the
date the exercise notice is given to the Company, but in no event shall the per
share price be less than $0.50 or more than $1.00. In accounting for Heartland
Bank's warrants, the Company has designated 1,000,000 warrants valued at
$270,800 and these are recorded by the Company as additional paid-in capital and
a discount on the credit facility. The Company has currently borrowed
$1,500,000 under the credit facility and has obtained personal guarantees of a
total of 125% of the amount outstanding on the loan from five persons, three of
which are current directors of the Company and one of which is a trust for the
benefit of a current officer and director of the Company. For giving their
personal guarantees, the Company issued to the five guarantors warrants to
purchase the number of shares of the Company's Common Stock equal to the
guarantee amount of each guarantor divided by the warrant purchase price as of
the date of exercise. The warrant purchase price is equal to 70 percent of the
"market price" of the common stock as of the day immediately prior to the date
the exercise notice is given to the Company, but in no event shall the per share
price be less than $0.50 or more than $1.00.

The Company also issued additional warrants to purchase 100,000 shares of Common
Stock to two guarantors with a warrant purchase price of $0.50 per share. In
accounting for the guarantors' warrants, the Company has designated 3,200,000
warrants valued at $667,578 and these are recorded by the Company as additional
paid-in capital and a discount on the credit facility. The credit facility is
recorded at September 30, 2001, net of unamortized discount of $842,869. The
value of the warrants in combination with the credit facility's 10 percent
coupon resulted in an effective interest rate of 50 percent on the note.

On March 30, 2001, the Company issued a $250,000 convertible debenture to one
accredited investor. The debenture is due March 30, 2004, bears interest payable
at a rate of 12 percent and is convertible into the Company's common stock based
on a price of $0.50 per share. The Company's common stock was trading at less
than $0.50 per share at the commitment date of this transaction.

On June 1, 2001, the Company issued an aggregate $200,000 of convertible
debentures to two accredited investors. The debentures are due May 30, 2004,
bear interest payable at a rate of 10 percent per annum, and are convertible
into the Company's common stock based on a price per share equal to $0.50 which
was the market price at the commitment date of this transaction.

F-14

SB-2 55th Page of 88 TOC 1st Previous Next ↓Bottom Just 55th
NOTE 4. NOTES PAYABLE AND LONG-TERM DEBT (CONTINUED)

Interest expense to related parties was $528,769 and $1,231,832 for the years
ended September 30, 2001 and 2000, respectively.

NOTE 5. INCOME TAXES

A reconciliation of income tax expense and the amount computed by applying the
statutory Federal income tax rate to loss before income taxes as of September
30, 2001 and 2000, is as follows:

[Download Table]

September 30,
2001 2000
---------- ------------

Income tax credit at statutory rates. . . . . . . . . . . $(398,000) $(1,254,700)
Nondeductible expenses. . . . . . . . . . . . . . . . . . 58,700 59,100
State income tax, net of federal benefits . . . . . . . . (55,700) (175,900)
Benefit of net operating loss not recognized, increase in
valuation allowance . . . . . . . . . . . . . . . . . . 395,000 1,371,500
---------- ------------
$ - $ -
========== ============

As of September 30, 2001, the Company had federal and state net operating loss
carryforwards of approximately $38,220,000 for income tax purposes expiring in
years 2005 to 2021. The benefit relating to $1,537,800 of these net operating
losses relates to exercise of common stock options and will be credited directly
to stockholders' equity when realized. The Company also has investment tax and
research and development credit carryforwards for income tax purposes
aggregating approximately $105,000 at September 30, 2001, expiring in years 2006
to 2010. The Company's UK subsidiary, The Female Health Company - UK, plc
subsidiary has UK net operating loss carryforwards of approximately $63,397,000
as of September 30, 2001. These UK net operating loss carryforwards can be
carried forward indefinitely to be used to offset future UK taxable income.
Significant components of the Company's deferred tax assets and liabilities are
as follows at September 30, 2001:

[Download Table]

Deferred tax assets:
Federal net operating loss carryforwards. $ 12,995,000
State net operating loss carryforwards. . 2,444,000
Foreign net operating loss carryforwards. 19,019,000
Foreign capital allowances. . . . . . . . 474,000
Tax credit carryforwards. . . . . . . . . 105,000
Accounts receivable allowances. . . . . . 11,000
Other . . . . . . . . . . . . . . . . . . 41,000
-------------
Total gross deferred tax assets . . . . . . 35,089,000
Valuation allowance for deferred tax assets (35,089,000)
-------------
Net deferred tax assets . . . . . . . . . . $ -
=============

The valuation allowance decreased by $(105,000) and $(4,213,500) for the years
ended September 30, 2001 and 2000, respectively.

F-15

SB-2 56th Page of 88 TOC 1st Previous Next ↓Bottom Just 56th
NOTE 6. ROYALTY AGREEMENTS

The Company has royalty agreements for sales of its products which provide for
royalty payments based on sales quantities and achievement of specific sales
levels. Royalty expense was $27,102 and $31,761 for the years ended September
30, 2001 and 2000, respectively.

NOTE 7. COMMON STOCK

Stock Option Plans

The Company has various stock option plans that authorize the granting of
options to officers, key employees and directors to purchase the Company's
common stock at prices generally equal to the market value of the stock at the
date of grant. Under these plans, the Company has 131,628 shares available for
future grants as of September 30, 2001. The Company has also granted options to
one of its legal counsel and an affiliate. Certain options are vested and
exercisable upon issuance, others over periods up to four years and still others
based on the achievement of certain performance criteria by the Company and
market prices of its common stock.

In September 2001, certain option holders waived their rights to exercise their
options until the Company amends its articles of incorporation to increase the
number of shares of common stock authorized for issuance. If the shareholders
approve this amendment, the exercise price of these options will be reduced to
$0.56 per share. The Company's common stock was trading at less than $0.56 per
share when these waivers were obtained.

The total number of options that were waived at September 30, 2001, was
2,659,800. The exercise price of $0.56 per share is reflected in the related
option plan disclosures.

Summarized information regarding all of the Company's stock options is as
follows:

[Download Table]

Weighted
Average
Number of Exercise
Shares Price

Outstanding at September 30, 1999 2,953,300 $ 1.27
Granted . . . . . . . . . . . . 50,000 0.50
Exercised . . . . . . . . . . . - -
Expired or canceled . . . . . . (85,900) 0.93
----------
Outstanding at September 30, 2000 2,917,400 1.27
Granted . . . . . . . . . . . . - -
Exercised . . . . . . . . . . . - -
Expired or canceled . . . . . . (37,600) 2.00
----------

Outstanding at September 30, 2001 2,879,800 $ 0.64
==========

Option shares exercisable at September 30, 2001 and 2000, are 40,000 and
438,300, respectively.

F-16

SB-2 57th Page of 88 TOC 1st Previous Next ↓Bottom Just 57th
NOTE 7. COMMON STOCK (CONTINUED)

Options Outstanding and Exercisable

[Download Table]

Range of . . . Number Wghted. Avg. Wghted. Avg. Number Wghted. Avg.
Exercise . . . Outstanding Remaining Exercise Exercisable Exercise
Prices . . . . At 9/30/01 Life Price at 9/30/01 Price
-------------- ----------- ------------ ------------- ----------- -------------

$0.50. . . . . 50,000 7 $ 0.50 - $ -
0.56 . . . . . 2,659,800 5.2 0.56 - -
0.85 . . . . . 50,000 6.9 0.85 - -
2.00 . . . . . 120,000 3.2 2.00 40,000 2.00
-------------- ----------- ------------ ------------- ----------- -------------
$0.50 to $2.00 2,879,800 5.6 $ 0.63 40,000 $ 2.00
============== =========== ============ ============= =========== =============

Stock options have been granted to employees with exercise prices at, or in
excess of, fair market value at the date of grant. The Company has accounted
for the stock options in accordance with variable plan accounting guidance
provided in APB No. 25 and related interpretations. To date, no compensation
expense has been recognized related to the stock options granted because their
exercise prices are in excess of fair market value.

Had compensation cost for the Company's stock option plans been determined based
on the fair value at the grant dates for all awards consistent with the method
set forth under FASB Statement No. 123, Accounting for Stock-Based Compensation
(FAS 123), the Company's net loss and loss per share would have been increased
to the pro forma amounts indicated below:

[Enlarge/Download Table]

Year Ending September 30,
----------------------------------------------------
Loss Loss
2001 Per Share 2000 Per Share
------------ ----------- ------------ -----------

Net loss attributable to common
stockholders. . . . . . . . . $(1,304,256) $ (0.09) $(3,822,355) $ (0.30)
Compensation expense related to
stock options granted . . . . (355,753) (0.02) (413,656) (0.03)
------------ ----------- ------------ -----------
$(1,660,009) $ (0.11) $(4,236,011) $ (0.33)
============ =========== ============ ===========

The fair value of options was estimated at the date of grant using the
Black-Scholes option pricing model assuming expected volatility of 63.4 percent
and risk-free interest rates of 5.38 percent, respectively, and expected lives
of one to three years and no dividend yield for the year ended September 30,
2000. The weighted average fair value of options granted for the year ended
September 30, 2000, was $0.35. There were no options granted for the year ended
September 30, 2001.

F-17

SB-2 58th Page of 88 TOC 1st Previous Next ↓Bottom Just 58th
NOTE 7. COMMON STOCK (CONTINUED)

The Black-Scholes option valuation model was developed for use in estimating the
fair value of traded options which have no vesting restrictions and are fully
transferable. Because the Company's employee stock options have characteristics
different from those of traded options, and because changes in the input
assumptions can materially affect the fair value estimate, the model may not
provide a reliable single measure of the fair value of its employee stock
options.

Common Stock Purchase Warrants

The Company enters into consulting agreements with separate third party
professionals to provide investor relations services and financial advisory
services. In connection with the consulting agreements, the Company granted
warrants to purchase common stock.

No warrants were exercised during 2001. At September 30, 2001, the following
warrants were outstanding and exercisable:

[Download Table]

Number
Outstanding
-----------

Warrants issued in connection with:
Financial advisory services contract 175,000
Convertible debentures . . . . . . . 2,587,500
Convertible preferred stock. . . . . 176,000
Equity line of credit. . . . . . . . 200,000
Note payable, bank . . . . . . . . . 4,200,000
Notes payable. . . . . . . . . . . . 1,589,000
-----------
Outstanding at September 30, 2001. . 8,927,500
===========

Warrants Outstanding and Exercisable

[Download Table]

Range of Number Wghted. Avg. Wghted. Avg
Exercise Outstanding Remaining Exercise
Prices At 9/30/01 Life Price
-------------- ----------- ------------ ------------

$0.40 to $0.50 4,564,000 7.9 $ 0.49
$0.51 to $1.00 2,912,500 3.5 0.97
$1.01 to $4.11 1,451,000 3.2 2.16
-------------- ---------- ------------ ------------
$0.40 to $4.11 8,927,500 5.6 $ 0.92
============== ========== ============ ============

At September 30, 2001, the Company had reserved a total of 9,427,500 shares of
its common stock for the exercise of options and warrants outstanding, exclusive
of the 2,659,800 options waived by the option holders discussed above. This
amount includes shares reserved to satisfy obligations due if the Company
defaults on the payment of interest or principal on $1.0 million of notes due in
March 2002.

F-18

SB-2 59th Page of 88 TOC 1st Previous Next ↓Bottom Just 59th
NOTE 7. COMMON STOCK (CONTINUED)

Issuance of Stock

The Company has issued common stock to consultants for providing investor
relation services. In 2000, the Company issued 200,000 shares of common stock
with a market value of $114,055 which was recorded as unearned consulting fees
and is being recognized over the term of the agreement. In 2001, the Company
issued 200,000 shares of common stock with a market value of $93,760 which was
recorded as unearned consulting fees and is being recognized over the term of
the agreement.

NOTE 8. PREFERRED STOCK

The Company has outstanding 660,000 shares of 8 percent cumulative convertible
preferred stock (Series 1). Each share of preferred stock is convertible into
one share of the Company's common stock on or after August 1, 1998. Annual
preferred stock dividends will be paid if and as declared by the Company's Board
of Directors. No dividends or other distributions will be payable on the
Company's common stock unless dividends are paid in full on the preferred stock.
The preferred stock may be redeemed at the option of FHC, in whole or in part,
on or after August 1, 2000, subject to certain conditions, at $2.50 per share
plus accrued and unpaid dividends. In the event of a liquidation or dissolution
of the Company, the preferred stock would have priority over the Company's
common stock.

NOTE 9. EQUITY LINE OF CREDIT

On November 19, 1998, the Company executed an agreement with a private investor
(the "Equity Line Agreement"). The Equity Line Agreement provided for the
Company, at its sole discretion, subject to certain restrictions, to sell
("put") to the investor up to $6.0 million of the Company's common stock,
subject to a minimum put of $1.0 million over the duration of the Equity Line
Agreement. The Equity Line Agreement expired on February 12, 2001. As of the
expiration date, the Company had placed four puts for the combined net cash
proceeds of $582,000 and issued a total of 680,057 shares of the Company's
common stock to the investor. Since the Company was not able to satisfy the
minimum put of $1.0 million, the Company was required to pay the investor a fee
on the portion not drawn. The Company paid the investor approximately $50,000
during the year ended September 30, 2001, which is included in interest expense
on the statement of operations.

NOTE 10. EMPLOYEE RETIREMENT PLAN

The Company has a Simple Individual Retirement Account (IRA) plan for its
employees. Employees are eligible to participate in the plan if their
compensation reaches certain minimum levels and are allowed to contribute up to
a maximum of $6,500 annual compensation to the plan. The Company has elected to
match 100 percent of employee contributions to the plan up to a maximum of 3
percent of employee compensation for the year ended September 30, 2001. Company
contributions were $15,303 and $17,539 for 2001 and 2000, respectively.

F-19

SB-2 60th Page of 88 TOC 1st Previous Next ↓Bottom Just 60th
NOTE 11. INDUSTRY SEGMENTS AND FINANCIAL INFORMATION ABOUT FOREIGN AND
DOMESTIC OPERATIONS

The Company currently operates primarily in one industry segment which includes
the development, manufacture and marketing of consumer health care products.

The Company operates in foreign and domestic regions. Information about the
Company's operations by geographic area is as follows.

[Download Table]

(Amounts in Thousands)
Net Sales to
External Customers Long-Term Assets
September 30, September 30,
2001 2000 2001 2000
------ ------ ------ ------

United States . . . . . . . . . . . . . . $2,715 $2,197 $ 136 $ 51
Brazil. . . . . . . . . . . . . . . . . . 766 1,446 - -
South Africa. . . . . . . . . . . . . . . 733 - - -
Ghana . . . . . . . . . . . . . . . . . . 547 * - -
Japan . . . . . . . . . . . . . . . . . . 382 895 - -
United Kingdom. . . . . . . . . . . . . . * * 1,571 2,081
Other . . . . . . . . . . . . . . . . . . 1,573 1,229 - -
------ ------ ------ ------
$6,716 $5,767 $1,707 $2,132
====== ====== ====== ======

* Less than 5 percent of total net sales

NOTE 12. 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
$5,000,000 for FHC's consumer health care product.

A former holder of the $1,500,000 convertible debentures (see Note 4 for
additional details on the debentures) has alleged that the Company is in default
with respect to the perfection of the investors' security interest in the
Company's assets. The investor has demanded the issuance of 1,500,000 shares of
the Company's common stock to the investors due to this default. The Company
disputes this claim and intends to vigorously defend its position.

NOTE 13. RELATED PARTIES

It has been and currently is the policy of the Company that transactions between
the Company and its officers, directors, principal shareholders or affiliates
are to be on terms no less favorable to the Company than could be obtained from
unaffiliated parties. The Company intends that any future transactions between
the Company and its officers, directors, principal shareholders or affiliates
will be approved by a majority of the directors who are not financially
interested in the transaction.

F-20

SB-2 61st Page of 88 TOC 1st Previous Next ↓Bottom Just 61st
NOTE 14. CONTINUING OPERATIONS

The Company's consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. The Company
incurred a loss of $1.3 million for the year ended September 30, 2001, and as of
September 30, 2001, had an accumulated deficit of $50.3 million. At September
30, 2001, the Company had working capital of $0.7 million and stockholders'
equity of less than $0.1 million. In the near term, the Company expects
operating and capital costs to continue to exceed funds generated from
operations, due principally to the Company's fixed manufacturing costs relative
to current production volumes and the ongoing need to commercialize the female
condom around the world. As a result, operations in the near future are expected
to continue to use working capital. Management recognizes that the Company's
continued operations may depend on its ability to raise additional capital
through a combination of equity or debt financing, strategic alliances and
increased sales volumes.

At various points during the developmental stage of the product, the Company was
able to secure resources, in large part through the sale of equity and debt
securities, to satisfy its funding requirements. As a result, the Company was
able to obtain FDA approval, worldwide rights, manufacturing facilities and
equipment and to commercially launch the female condom.

Management believes that recent developments, including the Company's agreement
with the UNAIDS, a joint United Nations program on HIV/AIDS, provide an
indication of the Company's early success in broadening awareness and
distribution of the female condom and may benefit efforts to raise additional
capital and to secure additional agreements to promote and distribute the female
condom throughout other parts of the world.

Between September and November 1999 the Company completed a private placement
where 983,333 shares of the Company's common stock were sold for $737,500. The
stock sales were directly with accredited investors and included one current
director of the Company. The Company sold the shares to these investors at a
price of $0.75 per share.

During the year ended September 30, 2000, the Company completed private
placements where 1,421,669 shares of the Company's common stock were sold for
$835,000. The stock sales were directly with accredited investors and included
two current directors of the Company. The Company sold the shares to these
investors at prices which ranged from $0.50 and $0.75 per share.

During the year ended September 30, 2001, the Company completed private
placements where 1,600,000 shares of the Company's common stock were sold for
$800,000. The stock sales were directly with accredited investors and included
one current director of the Company. The Company sold the shares to these
investors at the price of $0.50 per share.

On May 18, 2001, the Company entered into an agreement with Heartland Bank
providing for a $2,000,000 credit facility. The Company may borrow under the
credit facility from time to time, subject to certain conditions, including
obtaining personal guarantees of 125 percent of the amount outstanding under the
credit facility. The Company has currently borrowed $1,500,000 under the credit
facility. The unpaid balances on the credit facility are due May 18, 2004, and
bear interest payable at a rate of 10 percent.

On June 1, 2001, the Company issued an aggregate $200,000 of convertible
debentures to two accredited investors. The debentures are due May 30, 2004,
bear interest payable at a rate of 10 percent per annum, and are convertible
into the Company's common stock based on a price of $0.50 per share which was
the market price at the commitment date of this transaction.

F-21

SB-2 62nd Page of 88 TOC 1st Previous Next ↓Bottom Just 62nd
NOTE 14. CONTINUING OPERATIONS (CONTINUED)

While the Company believes that its existing capital resources will be adequate
to fund its currently anticipated capital needs, if they are not, the Company
may need to raise additional capital until its sales increase sufficiently to
cover operating expenses.

Further, there can be no assurance, assuming the Company successfully raises
additional funds or enters into business agreements with third parties, that the
Company will achieve profitability or positive cash flow. If the Company is
unable to obtain adequate financing, management will be required to sharply
curtail the Company's efforts to promote the female condom and to curtail
certain other of its operations or, ultimately, cease operations.

F-22

SB-2 63rd Page of 88 TOC 1st Previous Next ↓Bottom Just 63rd
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET

[Download Table]

JUNE 30,
2002
-------------

ASSETS
Current Assets:
Cash . . . . . . . . . . . . . . . . . . . . . . . . . . $ 869,923
Accounts receivable, net . . . . . . . . . . . . . . . . 1,327,089
Inventories. . . . . . . . . . . . . . . . . . . . . . . 1,169,341
Prepaid expenses and other current assets. . . . . . . . 362,968
-------------
TOTAL CURRENT ASSETS. . . . . . . . . . . . . . . . . . . . 3,729,321
-------------

Certificate of Deposit. . . . . . . . . . . . . . . . . . . 119,186
Intellectual property rights, net . . . . . . . . . . . . . 405,177
Other assets. . . . . . . . . . . . . . . . . . . . . . . . 153,118
-------------
677,481
-------------

PROPERTY, PLANT AND EQUIPMENT . . . . . . . . . . . . . . . 3,867,443
Less accumulated depreciation and amortization. . . . . . . (3,099,742)
-------------
Net property, plant, and equipment . . . . . . . . . . . . 767,701
-------------
TOTAL ASSETS. . . . . . . . . . . . . . . . . . . . . . . . $ 5,174,503
=============

LIABILITIES AND STOCKHOLDERS' DEFICIT
Current Liabilities:
Note payable, related party, net of unamortized discount $ 805,085
Accounts payable . . . . . . . . . . . . . . . . . . . . 580,712
Accrued expenses and other current liabilities . . . . . 1,732,838
Preferred dividends payable. . . . . . . . . . . . . . . 100,725
-------------
TOTAL CURRENT LIABILITIES . . . . . . . . . . . . . . . . . 3,219,360

Note payable, bank, net of unamortized discount. . . . . 1,079,626
Convertible debentures . . . . . . . . . . . . . . . . . 450,000
Deferred gain on sale of facility. . . . . . . . . . . . 1,259,113
-------------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . . . . . . 6,008,099
-------------

STOCKHOLDERS' DEFICIT:
Convertible preferred stock. . . . . . . . . . . . . . . 6,600
Common stock . . . . . . . . . . . . . . . . . . . . . . 160,535
Additional paid-in-capital . . . . . . . . . . . . . . . 52,509,595
Unearned consulting compensation . . . . . . . . . . . . (79,501)
Accumulated deficit. . . . . . . . . . . . . . . . . . . (53,544,667)
Accumulated other comprehensive income . . . . . . . . . 145,918
Treasury stock, at cost. . . . . . . . . . . . . . . . . (32,076)
-------------
TOTAL STOCKHOLDERS' DEFICIT . . . . . . . . . . . . . . . . (833,596)
-------------
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT . . . . . . . . $ 5,174,503
=============

See notes to unaudited condensed consolidated financial statements.
F-23

SB-2 64th Page of 88 TOC 1st Previous Next ↓Bottom Just 64th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

[Download Table]

Nine Months Ended
June 30,
-------------------------

2002 2001
------------ ------------

Net revenues . . . . . . . . . . . . . . . . $ 5,921,756 $ 4,959,512
Cost of products sold. . . . . . . . . . . . 3,390,849 3,258,768
------------ ------------
Gross profit . . . . . . . . . . . . . . . . 2,530,907 1,700,744
------------ ------------

Advertising and promotion. . . . . . . . . . 33,800 110,165
Selling, general and administrative. . . . . 2,225,084 2,023,129
Litigation settlement. . . . . . . . . . . . 1,289,397 -
Stock compensation . . . . . . . . . . . . . 1,415,392 79,938
------------ ------------
Total operating expenses . . . . . . . . . . 4,963,673 2,213,222
------------ ------------
Operating loss . . . . . . . . . . . . . . . (2,432,766) (512,478)
Interest, net and other expense. . . . . . . 706,449 463,926
------------ ------------
Loss before income taxes . . . . . . . . . . (3,139,215) (976,404)
Provision for income taxes . . . . . . . . . - -
------------ ------------
Net loss . . . . . . . . . . . . . . . . . . (3,139,215) (976,404)

Preferred dividends, Series 1. . . . . . . . 98,734 99,729
------------ ------------
Net loss attributable to common stockholders $(3,237,949) $(1,076,133)
============ ============

Net loss per common share outstanding. . . . $ (0.20) $ (0.07)
Weighted average common shares outstanding . 15,967,922 14,392,258

See notes to unaudited condensed consolidated financial statements.
F-24

SB-2 65th Page of 88 TOC 1st Previous Next ↓Bottom Just 65th
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

[Enlarge/Download Table]

Nine Months ended June 30,
--------------------------

2002 2001
------------ -----------

OPERATIONS:
Net (loss). . . . . . . . . . . . . . . . . . . . . . . . . . . $(3,139,215) $ (976,404)
Adjustment for noncash items:
Depreciation and amortization . . . . . . . . . . . . . . . . 382,863 385,044
Interest added to certificate of deposit. . . . . . . . . . . (4,186) -
Amortization of discounts on notes payable and convertible
debentures. . . . . . . . . . . . . . . . . . . . . . . . . 463,317 239,556
Litigation settlement . . . . . . . . . . . . . . . . . . . . 1,289,397 -
Stock based compensation. . . . . . . . . . . . . . . . . . . 1,415,392 79,938
Changes in operating assets and liabilities . . . . . . . . . (441,371) (352,952)
------------ -----------
Net cash (used in) operating activities . . . . . . . . . . . . (33,803) (624,818)
------------ -----------

INVESTING ACTIVITIES:
Net cash (used in) investing activities, capital expenditures . (42,398) (36,415)
FINANCING ACTIVITIES:
Proceeds from note payable, bank. . . . . . . . . . . . . . . . 500,000 -
Proceeds from issuance of convertible debentures. . . . . . . . - 450,000
Dividends paid on preferred stock . . . . . . . . . . . . . . . (95,825) (107,186)
Proceeds from issuance of common stock. . . . . . . . . . . . . 60,000 300,000
------------ -----------
Net cash provided by financing activities . . . . . . . . . . . 464,175 642,814
------------ -----------
Effect of exchange rate changes on cash . . . . . . . . . . . . 12,543 30,217
------------ -----------
INCREASE IN CASH. . . . . . . . . . . . . . . . . . . . . . . . 400,517 11,798
Cash at beginning of period . . . . . . . . . . . . . . . . . . 469,406 457,122
------------ -----------
CASH AT END OF PERIOD . . . . . . . . . . . . . . . . . . . . . $ 869,923 $ 468,920
============ ===========

Schedule of noncash financing and investing activities:
Renewal of notes payable with related parties . . . . . . . . $ 1,000,000 $1,300,000
Issuance of warrants on notes payable and credit facility . . 681,137 239,556
Common stock issued for payment of preferred stock dividends
and convertible debenture interest. . . . . . . . . . . . . 73,389 64,520
Preferred dividends declared, Series 1. . . . . . . . . . . . 98,734 99,729

See notes to unaudited condensed consolidated financial statements.

F-25

SB-2 66th Page of 88 TOC 1st Previous Next ↓Bottom Just 66th
------
THE FEMALE HEALTH COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 - Basis of Presentation
-----------------------

The accompanying financial statements are unaudited but in the opinion of
management contain all the adjustments (consisting of those of a normal
recurring nature) considered necessary to present fairly the financial position
and the results of operations and cash flow for the periods presented in
conformity with generally accepted accounting principles for interim financial
information and the instructions to Form SB-2 and Item 310 of Regulation S-B.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.

Operating results for the nine months ended June 30, 2002 are not necessarily
indicative of the results that may be expected for the fiscal year ending
September 30, 2002. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the fiscal year ended September 30, 2001.

Principles of consolidation and nature of operations:
----------------------------------------------------------

The consolidated financial statements include the accounts of the Company and
its wholly-owned subsidiaries, The Female Health Company - UK and The Female
Health Company - UK, plc. All significant intercompany transactions and accounts
have been eliminated in consolidation. The Female Health Company ("FHC" or the
"Company") is currently engaged in the marketing, manufacture and distribution
of a consumer health care product known as the female condom, "FC," in the U.S.
and "femidom", "femy" and "the female condom" outside the U.S. The Female Health
Company - UK, is the holding company of The Female Health Company - UK, plc,
which operates a 40,000 sq. ft. leased manufacturing facility located in London,
England.

Use of estimates:
------------------

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and use assumptions
that affect certain reported amounts and disclosures. Actual results may differ
from those estimates.

Reclassification:
-----------------

Certain expenses on the statements of operations for the nine months ended June
30, 2001 have been reclassified to be consistent with the presentation shown for
the nine months ended June 30, 2002.

NOTE 2 - Earnings Per Share
--------------------

Earnings per share (EPS): Basic EPS is computed by dividing income available to
common stockholders by the weighted average number of common shares outstanding
for the period. Diluted EPS is computed 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 conversion of
convertible preferred or convertible debt and the exercise of stock options and
warrants for all periods. Fully diluted (loss) per share is not presented since
the effect would be anti-dilutive.

NOTE 3 - Comprehensive Income (Loss)
-----------------------------

Total Comprehensive Income (Loss) was $(3,017,099) for the nine months ended
June 30, 2002 and $(1,113,791) for the nine months ended June 30, 2001.

F-26

SB-2 67th Page of 88 TOC 1st Previous Next ↓Bottom Just 67th
NOTE 4 - Inventories
-----------

The components of inventory consist of the following:

[Download Table]

JUNE 30, 2002
---------------

Raw Material and work in process $ 876,831
Finished Goods . . . . . . . . . 338,195
---------------
Inventory, Gross . . . . . . . . 1,215,026
Less: Inventory reserves . . . . (45,685)
---------------
Inventory, net . . . . . . . . . $ 1,169,341
===============

NOTE 5 - Financial Condition
--------------------

The Company's consolidated financial statements have been prepared on a going
concern basis which contemplates the realization of assets and the settlement of
liabilities and commitments in the normal course of business. The Company
incurred a net loss of $3.2 million for the nine months ended June 30, 2002 and
as of June 30, 2002 had an accumulated deficit of $53.5 million. At June 30,
2002, the Company had working capital of $0.5 million and stockholders' deficit
of $0.8 million. In the near term, the Company expects operating and capital
costs to continue to exceed funds generated from operations due principally to
the Company's manufacturing costs relative to current production volumes and the
ongoing need to commercialize the female condom around the world. As a result,
operations in the near future are expected to continue to use working capital.
Management recognizes that the Company's continued operations may depend on its
ability to raise additional capital through a combination of equity or debt
financing, strategic alliances and increased sales volumes.

Management believes that developments, including the Company's agreement with
the UNAIDS, a joint United Nations program on HIV/AIDS, and various distribution
partners in major countries, provide an indication of the Company's success in
broadening awareness and distribution of the female condom and may benefit
future efforts to raise additional capital and to secure additional agreements
to promote and distribute the female condom throughout other parts of the world.

F-27

SB-2 68th Page of 88 TOC 1st Previous Next ↓Bottom Just 68th
NOTE 5 - Financial Condition - (Continued)
------------------------------------

On May 18, 2001 the Company entered into an agreement with Heartland Bank
providing for a $2,000,000 credit facility. The unpaid balances on the note are
due May 18, 2004 and bear interest payable at a rate of 10% per annum. The
agreement contains certain covenants which include restrictions on the payment
of dividends and distributions and on the issuance of warrants. The Company may
borrow under the credit facility from time to time subject to conditions,
including obtaining personal guarantees of 125% of the amount outstanding under
the loan. In connection with the credit facility, the Company issued warrants to
Heartland bank to purchase the number of shares divided by the warrant purchase
price as of the date of exercise. The warrant purchase price is equal to 70% of
the "market price" of the Common Stock as of the day immediately prior to the
date the exercise notice is given to the Company, but in no event shall the per
share price be less than $0.50 or more than $1.00. In accounting for Heartland
Bank's warrants, the Company has designated 1,000,000 warrants valued at
$270,800 and these are recorded by the Company as additional paid in capital and
a discount on the credit facility.

The Company initially borrowed $1,500,000 under the credit facility and obtained
guarantees of five individuals equal in total to the amount outstanding under
the loan. Three of the guarantors are directors of the Company and one of the
guarantors is a trust for the benefit of the Company's Chairman and Chief
Executive Officer. Each guarantor may be liable to Heartland Bank for up to 125%
of the guarantor's guarantee amount if the Company defaults under the credit
facility. The Company issued warrants to the five guarantors to purchase the
number of shares of the Company's Common Stock equal to the guarantee amount of
such guarantor divided by the warrant purchase price as of the date of exercise.
The warrant purchase price is equal to 70% of the "market price" of the Common
Stock as of the day immediately prior to the date the exercise notice is given
to the Company, but in no event shall the per share price be less than $0.50 or
more than $1.00. The Company also issued additional warrants to purchase 100,000
shares of Common Stock to two guarantors with a warrant price of $0.50 per
share. In accounting for the guarantors' warrants, the Company has designated
3,200,000 warrants valued at $667,578 and these are recorded by the Company as
additional paid in capital and a discount on the credit facility.

On December 18, 2001 and December 20, 2001 the Company borrowed an additional
aggregate $400,000 under the credit facility initially entered into on May 18,
2001. The Company obtained guarantees from two individuals to guarantee the
additional amount outstanding on the credit facility. Each guarantor may be
liable to Heartland Bank for up to 125% of the guarantor's guarantee amount if
the Company defaults under the credit facility. The Company issued warrants to
the two guarantors to purchase the number of shares of the Company's Common
Stock equal to the guarantee amount of such guarantor divided by the warrant
purchase price as of the date of exercise. The warrant purchase price is equal
to 70% of the "market price" of the Common Stock as of the day immediately prior
to the date the exercise notice is given to the Company, but in no event shall
the per share price be less than $0.50 or more than $1.00. The Company also
issued additional warrants to purchase 100,000 shares of Common Stock to one of
the guarantors with a warrant price of $0.50 per share. In accounting for the
guarantors' warrants, the Company has designated 900,000 warrants valued at
$326,127 and these are recorded by the Company as additional paid in capital and
a discount on the credit facility.

During the three months ended December 31, 2001, the Company completed a private
placement where 120,000 shares of the Company's common stock were sold for
$60,000. The stock sale was directly with an accredited investor. The Company
sold the shares to this investor at the price of $0.50.

F-28

SB-2 69th Page of 88 TOC 1st Previous Next ↓Bottom Just 69th
NOTE 5 - Financial Condition - (Continued)
------------------------------------

On February 20, 2002 the Company borrowed an additional $100,000 under the
credit facility initially entered into on May 18, 2001. The Company obtained a
guarantee from one individual to guarantee the additional amount outstanding on
the credit facility. The guarantor may be liable to Heartland Bank for up to
125% of the guarantor's guarantee amount if the Company defaults under the
credit facility. The Company issued warrants to the one guarantor to purchase
the number of shares of the Company's Common Stock equal to the guarantee amount
of such guarantor divided by the warrant purchase price as of the date of
exercise. The warrant purchase price is equal to 70% of the "market price" of
the Common Stock as of the day immediately prior to the date the exercise notice
is given to the Company, but in no event shall the per share price be less than
$0.50 or more than $1.00. In accounting for the guarantor's warrants, the
Company has designated 151,515 warrants valued at $89,300 and are recorded by
the Company as additional paid in capital and a discount on the credit facility.

Until internally generated funds are sufficient to meet cash requirements, FHC
will remain dependent upon its ability to generate sufficient capital from
outside sources. While management believes that net revenues from sales of the
female condom will eventually exceed operating costs and that ultimately
operations will generate sufficient funds to meet capital requirements as it did
in the third quarter of fiscal 2002, there can be no assurance that such level
of operations will be achieved again. Likewise, there can be no assurance that
the Company will be able to source all or any portion of future required capital
through the sale of debt or equity or, if raised, the amount will be sufficient
to operate the Company until sales of the female condom generate sufficient net
revenues to fund operations. In addition, any funds raised may be costly to the
Company and/or dilutive to stockholders. If the Company is not able to source
the required funds or any future capital which becomes required, the Company may
be forced to sharply curtail the Company's efforts to promote the female condom,
to attempt to sell certain of its assets and rights or to curtail certain of its
operations and may ultimately be forced to cease operations. Currently, the
Company has made no plans to sell any assets nor has it identified any assets to
be sold or potential buyers.

NOTE 6 - Industry Segments And Financial Information About Foreign and Domestic
----------------------------------------------------------------------
Operations
----------

The Company currently operates primarily in one industry segment which includes
the development, manufacture and marketing of consumer health care products.

The Company operates in foreign and domestic regions. Information about the
Company's operations by geographic area is as follows:

[Download Table]

F-29

SB-2 70th Page of 88 TOC 1st Previous Next ↓Bottom Just 70th
NOTE 6 - Industry Segments And Financial Information About Foreign and Domestic
----------------------------------------------------------------------
Operations (Continued)
-----------------------

(Amounts in Thousands)
Net Sales to
External Customers
for the Long-Term Assets
Nine months Ended as of
June 30, June 30,

2002 2001 2002 2001
------ ------ ------ ------

United States. . $2,131 $2,184 $ 154 $ 22
Brazil . . . . . 1,049 331 - -
Ghana. . . . . . * 273 - -
South Africa . . 594 732 - -
United Kingdom . * * 1,291 1,663
Zimbabwe . . . . 786 * - -
Other. . . . . . 1,362 1,440 - -
------ ------ ------ ------
$5,922 $4,960 $1,445 $1,685
<FN>

* Less than 5 percent of total net sales

NOTE 7 - Contingent Liabilities and Litigation Settlement
----------------------------------------------------

The former holders of the $1,500,000 convertible debentures issued on May 19,
1999 and June 3, 1999 alleged that the Company was in default with respect to
the perfection of the former holders' security interest in the Company's assets.
The former holders demanded the issuance of 1,500,000 shares of the Company's
common stock to the investors due to this alleged default. On July 23, 2002 the
Company and the former holders settled the dispute out of court. The Company
agreed to issue 450,000 shares of the Company's common stock to the former
convertible debenture holders and to extend the expiration dates of 2.25 million
warrants held by the former holders to 2007. The former convertible debenture
holders agreed to release their security interest in the Company's assets. The
issuance of the shares and the extension of the expiration date of the warrants
have been recorded in accordance with Financial Accounting Standards Board No.
5. In accounting for the litigation settlement, the Company designated the value
of the newly issued shares and extended warrants at $1,289,397. The fair value
of extending the warrants was estimated at the date of settlement using the
Black-Scholes pricing model assuming expected volatility of 63.4 and a risk-free
interest rate of 6.26%. These non-cash costs are recorded as litigation
settlement on the three and nine-month statement of operations and as accrued
expenses and other current liabilities on the June 30, 2002 balance sheet.

F-30

SB-2 71st Page of 88 TOC 1st Previous Next ↓Bottom Just 71st
NOTE 8. - Related Parties
----------------

NOTE 9. - Stock Compensation
-------------------

In September 2001, certain option holders waived their rights to exercise their
options until the Company amended its Amended and Restated Articles of
Incorporation to increase the number of shares of common stock authorized for
issuance. To obtain this waiver, the Company agreed to re-price these options at
$0.56 per share once the amendment was approved. The Company's stock was
trading at less than $0.56 per share when the waivers were obtained.

On May 8, 2002 shareholders approved an amendment to the Company's Amended and
Restated Articles of Incorporation to increase the total number of authorized
shares of the Company's common stock from 27,000,000 to 35,500,000 shares.

Since the amendment was approved, options to purchase an aggregate of 2,659,800
shares of common stock have been re-priced to $0.56 per share. The Company will
continue to account for all of its stock options in accordance with variable
plan accounting guidance provided in APB 25 and related interpretations. This
accounting treatment requires the Company to record expense with respect to
stock options on a periodic basis based upon the amount, if any, by which the
fair market value of the common stock exceeds the exercise price of the stock
options. The reduction in the exercise price of the re-priced options and the
increase in the stock price of the Company's common stock as of June 30, 2002
resulted in the Company recording $1,308,858 of stock compensation expense
related to the Company's stock options under variable plan accounting for the
three-month period ended June 30, 2002. For the nine months ended June 30,
2002, the Company recorded $1,341,858 of stock compensation expense pertaining
to the Company's stock options.

F-31

SB-2 72nd Page of 88 TOC 1st Previous Next ↓Bottom Just 72nd
WE HAVE NOT AUTHORIZED ANYONE TO PROVIDE YOU WITH INFORMATION DIFFERENT
FROM THAT CONTAINED IN THIS PROSPECTUS. THE SELLING STOCKHOLDERS LISTED IN THIS
PROSPECTUS IS OFFERING TO SELL, AND SEEKING OFFERS TO BUY, SHARES OF COMMON
STOCK ONLY IN JURISDICTIONS WHERE OFFERS AND SALES ARE PERMITTED.

NO ACTION IS BEING TAKEN IN ANY JURISDICTION OUTSIDE THE UNITED STATES TO
PERMIT A PUBLIC OFFERING OF THE COMMON STOCK OR POSSESSION OR DISTRIBUTION OF
THIS PROSPECTUS IN ANY SUCH JURISDICTION. PERSONS WHO COME INTO POSSESSION OF
THIS PROSPECTUS IN JURISDICTIONS OUTSIDE THE UNITED STATES ARE REQUIRED TO
INFORM THEMSELVES ABOUT AND TO OBSERVE ANY RESTRICTIONS AS TO THIS OFFERING AND
THE DISTRIBUTION OF THIS PROSPECTUS APPLICABLE TO THAT JURISDICTION.

THE FEMALE HEALTH COMPANY

1,970,000 SHARES OF COMMON STOCK

____________________

PROSPECTUS

____________________

____________________, 2002

SB-2 73rd Page of 88 TOC 1st Previous Next ↓Bottom Just 73rd
PART II

INFORMATION NOT REQUIRED IN THE PROSPECTUS

Item 24. Indemnification of Directors and Officers.

Pursuant to sections 180.0850 to 180.0859 of the Wisconsin Business
Corporation Law, directors and officers of the Company are entitled to mandatory
indemnification from the Company against certain liabilities and expenses (i) to
the extent such officers or directors are successful in the defense of a
proceeding and (ii) in proceedings in which the director or officer is not
successful in the defense thereof, unless (in the latter case only) it is
determined that the director or officer breached or failed to perform his duties
to the Company and such breach or failure constitute: (a) willful failure to
deal fairly with the Company or its shareholders in connection with a matter in
which the director or officer had a material conflict of interest; (b) a
violation of the criminal law unless the director or officer had reasonable
cause to believe his or her conduct was lawful or had no reasonable cause to
believe his or her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal profit; or (d) willful
misconduct. It should be noted that section 180.0859 of the Wisconsin Business
Corporation Law specifically states that it is the public policy of Wisconsin to
require or permit indemnification in connection with a proceeding involving
securities regulation, as described therein, to the extent required or permitted
under sections 180.0850 to 180.0858 as described above. Additionally, under the
Wisconsin Business Corporation Law, directors of the Company are not subject to
personal liability to the Company, its shareholders or any person asserting
rights on behalf thereof for certain breaches or failures to perform any duty
resulting solely from their status as such directors, except in circumstances
paralleling those in subparagraphs (a) through (d) outlined above.

Consistent with sections 180.0850 to 180.0859 of the Wisconsin Business
Corporation Law, Article VIII of the Company's Amended and Restated By-Laws
provides that the Company shall indemnify any person in connection with legal
proceedings threatened or brought against him by reason of his present or past
status as an officer or director of the Company in the circumstances described
above. Article VIII of the Amended and Restated By-Laws also provides that the
directors of the Company are not subject to personal liability to the Company,
its shareholders or persons asserting rights on behalf thereof, as provided in
the Wisconsin Business Corporation Law. The Amended and Restated By-Laws also
contain a nonexclusivity clause which provides in substance that the
indemnification rights under the Amended and Restated By-Laws shall not be
deemed exclusive of any other rights to which those seeking indemnification may
be entitled under any agreement with the Company, any Amended and Restated
By-Law or otherwise.

The indemnification provided as set forth above is not exclusive of any
other rights to which a director or an officer of the Company may be entitled.

The general effect of the foregoing provisions is to reduce the
circumstances in which an officer or director may be required to bear the
economic burdens of the foregoing liabilities and expenses.

II-1

SB-2 74th Page of 88 TOC 1st Previous Next ↓Bottom Just 74th
Item 25. Other Expenses of Issuance and Distribution.

The expenses in connection with the offering, all of which are payable by
the Company, are as follows:

[Download Table]

ITEM AMOUNT*
---- -------

Registration fee . . . . . . $ 343
Printing expenses. . . . . . 2,000
Legal fees and expenses. . . 5,000
Accounting fees and expenses 2,000
Miscellaneous expenses . . . 2,000
--------

Total. . . . . $ 11,343
========

____________
<FN>

* All amounts estimated except the registration fee.

All of the above expenses will be paid by the Company.

Item 26. Recent Sales of Unregistered Securities.

On March 25, 1997, 1998, 1999, 2000, 2001 and 2002, the Company extended a
$1 million, one-year promissory note payable by the Company to Stephen M.
Dearholt for a previous loan Mr. Dearholt made to the Company. The promissory
note is now payable in full on March 25, 2003 and bears interest at 12%
annually, payable monthly. The borrowing transactions were effected in the form
of a promissory note from the Company to Mr. Dearholt and related Note Purchase
and Warrant Agreements and a Stock Issuance Agreement. Under the 1997, 1998 and
1999 Note Purchase and Warrant Agreements, the Company issued to Mr. Dearholt
warrants to purchase 200,000 shares of common stock in 1997 at an exercise price
of $1.848 per share, 200,000 shares of common stock in 1998 at an exercise price
of $2.25 per share and 200,000 shares of common stock in 1999 at an exercise
price of $1.16 per share. In connection with the extension of the note to March
25, 2001, the Company issued warrants to purchase 250,000 shares of our common
stock in 2000 at an exercise price of $0.71 per share. In connection with the
extension of the note to March 25, 2002, the Company issued warrants to purchase
250,000 shares of our common stock in 2001 at an exercise price of $0.45 per
share. In connection with the extension of the note to March 25, 2003, we
issued warrants to purchase 300,000 shares of our common stock in 2002 at an
exercise price of $1.18 per share. In each case, the exercise price of the
warrants equaled 80% of the market price of the common stock on the date of
issuance. The warrants expire upon the earlier of their exercise or on March
25, 2005 for the warrants issued in 1997, March 25, 2007 for the warrants issued
in 1998, March 25, 2009 for the warrants issued in 1999, March 25, 2010 for the
warrants issued in 2000, March 25, 2011 for the warrants issued in 2001 and
March 25, 2014 for the warrants issued in 2002. In consideration of Mr.
Dearholt's agreement to extend the note's due date to March 25, 2000, the
Company extended the expiration date of warrants held by Mr. Dearholt to
purchase 200,000 shares of our common stock from March 25, 2001 to March 25,
2002.

The Company believes that the sales described above were exempt from
registration under section 4(2) of the Securities Act and/or Regulation D
promulgated under the Securities Act because such sales were made to one person
who is an accredited investor and a director of the Company. Mr. Dearholt also
represented to the Company that he was purchasing for investment without a view
to further distribution. Restrictive legends were placed on all instruments
evidencing the securities described above.

II-2

SB-2 75th Page of 88 TOC 1st Previous Next ↓Bottom Just 75th
On May 19, 1999 and June 3, 1999, the Company issued an aggregate of
$1,500,000 of convertible debentures and warrants to purchase 1,875,000 shares
of the Company's common stock to five accredited investors. The convertible
debentures bear interest at 8% per annum and have a one-year term; provided,
however, that the Company may extend the repayment term for an additional one
year if, upon such extension, it issues to the investors warrants to purchase
375,000 shares of the Company's common stock having the same terms and
conditions as the warrants issued to the investors in the private placement. The
investors may convert the convertible debentures into common stock at any time
after one year from the date they were issued as follows: (a) the first 50% of
the original principal balance of the convertible debentures, plus any accrued
but unpaid interest thereon, is convertible into common stock based on a per
share price equal to the lesser of (i) 70% of the market price of the common
stock at the time of conversion or (ii) $1.25; and (b) the second 50% of the
original principal balance plus any accrued but unpaid interest thereon is
convertible into common stock based on the per share price equal to the lesser
of (i) 70% of the market price of the common stock at the time of conversion or
(ii) $2.50. As part of this offering, the Company also issued to the investors
warrants to purchase 1,875,000 shares of the Company's common stock. The
warrants are exercisable by the investors at any time within five years after
their date of issuance at an exercise price per share equal to the lesser of (a)
70% of the market price of the Company's common stock from the date of exercise
or (b) $1.00. As part of the consideration that the Company paid R.J. Steichen &
Company, the Company's placement agent in the private placement of the
convertible debentures and warrants, the Company issued to R.J. Steichen
warrants to purchase a total of 337,500 shares of the Company's common stock.
The warrants issued to R.J. Steichen are exercisable at any time commencing one
year after the date of the private placement and for a period of four years
thereafter at an exercise price of $1.00 per share.

The Company believes it has satisfied the exemption from the securities
registration requirement provided by section 4(2) of the Securities Act and
Regulation D promulgated thereunder in this offering since the securities were
sold in a private placement to only sophisticated, accredited investors, each of
whom provided representations which the Company deemed necessary to satisfy
itself that they were accredited investors and were purchasing for investment
and not with a view to resale in connection with a public offering.

On September 24, 1999, the Company completed a private placement of 666,671
shares of its common stock to nine investors. Each share of common stock was
sold for a purchase price of $0.75, representing a discount of 12% from the
market price on the date that the shares were sold. In connection with this
private placement, the Company agreed to register the investors' resale of these
shares pursuant to this registration statement. The Company raised approximately
$500,000 of proceeds, net of issuance cost of $0 in connection with this private
placement. The Company believes that it has satisfied the exemption from the
securities registration requirement provided by section 4(2) of the Securities
Act and Regulation D promulgated thereunder in this offering since the
securities were sold in a private placement to only accredited investors, most
of whom had a preexisting personal or business relationship with the Company or
its officers or directors and each of whom provided representations which the
Company deemed necessary to satisfy itself that they were accredited investors
and were purchasing for investment and not with a view to resale in connection
with a public offering. In addition, the common stock issued to these investors
contained restrictive legends indicating that the shares had not been registered
and, therefore, cannot be resold unless the resale was registered under the
Securities Act or an exemption from such registration requirement was available.

On February 18, 1999, the Company borrowed $50,000 from O.B. Parrish, the
Company's Chairman and Chief Executive Officer. The borrowing was completed
through the execution of a $50,000, one-year promissory note payable by the
Company to Mr. Parrish and a Note Purchase and Warrant Agreement and Stock
Issuance Agreement. Mr. Parrish was granted warrants to purchase 10,000 shares
of our common stock at an exercise price of $1.35 per share. The exercise price
of the warrants equaled 80% of the average market price of our common stock for
the five trading days prior to the date of issuance. The warrants expire upon
the earlier of their exercise or nine years after the date of their issuance.
Effective February 18, 2000, the Company extended the due date of the note to
February 18, 2001, and in connection with this extension, the Company issued to
Mr. Parrish warrants to purchase 12,500 shares of our common stock at an
exercise price of $0.72 per share, which equaled 80% of the average market price
of our common stock for the five trading days prior to the date of issuance.
Effective February 18, 2001, the Company extended the due date of the note to
February 18, 2002, and in connection with this extension, the Company issued to
Mr. Parrish warrants to purchase 14,000 shares of our common stock at an
exercise price of $0.40 per share, which equaled 75% of the average market price
of our common stock for the five trading days prior to the date of issuance. The
warrants expire upon the earlier of their exercise or ten years after the date
of their issuance.

II-3

SB-2 76th Page of 88 TOC 1st Previous Next ↓Bottom Just 76th
On February 12, 1999, the Company borrowed $250,000 from Mr. Dearholt. The
borrowing was effectuated in the form of a $250,000, one-year promissory note
payable by the Company to Mr. Dearholt. As part of this transaction, the
Company entered into a Note Purchase and Warrant Agreement and a Stock Issuance
Agreement. Mr. Dearholt received a warrant to purchase 50,000 shares of our
common stock at an exercise price of $1.248 per share. The exercise price of
the warrants equaled 80% of the average market price of the common stock for the
five trading days prior to the date of issuance. The warrants expire upon the
earlier of their exercise or nine years after the date of their issuance.
Effective February 12, 2000, the Company extended the due date of the note to
February 12, 2001, and in connection with this extension, the Company issued to
Mr. Dearholt warrants to purchase 62,500 shares of our common stock at an
exercise price of $0.77 per share, which equaled 80% of the average market price
of our common stock for the five trading days prior to the date of issuance.
Effective February 12, 2001, the Company extended the due date of the note to
February 12, 2002, and in connection with this extension, the Company issued to
Mr. Dearholt warrants to purchase 70,000 shares of our common stock at an
exercise price of $0.40 per share, which equaled 75% of the average market price
of our common stock for the five trading days prior to the date of issuance.
The warrants expire upon the earlier of their exercise or ten years after the
date of their issuance.

The Company has sold 129,506 shares of common stock on February 26, 1999,
157,356 shares of common stock on March 10, 1999, 196,102 shares of common stock
on April 10, 1999 and 197,093 shares of common stock on May 31, 2000 to a
private investor under an equity line agreement. The Company received net cash
proceeds of $145,500, $145,500, $194,000, and $97,000 respectively, from these
sales. As part of this offering, the Company also issued to the investor
warrants to purchase 200,000 shares of the Company's common stock at an exercise
price of $2.17 per share. The Company also issued warrants to purchase 100,000
shares of the Company's common stock at an exercise price of $1.625 to this
investor on February 12, 1999 in connection with a consulting agreement. The
Company believes it has satisfied the exemption from the securities registration
requirement provided by section 4(2) of the Securities Act and Regulation D
promulgated thereunder in this offering since the securities were sold in a
private placement to a sophisticated, accredited investor, who provided
representations which the Company deemed necessary to satisfy itself that it was
an accredited investor and was purchasing for investment and not with a view to
resale in connection with a public offering.

The Company sold 316,668 shares of common stock to three investors in
November 1999. The Company received cash proceeds of $237,500 from these sales.
The Company believes it has satisfied the exemption from the securities
registration requirement provided by section 4(2) of the Securities Act and
Regulation D promulgated thereunder in this offering since the securities were
sold in a private placement to sophisticated, accredited investors, who provided
representations which the Company deemed necessary to satisfy itself that they
were accredited investors and were purchasing for investment and not with a view
to resale in connection with a public offering.

The Company sold 100,000 shares of common stock to one investor in January
2000. The Company received cash proceeds of $75,000 from this sale. The
Company believes it has satisfied the exemption from the securities registration
requirement provided by section 4(2) of the Securities Act and Regulation D
promulgated thereunder in this offering since the securities were sold in a
private placement to a sophisticated, accredited investor, who provided
representations which the Company deemed necessary to satisfy itself that he was
an accredited investor and was purchasing for investment and not with a view to
resale in connection with a public offering.

The Company sold 80,001 shares of common stock to three investors in
February 2000. The Company received cash proceeds of $60,000 from these sales.
The Company believes it has satisfied the exemption from the securities
registration requirement provided by section 4(2) of the Securities Act and
Regulation D promulgated thereunder in this offering since the securities were
sold in a private placement to sophisticated, accredited investors, who provided
representations which the Company deemed necessary to satisfy itself that they
were accredited investors and were purchasing for investment and not with a view
to resale in connection with a public offering.

In June, 2000, the Company sold 500,000 shares of its common stock to two
investors, including 400,000 shares to a trust for the benefit of a child of
Stephen M. Dearholt, a director of the Company. The Company received cash
proceeds of $250,000 from this sale. The Company believes it has satisfied the
exemption from the securities registration requirement provided by section 4(2)
of the Securities Act and Regulation D promulgated thereunder in this offering
since the securities were sold in a private placement to sophisticated,

II-4

SB-2 77th Page of 88 TOC 1st Previous Next ↓Bottom Just 77th
accredited investors, who provided representations which the Company deemed
necessary to satisfy itself that were accredited investors and were purchasing
for investment and not with a view to resale in connection with a public
offering.

On May 19, 2000 and June 3, 2000, the Company issued warrants to purchase
375,000 shares of common stock to five investors, in connection with the
one-year extension of the due date of $1,500,000 of convertible debentures with
the exercise price of the warrants is the lesser of 70% of market value or $1.00
per share. The warrants expire upon the earlier of their exercise or four years
after the date of their issuance. The Company believes that it has satisfied
the exemption from the securities registration requirement provided by section
4(2) of the Securities Act in connection with this issuance.

On June 15, 2000, the Company issued 150,000 shares of common stock to one
person as compensation for consulting services. The Company believes that it
has satisfied the exemption from the securities registration requirement
provided by section 4(2) of the Securities Act in connection with this issuance.

Effective March 30, 2001, the Company issued a $250,000 convertible
debentures to one accredited investor. The convertible debenture bears interest
at 12% per annum and has a three-year term. The investor may convert the
convertible debenture into common stock at any time based on a conversion rate
of $0.50 per share. The Company believes it has satisfied the exemption from
the securities registration requirement provided by section 4(2) of the
Securities Act and Regulation D promulgated thereunder in this offering since
the securities were sold in a private placement to a sophisticated, accredited
investor, who provided representations which the Company deemed necessary to
satisfy itself that he was an accredited investor and was purchasing for
investment and not with a view to resale in connection with a public offering.

The Company entered into a loan agreement on May 18, 2001, providing for a
three-year loan commitment from a bank of up to $2,000,000. The Company may
borrow under this loan agreement from time to time subject to a number of
conditions, including obtaining personal guarantees of 125% of the amount
outstanding under the loan. In connection with the loan, the Company issued
warrants to the lender to purchase the number of shares of common stock equal to
$500,000 divided by the warrant purchase price as of the date of exercise. The
warrant purchase price is the price per share equal to 70% of the market price
of our common stock at the time of exercise, but in no event will the warrant
purchase price be less than $0.50 per share or more than $1.00 per share.

Five persons provided guarantees equal in total to the $1.5 million
outstanding under the loan. The guarantors included James R. Kerber, a member
of the Company's board of directors, Stephen M. Dearholt, a member of the
Company's board of directors, Richard E. Wenninger, a member of the Company's
board of directors, and a trust for the benefit of O.B. Parrish, the Company's
Chairman of the Board and Chief Executive Officer. Each guarantor may be liable
to the lender for up to 125% of the guarantor's guarantee amount if the Company
defaults under the loan. The Company issued warrants to the guarantors to
purchase the number of shares of common stock equal to the guarantee amount of
such guarantor divided by the warrant purchase price as of the date of exercise.
The warrant purchase price is the price per share equal to 70% of the market
price of common stock at the time of exercise, but in no event will the warrant
purchase price be less than $0.50 per share or more than $1.00 per share. The
Company also issued additional warrants to purchase 100,000 shares of common
stock at an exercise price of $0.50 per share to each of Stephen M. Dearholt and
Richard E. Wenninger because each of them guaranteed $500,000 under the loan.

In December 2001, the Company borrowed an additional $400,000 under the
loan and two persons provided guarantees equal in total to the additional
$400,000 outstanding under the loan and in February 2002 the Company borrowed an
additional $100,000 under the loan and one person provided a guarantee equal to
the additional $100,000 outstanding under the loan. Each guarantor may be
liable to the lender for up to 125% of the guarantor's guarantee amount if the
Company defaults under the loan. The Company issued warrants to the guarantors
to purchase the number of shares of common stock equal to the guarantee amount
of such guarantor divided by the warrant purchase price as of the date of
exercise. The warrant purchase price is the price per share equal to 70% of the
market price of common stock at the time of exercise, but in no event will the
warrant purchase price be less than $0.50 per share or more than $1.00 per
share. The Company also issued an additional warrant to purchase 100,000 shares
of common stock at an exercise price of $0.50 per share to one of the
guarantors.

II-5

SB-2 78th Page of 88 TOC 1st Previous Next ↓Bottom Just 78th
The Company believes it has satisfied the exemption from the securities
registration requirement provided by section 4(2) of the Securities Act and
Regulation D promulgated thereunder in this offering since the warrants were
sold in a private placement to only sophisticated, accredited investors, each of
whom provided representations which the Company deemed necessary to satisfy
itself that they were accredited investors and were purchasing for investment
and not with a view to resale in connection with a public offering.

Effective June 1, 2001, the Company issued an aggregate of $200,000 of
convertible debentures to two accredited investors. The convertible debentures
bear interest at 10% per annum and have a three-year term. The investors may
convert the convertible debentures into common stock at any time based on a
conversion rate of $0.50 per share. The Company believes it has satisfied the
exemption from the securities registration requirement provided by section 4(2)
of the Securities Act and Regulation D promulgated thereunder in this offering
since the securities were sold in a private placement to only sophisticated,
accredited investors, each of whom provided representations which the Company
deemed necessary to satisfy itself that they were accredited investors and were
purchasing for investment and not with a view to resale in connection with a
public offering.

On August 1, 2001, the Company issued 1,000,000 shares of common stock to
one accredited investor for a total purchase price of $500,000. The Company
believes it has satisfied the exemption from the securities registration
requirement provided by section 4(2) of the Securities Act and Regulation D
promulgated thereunder in this offering since the securities were sold in a
private placement to a sophisticated, accredited investor, who provided
representations which the Company deemed necessary to satisfy itself that he was
an accredited investor and was purchasing for investment and not with a view to
resale in connection with a public offering.

In November 2001, the Company issued 120,000 shares of common stock to one
accredited investor for a total purchase price of $60,000. The Company believes
it has satisfied the exemption from the securities registration requirement
provided by section 4(2) of the Securities Act and Regulation D promulgated
thereunder in this offering since the securities were sold in a private
placement to a sophisticated, accredited investor, who provided representations
which the Company deemed necessary to satisfy itself that he was an accredited
investor and was purchasing for investment and not with a view to resale in
connection with a public offering.

In December 2001, the Company issued 100,000 shares of common stock to one
person as compensation for consulting services. The Company believes that it
has satisfied the exemption from the securities registration requirement
provided by section 4(2) of the Securities Act in connection with this issuance.

The former holders of $1,500,000 convertible debentures issued on May 19,
1999 and June 3, 1999 alleged that the Company was in default with respect to
the perfection of the former holders' security interest in the Company's assets.
The former holders demanded the issuance of 1,500,000 shares of the Company's
common stock to the former holders due to this alleged default. On July 23,
2002, the Company and the former holders settled the dispute out of court. The
Company agreed to issue 450,000 shares of the Company's common stock to the
former convertible debenture holders and to extend the expiration dates of
2,250,000 warrants held by the former holders to 2007. The former convertible
debenture holders agreed to release their security interest in the Company's
assets. The Company believes it has satisfied the exemption from the securities
registration requirement provided by section 4(2) of the Securities Act and
Regulation D promulgated thereunder in this offering since the shares were
issued to sophisticated, accredited investors, who provided representations
which the Company deemed necessary to satisfy itself that they were accredited
investors and were purchasing the stock for investment and not with a view to
resale in connection with a public offering.

II-6

SB-2 79th Page of 88 TOC 1st Previous Next ↓Bottom Just 79th
Item 27. Exhibits. The following exhibits are filed as part of this
Registration Statement.

EXHIBIT NO. DESCRIPTION
----------- -----------

3.1 Amended and Restated Articles of Incorporation of the Company.(20)

3.2 Articles of Amendment to the Amended and Restated Articles of Incorporation
of the Company increasing the number of authorized shares of common stock
to 27,000,000 shares.(26)

3.3 Articles of Amendment to the Amended and Restated Articles of Incorporation
of the Company increasing the number of authorized shares of common stock
to 35,500,000 shares.

3.4 Amended and Restated By-Laws of the Company

5 Legal Opinion of Reinhart Boerner Van Deuren s.c. regarding legality of
securities being issued.

10.1 Employment Agreement between John Wundrock and the Company dated October 1,
1989.(3)

10.2 Wisconsin Pharmacal Company, Inc. (k/n/a The Female Health Company) 1990
Stock Option Plan.(4)

10.3 Reality Female Condom Clinical Trial Data Agreement between the Company and
Family Health International dated September 24, 1992.(6)

10.4 Trademark License Agreement for Reality Trademark.(7)

10.5 Office space lease between the Company and John Hancock Mutual Life
Insurance Company dated June 1, 1994.(8)

10.6 Employment Agreement dated September 10, 1994 between the Company and Dr.
Mary Ann Leeper.(9)

10.7 1994 Stock Option Plan.(10)

10.8 Investor relations and development services Consulting Agreement between
the Company and C.C.R.I. Corporation dated March 13, 1995.(11)

10.9 Consultant Warrant Agreement dated March 13, 1995 between the Company and
C.C.R.I. Corporation, as amended on April 22, 1996.(12)

10.10 Company Promissory Note payable to Stephen M. Dearholt for $1 million
dated March 25, 1996 and related Note Purchase and Warrant Agreement,
warrants and Stock Issuance Agreement.(13)

10.11 Outside Director Stock Option Plan.(12)

10.12 Exclusive Distribution Agreement between Chartex International Plc and
Taiho Pharmaceutical Co., Ltd. dated October 18, 1994.(14)

II-7

SB-2 80th Page of 88 TOC 1st Previous Next ↓Bottom Just 80th
10.13 Supply Agreement between Chartex International Plc and Deerfield Urethane,
Inc. dated August 17, 1994.(14)

10.14 Employment Letter dated February 28, 1990 from Chartex Resources Ltd. to
Michael Pope and Board Amendments thereto.(14)

10.15 Grant Letter dated March 7, 1996 from the Government Office for London of
the Secretary of State of Trade and Industry regarding economic development
grant to the Company. (14)

10.16 Letter Amendment to Asset Sale Agreement dated April 29, 1996 between the
Company and Dowty Seals Limited and Chartex International Plc. (14)

10.17 Form of Warrant issued by the Company to certain foreign investors as of
September 12, 1996.(15)

10.18 Fund Raising Agreement dated May 1, 1998 by and between Hartinvest-Medical
Ventures and the Company. (12)

10.19 Change of Control Agreement dated January 27, 1999, between The Female
Health Company and Michael Pope.(16)

10.20 Company Promissory Note to Stephen M. Dearholt for $250,000 dated February
1, 1999 and related Note Purchase and Warrant Agreement, warrants and Stock
issuance Agreement.(16)

10.21 Company Promissory Note to O.B. Parrish for $50,000 dated February 1, 1999
and related Note Purchase and Warrant Agreement, warrants and Stock
issuance Agreement.(16)

10.22 Company Promissory Note to Stephen M. Dearholt for $1 million dated March
25, 1999 and related Note Purchase and Warrant Agreement, Warrant and Stock
Issuance Agreement.(16)

10.23 Form of Registration Rights Agreement between the Company and certain
private placement investors dated as of June 1, 1999.(17)

10.24 Amendment to Registration Rights Agreement between the Company and Private
Placement Investors dated as of June 1, 1999.(17)

10.25 $1 million Convertible Debenture issued by the Company to Gary Benson
dated May 19, 1999.(17)

10.26 $100,000 Convertible Debenture issued by the Company to Daniel Bishop
dated June 3, 1999. (17)

10.27 $100,000 Convertible Debenture issued by the Company to Robert Johander
dated June 3, 1999. (17)

10.28 $100,000 Convertible Debenture issued by the Company to Michael Snow dated
June 3, 1999. (17)

II-8

SB-2 81st Page of 88 TOC 1st Previous Next ↓Bottom Just 81st
10.29 $100,000 Convertible Debenture issued by the Company to W.G. Securities
Limited Partnership dated June 3, 1999. (17)

10.30 Warrant to purchase 1,250,000 shares of the Company's common stock issued
to Gary Benson on May 19, 1999. (17)

10.31 Warrant to purchase 125,000 shares of the Company's common stock issued to
Daniel Bishop on June 3, 1999. (17)

10.32 Warrant to purchase 125,000 shares of the Company's common stock issued to
Robert Johander on June 3, 1999. (17)

10.33 Warrant to purchase 250,000 shares of the Company's common stock issued to
Michael Snow on June 3, 1999. (17)

10.34 Warrant to purchase 125,000 shares of the Company's common stock issued to
W.G. Securities Limited Partnership on June 3, 1999. (17)

10.35 Form of Common Stock Purchase Warrant to acquire 337,500 shares issued to
R.J. Steichen as placement agent. (17)

10.36 Form of Change of Control Agreement between the Company and each of O.B.
Parrish and Mary Ann Leeper.(20)

10.37 Lease Agreement among Chartex Resources Limited, P.A.T. (Pensions) Limited
and The Female Health Company.(18)

10.38 Agreement dated March 14, 1997, between the Joint United Nations Programme
on HIV/AIDS and Chartex International PLC.(19)

10.39 Company promissory note payable to Stephen M. Dearholt for $1 million
dated March 25, 1997, and related stock purchase and warrant agreement,
warrants and stock issuance agreement.(21)

10.40 1997 Stock Option Plan.(19)

10.41 Employee Stock Purchase Plan.(19)

10.42 Agreement dated September 29, 1997, between Vector Securities
International and The Female Health Company.(19)

10.43 Private Equity Line of Credit Agreement between the Company and
Kingsbridge Capital Limited dated November 19, 1998.(2)

10.44 Registration Rights Agreement between the Company and Kingsbridge Capital
Limited dated as of November 19, 1998.(2)

10.45 Warrant to Purchase up to 200,000 shares of common stock of the Company
issued to Kingsbridge Capital Limited as of November 19, 1998.(2)

10.46 Agreement between Kingsbridge Capital Limited and the Company dated
February 12, 1999.(23)

10.47 Consulting Agreement between the Company and Kingsbridge Capital Limited
dated February 12, 1999.(23)

II-9

SB-2 82nd Page of 88 TOC 1st Previous Next ↓Bottom Just 82nd
10.48 Registration Rights Agreement between Kingsbridge Capital Limited and the
Company dated February 12, 1999.(23)

10.49 Warrant for 100,000 shares of the Company's common stock issued to
Kingsbridge Capital Limited as of February 12, 1999.(23)

10.50 Company Promissory Note to Stephen M. Dearholt for $250,000 dated February
12, 2000 and related Warrants.(24)

10.51 Company Promissory Note to O.B. Parrish for $50,000 dated February 18,
2000 and related Warrants.(24)

10.52 Company Promissory Note to Stephen M. Dearholt for $1 million dated March
25, 2000 and related Warrants.(24)

10.53 Stock Purchase Agreement, dated as of June 14, 2000, between The Female
Health Company and The John W. Dearholt Trust.(25)

10.54 Warrant to purchase 250,000 shares of the Company's common stock issued to
Gary Benson on May 19, 2000.(25)

10.55 Warrant to purchase 25,000 shares of the Company's common stock issued to
Daniel Bishop on June 3, 2000.(25)

10.56 Warrant to purchase 25,000 shares of the Company's common stock issued to
Robert Johander on June 3, 2000.(25)

10.57 Warrant to purchase 50,000 shares of the Company's common stock issued to
Michael Snow on June 3, 2000.(25)

10.58 Warrant to purchase 25,000 shares of the Company's common stock issued to
W.G. Securities Limited Partnership on June 3, 2000. (25)

10.59 Stock Purchase Agreement, dated as of June 14, 2000, between the Company
and The John W. Dearholt Trust. (25)

10.60 Exclusive Distribution Agreement, dated as of ______, 2000, between the
Company and Mayer Laboratories, Inc. (26)

10.61 Amended and Restated Convertible Debenture issued by the Company to
Richard E. Wenninger dated March 30, 2001. (27)

10.62 Amended and Restated Promissory Note to Stephen M. Dearholt for $250,000
dated February 12, 2001 and related warrants. (5)

10.63 Amended and Restated Promissory Note to O.B. Parrish for $50,000 dated
February 18, 2001 and related warrants. (5)

10.64 Amended and Restated Promissory Note to Stephen M. Dearholt for $1,000,000
dated March 25, 2001 and related warrants. (27)

10.65 Loan Agreement, dated as of May 18, 2001, between the Company and
Heartland Bank. (27)

II-10

SB-2 83rd Page of 88 TOC 1st Previous Next ↓Bottom Just 83rd
10.66 Registration Rights Agreement, dated as of May 18, 2001, between the
Company and Heartland Bank. (27)

10.67 Warrant dated May 18, 2001 from the Company to Heartland Bank. (27)

10.68 Warrants dated May 18, 2001 from the Company to Stephen M. Dearholt. (28)

10.69 Warrant dated May 18, 2001 from the Company to James R. Kerber. (28)

10.70 Warrant dated May 18, 2001 from the Company to Tom Bodine. (28)

10.71 Warrant dated May 18, 2001 from the Company to The Geneva O. Parrish 1996
Living Trust. (28)

10.72 Warrants dated May 23, 2001 from the Company to Richard E. Wenninger. (28)

10.73 Registration Rights Agreement, dated as of May 18, 2001, among the Company
and certain guarantors. (28)

10.74 Exclusive Distribution Agreement, dated December 18, 2001, between the
Company and Total Access Group, Inc. (29)

10.75 Memorandum of Understanding, dated as of November 12, 2001, between the
Company and Hindustan Latex Limited. (30)

10.76 Warrant dated December 18, 2001 from the Company to Dr. Jerry Kinder. (31)

10.77 Warrants dated December 20, 2001 from the Company to Tom Bodine. (31)

10.78 Warrant dated February 20, 2002 from the Company to Gerald Stein. (31)

10.79 Amended and Restated Promissory Note to Stephen M. Dearholt for $1,000,000
dated March 25, 2002 and related warrants. (32)

21 Subsidiaries of Registrant. (22)

23.1 Consent of McGladrey & Pullen, LLP

23.2 Consent of Reinhart Boerner Van Deuren s.c. (included in Exhibit 5).

II-11

SB-2 84th Page of 88 TOC 1st Previous Next ↓Bottom Just 84th
24 Power of Attorney (incorporated by reference to the signature page hereof).

____________

(1) Incorporated herein by reference to the Company's 1995 Form 10-KSB.

(2) Incorporated herein by reference to the Company's Form SB-2 Registration
Statement filed December 8, 1998.

(3) Incorporated herein by reference to the Company's Registration Statement on
Form S-18, Registration No. 33-35096, as filed with the Securities and
Exchange Commission on May 25, 1990.

(4) Incorporated herein by reference to the Company's December 31, 1990 Form
10-Q.

(5) Incorporated herein by reference to the Company's March 31, 2001 Form
10-QSB.

(6) Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Company's Registration Statement on Form S-1, Registration No. 33-51586, as
filed with the Securities and Exchange Commission on September 28, 1992.

(7) Incorporated herein by reference to the Company's 1992 Form 10-KSB.

(8) Incorporated herein by reference to the Company's June 30, 1994 Form 10-Q.

(9) Incorporated herein by reference to the Company's Registration Statement on
Form S-2, Registration No. 33-84524, as filed with the Securities and
Exchange Commission on September 28, 1994.

(10) Incorporated herein by reference to the Company's 1994 Form 10-KSB.

(11) Incorporated herein by reference to the Company's March 31, 1995 Form 10-Q.

(12) Incorporated herein by reference to the Company's Form S-1 Registration
Statement filed with the Securities and Exchange Commission on April 23,
1996.

(13) Incorporated herein by reference to the Company's June 30, 1995 Form 10-Q.

(14) Incorporated herein by reference to Pre-Effective Amendment No. 1 to the
Company's Form S-1 Registration Statement filed with the Securities and
Exchange Commission on June 5, 1996.

(15) Incorporated herein by reference to the Company's 1996 Form 10-K.

(16) Incorporated herein by reference to the Company's March 31, 1999 Form
10-QSB.

II-12

SB-2 85th Page of 88 TOC 1st Previous Next ↓Bottom Just 85th
(17) Incorporated herein by reference to the Company's June 30, 1999 Form
10-QSB.

(18) Incorporated herein by reference to the Company's December 31, 1996 Form
10-QSB.

(19) Incorporated herein by reference to the Company's Form 10-KSB/A-2 for the
year ended September 30, 1997.

(20) Incorporated herein by reference to the Company's Form SB-2 Registration
Statement filed with the Securities and Exchange Commission on October 19,
1999.

(21) Incorporated herein by reference to the Company's March 31, 1997 Form
10-QSB.

(22) Incorporated herein by reference to the Company's Form 10-KSB for the year
ended September 30, 1999.

(23) Incorporated herein by reference to the Company's December 31, 1998 Form
10-QSB.

(24) Incorporated herein by reference to the Company's March 31, 2000 Form
10-QSB.

(25) Incorporated herein by reference to the Company's June 30, 2000 Form
10-QSB.

(26) Incorporated herein by reference to the Company's Form SB-2 Registration
Statement filed with the Securities and Exchange Commission on September
21, 2000.

(27) Incorporated herein by reference to the Company's June 30, 2001 Form
10-QSB.

(28) Incorporated by reference to the Company's Form SB-2 Registration Statement
filed with the Securities and Exchange Commission on November 13, 2001.

(29) Incorporated by reference to Amendment No. 1 to the Company's Form SB-2
Registration Statement filed with the Securities and Exchange Commission on
February 6, 2002.

(30) Incorporated by reference to Amendment No. 2 to the Company's Form SB-2
Registration Statement filed with the Securities and Exchange Commission on
February 27, 2002.

(31) Incorporated by reference to Amendment No. 3 to the Company's Form SB-2
Registration Statement filed with the Securities and Exchange Commission on
March 18, 2002.

(32) Incorporated herein by reference to the Company's March 31, 2002 Form
10-QSB.

II-13

SB-2 86th Page of 88 TOC 1st Previous Next ↓Bottom Just 86th
Item 28. Undertakings.

The small business issuer hereby undertakes as follows:

(a) Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of
the small business issuer pursuant to the foregoing provisions, or
otherwise, the small business issuer has been advised that in the opinion
of the Securities and Exchange Commission such indemnification is against
public policy as expressed in the Act and is, therefore, unenforceable. In
the event that a claim for indemnification against such liabilities (other
than the payment by the small business issuer of expenses incurred or paid
by a director, officer or controlling person of the small business issuer
in the successful defense of any action, suit or proceeding) is asserted by
such director, officer or controlling person in connection with the
securities being registered, the small business issuer will, unless in the
opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as expressed in
the Act and will be governed by the final adjudication of such issue.

(b) File, during any period in which offers and sales of securities may be made
pursuant to this registration, a post-effective amendment to this
registration statement to:

(i) include any prospectus required by section 10(a) (3) of the Securities
Act;

(ii) reflect in the prospectus any facts or events which, individually or
together, represent a fundamental change in the information in the
registration statement; and

(iii) include any additional or changed material information on the plan of
distribution.

(c) For determining liability under the Securities Act, treat each
post-effective amendment as a new registration statement of the securities
offered, and the offering of the securities at that time to be the initial
bona fide offering.

(d) File a post-effective amendment to remove from registration any of the
securities that remain unsold at the end of the offering.

II-14

SB-2 87th Page of 88 TOC 1st Previous Next ↓Bottom Just 87th
SIGNATURES

In accordance with the requirements of the Securities Act of 1933, the
registrant certifies that it has reasonable grounds to believe that it meets all
of the requirements for filing on Form SB-2 and authorized this Registration
Statement to be signed on its behalf by the undersigned, in the City of Chicago,
State of Illinois, on the 6th day of September, 2002.

THE FEMALE HEALTH COMPANY

BY /s/ O.B. Parrish
------------------------------
Its Chairman and
Chief Executive Officer

POWER OF ATTORNEY

Each person whose signature appears below hereby appoints O.B. Parrish and
Mary Ann Leeper, and each of them individually, his true and lawful
attorney-in-fact, with power to act with or without the other and with full
power of substitution and resubstitution, in any and all capacities, to sign any
or all amendments (including post-effective amendments) to the Registration
Statement and file the same with all exhibits thereto, and other documents in
connection therewith, with the Securities and Exchange Commission, granting unto
said attorneys-in-fact and agents full power and authority to do and perform
each and every act and thing requisite and necessary to done in and about the
premises, as fully to all intents and purposes as he or she might or could do in
person, hereby ratifying and confirming all that said attorneys-in-fact and
agents, or their substitutes, may lawfully cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated:

[Download Table]

SIGNATURE TITLE DATE
--------- ----- ----

/s/ O.B. Parrish
---------------------------
O.B. Parrish Chairman of the Board, September 6, 2002
Chief Executive Officer
and Director (Principal
Executive Officer)

---------------------------
Mary Ann Leeper, Ph.D. President and Chief
Operating Officer and Director

/s/ Robert R. Zic
---------------------------
Robert R. Zic Principal Accounting September 6, 2002
Officer

/s/ William R. Gargiulo
---------------------------
William R. Gargiulo, Jr. Secretary and Director September 6, 2002

---------------------------
David R. Bethune Director

/s/ Stephen M. Dearholt
---------------------------
Stephen M. Dearholt Director September 6, 2002

---------------------------
James R. Kerber Director

/s/ Michael R. Walton
---------------------------
Michael R. Walton Director September 6, 2002

/s/ Richard E. Wenninger
---------------------------
Richard E. Wenninger Director September 6, 2002

II-15

SB-2 Last Page of 88 TOC 1st Previous Next ↓Bottom Just 88th
EXHIBIT INDEX

[Enlarge/Download Table]

EXHIBIT PAGE
NUMBER DESCRIPTION NUMBER
----------------------------------------------------------------------------------------

3.3 Articles of Amendment to the Amended and Restated Articles of
Incorporation of the Company increasing the number of author

5 Legal Opinion of Reinhart Boerner Van Deuren s.c.

23.1 Consent of McGladrey & Pullen, LLP

SB-2	1st Page of 88	TOC	↑Top	Previous	Next	↓Bottom	Just 1st

SB-2	2nd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 2nd

SB-2	3rd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 3rd

SB-2	4th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 4th

SB-2	5th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 5th

SB-2	6th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 6th

SB-2	7th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 7th

SB-2	8th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 8th

SB-2	9th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 9th

SB-2	10th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 10th

SB-2	11th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 11th

SB-2	12th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 12th

SB-2	13th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 13th

SB-2	14th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 14th

SB-2	15th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 15th

SB-2	16th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 16th

SB-2	17th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 17th

SB-2	18th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 18th

SB-2	19th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 19th

SB-2	20th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 20th

SB-2	21st Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 21st

SB-2	22nd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 22nd

SB-2	23rd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 23rd

SB-2	24th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 24th

SB-2	25th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 25th

SB-2	26th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 26th

SB-2	27th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 27th

SB-2	28th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 28th

SB-2	29th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 29th

SB-2	30th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 30th

SB-2	31st Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 31st

SB-2	32nd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 32nd

SB-2	33rd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 33rd

SB-2	34th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 34th

SB-2	35th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 35th

SB-2	36th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 36th

SB-2	37th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 37th

SB-2	38th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 38th

SB-2	39th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 39th

SB-2	40th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 40th

SB-2	41st Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 41st

SB-2	42nd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 42nd

SB-2	43rd Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 43rd

SB-2	44th Page of 88	TOC	1st	Previous	Next	↓Bottom	Just 44th

Dates Referenced Herein and Documents Incorporated by Reference

		Referenced-On Page
This ‘SB-2’ Filing	Date	First	Last	Other Filings

	3/25/14	32	74	4, 8-K
	3/25/11	32	74
	3/25/10	32	74	4, 8-K, DEF 14A
	3/25/09	32	74
	3/25/07	32	74
	3/25/05	32	74
	5/30/04	13	61
	5/18/04	13	68
	3/30/04	10	61
	4/30/03	29
	3/25/03	10	74
	12/31/02	22		10QSB
	9/30/02	66		10KSB
Filed on:	9/6/02	1	87
	9/5/02	2	3
	8/30/02	6	38
	8/25/02	22	23
	8/22/02	19
	7/23/02	16	78
	6/30/02	7	71	10QSB
	6/15/02	51
	5/8/02	16	71	DEF 14A
	3/31/02	85		10QSB
	3/25/02	10	83
	3/18/02	85
	2/27/02	85		SB-2/A
	2/20/02	69	83
	2/18/02	32	75
	2/12/02	32	76
	2/6/02	85		SB-2/A
	12/31/01	14	68	10KSB, 10QSB
	12/28/01	42	54
	12/20/01	68	83
	12/18/01	21	83
	12/15/01	50	51
	11/29/01	21
	11/21/01	42
	11/13/01	85		SB-2
	11/12/01	83
	9/30/01	7	66	10KSB
	9/28/01	28
	8/1/01	78
	6/30/01	16	85	10QSB, NTN 10Q
	6/3/01	54
	6/1/01	19	78
	5/23/01	83
	5/18/01	18	83
	3/31/01	50	84	10QSB
	3/30/01	18	82
	3/25/01	32	82
	2/18/01	32	82
	2/12/01	32	82
	1/31/01	51
	12/31/00	14		10QSB
	12/15/00	50
	10/1/00	18
	9/30/00	9	61	10KSB
	9/21/00	85		SB-2
	8/1/00	35	59
	6/30/00	85		10QSB
	6/15/00	77
	6/14/00	33	82
	6/3/00	77	82
	5/31/00	76
	5/19/00	77	82
	3/31/00	85		10QSB
	3/25/00	32	82
	2/18/00	32	82
	2/12/00	32	82
	2/11/00	53		SB-2/A
	12/31/99	14		10QSB
	12/2/99	53
	10/19/99	85		SB-2
	9/30/99	9	85	10KSB
	9/24/99	75
	6/30/99	85		10QSB
	6/3/99	16	81
	6/1/99	80
	5/19/99	16	81
	4/10/99	76
	3/31/99	84		10-Q
	3/25/99	32	80
	3/10/99	76		DEFR14A
	2/26/99	76
	2/18/99	32	75	424B3
	2/12/99	32	82
	2/10/99	10
	2/1/99	80
	1/27/99	80
	12/31/98	85		10QSB
	12/8/98	84		SB-2
	11/19/98	59	81
	11/1/98	51
	9/30/98	26		10KSB
	8/1/98	35	59
	5/1/98	80
	4/3/98	35
	3/25/98	32	74	10KSB/A
	12/30/97	35
	9/30/97	85		10KSB
	9/29/97	81
	8/15/97	34
	4/30/97	29
	3/31/97	85		10QSB
	3/25/97	32	81
	3/14/97	81
	12/31/96	85		10QSB
	12/10/96	51
	9/12/96	80
	6/5/96	84
	4/29/96	80
	4/23/96	84
	4/22/96	79
	3/25/96	79
	3/7/96	80
	2/1/96	5
	12/31/95	20
	6/30/95	84
	3/31/95	84
	3/13/95	79
	10/18/94	79
	9/28/94	84
	9/10/94	79
	8/17/94	80
	6/30/94	84
	6/1/94	79
	5/1/94	29
	9/28/92	84
	9/24/92	79
				List all Filings

22 Subsequent Filings that Reference this Filing

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 4/01/24  Veru Inc.                         10-Q       12/31/23   79:9.8M
 4/01/24  Veru Inc.                         10-K/A      9/30/23   96:18M
12/08/23  Veru Inc.                         10-K        9/30/23   88:14M
11/15/23  Veru Inc.                         10-Q/A      6/30/23   81:13M
 8/10/23  Veru Inc.                         10-Q        6/30/23   79:12M
 5/12/23  Veru Inc.                         S-3                    4:273K                                   Donnelley … Solutions/FA
 5/11/23  Veru Inc.                         10-Q        3/31/23   74:10M
 4/11/23  Veru Inc.                         S-3/A                  2:345K                                   Donnelley … Solutions/FA
 3/16/23  Veru Inc.                         S-3                    6:710K                                   Donnelley … Solutions/FA
 2/09/23  Veru Inc.                         10-Q       12/31/22   72:8.5M
12/05/22  Veru Inc.                         10-K        9/30/22   87:13M
 8/11/22  Veru Inc.                         S-8         8/11/22    4:79K                                    Donnelley … Solutions/FA
 8/11/22  Veru Inc.                         10-Q        6/30/22   79:12M
 5/12/22  Veru Inc.                         S-8         5/12/22    4:65K                                    Donnelley … Solutions/FA
 5/12/22  Veru Inc.                         10-Q        3/31/22   78:11M
 2/09/22  Veru Inc.                         10-Q       12/31/21   81:6.2M
12/02/21  Veru Inc.                         10-K        9/30/21   96:9.5M
 8/12/21  Veru Inc.                         10-Q        6/30/21   82:12M
 5/12/21  Veru Inc.                         10-Q        3/31/21   81:7.3M
 2/10/21  Veru Inc.                         10-Q       12/31/20   81:6.1M
12/10/20  Veru Inc.                         10-K        9/30/20  100:9.9M
 8/13/20  Veru Inc.                         10-Q        6/30/20   82:7.6M

↑Top

Filing Submission 0001042167-02-000129 – Alternative Formats (Word / Rich Text, HTML, Plain Text, et al.)

Female Health Co – ‘SB-2’ on 9/6/02

On: Friday, 9/6/02, at 4:49pm ET · Accession #: 1042167-2-129 · File #: 333-99285

Registration of Securities by a Small-Business Issuer — Form SB-2Filing Table of Contents

SB-2 — Registration of Securities by a Small-Business IssuerDocument Table of Contents

Dates Referenced Herein and Documents Incorporated by Reference

22 Subsequent Filings that Reference this Filing

Registration of Securities by a Small-Business Issuer — Form SB-2
Filing Table of Contents

SB-2 — Registration of Securities by a Small-Business Issuer
Document Table of Contents