Financial Analysis

Note 18 - Commitments and Contingencies EXXUA Exclusive Commercialization Agreement On June 5, 2025, the Company, entered into the Commercialization Agreement with Fabre-Kramer, pursuant to which the Company acquired certain rights and obligations in connection with the commercialization of EXXUA in the United States. As consideration for the Commercialization Agreement, the Company made an upfront cash payment of $3.0 million to Fabre-Kramer in June 2025, which was capitalized as a definite-lived intangible asset (see Note 7 - Intangible Assets for further detail). Within 45 days of the one -year anniversary of the first product launch EXXUA in the United States, the Company has agreed to make a second $3.0 million payment (the Second Payment). The Second Payment may be increased to $5.0 million if first year EXXUA net sales meet or exceed $35.0 million. Additionally, the Company has agreed to pay Fabre-Kramer certain milestone payments ranging from $5.0 million to over $100.0 million per year based on sales milestones after a certain level of net sales are achieved with a threshold of $100.0 million in net sales and the Company will pay 10% of net sales exceeding $1.0 billion. The Company has also agreed to pay royalty fees throughout the term of the Commercialization Agreement based on the Companys net sales of EXXUA as follows: (i) initially 28% of net sales and increasing to 39% if net sales exceed $300.0 million in any year during the term until such net sales reach a r …

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Year Ended June 30, 2025 2024 (in thousands) ADHD Portfolio $ 57,576 $ 57,784 Pediatric Portfolio 8,769 7,280 Other 37 119 Total net revenue $ 66,382 $ 65,183

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Note 15 - Equity Incentive Plan 2023 Equity Incentive Plan On May 18, 2023, the Companys stockholders approved the adoption of the Aytu BioPharma, Inc. 2023 Equity Incentive Plan (the 2023 Equity Incentive Plan), which replaced all previous plans. For the 2023 Equity Incentive Plan, the stockholders approved (a) 200,000 new shares; (b) 87,155 shares rolled over to the 2023 Equity Incentive Plan from plans replaced by the 2023 Equity Incentive Plan; and (c) any shares that are returned to the Company under plans replaced by the 2023 Equity Incentive Plan to be added to the 2023 Equity Incentive Plan. On May 21, 2025, the Companys stockholders approved an amendment (the Plan Amendment) to the 2023 Equity Incentive Plan. The Plan Amendment increased the number of shares reserved for issuance under the 2023 Equity Incentive Plan by 300,000 shares to bring the total number of shares reserved for issuance under the 2023 Equity Incentive Plan to 500,000 shares, not including unissued shares from available awards under prior plans or any returned shares. The Plan Amendment became effective immediately upon approval by the Companys stockholders and the Company plans to register the 300,000 shares pursuant to a registration statement on Form S- 8 to be filed with the SEC in fiscal 2026. With the approval of the 2023 Equity Incentive Plan, no additional awards will be granted under any previous plans. All outstanding awards previously granted under previous stock incentive plans will re …

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Note 12 - Fair Value Measurements The Company determines the fair value of financial and non-financial assets using the fair value hierarchy, which establishes three levels of inputs that may be used to measure fair value as follows: Level 1: Inputs that reflect unadjusted quoted prices in active markets that are accessible to the Company for identical assets or liabilities; Level 2: Inputs include quoted prices for similar assets and liabilities in active or inactive markets or that are observable for the asset or liability either directly or indirectly; and Level 3: Unobservable inputs that are supported by little or no market activity. The Companys financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative warrant liabilities, fixed payment arrangements, and current and non-current debt. The carrying amounts of certain short-term financial instruments, including cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities approximate their fair value due to their short maturities. Current and non-current debt are reported at their amortized costs on the Companys consolidated balance sheets. The remaining financial instruments are reported on the Companys consolidated balance sheets at amounts that approximate current fair values. The Companys policy is to recognize transfers in and/or out of fair value hierarchy as of the date in which the event or change in circumstances cause …

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Note 13 - Income Taxes For the years ended June 30, 2025 , and 2024 , there was $0.4 million of income tax expense and $2.1 million of income tax expense from continuing operations, which was an effective tax rate of negative 3.2% and negative 20.6%, respectively. This income tax expense was primarily driven by Section 382 limitation of the IRC on pre-Tax Cuts and Jobs Act (the TCJA) and post-TCJA net operating loss (NOL) utilization, as further described below, coupled with existing valuation allowances. As of June 30, 2025, and 2024, the Company had $0.3 million and $0.8 million of deferred tax assets (DTAs), net of valuation allowance from continuing operations, respectively, included in other non-current assets and $0.3 million and $0.8 million of deferred tax liabilities (DTLs) from continuing operations, respectively, included in other non-current liabilities. As of June 30, 2025 , and 2024 , the Company had $1.1 million of prepaid income taxes included in prepaid expenses and other current assets and $0.3 million of accrued income taxes payable, respectively, recorded in the Companys consolidated balance sheets. Section 382 Limitation Under the provisions of the IRC, substantial changes in the Companys ownership have resulted in limitations on the amount of NOL carryforwards that can be utilized in future years. NOL carryforwards are subject to examination in the year they are utilized regardless of whether the tax year in which they are generated has been closed by st …

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Note 11 - Debt On June 20, 2025, the Company and certain of its subsidiaries entered into Eclipse Amendment No. 6, which provided for among other things, an increase in the Eclipse Term Loan principal amount of $13.0 million on the closing date of the Eclipse Amendment No. 6 and an extension of the maturity date of the Eclipse Term Loan to June 12, 2029, as well as certain amendments to the Eclipse Revolving Loan described further in Note 10 - Revolving Credit Facility . The Eclipse Term Loan incurs interest at a rate of the SOFR plus 7.0%, with a four -year term maturing, as amended, on June 12, 2029, and a straight-line loan amortization period of seven years, which would provide for a loan balance at the end of the four -year term of $5.6 million to be repaid on the maturity date of June 12, 2029. The Company used proceeds from the Eclipse Term Loan and a portion of the proceeds from the exercise of warrants to repay a $15.0 million term loan in full, which resulted in the Company recording a loss on extinguishment of debt of $0.6 million in the fourth quarter of fiscal 2024. The Company incurred interest expense on the $15.0 million term loan including debt discount amortization of $3.4 million for the year ended June 30, 2024. In the event that, for any reason, all or any portion of the Eclipse Agreement is terminated prior to the scheduled maturity date, in addition to the payment of all outstanding principal and unpaid accrued interest, the Company is required to pay a …

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Recently Adopted Accounting Pronouncements Debt - Debt with Conversion and Other Options In August 2020, the FASB issued Accounting Standards Update (ASU) No. 2020 - 06, DebtDebt with Conversion and Other Options (Subtopic 470 - 20 ) and Derivatives and HedgingContracts in Entitys Own Equity (Subtopic 815 - 40 )Accounting for Convertible Instruments and Contracts in an Entitys Own Equity , which simplifies the accounting for convertible instruments by removing major separation models currently required. Consequently, more convertible debt instruments will be reported as a single liability instrument with no separate accounting for embedded conversion features. The Company adopted the guidance on July 1, 2024, and the adoption of the standard did not have a material impact on the Companys consolidated financial statements. Segment Reporting In November 2023, the FASB issued ASU No. 2023 - 07, Segment Reporting (Topic 280 ): Improvements to Reportable Segment Disclosures (ASU 2023 - 07 ). ASU 2023 - 07 was issued to improve reportable segment disclosure requirements, primarily through enhanced disclosures about significant segment expenses. ASU 2023 - 07 also requires all annual disclosures currently required by ASC Topic 280, Segment Reporting to be included in interim periods. The Company adopted ASU 2023 - 07 on June 30, 2025, on a retrospective basis and updated its disclosures to conform to the new segment disclosure requirements. Refer to the Segment Information section w …

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Note 17 - Restructuring Costs As part of the Companys previously announced restructuring activities related to the wind down and divestiture of the Consumer Health business and the closure of the Grand Prairie, Texas manufacturing site, the Company has incurred expenses that qualify as exit and disposal costs under U.S. GAAP. These include severance and employee benefit costs as well as other direct separation benefit costs, right of use asset impairment charges, fixed asset and other asset impairment charges, accelerated depreciation of fixed assets, contract termination costs, and inventory write-downs. Severance and employee benefit costs primarily relate to cash severance. Restructuring costs associated with the Consumer Health business are recorded within the net income (loss) from discontinued operations, net of tax in the consolidated financial statement of operations (see Note 20 - Discontinued Operations ). The expense associated with the closure of the Grand Prairie, Texas manufacturing site such as severance and employee benefits and exit and disposal activities are included in restructuring costs in the consolidated statements of operations. There have been no inventory write-downs associated with this closure. During the years ended June 30, 2025, and 2024, the Company incurred $2.1 million and $2.2 million, respectively, of costs associated with exit and disposal activities related to its previously announced operational realignment and related costs. The Compan …

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Note 3 - Revenue The Company disaggregates its net revenue from continuing operations by product portfolio, which for the years ended June 30, 2025 , and 2024 , includes the ADHD Portfolio, comprised primarily of Adzenys and Cotempla; and the Pediatric Portfolio, comprised primarily of Karbinal, Poly-Vi-Flor and Tri-Vi-Flor. The Companys disaggregation of revenue is consistent with its operating segment. Net Revenue by Product Portfolio Net revenue disaggregated by product portfolios for the years ended June 30, 2025 , and 2024 , were as follows: Year Ended June 30, 2025 2024 (in thousands) ADHD Portfolio $ 57,576 $ 57,784 Pediatric Portfolio 8,769 7,280 Other 37 119 Total net revenue $ 66,382 $ 65,183 Other includes net revenue from various discontinued or deprioritized products. The Consumer Health business was divested in the first quarter of fiscal 2025 and is reported within discontinued operations (see Note 20 - Discontinued Operations ). Net Revenue by Geographic Location The Companys net revenue is predominately within the United States, with insignificant international sales. …

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Note 2 - Summary of Significant Accounting Policies Principles of Consolidation The Companys consolidated financial statements and notes thereto include the accounts of its wholly owned subsidiaries Aytu Therapeutics, LLC and Neos Therapeutics, Inc. (Neos) and their respective wholly owned subsidiaries, as well as Innovus Pharmaceuticals, Inc. (Innovus) and its wholly owned subsidiaries prior to the divestiture of Innovus on July 31, 2024. All significant inter-company balances and transactions have been eliminated in consolidation. Basis of Presentation The Companys consolidated financial statements and notes thereto have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP). Use of Estimates The preparation of financial statements and footnotes requires the use of management estimates, judgments and assumptions. Actual results may differ from estimates. In the accompanying consolidated financial statements and notes thereto, estimates are used for, but not limited to, stock-based compensation; revenue recognition, determination of variable consideration for accruals of chargebacks, administrative fees and rebates, government rebates, returns and other allowances; allowance for credit losses; inventory impairment; determination of right-of-use (ROU) assets and lease liabilities; valuation of financial instruments, warrants and derivative warrant liabilities, intangible assets, and long-lived assets; purchase price allocati …

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Note 14 - Stockholders Equity The Company has 50.0 million shares of preferred stock authorized with a par value of $0.0001 per share and no preferred shares issued and outstanding. The Company has 200.0 million shares of common stock authorized with a par value of $0.0001 per share and as of September 15, 2025, June 30, 2025 , and June 30, 2024 , the Company had 9,911,913, 8,976,913 and 5,972,638 shares of common stock issued and outstanding, respectively. As of June 30, 2025 , included in common stock outstanding are 32,916 shares of unvested restricted stock issued to directors, executives and employees. On September 26, 2024, the Company filed a shelf registration statement on Form S- 3, which was declared effective by the SEC on October 15, 2024. This shelf registration statement covers the offering, issuance and sale by the Company of up to an aggregate of $100.0 million of its common stock, preferred stock, debt securities, warrants, rights and units (the 2024 Shelf). Through the filing date of this report, $100.0 million remains available under the 2024 Shelf. This availability is subject to the SECs baby shelf limitation as set forth in SEC Instruction I.B.6 limitation to the Form S- 3. In June 2025, the Company raised gross proceeds of $16.6 million from the issuance of (i) 2,806,688 shares of its common stock, at a public offering price of $1.50 (the June 2025 Common Stock), and 8,233,332 prefunded warrants at a public offering price of $1.4999 to purchase 8,233,33 …

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Note 21 - Subsequent Events The One Big Beautiful Bill Act The enactment of the OBBBA on July 4, 2025, may adversely affect the Companys business, financial condition, results of operation and future plans. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the TCJA, allowing for accelerated tax deductions for qualified property and research expenditures, and the restoration of favorable tax treatment for certain business provisions. The legislation has multiple effective dates, with certain provisions effective in calendar year 2025 and others implemented through calendar year 2027. None of the provisions are expected to impact the realizability of the Companys deferred tax assets and liabilities on the consolidated balance sheet as of June 30, 2025. However, because the OBBBA is a wide-reaching law, the Company is currently assessing its potential impact on its business, financial condition, results of operations and future plans and the Company plans to provide an update in future SEC filings once this assessment is complete. See Note 13 - Income Taxes for further detail. Termination of AR101 Rumpus Asset Purchase Agreement As previously disclosed in its SEC filings, the Company suspended its clinical development of AR101 (enzastaurin) ( AR101 ). In connection with this suspension, the Company has been engaged in negotiations with EnzCo, LLC (EnzCo) and Rumpus VEDS LLC, (Rumpus VEDS), Rumpus Therapeutics LLC, (Rumpu …

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