AYTU BIOPHARMA, INC

Note1 - Nature of Business and Financial Condition

Aytu BioPharma, Inc. (“Aytu,” the “Company,” “we,” “us,” or “our”), is a pharmaceutical company focused on advancing innovative medicines for complex central nervous system (“CNS”) diseases to improve the quality of life for patients. The Company was originally incorporated as Rosewind Corporation on* August 9, 2002,in the state of Colorado and was re-incorporated as Aytu BioScience, Inc. in the state of Delaware on June 8, 2015.In March 2021,*the Company changed its name to Aytu BioPharma, Inc.

The Company’s strategy is to become a leading pharmaceutical company that improves the lives of patients. The Company uses a focused approach of in-licensing, acquiring, developing and commercializing novel prescription therapeutics in order to continue building its portfolio of revenue-generating products and leveraging its commercial team’s expertise to build leading brands within large therapeutic markets. In* June 2025,the Company entered into an Exclusive Commercialization Agreement (the “Commercialization Agreement”) with Fabre-Kramer Holdings, Inc. (“Fabre-Kramer”) to commercialize EXXUA (gepirone) extended-release tablets (“EXXUA”) in the United States. Gepirone is a new chemical entity, and the Company believes EXXUA to be a novelfirst*-in-class selective serotonin5HT1a receptor agonist approved by the United States Food and Drug Administration (“FDA”) for the treatment of major depressive disorder (“MDD”) in adults. It is the Company’s expectation that EXXUA has the potential to serve as a major growth catalyst for the Company and anticipates launching EXXUA in thesecond quarter of fiscal2026 as a centerpiece of its commercial efforts.

In addition, the Company will continue to focus on commercializing innovative prescription products that primarily address CNS conditions, including attention deficit hyperactivity disorder (“ADHD”). The Company is focusing its efforts on accelerating the growth of its commercial business and achieving positive operating cash flows. To achieve these goals, the Company indefinitely suspended active development of its clinical development programs and has wound down and divested unprofitable operations.

In thefirst quarter of fiscal2025 the Company completed the previously announced wind down of its Consumer Health business and on* July 31, 2024,the Company entered into a definitive agreement to divest its Consumer Health business. The accounting requirements for reporting the Consumer Health business as a discontinued operation were met when the wind down and divestiture was completed on July 31, 2024.Accordingly, the Company’s unaudited consolidated financial statements for all periods presented reflect the Consumer Health business as a discontinued operation and the Company determined that its continuing operations now operate in asingle operating and reportable segment (seeNote20** -Discontinued Operationsand theSegment Information* section withinNote2* - Summary of Significant Accounting Policies* for further detail).

The Company’s business from continuing operations is focused on the upcoming launch of EXXUA and on its current prescription pharmaceutical products sold primarily throughthird party wholesalers, distributors and pharmacies and which primarily consists oftwo product portfolios. Thefirst consists of products for the treatment of ADHD (the “ADHD Portfolio”) and thesecond consists of a line of legacy products (the “Pediatric Portfolio”). The Company contracts with contract manufacturing organizations (“CMOs”) for the manufacture and testing of all of its products.

The Company has entered intotwo international exclusive collaboration, distribution and supply agreements to commercialize certain of the Company’s ADHD products. Thefirst agreement is with Medomie Pharma Ltd (“Medomie”), a privately owned pharmaceutical company, which will commercialize the ADHD products in Israel and the Palestinian Authority. Thesecond agreement is with Lupin Pharma Canada Ltd (“Lupin”), a subsidiary of global pharmaceutical company Lupin Limited, which will commercialize the ADHD products in Canada. The Company will supply the ADHD products to Medomie and Lupin based on forecasts and provide various product commercialization, regulatory and quality assurance resources. Medomie and Lupin are responsible for seeking local regulatory approvals and marketing authorizations for the ADHD products, which is expected to occur over the next24 months.

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Note2 - Summary of Significant Accounting Policies

Principals of Consolidation

The Company’s unaudited 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 unaudited consolidated financial statements and notes thereto contained in this Form10-Q represent the financial statements of the Company and its wholly owned subsidiaries and have been prepared pursuant to the rules and regulations of the SEC regarding interim financial reporting. Accordingly, certain information and disclosures normally included in the complete financial statements prepared in accordance with accounting principles generally accepted in the United States (“U.S. GAAP”) have been omitted pursuant to such rules and regulations. The unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company’s2025 Form10-K, which included all disclosures required by U.S. GAAP. In the opinion of management, these unaudited consolidated financial statements and notes thereto contain all adjustments necessary for the fair statement of the financial position of the Company and the results of operations and cash flows for the interim periods presented. The consolidated balance sheet as of* June 30, 2025*, was derived from the audited annual financial statements but doesnot contain all of the footnote disclosures from the annual financial statements. The results of operations for the period ended* September 30, 2025*, arenot necessarily indicative of expected operating results for the full year or any future period.

Use of Estimates

The preparation of financial statements and footnotes requires the use of management estimates, judgments and assumptions. Actual results* maydiffer from estimates. In the accompanying unaudited consolidated financial statements and notes thereto, estimates are used for, butnot* 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 allocations and the depreciable lives of long-lived assets; accruals for contingent liabilities; and determination of the income tax provision, deferred taxes and valuation allowance. Because of the uncertainties inherent in such estimates, actual results* may*differ from those estimates. The Company periodically evaluates estimates used in the preparation of the financial statements for reasonableness.

Prior Period Reclassification

Certain prior year amounts in the Company’s unaudited consolidated financial statements and the notes thereto have been reclassified to conform to the current year presentation. These reclassifications didnot impact operating results or cash flows for thethree months ended* September 30, 2025,and2024*, or the Company’s financial position as of* September 30, 2025*, or* June 30, 2025*.

Segment Information

Operating segments are identified as components that engage in business activities from which it* mayearn revenues and incur expenses and for which discrete information is available and regularly reviewed by the Company’s chief operating decision maker (“CODM”) to make decisions about resources to be allocated to the segment and to assess performance. Operating segments are aggregated for reporting purposes when the operating segments are identified as similar in accordance with the basic principles and aggregation criteria in the accounting standards. After the previously announced successful wind down and divestiture of the Consumer Health business in thefirst* quarter of fiscal2025, the Company determined that its continuing operations operate in a single operating and reportable segment. The Company’s CODM is its Chief Executive Officer, who manages operations and regularly reviews the financial information of the Company’s continuing operations as a single operating segment for the purposes of allocating resources and evaluating its financial performance. The results of the Consumer Health business have been reported as discontinued operations (seeNote20** -Discontinued Operations for further detail).

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The CODM reviews net income or loss as a measure of segment profit or loss in assessing performance and allocating resources. Segment revenues, expenses and profit or loss is reported on the unaudited consolidated statements of operations, with particular emphasis on net revenue by product portfolio (seeNote3* - Revenue* for net revenue disaggregated by product portfolio). Additionally, the measure of segment assets is reported on the Company’s unaudited balance sheet as total assets, with particular emphasis on the Company’s available liquidity and working capital, including its cash and cash equivalents, accounts receivables, net, inventories and current liabilities. As of* September 30, 2025*, and* June 30, 2025*, all long-lived assets were domiciled within the United States.

Warrants

The Company accounts for warrants as either equity-classified or liability-classified instruments based on an assessment of the warrant’s specific terms and applicable authoritative guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”) Topic480, Distinguishing Liabilities from Equity (“ASC480”) and ASC Topic815, Derivatives and Hedging (“ASC815”). The assessment considers whether the warrants are freestanding financial instruments pursuant to ASC480, meet the definition of a liability pursuant to ASC480, and whether the warrants meet all of the requirements for equity classification under ASC815, including whether the warrants are indexed to the Company’s own common shares and whether the warrant holders could potentially require “net cash settlement” in a circumstance outside of the Company’s control, among other conditions for equity classification. This assessment, which requires the use of professional judgment, is conducted at the time of warrant issuance and as of each subsequent quarterly period end date while the warrants are outstanding. Liability and equity classified warrants are valued using a Black-Scholes option pricing model or Monte Carlo simulation model at issuance and for each reporting period when applicable.

Income Taxes

The Company calculates its quarterly income tax provision based on estimated annual effective tax rates applied to ordinary income (or loss) and other known items computed and recognized when they occur. In* July 2025,the One Big Beautiful Bill Act (the “OBBBA”) was enacted in the United States. The OBBBA includes significant provisions, such as the permanent extension of certain expiring provisions of the Tax Cuts and Jobs Act (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 year2025* and others implemented through calendar year2027. None of the provisions are expected to impact the realizability of the Company’s deferred tax assets and liabilities on the unaudited consolidated balance sheets as of* September 30, 2025*, and* 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. Other than the OBBBA, there have beenno changes in tax law affecting the tax provision during thethree months ended* September 30, 2025*.

For thethree months ended* September 30, 2025,and2024*, there waszero and $0.4 million of income tax expense from continuing operations, which was an effective tax rate ofzero and negative 27.0%, respectively. This income tax expense was primarily driven by Section382 limitation of the Internal Revenue Code of1986, as amended (the “IRC”) on pre-TCJA and post-TCJA net operating loss (“NOL”) utilization, coupled with existing valuation allowances.

An ownership change has limited the Company’s ability to offset, post-change, United States federal taxable income. Section382 of the IRC imposes an annual limitation on the amount of post-ownership change taxable income a corporation* mayoffset with pre-ownership change net operating loss carryforwards and certain recognized built-in losses. Previous acquisitions, financing transactions, and equity ownership changes in the pastfive* years have caused a significant limitation on the Company’s ability to use the change in control net operating loss carryovers. The ownership changes result in increased future tax liability and are a driver of the change from azero percent effective tax rate.

The provision for income taxes is determined using the asset and liability approach of accounting for income taxes. Under this approach, deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes and net operating loss and tax credit carryforwards. The amount of deferred taxes on these temporary differences is determined using the tax rates that are expected to apply to the period when the asset is realized or the liability is settled, as applicable, based on tax rates and laws in the respective tax jurisdiction enacted as of the balance sheet date. A valuation allowance is recorded to reduce the net deferred tax asset when it is more likely thannot that some portion or all of its deferred tax asset willnot be utilized.

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The Company recognizes the effect of income tax positions only if those positions are more likely thannot to be sustained upon an examination. The Company recognizes interest and penalties related to uncertain tax positions in income tax expense in the unaudited consolidated statements of operations.

Recently Issued Accounting Guidance

As of* September 30, 2025*, and through the filing of this report,no accounting guidance applicable to the Company has been issued andnot yet adopted in fiscal2026 that would have a material effect on the Company’s unaudited consolidated financial statements and related disclosures. For information about accounting guidance issued in previous years butnot yet adopted by the Company and a complete set of the Company’s significant accounting policies, refer to the audited consolidated financial statements and notes thereto included in the Company’s2025 Form10-K.

Note3 - Revenue

Net revenue from continuing operations primarily consists of sales of prescription pharmaceutical products from the Company’s ADHD Portfolio and Pediatric Portfolio, principally to a limited number of wholesalers, distributors and pharmacies in the United States. Net revenue is recognized at the point in time that control of the product transfers to the customer, which typically aligns with shipping terms (i.e., upon delivery), generally “free-on-board” destination when shipped domestically within the United States, consistent with contractual terms.

Savings offers, rebates, and wholesaler chargebacks reflect the terms of underlying agreements, which* mayvary. Accordingly, actual amounts will depend on the mix of sales by product and contracting entity. Future returns may**not* follow historical trends. The Company’s periodic adjustments of its estimates are subject to time delays between the initial product sale, and the ultimate reporting and settlement of deductions. In fiscal2025, the Company entered into negotiations with a vendor related to certain variable interest accruals that reduce revenue for the Company’s ADHD Portfolio. As a result of these negotiations, the Company and the vendor agreed to a reduction to the liability purportedly owed by the Company of $3.3 million, which resulted in a decrease in the estimated variable consideration accrual, and a related increase in net revenue of $3.3 million in thefirst quarter of fiscal2025.

Net Revenueby Product Portfolio

Net revenue disaggregated by product portfolio for thethree months ended* September 30, 2025,and2024*, were as follows:

Other includes net revenue from various discontinued or deprioritized products. The Consumer Health business was divested in thefirst quarter of fiscal2025 and is reported within discontinued operations (seeNote20* *-Discontinued Operations).

Net Revenue by Geographic Location

The Company’s net revenue is predominately within the United States, with insignificant international sales.

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Note4 - Inventories

Inventories consist of raw materials, work in process and finished goods, and are recorded at the lower of cost or net realizable value, with cost determined on afirst-in,first-out basis. The Company periodically reviews the composition of its inventories to identify obsolete, slow-moving or otherwise unsaleable items. In the event that such items are identified and there areno alternate uses for the inventory, the Company will record a charge to reduce the value of the inventory to net realizable value in the periodfirst recognized. The Company incurred inventory write-downs primarily as a result of unsalable and slow-moving products of $0.3 million and $0.1 million for thethree months ended* September 30, 2025,and2024*, respectively.

Inventories consist of the following:

Note5 - Property and Equipment

Property and equipment are recorded at cost and depreciated on a straight-line basis over the assets’ estimated economic life. Leasehold improvements are amortized over the shorter of the estimated economic life or remaining lease term. Depreciation and amortization expense from property and equipment was less than $0.1 million and $0.1 million for thethree months ended* September 30, 2025,and2024*, respectively.

Property and equipment, net, consist of the following:

Note6 - Leases

The Company’s operating leases are for its offices, and these leases have original lease periods expiring between2029 and2030. Most leases include option provisions under which the parties* mayextend the lease term. The Company’s lease agreements generally donot* contain any material residual value guarantees or material restrictive covenants. The Company hasno finance leases.

In* June 2024,the Company entered into a forward-starting operating lease agreement to lease office space in Berwyn, Pennsylvania from the owner of the office space that the Company was renting that same space under a sublease arrangement. The Company determined that it was an operating lease, and that lease commencement occurred in July 2024.The initial lease termination date is July 31, 2030,and under the lease agreement the Company hasonefive*-year renewal option to extend the lease through* July 2035.The Company has elected to utilize the practical expedient tonot* separate lease and non-lease components upon recognition and variable lease payments will be expensed as incurred. The Company recorded an operating lease ROU asset of $0.5 million and a lease liability of $0.5 million at lease commencement. The ROU asset and lease liability was recorded at present value using an incremental borrowing rate of 12.3%.

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In* May 2023,the Company entered into an operating lease agreement to relocate its principal office to Denver, Colorado. The initial lease termination date is March 31, 2029,and under the lease agreement the Company hasone five*-year renewal option to extend the lease through* March 2034.*Undiscounted minimum monthly rent payments average approximately $15,500 over the initial term of the lease and variable lease payments are expensed as incurred.

The components of lease costs from continuing operations are as follows:

Supplemental balance sheet information related to leases is as follows:

The remaining weighted-average lease term and discount rate used are as follows:

For thethree months ended* September 30, 2025,the Company had operating net cash provided by operating leases of $0.1 million, primarily from the receipt of cash related to a tenant improvement allowance, partially offset by rent payments. For thethree* months ended* September 30, 2024,*the Company had operating net cash used by operating leases of $0.2 million, primarily due to rent payments.

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As of* September 30, 2025*, the Company’s estimated future minimum lease payments are as follows:

Note7 - Intangible Assets

A summary of the Company’s intangible assets, all of which are definite-lived intangible assets, as of* September 30, 2025*, and* June 30, 2025*, is as follows:

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Gross carrying amounts are net of any impairment charges from prior periods. An intangible asset withzero net carrying amount at the end of a reporting period isnot presented in the table of a future reporting period. Certain of the Company’s amortizable intangible assets include renewal options, extending the expected life of the asset. Renewal periods generally range between approximately 1 to 20 years depending on the license, patent or other agreement. Renewals are accounted for when they are reasonably assured. Intangible assets are amortized using the straight-line method over the estimated useful lives.

Amortization expense of intangible assets from continuing operations included in the unaudited consolidated statements of operations for thethree months ended* September 30, 2025,and2024*, are set forth in the below table:

As of* September 30, 2025*, the Company’s estimated future amortization expense is as follows:

Product Technology Rights

The product technology rights are related to the rights to production, supply and distribution agreements of various products.

ADHD Portfolio

The Company has developed product technology rights related to the production and sale of certain ADHD products. The formulations for the ADHD products are protected by patented technology. The estimated remaining economic life of these proprietary product technology rights is 12.5 years.

Pediatric Portfolio

The Company acquired and assumed all rights and obligations pursuant to supply and license agreements and various assignment and release agreements. As a result of the Company’s shifted focus of its commercial efforts on EXXUA and its ADHD Portfolio the Company recorded a full impairment of these intangible assets, which resulted in impairment expense of $8.3 million being recognized in thefourth quarter of fiscal2025. Please refer toNote12* - Fair Value Measurements* for further discussion on the fair value measurement of intangible assets.

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Technology Rights

TRRP Proprietary Technology

The Company has time release resin particle (“TRRP”) proprietary technology, which is a proprietary drug delivery technology protected by the Company as a trade secret that allows the Company to modify the drug release characteristics of each of its respective products. The TRRP technology underlines each of the ADHD Portfolio core products and can potentially be used in future product development initiatives as well. The estimated remaining economic life of these proprietary technology rights is 12.5 years.

Commercialization Rights

As part of the Commercialization Agreement for the exclusive commercialization rights of EXXUA in the United States, the Company capitalizes to the carrying value of intangible assets any contingent payments made that are considered a part of the Commercialization Agreement’s total consideration and which arenot within the scope of derivative guidance once the contingencies related to these payments are resolved. Once the commercialization rights are considered placed in service on the launch date of EXXUA, the Company will amortize the commercialization rights on a straight-line basis over the estimated life of the asset, and the Company will adjust the carrying value of the commercialization rights on a cumulative catch-up basis as if any additional capitalized amount had been capitalized on the same date that the intangible asset was placed in service. As of* September 30, 2025*, the commercialization rights hadnot been placed in service and as a result, no amortization expense has been recorded for this intangible asset. The Company currently anticipates launching EXXUA in thesecond quarter of fiscal2026 with an initial estimated useful life through* September 2030.*

Note8 - Accrued Liabilities

Accrued liabilities consist of the following:

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Accrued savings offers represent programs for the Company’s patients covered under commercial payor plans in which the cost of a prescription to such patients is discounted. The return reserve represents the Company’s accrual for estimated product returns. Accrued customer and product related fees include accrued expenses and deductions for rebates, wholesaler chargebacks and fees, and other product-related fees and deductions such as royalties for Pediatric Portfolio products, accrued distributor fees, and Medicaid liabilities. Accrued program liabilities include government and commercial rebates. Accrued employee compensation includes sales commissions, paid time off earned, accrued payroll and accrued bonus. Other accrued liabilities consist of various other accruals,none of which individually or in the aggregate represent greater thanfive percent of total liabilities.

Note9 - Other Liabilities

Other liabilities consist of the following:

Employee Retention Credit

The $3.8 million Employee Retention Credit (“ERC”) accrual in other non-current liabilities as of* September 30, 2025*, represents the proceeds the Company received from the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”) program during thefirst quarter of fiscal2024. When management determines it has reasonable assurance that the Company has substantially met all eligibility requirements of the ERC and following any adjustments from its regulatory audit or upon further clarifications from the IRC, the ERC accrual shall be recognized as a benefit in other income, net in the unaudited consolidated statement of operations.

Operating Lease Liabilities

The Company has entered into various operating lease agreements for certain of its offices. Please seeNote6* - Leases* for further detail.

Other

Other consists of taxes payable, deferred cost related to the Company’s technology transfer, and various other accruals,none of which individually or in the aggregate represent greater thanfive percent of total liabilities.

Fixed Payment Arrangements

Fixed payment arrangements represent obligations related to the acquisition of products. As of* September 30, 2025*, the Company hadno remaining accrued amount recorded related to fixed payment arrangements.

Note10 - Revolving Credit Facility

On* June 20, 2025,the Company and certain of its subsidiaries entered into an AmendmentNo.* 6 to Loan and Security Agreement (the “Eclipse AmendmentNo. 6”) to the loan and security agreement dated* October 2, 2019,as amended by AmendmentNo.* 1, dated* March 19, 2021;AmendmentNo.* 2, dated* January 26, 2022;AmendmentNo.* 3, dated* June 1, 2022;AmendmentNo.* 4 dated* March 24, 2023;and AmendmentNo.* 5 dated* June 12, 2024 (together the “Eclipse Agreement”), with Eclipse Business Capital LLC (“Eclipse”), as agent, and the lenders party thereto (agent and such lenders, collectively, the “Eclipse Lender”). Under the Eclipse Agreement, the Company hastwo* loan agreements, a term loan (the “Eclipse Term Loan”), which is described further inNote11* - Debt,* and a revolving credit facility (the “Eclipse Revolving Loan”).

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The Eclipse Revolving Loan has a potential maximum borrowing base of $14.5 million at an interest rate of the secured overnight financing rate as administered by the SOFR Administrator (the “SOFR”) plus 4.5%, which was temporarily increased by Eclipse AmendmentNo. 6. pursuant to a $1.5 million incremental advance at an interest rate of the SOFR plus 5.5% (the “Eclipse Incremental Advance”), with repayment and permanent reduction of the Eclipse Incremental Advance commencing on* August 1, 2025,and continuing on thefirst* day of each calendar month thereafter, in an amount equal to $125,000 per month, until the Eclipse Incremental Advance has been reduced to $0. In addition, the Company is required to pay an unused line fee of 0.5% of the average unused portion of the maximum Eclipse Revolving Loan amount during the immediately preceding month. The ability to make borrowings and obtain advances of the Eclipse Revolving Loan remains subject to a borrowing base and reserve, and availability blockage requirements. The maturity date, as amended, is* June 12, 2029,and the effective interest rate of the Eclipse Revolving Loan and the Eclipse Incremental Advance was 8.9% and 9.9%, respectively, as of September 30, 2025*, and there was $1.3 million of the Eclipse Incremental Advance remaining.

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 fee equal to (i)2.0% of the Eclipse Revolving Loan commitment if such event occurs on or before* June 12, 2026, (ii)1.0% of the Eclipse Revolving Loan commitment if such event occurs after June 12, 2026,but on or before June 12, 2027,and (iii)0.5% of the Eclipse Revolving Loan commitment if such event occurs after June 12, 2027,but on or before June 12, 2029.The Company mayalso be required to pay an early termination fee related to the Eclipse Term Loan as further described inNote11 - Debt*. The Company* may*permanently terminate the Eclipse Agreement upon written notice to Eclipse.

The Eclipse Agreement contains customary affirmative covenants, negative covenants and events of default, as defined in the Eclipse Agreement, including covenants and restrictions that, among other things, require the Company to satisfy certain capital expenditure limitations and other financial covenants and restrict the Company’s ability to incur liens, incur additional indebtedness, make certain dividends and distributions with respect to equity securities, engage in mergers and acquisitions or make asset sales without the prior written consent of Eclipse. A failure to comply with these covenants could permit Eclipse to declare the Company’s obligations under the Eclipse Agreement, together with accrued interest and fees, to be immediately due and payable, plus any applicable additional amounts relating to a prepayment or termination, as described above. As of* September 30, 2025*, the Company was in compliance with the covenants under the Eclipse Agreement. The Company’s obligations under the Eclipse Agreement are secured by substantially all of the Company’s assets, as defined further in the Eclipse Agreement.

As of* September 30, 2025*, there was $0.2 million of unamortized debt issuance costs related to the Eclipse Revolving Loan, which will be amortized straight-line over the term of the loan. Total interest expense on the Eclipse Revolving Loan, including amortization of deferred financing costs, was $0.1 million and less than $0.1 million for thethree months ended* September 30, 2025,and2024*, respectively. As of* September 30, 2025*, and* June 30, 2025*, the outstanding amounts drawn on the Eclipse Revolving Loan were $14.9 million and $9.1 million, respectively. The unused Eclipse Revolving Loan amount as of* September 30, 2025*, was $0.7 million.

Note11 - Debt

On* June 20,2025, the Company and certain of its subsidiaries entered into Eclipse AmendmentNo. 6, which provided for among other things, an increase in the Eclipse Term Loan principal amount to $13.0 million on the closing date of the Eclipse AmendmentNo. 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 inNote10 - Revolving Credit Facility*.

The Eclipse Term Loan incurs interest at a rate of the SOFR plus 7.0%, with afour-year term maturing, as amended, on* June 12, 2029,and a straight-line loan amortization period ofseven years, which would provide for a loan balance at the end of thefour-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 thefourth* quarter of fiscal2024.

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 fee equal to (i)3.0% of the Eclipse Term Loan if such event occurs on or before* June 12, 2026, (ii)2.0% of the Eclipse Term Loan if such event occurs after June 12, 2026,but on or before June 12, 2027, (iii)1.0% of the Eclipse Term Loan if such event occurs after June 12, 2027,but on or before June 12, 2028,and (iv)0.5% of the Eclipse Term Loan if such event occurs after June 12, 2028,but on or before June 12, 2029.The Company mayalso be required to pay an early termination fee related to the Eclipse Revolving Loan as further described inNote10** - Revolving Credit Facility. The Company may*permanently terminate the Eclipse Agreement upon written notice to Eclipse. The Company’s obligations under the Eclipse Agreement are secured by substantially all of the Company’s assets, as further defined in the Eclipse Agreement.

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The Eclipse Agreement contains customary affirmative covenants, negative covenants and events of default, as defined in the Eclipse Agreement, including covenants and restrictions that, among other things, require the Company to satisfy certain capital expenditure limitations and other financial covenants and restricts the Company’s ability to incur liens, incur additional indebtedness, make certain dividends and distributions with respect to equity securities, engage in mergers and acquisitions or make certain asset sales without the prior written consent of the Eclipse Lender. A failure to comply with these covenants could permit the Eclipse Lender to declare the Company’s obligations under the agreement, together with accrued interest and fees, to be immediately due and payable, plus any applicable additional amounts relating to a prepayment or termination, as described above. As of* September 30, 2025*, the Company was in compliance with the covenants under the Eclipse Agreement.

As of* September 30, 2025*, there was $0.2 million of unamortized debt discount and debt issuance costs related to the Eclipse Term Loan, which will be amortized over the term of the loan. Total interest expense on the Eclipse Term Loan, including debt discount and issuance costs amortization, was$0.4 million for both of thethree months ended* September 30, 2025,and2024*. The effective interest rate on the Eclipse Term Loan was 11.4% as of* September 30, 2025*.

Debt consists of the following:

As of* September 30, 2025*, the Company’s future Eclipse Term Loan principal payments are as follows:

Note12 - Fair Value Measurements

The Company determines the fair value of financial and non-financial assets using the fair value hierarchy, which establishesthree levels of inputs that* may*be used to measure fair value as follows:

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The Company’s financial instruments include cash and cash equivalents, accounts receivable, accounts payable, accrued liabilities, derivative warrant liabilities 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 Company’s unaudited consolidated balance sheets. The remaining financial instruments are reported on the Company’s unaudited consolidated balance sheets at amounts that approximate current fair values. The Company’s carrying value of its consolidated amounts of cash and cash equivalents approximate their fair value as of* September 30, 2025*, and* June 30, 2025*, and are categorized within level1 of the U.S. GAAP fair value hierarchy. The Company’s 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 caused the transfer. There wereno transfers between Level1, Level2 and Level3 in the periods presented.

Recurring Fair Value Measurements

The Company’s financial assets and liabilities that were accounted for at fair value on a recurring basis as of* September 30, 2025*, and* June 30, 2025*, by level within the fair value hierarchy as follows:

Summary of Level3 Input Changes**

A summary of changes to those fair value measures using Level3 inputs is as follows:

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Significant Assumptions

The valuation methodologies and key assumptions used for the mark to market fair value measurements of derivative warrant liabilities as of* September 30, 2025*, are as follows:

Note13 - 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 (seeNote7 - Intangible Assets* for further detail). Within 45 days of theone-year anniversary of thefirst product launch of EXXUA in the United States, the Company has agreed to make asecond $3.0 million payment (the “Second Payment”). The Second Payment* maybe increased to $5.0 million iffirst* year EXXUA net revenue 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 revenue are achieved with a threshold of $100.0 million in net revenue and the Company will pay 10% of net revenue exceeding $1.0 billion. The Company has also agreed to pay royalty fees throughout the term of the Commercialization Agreement based on the Company’s net revenue of EXXUA as follows: (i) initially 28% of net revenue and increasing to 39% if net revenue exceed $300.0 million in any year during the term until such net revenue reach a reduced royalty trigger; and (ii) after reaching such royalty trigger,24.5% and increasing to 35.5% if net revenue exceed $300.0 million in any year during the term. The Company will also pay a supply price of 3% of net revenue less its cost of goods sold, increasing to 4% of net revenue if annual net revenue exceed $300.0 million. The Commercialization Agreement also contains customary clauses for pharmaceutical commercialization agreements, including, among others, post-marketing obligations, regulatory matters, and indemnification.

The Commercialization Agreement can be terminated at any time upon mutual agreement between the Company and Fabre-Kramer. Either party can terminate the Commercialization Agreement at any time upon written notice for a material default or breach if the material default or breach isnot cured within (1)90 days after written notice or (2) in the case of a breach that cannot be cured within 90 days, within a reasonable periodnot exceeding 120 days after written notice. Additionally, either party can terminate the Commercialization Agreement at any time upon writing notice if (1) either party withdraws EXXUA from the market in the United States for safety reasons or (2)(i) the FDA materially restricts the indications for EXXUA, or (ii) federal or state pricing controls are imposed that would result in obvious or substantial loss of sales for EXXUA.

Pediatric Portfolio

The Company has the exclusive right to distribute and sell certain legacy products in the United States from agreements signed by the Company. The initial term of the agreement was 20 years. The Company pays Tris a royalty equal to 23.5% of net revenue from the products.

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Legal Matters

Granules Paragraph IV

On* October 31, 2024,the Company received a Paragraph IV Certification Notice Letter (the “Notice Letter”) from Granules Pharmaceuticals, Inc. (“Granules”), stating that it intends to market a generic version of Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (“Adzenys”) before the expiration of all patents currently listed in the FDA’s publication of approved drug products with therapeutic equivalence evaluations (the “Orange Book”). The Notice Letter states that Granules’ NDA for the generic version of Adzenys contains a Paragraph IV certification alleging that these patents arenot* valid,not enforceable, and/or willnot be infringed by the commercial manufacture, use or sale of the generic version of Adzenys. On* December 11, 2024,the Company filed a patent infringement lawsuit against Granules which triggered a stay precluding the FDA from approving Granules’ NDA for a generic version of Adzenys for up to30* months or entry of judgment holding the patents invalid, unenforceable, ornot infringed, whichever occurs first. On* January 7, 2025,Granules submitted an answer to the complaint. On October 28, 2025,the case was reassigned to visiting judge, Judge Jennifer Choe-Groves of the United States Court of International Trade. The trial date has been moved to January 11, 2027,*with all other scheduling dates remaining unchanged. The Company plans to vigorously enforce its intellectual property rights related to Adzenys.

Revive Investing

The Company had been named as a nominal plaintiff in a lawsuit bytwo shareholders against Armistice Capital Master Fund, Ltd (“Armistice”), entitled Revive Investing, LLC. et al v. Armistice Master Fund, Ltd. et al, Case1:20-cv-02849-CMA-TPO, in the United States District Court for the District of Colorado, contending that Armistice was liable for short swing trading profits in violation of Section16(b) of the Securities Exchange Act of1934, as amended, for certain trades it made in Company stock in2019 and2020 and must disgorge those profits to the Company. That matter proceeded to trial before a jury, which on* January 29, 2025,returned a verdict findingno* liability. On* March 6, 2025,the plaintiffs filed an appeal in the United States Court of Appeals for the Tenth Circuit. As with the original case, regardless of the outcome, this case willnot* have a materially adverse effect upon the Company’s financial condition, results of operations, or cash flows.

Note14 - Stockholders’** Equity**

The Company has 50.0 million shares of preferred stock authorized with a par value of $0.0001 per share andno 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 30, 2025*, the Company had 9,911,913 shares of common stock issued and outstanding. As of* September 30, 2025*, included in common stock outstanding are 31,298 shares of unvested restricted stock issued to directors 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 the2024 Shelf. This availability is subject to the SEC’s “baby shelf” limitation as set forth in SEC InstructionI.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 2025Common Stock”), and 8,233,332 prefunded warrants at a public offering price of $1.4999 to purchase 8,233,332 shares of its common stock at an exercise price of $0.0001 per share (the “June 2025Prefunded Warrants”). The Company received $14.8 million in proceeds net of underwriting commissions and offering expenses and intends to use the net proceeds from the offering for working capital, general corporate purposes and to enable the Company to exclusively commercialize EXXUA. SeeNote16 - Warrants* for further detail.

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Note15 - Equity Incentive Plan

2023 Equity Incentive Plan

On* May 18, 2023,the Company’s stockholders approved the adoption of the Aytu BioPharma, Inc.2023 Equity Incentive Plan (the“2023* Equity Incentive Plan”), which replaced all previous plans. For the2023 Equity Incentive Plan, the stockholders approved (a)200,000 new shares; (b)87,155 shares “rolled over” to the2023 Equity Incentive Plan from plans replaced by the2023 Equity Incentive Plan; and (c) any shares that are returned to the Company under plans replaced by the2023 Equity Incentive Plan to be added to the2023 Equity Incentive Plan. On* May 21, 2025,the Company’s stockholders approved an amendment (the “Plan Amendment”) to the2023* Equity Incentive Plan. The Plan Amendment increased the number of shares reserved for issuance under the2023 Equity Incentive Plan by 300,000 shares to bring the total number of shares reserved for issuance under the2023 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 Company’s stockholders and the Company registered the 300,000 shares pursuant to a registration statement on Form S-8 filed with the SEC on* September 23, 2025.With the approval of the2023* Equity Incentive Plan,no additional awards will be granted under any previous plans. All outstanding awards previously granted under previous stock incentive plans will remain outstanding and subject to the terms of the plans.

Stock options granted under the2023 Equity Incentive Plan and previous plans typically have contractual terms of 10 years or less from the grant date and a vesting period ranging fromone tofour years. The restricted stock and restricted stock units granted under the2023 Equity Incentive Plan typically have a vesting period ofthree tofour years and restricted stock and restricted stock units granted from previous plans typically have a vesting period ranging from four to 10 years andfour years, respectively. As of* September 30, 2025*, the Company had 402,227 shares available for grant under the2023 Equity Incentive Plan.

Stock Options

Stock option activity during thethree months ended* September 30, 2025*, is as follows:

During thethree months ended* September 30, 2025*, the Company didnot grant any stock options. As of* September 30, 2025*, there was $0.1 million of total unrecognized compensation cost related to non-vested stock options granted by the Company, which is expected to be recognized over a weighted-average period of 1.9 years.

Restricted Stock

Restricted stock activity under the2023 Equity Incentive Plan during thethree months ended* September 30, 2025*, is as follows:

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During thethree months ended* September 30, 2025*, the Company didnot grant any shares of restricted stock. As of* September 30, 2025*, there was $0.6 million of total unrecognized compensation costs related to non-vested restricted stock granted under the2023 Equity Incentive Plan. The unrecognized compensation cost is expected to be recognized over a weighted-average period of 1.7 years.

As of* September 30, 2025*, there were four shares of unvested restricted stock that were granted outside of equity compensation plans approved by security holders, which had $0.1 million of total unrecognized compensation costs and a remaining weighted-average vesting period of 0.8 years.

Restricted Stock Units

There wereno remaining unvested restricted stock units as of* June 30, 2025,and the Company didnot grant any restricted stock units during thethree* months* September**30,* 2025, and2024.

Stock-Based Compensation Expense

Stock-based compensation expense related to the fair value of stock options, restricted stock and restricted stock units were included in the unaudited consolidated statements of operations as set forth in the below table:

Note16 - Warrants

The Company has engaged in several different types of equity financings throughout its history, some of which have resulted in the Company issuing warrants and prefunded warrants. Equity classified warrants are valued using a Black-Scholes option pricing model at issuance and arenot remeasured. Liability classified warrants are carried at fair value using either the Black-Scholes option pricing model or the Monte Carlo simulation model. Changes in the fair value of liability classified warrants in subsequent periods are recorded as a gain or loss on remeasurement and reported as a component of cash flows from operations. Outstanding warrants that are classified as derivative warrant liabilities in the unaudited consolidated balance sheets are marked to market at each reporting period, with the change in fair value recorded as a gain or loss on remeasurement and reported as a component of cash flows from operations. (seeNote12* *-Fair Value Measurements for further detail).

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The number of warrants and prefunded warrants outstanding as of* September 30, 2025*, is as follows:

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A summary of warrant activity, excluding prefunded warrants, during thethree months ended* September 30, 2025*, is as follows:

A summary of prefunded warrant activity during thethree months ended* September 30, 2025*, is as follows:

Note17 - Earnings Per Share

Basic net income or loss per share is calculated by dividing net income or loss available to common stockholders by the basic weighted-average number of common shares outstanding for the respective period. Diluted net income or loss per share is calculated by dividing adjusted net income or loss by the diluted weighted-average number of common shares outstanding, which includes the effect of potentially dilutive securities. Potentially dilutive securities for this calculation consist of warrants to purchase common stock that are either liability classified or equity classified, stock options, unvested restricted stock and unvested restricted stock units (seeNote15* -* Equity Incentive Plan andNote16* -* Warrants for further detail). If the Company’s adjusted numerator for net income from continuing operations divided by the diluted weighted-average number of common shares outstanding for each potentially dilutive security was greater than the net income from continuing operations per share, then the Company didnot include those common equivalent shares in the computation of diluted net income or loss from continuing operations per share; diluted net income or loss from discontinued operations, net of tax; or diluted net income or loss per share because the effect would have been anti-dilutive.

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The following is a reconciliation of the numerator and the denominator used in the basic per share calculations:

The following is a reconciliation of the numerator and the denominator used in the diluted per share calculations:

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The following table sets forth securities that could be considered anti-dilutive, and therefore are excluded from the calculation of diluted weighted-average common shares outstanding and related per share calculations:

Note18 - License Agreements

Teva

On* December 21, 2018,the Company and Teva Pharmaceuticals USA, Inc. (“Teva”) entered into an agreement granting Teva a non-exclusive license to certain patents owned by Neos by which Teva has the right to manufacture and market its generic version ofone* of the Company’s ADHD products under an abbreviated new drug application (“ANDA”) filed by Teva beginning on* July 1, 2026,or earlier under certain circumstances. The ANDA was approved by the FDA on June 19, 2020.*

Actavis

On* October 17, 2017,the Company entered into an agreement granting Actavis Laboratories FL, Inc. (“Actavis”) (which is now owned by Teva Pharmaceutical Industries Limited) a non-exclusive license to certain patents owned by the Company by which Actavis has the right to manufacture and market its generic version ofone* of the Company’s ADHD products under its ANDA beginning on* September 1, 2025.The ANDA was approved by the FDA on June 22, 2023.Through the filing date of this report, to the Company’s knowledge Teva hasnot* launched a generic version of this ADHD product.

Note19 - Restructuring Costs

As part of the Company’s 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 from discontinued operations, net of tax in the unaudited consolidated financial statement of operations (seeNote 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 unaudited consolidated statements of operations. There wereno inventory write-downs associated with this closure. During thethree months ended* September 30, 2025,and2024*, the Company incurred zero and $0.8 million, respectively, of costs associated with exit and disposal activities related to its previously announced operational realignment and related costs. The Company doesnot expect to incur additional significant restructuring costs.

Note20 - Discontinued Operations

On* July 31, 2024,*after the wind down of operations, the Company entered into a definitive agreement to divest its Consumer Health business to a private, e-commerce focused company. The divested business encompassed the established e-commerce platform, certain inventory and associated consumer brands, intellectual property, external workforce and contracts, and provided for the Company to receive contingent consideration payments on certain future sales of former Consumer Health business products.

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The accounting requirements for reporting the Consumer Health business as a discontinued operation were met when the wind down and divestiture was completed on* July 31, 2024.Accordingly, the accompanying unaudited consolidated financial statements for all periods presented reflect this business as a discontinued operation. There wereno* assets or liabilities classified as discontinued operations on the accompanying unaudited consolidated balance sheets as of* September 30, 2025,and June 30, 2025.The Company elected to record the contingent consideration portion of the arrangement when the consideration was determined to be realizable and, therefore, the Company didnot* record a contingent consideration asset at the transaction date.

There wasno income from discontinued operations for thethree months ended* September 30, 2025.The key components of income from discontinued operations, net of tax for thethree* months ended* September 30, 2024,*were as follows:

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