Core Insights - The company reported a full year fiscal 2025 net revenue of $66.4 million and a net loss of $13.6 million [1] - Adjusted EBITDA for fiscal 2025 was $9.2 million, with a cash balance of $31.0 million as of June 30, 2025 [1] - An exclusive agreement was made in June 2025 to commercialize EXXUA™ (gepirone) extended-release tablets, which is expected to be a significant growth catalyst [1] - The anticipated launch of EXXUA in the fourth calendar quarter of 2025 targets the over $22 billion U.S. prescription major depressive disorder market [1] - EXXUA is positioned as a novel first-in-class oral selective serotonin 5HT1a receptor agonist for adults with major depressive disorder [1] - The company will host a conference call and webcast on September 23, 2025, at 4:30 p.m. Eastern time to discuss these results [1]

Core Insights - Several biotech companies experienced significant stock price increases in after-hours trading, driven by clinical updates, strategic shifts, and upcoming catalysts [1] Cassava Sciences (SAVA) - Shares surged 37.1% to $3.18 in after-hours trading, following a regular session close of $2.32, which marked a 1.75% gain [2] - The rally is attributed to renewed interest in the investigational drug simufilam, particularly its potential in treating TSC-related epilepsy, following positive preclinical data [3] - Leadership changes, including the appointment of Dr. Joseph Hulihan as Chief Medical Officer, indicate a strategic pivot in clinical priorities [3] - Future updates on simufilam and the diagnostic candidate SavaDx could serve as near-term catalysts [4] Helius Medical Technologies (HSDT) - Stock rose 15.67% to $18.53 in after-hours trading after a regular session close of $16.02, where it had dropped 33.61% [4] - The rebound followed a $500 million private placement announcement, marking a significant pivot from its core neurotech focus [5] - Helius continues to advance its medical device pipeline, with positive results from the Portable Neuromodulation Stimulator (PoNS) stroke registrational program and plans for FDA submission [6] Werewolf Therapeutics (HOWL) - Shares increased 9.78% to $2.02 in after-hours trading, following a regular session close of $1.84, which was up 23.49% [6] - The company is advancing multiple conditionally activated cytokine therapies through its INDUKINE platform, with lead candidate WTX-124 in a Phase 1/1b trial targeting advanced solid tumors [7] - Participation in the H.C. Wainwright 27th Annual Global Investment Conference highlighted management's timelines for clinical readouts and pipeline progress [8] Aytu BioPharma Inc. (AYTU) - Stock rose 7.63% to $2.68 in after-hours trading after closing at $2.49, up 2.05% [8] - The price action follows the announcement of full-year and Q4 fiscal 2025 results expected on September 23, 2025, which will clarify commercial performance and progress with EXXUA [9] - Aytu maintains a portfolio of pediatric and ADHD-focused therapeutics and has extended its loan agreement with Eclipse to boost liquidity [10] Equillium Inc. (EQ) - Shares increased 10.34% to $1.60 in after-hours trading after closing at $1.45, down 0.68% [10] - The company announced up to $50 million in financing to advance EQ504 into clinical development, with positive feedback from the FDA regarding its regulatory pathway [11] - Its lead candidate, itolizumab (EQ001), is in Phase 3 trials for acute graft-versus-host disease and has completed earlier-stage studies in lupus nephritis and ulcerative colitis [11]

Core Viewpoint - Aytu BioPharma, Inc. is set to report its operational and financial results for fiscal year 2025 and the fourth quarter on September 23, 2025, after market close [1] Group 1 - The company focuses on advancing innovative medicines for complex central nervous system diseases [1] - A conference call and webcast is scheduled for the same day at 4:30 p.m. [1]

Aytu BioPharma (AYTU) Conference Call Summary Company Overview - **Company**: Aytu BioPharma - **Product**: ExuA, a novel treatment for Major Depressive Disorder (MDD) - **Market Size**: Over $22 billion in the U.S. depression market with more than 345 million prescriptions annually Key Points and Arguments Commercialization Agreement - Aytu BioPharma has entered an exclusive commercialization agreement with Faber Kramer Pharmaceuticals for ExuA in the U.S. [2][13] - The agreement includes an upfront cash payment of $3 million and additional payments based on sales milestones, potentially exceeding $100 million [42][43] Market Opportunity - The U.S. depression market is significantly larger than the ADHD market, with SSRIs and SNRIs being the most prescribed classes [10][25] - ExuA targets a specific receptor (5-HT1A) and is expected to have fewer side effects compared to traditional antidepressants [18][19] - The market is characterized by high patient switching due to dissatisfaction with current treatments, indicating a strong need for new therapies [12][26] Product Profile - ExuA is a 5-HT1A receptor agonist, distinct from SSRIs and SNRIs, and does not cause sexual dysfunction or weight gain [17][19] - Clinical trials have shown robust efficacy in over 5,000 patients, with significant improvements in both depression and anxiety symptoms [21][22] Launch Strategy - Aytu plans to leverage its existing sales force, which already covers a significant portion of the branded MDD market, to launch ExuA efficiently [32][33] - The launch is targeted for late 2025, with a focus on establishing clinical value and engaging key opinion leaders [35][38] Financial Projections - Aytu anticipates that capturing just 10% of the market share from existing products could yield approximately $25 million in net revenue [48] - The company expects to generate significant revenue in fiscal 2026, with a more pronounced impact in fiscal 2027 [73] Reimbursement Landscape - The MDD market has favorable reimbursement conditions, with government payers required to cover antidepressants [66][67] - Aytu plans to integrate ExuA into its existing patient access program to minimize coverage barriers [37][40] Future Considerations - Aytu is focused on ExuA as its primary product for the near term but is also evaluating opportunities for lifecycle management and potential new psychiatric assets [81][82] - The company has not pursued international markets for ExuA, focusing solely on the U.S. [78] Additional Important Insights - The MDD market is characterized by a high rate of treatment failure, with 40% of patients relapsing after the first line of treatment and up to 71% after multiple lines [62][63] - There is a significant interest from psychiatrists in novel medications that target serotonin pathways, indicating a favorable reception for ExuA [30][31] This summary encapsulates the critical aspects of Aytu BioPharma's conference call regarding the ExuA opportunity, highlighting the company's strategic plans, market potential, and product differentiation in the competitive landscape of depression treatments.

Financial Data and Key Metrics Changes - Total revenue grew 32% to $18,500,000 compared to $14,000,000 in the same quarter last year [22] - Net income was $4,000,000, a significant improvement from a net loss of $2,900,000 in the prior year [27] - Adjusted EBITDA increased to $3,900,000 from $900,000 in the previous year [27] Business Line Data and Key Metrics Changes - ADHD portfolio net revenue rose 25% to $15,400,000, driven by improvements in gross to net [22][9] - Pediatric portfolio net revenue increased 77% to $3,100,000, reflecting the success of a return to growth plan [14][22] Market Data and Key Metrics Changes - ADHD prescriptions were approximately 94,000 during the third quarter, indicating a recovery in the stimulant market [10] - The pediatric portfolio saw a sequential revenue increase of 27%, showcasing effective promotional strategies [14][22] Company Strategy and Development Direction - The company has focused on its prescription pharmaceutical business, halting clinical development and selling its consumer health business [7][19] - Future growth is expected to come from leveraging the A2 RxConnect platform and pursuing additional in-licensed or acquired products [9][19] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in maintaining growth in both ADHD and pediatric portfolios, citing effective optimization efforts [35][36] - The company is monitoring macro factors, including potential impacts from political changes regarding fluoride supplementation [50] Other Important Information - The company has achieved three consecutive quarters of positive net income and eight straight quarters of positive adjusted EBITDA [31] - Cash and cash equivalents were $18,200,000, with a focus on managing debt and operational efficiency [28][29] Q&A Session Summary Question: Were there any one-time effects in the ADHD or pediatric business this quarter? - Management confirmed that the growth was organic and driven by optimization efforts, with no one-time effects [34] Question: What are the expectations for the ADHD franchise moving forward? - Management expects continued growth, emphasizing the balance and prioritization across the product portfolio [35][36] Question: What is the potential for the pediatric business? - Management indicated realistic growth expectations but does not foresee reaching a $25,000,000 annual run rate [38][39] Question: What are the main factors affecting business development and valuations? - The main gating factor is finding the right asset that complements the company's capabilities, with valuations currently being higher due to market conditions [40][43] Question: What impact do tariffs have on the company? - Management stated that tariffs have a minimal impact as all ADHD products are manufactured in the US, with only small components sourced internationally [45][46] Question: Can you elaborate on the return to growth plan for the pediatric business? - The plan involved deploying more sales force resources to pediatric targets and improving payer coverage [53][54]

Financial Data and Key Metrics Changes - Total revenue grew 32% to $18,500,000 compared to $14,000,000 in the same quarter last year [22] - Net income was $4,000,000, a significant improvement from a net loss of $2,900,000 in the prior year [6][27] - Basic earnings per share increased to $0.65 from a loss of $0.52 in the same quarter last year [6][27] - Adjusted EBITDA rose to $3,900,000 from $900,000 in the prior year [6][27] Business Line Data and Key Metrics Changes - ADHD portfolio net revenue increased by 25% to $15,400,000 compared to $12,300,000 in Q3 of the previous year [22] - Pediatric portfolio net revenue surged 77% to $3,100,000 from $1,700,000 in the same quarter last year [22][14] Market Data and Key Metrics Changes - ADHD prescriptions were approximately 94,000 during the third quarter, reflecting a return to normalized market conditions following previous shortages [10] - The pediatric business saw a rebound due to a return to growth plan and improved payer coverage [14][15] Company Strategy and Development Direction - The company has focused on its prescription pharmaceutical business, halting clinical development and selling its consumer health business [7] - Future growth is expected to be driven by leveraging the A2 RxConnect platform and pursuing additional in-licensed or acquired products [8][19] - The company aims to maintain a balanced focus on both ADHD and pediatric portfolios for growth [18] Management's Comments on Operating Environment and Future Outlook - Management expressed satisfaction with the operational and financial performance, highlighting the achievement of positive income from operations for the second consecutive quarter [5][6] - The company is optimistic about future growth, particularly in the ADHD and pediatric segments, and is focused on operational efficiencies [18][19] Other Important Information - Gross margin for the third quarter was 69%, down from 74% in the same quarter last year, with expectations for improvement as inventory issues are resolved [22][25] - The company paid down $2,500,000 in long-term debt during the quarter, maintaining compliance with all debt covenants [29] Q&A Session Summary Question: Were there any one-time effects in the ADHD or pediatric business this quarter? - Management confirmed that the growth was organic and driven by optimization efforts, with no one-time effects impacting the numbers [35] Question: What are the expectations for the ADHD franchise moving forward? - Management expects continued growth in the ADHD franchise, supported by optimization efforts and a balanced focus on both ADHD and pediatric products [36][37] Question: What is the potential for the pediatric business? - Management indicated realistic growth expectations but does not foresee returning to a $25,000,000 annual business, aiming for something north of current levels [39][40] Question: What are the main factors affecting business development and asset acquisition? - The main gating factor is finding the right asset that complements the company's capabilities and therapeutic focus, with a preference for commercial-ready products [41][42] Question: What impact do tariffs have on the company? - Management stated that tariffs have a minimal impact as all ADHD products are manufactured in the U.S., with only small components sourced internationally [46][47] Question: Can you elaborate on the return to growth plan for the pediatric business? - The plan involved deploying the sales force against more pediatric targets and expanding coverage through creative contracting with payers [54][56] Question: What is the breakeven revenue number based on current operating expenses? - The breakeven revenue is approximately $15,000,000 on a quarterly basis, with a cash-based breakeven closer to $13,100,000 [61][62]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 2025 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from __________ to ___________ Commission File Number: 001-38247 AYTU BIOPHARMA, INC. (Exact name of registrant as specified in its charter) | Delaware | 47-0883144 | | --- | ...

[Q3 2025 Highlights & Management Discussion](index=1&type=section&id=Q3%202025%20Highlights) The company reported significant revenue growth and a return to profitability, driven by its strategic focus on the prescription pharmaceutical business Q3 FY2025 Key Financial Metrics | Metric | Q3 FY2025 | Q3 FY2024 | Change | | :--- | :--- | :--- | :--- | | Total Net Revenue | $18.5 million | $14.0 million | +32% | | ADHD Portfolio Revenue | $15.4 million | $12.3 million | +25% | | Pediatric Portfolio Revenue | $3.1 million | $1.7 million | +77% | | Net Income (Loss) | $4.0 million | ($2.9 million) | N/A | | Net Income (Loss) per Share (basic) | $0.65 | ($0.52) | N/A | | Adjusted EBITDA | $3.9 million | $0.9 million | +333% | | Cash and Cash Equivalents | $18.2 million | - | - | - The CEO stated that the **strategic realignment** to focus on the profitable prescription pharmaceutical business is beginning to fully manifest in the company's financial performance[3](index=3&type=chunk) - Aytu is actively pursuing in-licensed or acquired products to leverage its CNS-focused sales team and the **Aytu RxConnect platform**[3](index=3&type=chunk) - The company **reduced company-wide operating expenses by 13%** year-over-year while growing revenue, demonstrating improved operational efficiency[3](index=3&type=chunk) [Q3 2025 Detailed Financial Results](index=2&type=section&id=Q3%202025%20Financial%20Results) Net revenue grew 32% to $18.5 million, and despite a temporary gross margin dip, reduced operating expenses led to a significant operating income turnaround [Revenue by Portfolio](index=2&type=section&id=Revenue%20by%20Portfolio) Total net revenue grew 32% YoY, fueled by strong performance in both the ADHD and Pediatric portfolios Net Revenue by Portfolio (in thousands) | Portfolio | Q3 2025 | Q3 2024 | % Change | | :--- | :--- | :--- | :--- | | ADHD Portfolio | $15,389 | $12,326 | +25% | | Pediatric Portfolio | $3,059 | $1,729 | +77% | | **Total Net Revenue** | **$18,452** | **$14,025** | **+32%** | - ADHD Portfolio growth was primarily driven by **improvements in gross-to-nets** through the Aytu RxConnect platform[7](index=7&type=chunk) - Pediatric Portfolio growth reflects the positive effects from the Company's recently implemented **return-to-growth plan**[8](index=8&type=chunk) [Profitability and Operations](index=2&type=section&id=Profitability%20and%20Operations) Reduced operating expenses and operational efficiencies drove a significant turnaround to operating income despite a temporary gross margin decline - Gross profit margin decreased to **69% from 74% YoY** due to higher cost of sales for ADHD inventory from a now-closed facility, which is expected to normalize[9](index=9&type=chunk) - Operating expenses, excluding amortization and restructuring, were **reduced by 13% YoY to $9.5 million** due to cost reduction efforts and operational efficiencies[10](index=10&type=chunk) Profitability Comparison (in millions) | Metric | Q3 FY2025 | Q3 FY2024 | | :--- | :--- | :--- | | Income from Operations | $2.4 | ($1.6) | | Net Income (Loss) | $4.0 | ($2.9) | [Balance Sheet and Cash Position](index=2&type=section&id=Balance%20Sheet%20and%20Cash%20Position) The company maintained a solid cash position of $18.2 million while actively paying down $2.5 million in debt during the quarter - Cash and cash equivalents were **$18.2 million** at March 31, 2025[13](index=13&type=chunk) - The Company **paid down a combined $2.5 million** in long-term debt and other fixed payment arrangements during the third quarter[13](index=13&type=chunk) [Financial Statements](index=5&type=section&id=Financial%20Statements) This section presents the unaudited consolidated statements of operations and balance sheets, alongside a non-GAAP to GAAP reconciliation [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) The company shifted from a prior-year net loss to a net income of $4.0 million, or $0.21 per diluted share, in Q3 FY2025 Q3 2025 vs Q3 2024 Statement of Operations Highlights (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net revenue | $18,452 | $14,025 | | Gross profit | $12,806 | $10,361 | | Income (loss) from operations | $2,421 | ($1,597) | | Net income (loss) | $3,994 | ($2,887) | | Diluted net income (loss) per share | $0.21 | ($0.52) | [Unaudited Consolidated Balance Sheets](index=6&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) The balance sheet shows total assets of $124.2 million and an increase in total stockholders' equity to $34.9 million as of March 31, 2025 Balance Sheet Highlights (in thousands) | Line Item | March 31, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $18,173 | $20,006 | | Total current assets | $72,512 | $61,891 | | Total assets | $124,201 | $118,095 | | Total current liabilities | $70,706 | $62,228 | | Total liabilities | $89,303 | $90,379 | | Total stockholders' equity | $34,898 | $27,716 | [Unaudited Reconciliation of Net Income (Loss) to Adjusted EBITDA](index=7&type=section&id=Unaudited%20Reconciliation%20of%20Net%20Income%20(Loss)%20to%20Adjusted%20EBITDA) A reconciliation from GAAP net income of $4.0 million to a non-GAAP Adjusted EBITDA of $3.9 million highlights strong operational performance Reconciliation to Adjusted EBITDA (in thousands) | Line Item | Three Months Ended March 31, 2025 | Three Months Ended March 31, 2024 | | :--- | :--- | :--- | | Net income (loss) - GAAP | $3,994 | ($2,887) | | Adjustments (Net) | ($51) | $3,818 | | **Adjusted EBITDA - non-GAAP** | **$3,943** | **$931** | [Other Information](index=3&type=section&id=Other%20Information) This section provides details on the investor conference call, a corporate overview, and the forward-looking statements disclaimer - The company hosted a conference call and webcast on **May 14, 2025**, to discuss the quarterly results[14](index=14&type=chunk) - Aytu's prescription products include **Adzenys XR-ODT®** and **Cotempla XR-ODT®** for ADHD, **Karbinal® ER** for allergies, and fluoride-based vitamins[16](index=16&type=chunk) - The press release contains **forward-looking statements** that are subject to risks and uncertainties, and readers are referred to the company's SEC filings[17](index=17&type=chunk)

Financial Data and Key Metrics Changes - The company's net revenue for Q2 2025 was $16.2 million, down from $18.7 million in the same quarter last year [44] - ADHD portfolio net revenue decreased 17% to $13.8 million compared to $16.6 million in Q2 fiscal 2024, reflecting normalization of the ADHD stimulant supply chain [44] - Pediatric portfolio net revenue was $2.4 million, up from $2.1 million in Q2 of last year, with a sequential increase of approximately 86% [45] Business Line Data and Key Metrics Changes - ADHD prescriptions were slightly over 99,000 in Q2, compared to just under 99,000 in Q1 and 111,000 in Q2 of last year [14] - ADHD net revenue was up 16% sequentially on an apples-to-apples basis, excluding a one-time item from the previous quarter [17] - Pediatric portfolio net revenue showed an 86% sequential increase, indicating a rebound from previous payer changes [24] Market Data and Key Metrics Changes - The ADHD stimulant market is returning to a more normalized state following significant market-wide stimulant shortages that began in early 2023 [17] - The company has diversified its prescriber base and improved payer coverage for both its multivitamin and antihistamine franchises, leading to better access and coverage [20][21] Company Strategy and Development Direction - The company is focusing on its profitable prescription business and leveraging the Aytu RxConnect platform while pursuing additional in-licensed or acquired products [12][34] - Future growth is expected to come from both organic growth in ADHD and Pediatric portfolios and potential acquisitions of smaller assets [35] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving net revenue and adjusted EBITDA growth from current levels, aiming for positive cash flows [58] - The company has successfully implemented a multiyear strategic realignment to focus on its profitable prescription business [57] Other Important Information - The company reported its seventh consecutive quarter of positive adjusted EBITDA and second consecutive quarter of net income [12] - Cash balance at the end of December was $20.4 million, slightly up from $20.1 million at the end of September [12][53] Q&A Session Summary Question: What is the outlook for the ADHD franchise? - Management anticipates growth and believes reaching $16 million to $17 million quarterly is feasible, contingent on market growth and share gains [63] Question: Were there any one-time effects in the Pediatric business? - Management confirmed that the growth in the Pediatric business is organic, with the antihistamine franchise being the largest driver of growth [66] Question: Can you elaborate on Medicaid coverage dynamics? - Management noted that they have expanded coverage across multiple states, resulting in healthier margins on Medicaid reimbursed business [71] Question: What are the sources of the additional $2 million in cost savings? - The additional savings are expected from G&A reductions and slimming down contracted services, starting in the current quarter [76] Question: What is the status of business development and potential acquisitions? - Management is in active discussions for potential tuck-in acquisitions and is optimistic about opportunities that require small or no upfront costs [80]

[Cautionary Information Regarding Forward-Looking Statements](index=3&type=section&id=Cautionary%20Information%20Regarding%20Forward-Looking%20Statements) This report contains forward-looking statements regarding future events and financial position, subject to risks detailed in the company's Annual Report on Form 10-K - This report contains **forward-looking statements** concerning the company's future clinical and regulatory events, financial position, business strategy, and operational objectives, identifiable by words like "may," "will," "expect," "anticipate," and similar terms[8](index=8&type=chunk) - These **forward-looking statements** are subject to **numerous risks and uncertainties**, as detailed in the "**Risk Factors**" section of the company's **Annual Report on Form 10-K** for the year ended June 30, 2024[9](index=9&type=chunk) PART I - FINANCIAL INFORMATION [Financial Statements](index=4&type=section&id=Item%201.%20Financial%20Statements) This section presents the unaudited consolidated financial statements for the quarter ended December 31, 2024, along with comprehensive notes on accounting policies and financial items [Unaudited Consolidated Balance Sheets](index=4&type=section&id=Unaudited%20Consolidated%20Balance%20Sheets) As of December 31, 2024, total assets slightly decreased to $116.2 million, while total liabilities decreased and stockholders' equity increased Consolidated Balance Sheet Summary (in thousands) | | December 31, 2024 | June 30, 2024 | | :--- | :--- | :--- | | **Total Current Assets** | $63,053 | $61,891 | | **Total Non-Current Assets** | $53,174 | $56,204 | | **Total Assets** | **$116,227** | **$118,095** | | **Total Current Liabilities** | $64,048 | $62,228 | | **Total Non-Current Liabilities** | $21,414 | $28,151 | | **Total Stockholders' Equity** | $30,765 | $27,716 | | **Total Liabilities and Stockholders' Equity** | **$116,227** | **$118,095** | [Unaudited Consolidated Statements of Operations](index=5&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Operations) For the three months ended December 31, 2024, the company reported net revenue of $16.2 million and a net income of $0.8 million, with significant improvement in net income for the six-month period Statement of Operations Summary (in thousands) | | Three Months Ended Dec 31, 2024 | Three Months Ended Dec 31, 2023 | Six Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | | :--- | :--- | :--- | :--- | :--- | | **Net Revenue** | $16,221 | $18,748 | $32,795 | $36,565 | | **Gross Profit** | $10,786 | $14,603 | $22,771 | $27,641 | | **(Loss) Income from Operations** | $(1,695) | $3,146 | $(2,625) | $2,279 | | **Net Income (Loss) from Continuing Operations** | $665 | $619 | $1,758 | $(6,854) | | **Net Income (Loss)** | **$788** | **$(220)** | **$2,262** | **$(8,340)** | Earnings Per Share (Basic) - Continuing Operations | | Three Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2024 | | :--- | :--- | :--- | | **Basic EPS** | $0.11 | $0.29 | [Unaudited Consolidated Statements of Cash Flows](index=7&type=section&id=Unaudited%20Consolidated%20Statements%20of%20Cash%20Flows) For the six months ended December 31, 2024, operating activities provided $1.7 million in cash, marking a positive shift, with the company ending the period with $20.4 million in cash and cash equivalents Cash Flow Summary (in thousands) | | Six Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | | :--- | :--- | :--- | | **Net cash provided by (used in) operating activities** | $1,715 | $(346) | | **Net cash provided by (used in) investing activities** | $526 | $(250) | | **Net cash used in financing activities** | $(1,849) | $(2,860) | | **Net change in cash and cash equivalents** | $392 | $(3,456) | | **Cash and cash equivalents at end of period** | **$20,398** | **$19,529** | [Notes to the Unaudited Consolidated Financial Statements](index=8&type=section&id=Notes%20to%20the%20Unaudited%20Consolidated%20Financial%20Statements) The notes detail the company's accounting policies and provide breakdowns of key financial statement items, highlighting strategic shifts, revenue impacts, and ongoing litigation - The company's continuing operations are now a **single segment** focused on prescription pharmaceuticals, primarily the **ADHD Portfolio** (Adzenys, Cotempla) and the **Pediatric Portfolio** (Karbinal, Poly-Vi-Flor, Tri-Vi-Flor)[23](index=23&type=chunk)[24](index=24&type=chunk) - The company entered into its **first international commercial agreements** to sell **Adzenys** and **Cotempla** in Israel, the Palestinian Authority, and Canada through partnerships with Medomie Pharma and Lupin Pharma[25](index=25&type=chunk) - A negotiation with a vendor led to a **$3.3 million reduction in a liability**, which was recognized as an **increase in net revenue** during the first quarter of fiscal 2025[45](index=45&type=chunk) - The **Consumer Health business was divested** on July 31, 2024, and its financial results are now reported as **discontinued operations**[133](index=133&type=chunk) - On December 11, 2024, the company filed a **patent infringement lawsuit** against **Granules Pharmaceuticals**, which triggered a **30-month stay on FDA approval** for the generic drug[98](index=98&type=chunk) [Management's Discussion and Analysis of Financial Condition and Results of Operations](index=33&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the company's financial performance, strategic shifts, and liquidity, emphasizing the divestiture of the Consumer Health business, revenue changes, and capital management initiatives - The company's strategy is to focus on its **commercial prescription business**, having **divested the unprofitable Consumer Health business** and suspended clinical development programs to accelerate growth and achieve **positive operating cash flow**[138](index=138&type=chunk)[139](index=139&type=chunk) Net Revenue by Portfolio (in thousands) | Portfolio | Six Months Ended Dec 31, 2024 | Six Months Ended Dec 31, 2023 | Change | | :--- | :--- | :--- | :--- | | **ADHD Portfolio** | $29,080 | $31,700 | $(2,620) | | **Pediatric Portfolio** | $3,693 | $4,710 | $(1,017) | | **Total Net Revenue** | **$32,795** | **$36,565** | **$(3,770)** | - Net revenue for the six months ended Dec 31, 2024, **decreased by $3.8 million (10%)** compared to the prior year, primarily due to payer changes affecting the **Pediatric Portfolio** and normalized market conditions for the **ADHD Portfolio**[149](index=149&type=chunk)[150](index=150&type=chunk) - **Gross profit margin decreased to 69% from 76%** for the six months ended Dec 31, 2024, mainly due to the higher cost of self-manufactured ADHD inventory, which is expected to normalize[151](index=151&type=chunk) - The company secured a **new $13.0 million term loan** and maintains a **$14.5 million revolving credit facility** with Eclipse, also filing a **new $100.0 million shelf registration** in October 2024 to support liquidity[163](index=163&type=chunk)[164](index=164&type=chunk)[165](index=165&type=chunk)[166](index=166&type=chunk) [Quantitative and Qualitative Disclosures About Market Risk](index=40&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20About%20Market%20Risk) As a smaller reporting company, Aytu BioPharma is not required to provide market risk disclosures - The company is a **smaller reporting company** as defined by Rule 12b-2 of the Exchange Act and is therefore **not required to provide quantitative and qualitative disclosures about market risk**[181](index=181&type=chunk) [Controls and Procedures](index=40&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that the company's disclosure controls and procedures were effective as of December 31, 2024, with no material changes to internal control over financial reporting during the quarter - Based on an evaluation, the CEO and CFO concluded that the company's **disclosure controls and procedures were effective** at a reasonable assurance level as of the end of the period[182](index=182&type=chunk) - **No changes in internal control over financial reporting** occurred during the quarter that have materially affected, or are reasonably likely to materially affect, these controls[184](index=184&type=chunk) PART II - OTHER INFORMATION [Legal Proceedings](index=41&type=section&id=Item%201.%20Legal%20Proceedings) This section outlines the company's material legal proceedings, including the settlement of the Witmer class-action, ongoing patent litigation against Granules Pharmaceuticals, and the conclusion of the Revive Investing lawsuit - **Witmer Class-Action:** A stockholder derivative suit was **settled** with court approval on January 13, 2025, involving corporate governance modifications and payment of plaintiff's attorneys' fees[187](index=187&type=chunk) - **Granules PIV:** The company filed a **patent infringement lawsuit** against Granules Pharmaceuticals on December 11, 2024, triggering a **30-month stay on FDA approval** of the generic, with a trial scheduled for December 2026[188](index=188&type=chunk) - **Revive Investing:** A lawsuit concerning alleged short-swing trading profits proceeded to a jury trial, which returned a verdict of **no liability** on January 29, 2025[189](index=189&type=chunk) [Risk Factors](index=42&type=section&id=Item%201A.%20Risk%20Factors) This section highlights new risk factors related to the potential negative impact of unstable market and economic conditions and the significant costs and uncertainties associated with intellectual property litigation - A new risk factor was added regarding **unstable market and economic conditions**, noting that volatility, inflation, and geopolitical events could **adversely affect business operations, financial condition, and access to capital**[192](index=192&type=chunk) - A new risk factor addresses the potential for **costly and unpredictable litigation** related to enforcing **intellectual property rights**, which could divert resources and put **patents at risk of being invalidated**[195](index=195&type=chunk)[196](index=196&type=chunk) [Other Information](index=43&type=section&id=Item%205.%20Other%20Information) The company states that during the quarter ended December 31, 2024, no directors or executive officers adopted or terminated a Rule 10b5-1 trading arrangement - During the quarter ended December 31, 2024, **no directors or executive officers adopted or terminated a Rule 10b5-1 trading plan**[197](index=197&type=chunk) [Exhibits](index=44&type=section&id=Item%206.%20Exhibits) This section lists the exhibits filed with the Form 10-Q, including employment and separation agreements for CFOs and Sarbanes-Oxley certifications - The report includes as exhibits the **employment agreement for new CFO Ryan J. Selhorn**, the **separation agreement for former CFO Mark K. Oki**, and **certifications from the CEO and CFO pursuant to the Sarbanes-Oxley Act**[199](index=199&type=chunk) [Signatures](index=45&type=section&id=SIGNATURES) The Form 10-Q report was duly signed and authorized on February 12, 2025, by Joshua R. Disbrow, Chief Executive Officer, and Ryan J. Selhorn, Chief Financial Officer - The report was **signed on February 12, 2025**, by **Joshua R. Disbrow (CEO)** and **Ryan J. Selhorn (CFO)**[204](index=204&type=chunk)