Nature of Business, Financial Condition, Basis of Presentation	6 Months Ended
Dec. 31, 2021
Nature of Business, Financial Condition, Basis of Presentation
Nature of Business, Financial Condition, Basis of Presentation	1. Nature of Business, Financial Condition, Basis of Presentation Aytu BioPharma, Inc. (“Aytu”, the “Company” or “we”), is a commercial-stage pharmaceutical company focused on commercializing novel therapeutics and consumer healthcare products. The Company currently operates the Aytu BioPharma business, consisting of the Company’s prescription pharmaceutical products (the “Rx Portfolio”), and the Aytu consumer healthcare products business (the “Consumer Health Portfolio”). The core Rx Portfolio commercial products consists primarily of prescription pharmaceutical products for the treatment of attention deficit hyperactivity disorder ("ADHD"), allergies and vitamin and fluoride deficiency. The Aytu consumer health business is focused on commercializing consumer healthcare products. The Company was incorporated as Rosewind Corporation on August 9, 2002 in the State of Colorado and was re-incorporated in the state of Delaware on June 8, 2015. The Rx Portfolio consists of (i) Adzenys XR-ODT (amphetamine) extended-release orally disintegrating tablets, Cotempla XR-ODT (methylphenidate) extended-release orally disintegrating tablets and Adzenys ER (amphetamine) extended-release oral suspension for the treatment of ADHD, (ii) Poly-Vi-Flor and Tri-Vi-Flor, two complementary prescription fluoride-based supplement product lines containing combinations of fluoride and vitamins in various formulations for infants and children with fluoride deficiency, (iii) Karbinal ER, an extended-release carbinoxamine (antihistamine) suspension indicated to treat numerous allergic conditions, (iv) ZolpiMist, the only U.S. Food & Drug Administration (“FDA”) approved oral spray prescription sleep aid, (v) Tuzistra XR, the only FDA-approved 12-hour codeine-based antitussive syrup and (vi) a generic Tussionex (hydrocodone and chlorpheniramine) (“generic Tussionex”), extended-release oral suspension for the treatment of cough and upper respiratory symptoms of a cold. Adzenys ER was discontinued as of September 30, 2021. The Consumer Health Portfolio consists of over twenty consumer health products competing in large healthcare categories, including diabetes management, pain management, digestive health, sexual and urological health and general wellness, commercialized through direct-to-consumer marketing channels utilizing the Company's proprietary Beyond Human marketing and sales platform and on e-commerce platforms. The Company’s strategy is to continue building its portfolio of revenue-generating products, leveraging its commercial team’s expertise to build leading brands within large therapeutic markets, while also developing a late-stage pipeline focused on pediatric-onset conditions and difficult-to-treat diseases. As of December 31, 2021, the Company had approximately $35.3 million of cash and cash equivalents. The Company’s operations have historically consumed cash and are expected to continue to consume cash. The Company incurred a net loss of approximately $11.5 million and $9.5 million during the three months ended December 31, 2021 and 2020, respectively, and $39.4 million and $13.8 million for the six months ended December 31, 2021 and 2020, respectively. The Company had an accumulated deficit of approximately $217.7 million and $178.3 million as of December 31, 2021 and June 30, 2021, respectively. Cash used in operations was approximately $12.6 million and $10.9 million during the six months ended December 31, 2021 and 2020, respectively. Management plans to focus on executing on its business plan or otherwise reducing its expenses, renegotiating its debt facilities, or raising additional capital in order to meet its obligations. Management believes that the Company has access to capital resources through possible public or private equity offerings, debt financings, or other means; however, the Company cannot provide any assurance that it will be able to raise additional capital or obtain new financing on commercially acceptable terms. If the Company is unable to secure additional capital, it may be required to curtail its operations or delay the execution of its business plan. As of the date of this Report, the Company expects its costs for operations to increase as the Company integrates the Neos acquisition, invests in new product development, and continues to focus on revenue growth through increasing product sales and making additional acquisitions. The Company’s current assets totaling approximately $87.5 million as of December 31, 2021 and the proceeds expected from ongoing product sales will be used to fund existing operations. The Company may continue to access the capital markets from time-to-time. The timing and amount of capital that may be raised is dependent on the terms and conditions upon which investors would require to provide such capital. There is no guarantee that capital will be available on terms favorable to the Company and its stockholders, or at all. The Company believes it has sufficient cash on-hand as of December 31, 2021 to cover potential net cash outflows for at least the twelve months following the filing date of this Quarterly Report. If the Company is unable to raise adequate capital in the future when it is required, the Company's management can adjust its operating plans to reduce the magnitude of the Company's capital need under its existing operating plan. Some of the adjustments that could be made include delays of and reductions to commercial programs, reductions in headcount, narrowing the scope of the Company’s commercial plans or reductions or delays to its research and development programs, or monetization of certain Company assets. Without sufficient operating capital, the Company could be required to relinquish rights to products or renegotiate to maintain such rights on less favorable terms than it would otherwise choose. This may lead to impairment or other charges, which could materially affect the Company’s balance sheet and operating results. Basis of Presentation. The unaudited condensed consolidated financial statements contained in this report represent the financial statements of the Company and its wholly owned subsidiaries, Innovus Pharmaceuticals, Inc., Aytu Therapeutics, LLC and Neos Therapeutics, Inc. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2021, which included all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”). In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company and the results of operations and cash flows for the interim periods presented. The results of operations for the period ended December 31, 2021 are not necessarily indicative of expected operating results for the full year. The information presented throughout this report, as of December 31, 2021 and for the three and six months ended December 31, 2021, and 2020, is unaudited.

Nature of Business, Financial Condition, Basis of Presentation

6 Months Ended

Dec. 31, 2021

Nature of Business, Financial Condition, Basis of Presentation

Nature of Business, Financial Condition, Basis of Presentation

1. Nature of Business, Financial Condition, Basis of Presentation

Aytu BioPharma, Inc. (“Aytu”, the “Company” or “we”), is a commercial-stage pharmaceutical company focused on commercializing novel therapeutics and consumer healthcare products. The Company currently operates the Aytu BioPharma business, consisting of the Company’s prescription pharmaceutical products (the “Rx Portfolio”), and the Aytu consumer healthcare products business (the “Consumer Health Portfolio”). The core Rx Portfolio commercial products consists primarily of prescription pharmaceutical products for the treatment of attention deficit hyperactivity disorder ("ADHD"), allergies and vitamin and fluoride deficiency. The Aytu consumer health business is focused on commercializing consumer healthcare products. The Company was incorporated as Rosewind Corporation on August 9, 2002 in the State of Colorado and was re-incorporated in the state of Delaware on June 8, 2015.

The Rx Portfolio consists of (i) Adzenys XR-ODT (amphetamine) extended-release orally disintegrating tablets, Cotempla XR-ODT (methylphenidate) extended-release orally disintegrating tablets and Adzenys ER (amphetamine) extended-release oral suspension for the treatment of ADHD, (ii) Poly-Vi-Flor and Tri-Vi-Flor, two complementary prescription fluoride-based supplement product lines containing combinations of fluoride and vitamins in various formulations for infants and children with fluoride deficiency, (iii) Karbinal ER, an extended-release carbinoxamine (antihistamine) suspension indicated to treat numerous allergic conditions, (iv) ZolpiMist, the only U.S. Food & Drug Administration (“FDA”) approved oral spray prescription sleep aid, (v) Tuzistra XR, the only FDA-approved 12-hour codeine-based antitussive syrup and (vi) a generic Tussionex (hydrocodone and chlorpheniramine) (“generic Tussionex”), extended-release oral suspension for the treatment of cough and upper respiratory symptoms of a cold. Adzenys ER was discontinued as of September 30, 2021.

The Consumer Health Portfolio consists of over twenty consumer health products competing in large healthcare categories, including diabetes management, pain management, digestive health, sexual and urological health and general wellness, commercialized through direct-to-consumer marketing channels utilizing the Company's proprietary Beyond Human marketing and sales platform and on e-commerce platforms.

The Company’s strategy is to continue building its portfolio of revenue-generating products, leveraging its commercial team’s expertise to build leading brands within large therapeutic markets, while also developing a late-stage pipeline focused on pediatric-onset conditions and difficult-to-treat diseases.

As of December 31, 2021, the Company had approximately $35.3 million of cash and cash equivalents. The Company’s operations have historically consumed cash and are expected to continue to consume cash. The Company incurred a net loss of approximately $11.5 million and $9.5 million during the three months ended December 31, 2021 and 2020, respectively, and $39.4 million and $13.8 million for the six months ended December 31, 2021 and 2020, respectively. The Company had an accumulated deficit of approximately $217.7 million and $178.3 million as of December 31, 2021 and June 30, 2021, respectively. Cash used in operations was approximately $12.6 million and $10.9 million during the six months ended December 31, 2021 and 2020, respectively.

Management plans to focus on executing on its business plan or otherwise reducing its expenses, renegotiating its debt facilities, or raising additional capital in order to meet its obligations. Management believes that the Company has access to capital resources through possible public or private equity offerings, debt financings, or other means; however, the Company cannot provide any assurance that it will be able to raise additional capital or obtain new financing on commercially acceptable terms. If the Company is unable to secure additional capital, it may be required to curtail its operations or delay the execution of its business plan.

As of the date of this Report, the Company expects its costs for operations to increase as the Company integrates the Neos acquisition, invests in new product development, and continues to focus on revenue growth through increasing product sales and making additional acquisitions. The Company’s current assets totaling approximately $87.5 million as of December 31, 2021 and the proceeds expected from ongoing product sales will be used to fund existing

operations. The Company may continue to access the capital markets from time-to-time. The timing and amount of capital that may be raised is dependent on the terms and conditions upon which investors would require to provide such capital. There is no guarantee that capital will be available on terms favorable to the Company and its stockholders, or at all.

The Company believes it has sufficient cash on-hand as of December 31, 2021 to cover potential net cash outflows for at least the twelve months following the filing date of this Quarterly Report.

If the Company is unable to raise adequate capital in the future when it is required, the Company's management can adjust its operating plans to reduce the magnitude of the Company's capital need under its existing operating plan. Some of the adjustments that could be made include delays of and reductions to commercial programs, reductions in headcount, narrowing the scope of the Company’s commercial plans or reductions or delays to its research and development programs, or monetization of certain Company assets. Without sufficient operating capital, the Company could be required to relinquish rights to products or renegotiate to maintain such rights on less favorable terms than it would otherwise choose. This may lead to impairment or other charges, which could materially affect the Company’s balance sheet and operating results.

Basis of Presentation. The unaudited condensed consolidated financial statements contained in this report represent the financial statements of the Company and its wholly owned subsidiaries, Innovus Pharmaceuticals, Inc., Aytu Therapeutics, LLC and Neos Therapeutics, Inc. The unaudited consolidated financial statements should be read in conjunction with the Company’s Annual Report on Form 10-K for the year ended June 30, 2021, which included all disclosures required by generally accepted accounting principles in the United States (“U.S. GAAP”). In the opinion of management, these unaudited condensed consolidated financial statements contain all adjustments necessary to present fairly the financial position of the Company and the results of operations and cash flows for the interim periods presented. The results of operations for the period ended December 31, 2021 are not necessarily indicative of expected operating results for the full year. The information presented throughout this report, as of December 31, 2021 and for the three and six months ended December 31, 2021, and 2020, is unaudited.