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Equity Incentive Plans

3 Months Ended

Sep. 30, 2023

Share-Based Payment Arrangement [Abstract]

Equity Incentive Plans

15. Equity Incentive Plans

2023 Equity Incentive Plan. On May 18, 2023, the Company’s stockholders approved the Aytu BioPharma, Inc. 2023 Equity Incentive Plan (the “2023 Equity Incentive Plan”). Prior to the Company’s adoption of the 2023 Equity Incentive Plan, the Company awarded equity incentive grants to its directors and employees under the Aytu BioScience, Inc. 2015 Stock Option and Incentive Plan (the “Aytu 2015 Plan”) and the Neos Therapeutics, Inc. 2015 Stock Options and Incentive Plan (the “Neos 2015 Plan”, and collectively with the Aytu 2015 Plan, the “2015 Plans”). For the 2023 Equity Incentive Plan, the stockholders approved (a) 200,000 new shares, (b) 87,129 shares available for grant under the 2015 Plans be “rolled over” to the 2023 Equity Incentive Plan and (c) any shares that are returned to the company under the 2015 Plans be added to the 2023 Equity Incentive Plan. With the approval of the 2023 Equity Incentive Plan, no additional awards will be granted under the 2015 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 the 2023 Equity Incentive Plan have contractual terms of 10 years or less from the grant date and a vesting period ranging from 3 to 4 years. The restricted stock awards and restricted stock units have a vesting period of 3 to 4 years. As of September 30, 2023 the Company had 165,667 shares that are available for grant under the 2023 Equity Incentive Plan.

Aytu 2015 Plan. On June 1, 2015, the Company’s stockholders approved the Aytu 2015 Plan, which, as amended in July 2017, provides for the award of stock options, stock appreciation rights, restricted stock and other equity awards for up to an aggregate of 150,000 shares of common stock. The shares of common stock underlying any awards that are forfeited, canceled, reacquired by Aytu prior to vesting, satisfied without any issuance of stock, expire or are otherwise terminated (other than by exercise) under the Aytu 2015 Plan will be added back to the shares of common stock available for issuance under the 2023 Equity Incentive Plan. On February 13, 2020, the Company’s stockholders approved an increase to 250,000 total shares of common stock in the Aytu 2015 Plan. Stock options granted under this plan have contractual terms of 10 years from the grant date and a vesting period ranging from 3 to 4 years. The restricted stock awards have a vesting period ranging from 4 to 10 years, whereas the restricted stock units have a vesting period of 4 years.

Neos 2015 Plan. Pursuant to the Neos Merger, the Company assumed 3,486 stock options and 1,786 restricted stock units previously granted under the Neos 2015 Plan. Accordingly, on April 19, 2021, the Company registered 5,272 shares of its common stock under the Neos 2015 Plan with the SEC. The terms and conditions of the assumed equity securities remained the same as they were previously under the Neos 2015 Plan. The Company allocated costs of the replacement awards attributable to pre- and post-combination service periods. The pre-combination service costs were included in the considerations transferred. The remaining costs attributable to the post-combination service period are being recognized as stock-based compensation expense over the remaining terms of the replacement awards. Stock options granted under this plan have contractual terms of 10 years from the grant date and a vesting period ranging from 1 to 4 years.

Stock Options

Stock option activity is as follows:


							Weighted
							Average
				Weighted			Remaining
		Number of		Average			Contractual
		Options		Exercise Price			Life in Years
Outstanding June 30, 2023		52,762		$	18.37		9.06
Granted		112,000			1.73
Forfeited/Cancelled		(2,045)			4.78
Expired		(34)			158.09
Outstanding at September 30, 2023		162,683		$	6.91		9.55

Exercisable at September 30, 2023		3,019		$	227.16		5.97

During the three months ended September 30, 2023, 112,000 stock options were granted. The weighted-average grant date fair value of options granted during the three months ended September 30, 2023 was $1.73. As of September 30, 2023, there was $0.3 million total unrecognized compensation costs related to non-vested stock options granted under the Company’s equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.7 years.

Restricted Stock

Restricted stock activity is as follows:


				Weighted
				Average Grant
		Number of		Date Fair
		Shares		Value
Unvested at June 30, 2023		38,075		$	142.20
Granted		12,500			1.77
Vested		(6,424)			137.95
Unvested at September 30, 2023		44,151		$	103.06

As of September 30, 2023, there was $2.8 million total unrecognized compensation costs related to non-vested restricted stock granted under the Company’s equity incentive plan. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.8 years.

As of September 30, 2023, there was $0.3 million total unrecognized costs related to non-vested restricted stock outside of the Company’s equity incentive plan. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.3 years. As of September 30, 2023, 2,505 shares of restricted stock remain unvested.

Restricted Stock Units

Restricted stock units (RSUs) activity is as follows:



				Weighted
				Average Grant
		Number of		Date Fair
		Shares		Value
Unvested at June 30, 2023		4,963		$	25.62
Vested		(561)			24.28
Forfeited		(939)			31.60
Unvested at September 30, 2023		3,463		$	24.21

As of September 30, 2023, there was $0.1 million total unrecognized compensation costs related to non-vested RSUs granted under the Company’s equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.4 years.

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


		Three Months Ended
		September 30,
		2023			2022

			(in thousands)
Cost of sales		$	—		$	5
Research and development			1			9
Selling and marketing			—			3
General and Administrative			929			1,160
Total stock-based compensation expense		$	930		$	1,177