Note 15 - Equity Incentive Plans

6 Months Ended

Dec. 31, 2024

Notes to Financial Statements

Share-Based Payment Arrangement [Text Block]

Note 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 (i) 200,000 new shares; (ii) 87,129 shares available for grant under the 2015 Plans be “rolled over” to the 2023 Equity Incentive Plan; and (iii) 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 December 31, 2024, the Company had 87,636 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. On February 13, 2020, the Company’s stockholders approved an increase to 250,000 total shares of common stock in the Aytu 2015 Plan. 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. 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, and the restricted stock units have a vesting period of 4 years.

Neos 2015 Plan

Pursuant to the Neos Acquisition, 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-combination and post-combination service periods. The pre-combination service costs were included in the consideration 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 at June 30, 2024		146,539		$	6.18		8.8
Granted		83,000		$	1.84		2.3
Forfeited/cancelled		(8,147	)	$	5.73		—
Outstanding at December 31, 2024		221,392		$	4.57		8.3
Exercisable at December 31, 2024		81,399		$	9.02		6.6

During the six months ended  December 31, 2024, the Company granted 83,000 stock options with a weighted average exercise price per option of $1.84. As of December 31, 2024, there was $0.2 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 2.3 years.

Restricted Stock

Restricted stock activity is as follows:

				Weighted
				Average Grant
	Number of			Date Fair
	Shares			Value
Unvested at June 30, 2024		24,105		$	100.34
Granted		20,000		$	1.79
Vested		(7,853	)	$	15.33
Unvested at December 31, 2024		36,252		$	64.38

During the six months ended  December 31, 2024, the Company granted 20,000 shares of restricted stock under the Company’s 2023 Equity Incentive Plan with a weighted average grant date fair value of $1.79 per share. As of December 31, 2024, there was $0.9 million total unrecognized compensation costs related to non-vested restricted stock granted under the Company’s equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 2.3 years.

During the six months ended  December 31, 2024, no restricted stock was granted outside of the Company’s equity incentive plan. As of December 31, 2024, there was $0.2 million total unrecognized compensation costs related to non-vested restricted stock issued outside of the Company’s equity incentive plans. The unrecognized compensation cost is expected to be recognized over a weighted average period of 1.5 years. As of December 31, 2024, 4 shares of restricted stock remain unvested that were granted outside of the Company’s equity incentive plan.

Restricted Stock Units

Restricted stock units (“RSU” or “RSUs”) activity is as follows:

				Weighted
				Average Grant
	Number of			Date Fair
	Shares			Value
Unvested at June 30, 2024		1,775		$	24.14
Vested		(1,043	)	$	24.13
Forfeited		(167	)	$	26.20
Unvested at December 31, 2024		565		$	23.55

During the six months ended  December 31, 2024, no RSUs were granted. As of December 31, 2024, there was less than $0.1 million of 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 0.2 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				Six Months Ended
	December 31,				December 31,
	2024		2023		2024		2023
	(in thousands)
Cost of sales	$	—	$	1	$	1	$	1
Research and development		1		2		3		3
Selling and marketing		14		—		46		—
General and administrative		136		704		274		1,428
Net income (loss) from discontinued operations, net of tax		—		113		—		318
Total stock-based compensation expense	$	151	$	820	$	324	$	1,750