UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM
8-K CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of
1934
Date of
Report (Date of earliest event reported): February 13, 2020
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AYTU
BIOSCIENCE, INC.
(Exact
name of registrant as specified in its charter)
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Delaware
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001-38247
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47-0883144
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(State
or other jurisdiction of incorporation)
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(Commission File
Number)
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(IRS
Employer Identification No.)
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373 Inverness Parkway, Suite 206
Englewood, CO 80112
(Address of
principal executive offices, including Zip Code)
Registrant’s
telephone number, including area code:
(720) 437-6580
N/A
(Former
name or former address, if changed since last report)
Check
the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:
☒
Written
communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
☐
Soliciting material
pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
☐
Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
CFR 240.14d-2(b))
☐
Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
CFR 240.13e-4(c))
Securities
registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading
Symbol(s)
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Name of each exchange on which registered
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Common
Stock, par value $0.0001 per share
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AYTU
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The
NASDAQ Stock Market LLC
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Indicate by check
mark whether the registrant is an emerging growth company as
defined in Rule 405 of the Securities Act of 1933 (§230.405 of
this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
Emerging growth
company ☐
If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. ☐
Item
2.02 Results of Operations and Financial Condition.
On
February 13, 2020, the Company issued a press release announcing
that the Company will present its operational results for the
fiscal second quarter ended December 31, 2019 on Thursday, February
13, 2020, at 4:30 p.m. ET. A copy of the press release is attached
as Exhibit 99.1 and incorporated herein by reference.
In
accordance with General Instruction B.2 of Form 8-K, the
information in the press release attached as Exhibit 99.1 hereto
shall not be deemed to be “filed” for purposes of
Section 18 of the Securities Exchange Act of 1934, as amended (the
“Exchange Act”), nor shall such information be deemed
incorporated by reference in any filing under the Securities Act of
1933, as amended, or the Exchange Act, except as shall be expressly
set forth by specific reference in such filing.
Item
9.01 Financial Statements and Exhibits.
(d)
The following
exhibit is being filed herewith:
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Exhibit
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Description
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Press Release dated
February 13, 2020
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SIGNATURES
Pursuant to the
requirements of the Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
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AYTU BIOSCIENCE,
INC.
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Date:
February 13,
2020
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By:
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/s/ Joshua R.
Disbrow
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Joshua R.
Disbrow
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Chief Executive
Officer
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Aytu Reports Q2 Revenue of $3.2M, Up 77% Year-over-Year and 121%
Sequentially
ENGLEWOOD, CO / ACCESSWIRE / February 13, 2020 / Aytu
BioScience, Inc. (NASDAQ:AYTU), a specialty pharmaceutical company
focused on commercializing of novel products that address
significant medical needs, today will provide an overview of its
business, including the company's operational and financial results
for its fiscal second quarter 2020 that ended December 31, 2019.
The company will host a live conference call and webcast today at
4:30 p.m. ET. Conference call details are provided at the end of
this press release.
2020 Second Quarter Financial and Corporate Highlights
●
Reports
revenue of $3.2 million for the three months ended December 31,
2019, an increase of 77% compared to the three months ended
December 31, 2018, and an increase of 121% compared to the three
months ended September 30, 2019; quarterly revenue results only
represent partial contribution from the acquisition of the Cerecor
assets closed on November 1, 2019;
●
Net
loss of $0.2 million for the three months ended December 31, 2019,
a reduction of 95% compared to the three months ended December 31,
2018, and a reduction of 96% compared to the three months ended
September 30, 2019; quarterly net income/(loss) results only
represent partial contribution from the acquisition of the Cerecor
assets closed on November 1, 2019;
●
Engaged
health-care focused investment bank to secure near-term
non-dilutive financing;
●
Announced
positive clinical results from Natesto® spermatogenesis study,
the first such study to demonstrate conclusively that a
testosterone replacement therapy (TRT) maintains key fertility
parameters in hypogonadal men;
●
Closed
on a $12.4 million prescription product portfolio purchase from
Cerecor;
●
Hired
Matthew Phillips as Executive Vice President of Commercial
Operations. Mr. Phillips was Chief Commercial Officer at Cerecor
and responsible for leading the growth of the prescription product
portfolio that Aytu acquired, as well as at its predecessor company
Zylera Pharmaceuticals;
●
Raised
$10 million (approximately $9.3 million after fees and expenses)
through a private placement with healthcare institutional investors
– Armistice Capital and Altium Capital in October
2019;
●
Launched
Natesto co-promote with Acerus Pharmaceuticals to expand
promotional coverage and drive revenue growth and eliminated
certain royalty and contingent consideration obligations, resulting
in a $5.2 million unrealized gain;
●
Launched
ZolpiMist co-promote with Validus Pharmaceuticals to expand
promotion into the psychiatry market;
●
Natesto
and Tuzistra added to two national PBM formularies representing
over 36 million U.S. lives;
●
Ends
the quarter with cash, cash equivalents and restricted cash of $5.5
million, which does not include cash owed by Cerecor for
receivables from post-acquisition sales of Commercial Portfolio
products and a financing commitment from an institutional
investor.
Commenting on the second quarter of 2020, Josh Disbrow, Chief
Executive Officer of Aytu BioScience, stated, "Revenue for the
three months ended December 31, 2019 was $3.2 million, which
represents 121% growth over the three months ended September 30,
2019. Considering that the Cerecor Rx portfolio purchase
didn’t close until November, with the start of the
integration beginning after that, this is a strong revenue number
that we expect to grow with the product portfolio now integrated.
We are not yet to realizing the full benefit of the acquisition, so
we look forward to our continued growth as we complete
cross-training and maximize the multiple opportunities to gain
synergy through our expanded Rx product
portfolio.”
Conference Call Information
The company will host a live conference call at 4:30 p.m. ET today.
The conference call can be accessed by dialing either:
1- 844-602-0380 (toll-free)
1- 862-298-0970 (international)
The webcast will be accessible live and archived on Aytu
BioScience's website, within the Investors section under Events
& Presentations, at aytubio.com, for 90 days.
A replay of the call will be available for fourteen days. Access
the replay by calling 1-877-481-4010 (toll-free) and using the
replay access code 57940.
About Aytu BioScience, Inc.
Aytu BioScience is a commercial-stage specialty pharmaceutical
company focused on commercializing novel products that address
significant patient needs. The company currently markets a
portfolio of prescription products addressing large primary care
and pediatric markets. The primary care portfolio includes (i)
Natesto®, the only FDA-approved nasal formulation of
testosterone for men with hypogonadism (low testosterone, or "Low
T"), (ii) ZolpiMist™, the only FDA-approved oral spray
prescription sleep aid, and (iii) Tuzistra® XR, the only
FDA-approved 12-hour codeine-based antitussive syrup. The pediatric
portfolio includes (i) AcipHex® Sprinkle™, a granule
formulation of rabeprazole sodium, a commonly prescribed proton
pump inhibitor; (ii) Cefaclor, a second-generation cephalosporin
antibiotic suspension; (iii) Karbinal® ER, an extended-release
carbinoxamine (antihistamine) suspension indicated to treat
numerous allergic conditions; and (iv) Poly-Vi-Flor® and
Tri-Vi-Flor®, two complementary prescription fluoride-based
supplement product lines containing combinations of fluoride and
vitamins in various for infants and children with fluoride
deficiency. Aytu's strategy is to continue building its portfolio
of revenue-generating products, leveraging its focused commercial
team and expertise to build leading brands within large therapeutic
markets. For more information visit aytubio.com.
Forward-Looking Statements
This press release includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933, as amended,
and Section 21E of the Securities Exchange Act of 1934, or the
Exchange Act. All statements other than statements of historical
facts contained in this presentation, are forward-looking
statements. Forward-looking statements are generally written in the
future tense and/or are preceded by words such as ''may,''
''will,'' ''should,'' ''forecast,'' ''could,'' ''expect,''
''suggest,'' ''believe,'' ''estimate,'' ''continue,''
''anticipate,'' ''intend,'' ''plan,'' or similar words, or the
negatives of such terms or other variations on such terms or
comparable terminology. These statements are just predictions and
are subject to risks and uncertainties that could cause the actual
events or results to differ materially. These risks and
uncertainties include, among others: the effects of the business
combination of Aytu and the Commercial Portfolio and the previously
announced, but not yet consummated, merger ("Merger") with Innovus
Pharmaceuticals, including the combined company's future financial
condition, results of operations, strategy and plans, the ability
of the combined company to realize anticipated synergies in the
timeframe expected or at all, changes in capital markets and the
ability of the combined company to finance operations in the manner
expected, the diversion of management time on Merger-related issues
and integration of the Commercial Portfolio, the ultimate timing,
outcome and results of integrating the operations the Commercial
Portfolio and Innovus with Aytu's existing operations, the failure
to obtain the required votes of Innovus' shareholders or Aytu's
shareholders to approve the Merger and related matters, the risk
that a condition to closing of the Merger may not be satisfied,
that either party may terminate the merger agreement or that the
closing of the Merger might be delayed or not occur at all, the
price per share utilized in the formula for the initial $8 million
merger consideration in the Merger may not be reflective of the
current market price of Aytu's common stock on the closing date,
potential adverse reactions or changes to business or employee
relationships, including those resulting from the announcement or
completion of the Merger, risks relating to gaining market
acceptance of our products, obtaining or maintaining reimbursement
by third-party payors, the potential future commercialization of
our product candidates, the anticipated start dates, durations and
completion dates, as well as the potential future results, of our
ongoing and future clinical trials, the anticipated designs of our
future clinical trials, anticipated future regulatory submissions
and events, our anticipated future cash position and future events
under our current and potential future collaboration. We also refer
you to the risks described in ''Risk Factors'' in Part I, Item 1A
of the company's Annual Report on Form 10-K and in the other
reports and documents we file with the Securities and Exchange
Commission from time to time.
Contact for Investors:
James Carbonara
Hayden IR
(646) 755-7412
james@haydenir.com
Aytu BioScience, Inc,
Condensed Consolidated Balance Sheet Information
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Assets
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Current
assets
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Cash and cash
equivalents
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$5,259,492
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11,044,227
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Restricted
cash
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251,396
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250,000
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Accounts
receivable, net
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5,197,151
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1,740,787
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Inventory,
net
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2,491,807
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1,440,069
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Prepaid
expenses and other
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2,361,249
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957,781
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Note
receivable
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1,350,000
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–
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Other current
assets
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1,426,617
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–
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Total current
assets
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18,337,712
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15,432,864
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Fixed assets,
net
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122,064
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203,733
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Licensed
assets, net
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17,724,416
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18,861,983
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Patents,
net
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207,944
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220,611
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Right-of-use
asset
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374,568
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–
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Product
technology rights
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22,321,667
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–
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Deposits
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2,200
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2,200
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Goodwill
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15,387,064
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–
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Total
long-term assets
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56,139,923
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19,288,527
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Total
assets
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$74,477,635
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$34,721,391
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Liabilities
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Current
liabilities
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Accounts
payable and other
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$9,598,567
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$2,297,270
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Accrued
liabilities
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2,114,060
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1,147,740
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Accrued
compensation
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786,769
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849,498
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Current lease
liability
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82,755
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–
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Current
contingent consideration
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705,880
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1,078,068
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Current
portion of fixed payment arrangements
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2,661,456
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–
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Total current
liabilities
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15,949,487
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5,372,576
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Long-term
contingent consideration
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17,739,964
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22,247,796
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Long-term
lease liability
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291,813
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–
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Long-term
fixed payment arrangements
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23,394,761
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Warrant
derivative liability
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11,371
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13,201
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Total
liabilities
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57,387,395
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27,633,573
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Commitments
and contingencies (Note 12)
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Stockholders'
equity
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Preferred
Stock, par value $.0001; 50,000,000 shares authorized; shares
issued and outstanding 10,215,845 and 3,594,981, respectively as of
December 31, 2019 (unaudited) and June 30, 2019.
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1,022
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359
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Common Stock,
par value $.0001; 100,000,000 shares authorized; shares issued and
outstanding 20,733,052 and 17,538,071, respectively as of December
31, 2019 (unaudited) and June 30, 2019.
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2,073
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1,754
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Additional
paid-in capital
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128,619,922
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113,475,205
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Accumulated
deficit
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(111,532,777)
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(106,389,500)
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Total
stockholders' equity
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16,758,367
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7,087,818
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Total
liabilities and stockholders' equity
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$74,477,635
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$34,721,391
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Aytu BioScience, Inc,.
Consolidated Statements of Operations Information
(Unaudited)
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Three Months Ended December
31,
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Six Months Ended December
31,
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Revenues
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Product
revenue, net
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$3,175,236
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$1,795,011
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$4,615,062
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$3,226,820
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Operating expenses
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Cost of sales
|
606,046
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525,138
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981,766
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936,097
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Research
and development
|
66,675
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149,029
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144,695
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304,907
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Selling,
general and administrative
|
6,516,160
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5,046,174
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11,662,603
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8,622,754
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Selling,
general and administrative - related party
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91,337
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345,046
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Amortization
of intangible assets
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953,450
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534,063
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1,528,567
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986,020
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Total
operating expenses
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8,142,331
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6,345,741
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14,317,631
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11,194,824
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Loss
from operations
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(4,967,095)
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(4,550,730)
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(9,702,569)
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(7,968,004)
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Other (expense) income
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Other
(expense), net
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(446,958)
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(127,569)
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(642,344)
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(204,130)
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Gain
from derecognition of contingent consideration
liability
|
5,199,806
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–
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5,199,806
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Gain
from warrant derivative liability
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–
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20,637
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1,830
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67,989
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Total
other (expense) income
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4,752,848
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(106,932)
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4,559,292
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(136,141)
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Net loss
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$(214,247)
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$(4,657,662)
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$(5,143,277)
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$(8,104,145)
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Weighted
average number of common shares outstanding
|
17,538,148
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6,477,004
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16,425,990
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4,183,591
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Basic
and diluted net loss per common share
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$(0.01)
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$(0.72)
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$(0.31)
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$(1.94)
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Aytu BioScience, Inc,
Condensed Consolidated Cash Flow Information
(Unaudited)
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Six
Months Ended December 31,
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Operating Activities
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Net
loss
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$(5,143,277)
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$(8,104,145)
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Adjustments to reconcile net loss to cash used in operating
activities:
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Depreciation,
amortization and accretion
|
2,157,540
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1,230,671
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Stock-based
compensation expense
|
327,435
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346,176
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Derecognition
of contingent consideration
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(5,199,806)
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–
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Issuance
of common stock to employee
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–
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11,690
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Derivative
income
|
(1,830)
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(67,989)
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Changes
in operating assets and liabilities:
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(Increase)
in accounts receivable
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(3,456,364)
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(903,708)
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(Increase)
in inventory
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(132,199)
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(305,888)
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(Increase)
in prepaid expenses and other
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(171,430)
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(504,757)
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(Increase)
in other current assets
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(136,694)
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–
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Increase
in accounts payable and other
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2,806,973
|
252,113
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Increase
in accrued liabilities
|
145,467
|
760,798
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(Decrease)
Increase in accrued compensation
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(62,729)
|
203,160
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(Decrease)
in fixed payment arrangements
|
(216,150)
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–
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Increase
in interest payable
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–
|
36,164
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(Decrease)
in deferred rent
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(3,990)
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(1,450)
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Net
cash used in operating activities
|
(9,087,054)
|
(7,047,165)
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|
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Investing Activities
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Deposit
|
–
|
2,888
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Purchases
of fixed assets
|
–
|
(12,954)
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Contingent
consideration payment
|
(104,635)
|
(50,221)
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Note
receivable
|
(1,350,000)
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–
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Purchase
of assets
|
(4,500,000)
|
(800,000)
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Net
cash used in investing activities
|
(5,954,635)
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(860,287)
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|
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Financing Activities
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|
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Issuance
of preferred, common stock and warrants
|
10,000,000
|
15,180,000
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Issuance
costs related to preferred, common stock and warrants
|
(741,650)
|
(1,479,963)
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Issuance
of debt
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–
|
5,000,000
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Net
cash provided by financing activities
|
9,258,350
|
18,700,037
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|
|
|
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Net
change in cash, restricted cash and cash equivalents
|
(5,783,339)
|
10,792,585
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Cash,
restricted cash and cash equivalents at beginning of
period
|
11,294,227
|
7,112,527
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|
Cash,
restricted cash and cash equivalents at end of period
|
$5,510,888
|
$17,905,112
|
|
|
|
|
|
Supplemental disclosures of cash and non-cash investing and
financing transactions
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Cash
paid for interest
|
$161,890
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$–
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Fair
value of right-to-use asset and related lease
liability
|
374,568
|
–
|
|
Issuance
of Series G preferred stock due to acquisition of the Cerecor
portfolio of pediatrics therapeutics (unaudited)
|
5,559,914
|
–
|
|
Inventory
payment included in accounts payable
|
460,416
|
–
|
|
Contingent
consideration included in accounts payable
|
16,014
|
–
|
|
Fixed
payment arrangements included in accounts payable
|
291,666
|
–
|
|
Exchange
of convertible preferred stock into common stock
|
319
|
–
|
|
Return
deductions received by Cerecor
|
1,309,365
|
–
|
|
Fair
value of warrants issued to investors and underwriters
|
–
|
1,888,652
|
|
Issuance
of preferred stock related to purchase of asset
|
–
|
519,600
|
|
Contingent
consideration related to purchase of asset
|
$–
|
$8,833,219
|