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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): June 8, 2023
AYTU BIOPHARMA, INC.
(Exact name of registrant as specified in its charter)
| Delaware | 001-38247 | 47-0883144 | ||
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
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:
| Title of each class | Trading
Symbol(s) |
Name
of each exchange on which registered |
||
| Common Stock, par value $0.0001 per share | AYTU | The NASDAQ Stock Market LLC |
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 1.01 Entry into a Material Definitive Agreement.
On June 8, 2023, Aytu BioPharma, Inc. (the “Company”) entered into a securities purchase agreement (the “Purchase Agreement”) with certain investors named therein (the “Purchasers”), and a placement agency agreement (the “PAA”) with Maxim Group LLC (the “Placement Agent”), pursuant to which the Company agreed to issue and sell to investors in the offering (the “Offering”) an aggregate of 1,743,695 shares (the “Offered Shares”) of the Company’s common stock, par value $0.0001 per share (the “Common Stock”), pre-funded warrants in lieu of Offered Shares to purchase 430,217 shares of Common Stock (the “Pre-Funded Warrants”), accompanying Tranche A warrants to purchase 2,173,912 shares of Common Stock (the “Tranche A Warrants”), and accompanying Tranche B warrants to purchase 2,173,912 shares of Common Stock (the “Tranche B Warrants”, and together with the Tranche A Warrants, the “Common Warrants”) in a best-efforts offering. The Common Warrants may be exercised for either shares of Common Stock or pre-funded warrants to purchase Common Stock at a future exercise price of $0.0001 per share in the same form as the Pre-Funded Warrant (the “Exchange Warrants”). The aggregate proceeds to the Company from the Offering are expected to be approximately $4 million before deducting placement agent fees and other estimated offering expense payable by the Company, and excluding the proceeds, if any, from the exercise of the Pre-Funded Warrants or Common Warrants. The Offering is expected to close on June 13, 2023, subject to customary closing conditions.
Each Offered Share, together with the accompanying Common Warrants, is being sold at a public offering price of $1.84. Each Pre-Funded Warrant, together with the accompanying Common Warrants, is being sold at a public offering price of $1.8399.
Each Pre-Funded Warrant will be exercisable for one share of common stock at an exercise price of $0.0001 per share. The Pre-Funded Warrants will be immediately exercisable and may be exercised at any time until all of the Pre-Funded Warrants are exercised in full. A holder (together with its affiliates) may not exercise any portion of the Common Warrants, Pre-Funded Warrants, or Exchange Warrants if, immediately after exercise, such holder shall own more than 4.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, except that upon at least 61 days’ prior notice from the holder to us, the holder may increase the amount of ownership of outstanding stock after exercising the holder’s warrants up to 9.99% or 19.99% of the number of shares of Common Stock outstanding immediately after giving effect to the exercise, as such percentage ownership is determined in accordance with the terms of the warrants.
The Common Warrants will be immediately exercisable at a price of $1.59 per share (or $1.5899 per Exchange Warrant). The Tranche A Warrants will expire upon the earlier of (i) five years after the date of issuance, and (ii) 30 days following the closing price of the Company’s Common Stock equaling 200% of the exercise price for at least 40 consecutive trading days. The Tranche B Warrants will expire upon the earlier of (x) five years after the date of issuance, and (y) 30 days following the Company’s achievement of consolidated trailing twelve-month adjusted EBITDA, as defined in the Purchase Agreement, of $12 million.
Additionally, pursuant to the terms of the Purchase Agreement, the Company will provide Nantahala Capital Management, LLC (“Nantahala”), an investor in the Offering, the right to appoint one member of the Company’s Board of Directors (the “Board”) and one member of each Board Committee as well as the right to nominate an additional Board member mutually agreeable to Nantahala and the Company. Upon the closing of the Offering, the Company shall appoint Abhinav Jain to the Board and to each of the Audit Committee, Compensation Committee, and Nominating and Governance Committee of the Board, pursuant to such right.
The Purchase Agreement and PAA contain customary representations, warranties and agreements by the Company, customary conditions to closing, and indemnification obligations of the Company and the Purchasers. The representations, warranties and covenants contained in the Purchase Agreement and PAA were made only for purposes of such agreements and as of a specific date, were solely for the benefit of the parties to such agreements, and may be subject to limitations agreed upon by the contracting parties.
The Company engaged Maxim Group LLC as the Company’s sole placement agent for the Offering pursuant to the PAA. Pursuant to the PAA, the Company agreed to pay the Placement Agent a cash placement fee equal to 7.0% of the gross proceeds of the Offering, plus reimbursement of certain expenses and legal fees.
Copies of the forms of Pre-Funded Warrant, Tranche A Warrant, and Tranche B Warrant are filed hereto as Exhibits 4.1, 4.2, and 4.3, respectively. Copies of the forms of Purchase Agreement and PAA are filed hereto as Exhibits 10.1 and 10.2. The foregoing descriptions of the terms of the Pre-Funded Warrant, Tranche A Warrant, Tranche B Warrant, the Purchase Agreement and the PAA are qualified in their entirety by reference to such exhibits.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 5.02.
Pursuant to the terms of the Purchase Agreement, effective as of the closing of the Offering, the size of the Board will be increased from four (4) to five (5), and Abhinav Jain shall be appointed to the Board. Mr. Jain’s term will expire at the 2024 annual meeting of stockholders, until his successor is duly elected and qualified or until his earlier death, resignation or removal. In connection with Mr. Jain’s appointment to the Board, upon the closing of the Offering, Mr. Jain will be appointed to the Company’s Audit Committee, Compensation Committee, and Nominating and Governance Committee.
Mr. Jain will participate in the Company's non-employee director compensation program. A complete description of the non-employee director compensation program is set forth in the Company's proxy statement for the 2023 Annual Meeting of Stockholders, filed with the Securities and Exchange Commission on April 7, 2023 and is incorporated herein by this reference.
There are no family relationships between Mr. Jain and any director or executive officer of the Company, and he has no direct or indirect material interest in any transaction required to be disclosed pursuant to Item 404(a) of Regulation S-K, other than the transactions contemplated by the Purchase Agreement.
Item 8.01 Other Events.
On June 9, 2023, the Company issued a press release announcing the Offering and Board appointment. A copy of the press release is attached as Exhibit 99.1 to this Current Report on Form 8-K and is incorporated herein by reference.
Forward-Looking Statements
This current report on Form 8-K contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 (“PSLRA”). Such forward-looking statements include but are not limited to statements about the Offering and other statements that are not historical facts. These forward-looking statements are subject to risks and uncertainties that may cause actual results or events to differ materially from those projected, including but not limited to the risks that the Offering does not occur when expected or at all because required conditions to closing are not satisfied on a timely basis or at all. Readers are cautioned not to place undue reliance on the forward-looking statements, which speak only as of the date on which they are made and reflect management’s current estimates, projections, expectations and beliefs. The Company undertakes no obligation to publicly revise or update the forward-looking statements to reflect events or circumstances that arise after the date of this report.
Item 9.01 Financial Statements and Exhibits.
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.
| Aytu BioPharma, Inc. | ||||
| Date: | June 12, 2023 | By: | /s/ Joshua R. Disbrow | |
| Joshua R. Disbrow | ||||
| Chief Executive Officer | ||||
Exhibit 5.1
June 12, 2023
Aytu Biopharma, Inc.
373 Inverness Parkway, Suite 206
Englewood, Colorado 80112
| Re: | Registration Statement on Form S-1 |
Ladies and Gentlemen:
We have acted as counsel to Aytu Biopharma, Inc., a Delaware corporation (the “Company”), in connection with a Registration Statement on Form S-1 (the “Registration Statement”) filed by the Company with the Securities and Exchange Commission (the “Commission”) under the Securities Act of 1933, as amended (the “Securities Act”), relating to the registration by the Company of up to 2,173,912 shares (the “Offered Shares”) of the Company’s Common Stock, par value $0.0001 per share (the “Common Stock”), or pre-funded warrants in lieu thereof to purchase up to 2,173,912 shares of Common Stock (the “Pre-Funded Warrants”), together with Tranche A warrants to purchase up to 2,173,912 shares of Common Stock (the “Tranche A Warrants,”) and Tranche B warrants to purchase up to 2,173,912 shares of Common Stock (the “Tranche B Warrants”, and together with the Tranche A Warrants, the “Common Warrants”). The Common Warrants may be exercised for either shares of Common Stock or pre-funded warrants to purchase Common Stock at a future exercise price of $0.0001 per share in the same form as the Pre-Funded Warrant (the “Exchange Warrants”). The shares of Common Stock underlying the Pre-Funded Warrants, Common Warrants, and Exchange Warrants are referred to herein as the “Warrant Shares”).
We have examined such documents and have reviewed such questions of law as we have considered necessary or appropriate for the purposes of our opinions set forth below. In rendering our opinions set forth below, we have assumed the authenticity of all documents submitted to us as originals, the genuineness of all signatures and the conformity to authentic originals of all documents submitted to us as copies. We have also assumed the legal capacity for all purposes relevant hereto of all natural persons. As to questions of fact material to our opinions, we have relied upon certificates or comparable documents of officers and other representatives of the Company and of public officials.
Based on the foregoing, we are of the opinion that:
1. The Shares, when issued, delivered and paid for as described in the Registration Statement, will be validly issued, fully paid and non-assessable.
2. The Pre-Funded Warrants, when duly executed by the Company and duly delivered to the purchasers thereof against payment therefor as described in the Registration Statement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
3. The Common Warrants, when duly executed by the Company and duly delivered to the purchasers thereof against payment therefor as described in the Registration Statement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
4. The Exchange Warrants, when duly executed by the Company and duly delivered to the purchasers thereof against payment therefor as described in the Registration Statement, will constitute valid and binding obligations of the Company, enforceable against the Company in accordance with their terms.
5. The Warrant Shares have been duly authorized and if, as, and when the Warrant Shares are issued and delivered by the Company upon exercise of the Common Warrants, Pre-Funded Warrants, and Exchange Warrants in accordance with the terms thereof, including, without limitation, the payment in full of applicable consideration, the Warrant Shares will be validly issued, fully paid and non-assessable.
(a) Our opinions set forth in paragraphs 2, 3, and 4 above are subject to the effect of any applicable bankruptcy, insolvency, reorganization, moratorium or similar law relating to or affecting creditors’ rights generally (including, without limitation, fraudulent conveyance laws).
(b) Our opinion set forth in paragraphs 2, 3, and 4 above are subject to the effect of general principles of equity, including, without limitation, concepts of materiality, reasonableness, good faith and fair dealing and the possible unavailability of specific performance or injunctive relief, regardless of whether considered in a proceeding in equity or at law.
(c) Our opinion set forth in paragraphs 2, 3, and 4 above are subject to limitations regarding the availability of indemnification and contribution where such indemnification or contribution may be limited by applicable law or the application of principles of public policy.
(d) We express no opinion as to the enforceability of (i) provisions that relate to choice of law, forum selection or submission to jurisdiction (including, without limitation, any express or implied waiver of any objection to venue in any court or of any objection that a court is an inconvenient forum) to the extent that the validity, binding effect or enforceability of any such provision is to be determined by any court other than a state court of the State of New York, (ii) waivers by the Company of any statutory or constitutional rights or remedies, (iii) terms which excuse any person or entity from liability for, or require the Company to indemnify such person or entity against, such person’s or entity’s negligence or willful misconduct or (iv) obligations to pay any prepayment premium, default interest rate, early termination fee or other form of liquidated damages, if the payment of such premium, interest rate, fee or damages may be construed as unreasonable in relation to actual damages or disproportionate to actual damages suffered as a result of such prepayment, default or termination.
(e) We draw your attention to the fact that, under certain circumstances, the enforceability of terms to the effect that provisions may not be waived or modified except in writing may be limited.
Our opinions expressed above are limited to the laws of the State of New York and the Delaware General Corporation Law.
We hereby consent to the filing of this opinion as an exhibit to the Registration Statement, and to the reference to our firm under the heading “Legal Matters” in the prospectus constituting part of the Registration Statement. In giving this consent, we do not admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Commission thereunder.
| Very truly yours, | |
| /s/ Dorsey & Whitney LLP |
AWE/NST
Exhibit 99.1
Aytu BioPharma Announces Pricing of $4.0 Million Public Offering Priced At-The-Market and the Appointment of a New Director
Abhinav Jain of Nantahala Capital Management, LLC Joins the Company’s Board of Directors Upon Closing
Potential for Additional $7 Million in Event of Exercise of Common Warrants in Full
Extends Interest Only Period on Avenue Capital Term Loan Through January 2025 Maturity Date
ENGLEWOOD, CO / ACCESSWIRE / June 9, 2023 / Aytu BioPharma, Inc. (NASDAQ:AYTU), a pharmaceutical company focused on developing and commercializing novel therapeutics, today announced the pricing of its equity offering co-led by Nantahala Capital Management and Stonepine Capital Management with participation by Armistice Capital of (i) 1,743,695 shares of its common stock, and, in lieu of common stock to certain investors that so chose, pre-funded warrants to purchase 430,217 shares of its common stock (“Pre-Funded Warrants”), and (ii) accompanying Tranche A and Tranche B warrants (the "Common Warrants") to purchase 4,347,824 shares of its common stock priced at-the-market under Nasdaq rules (the "Offering").
Gross proceeds, before deducting placement agent fees and other offering expenses, are expected to be approximately $4.0 million (assuming no exercise of the Common Warrants). The Offering is expected to close on June 13, 2023, subject to customary closing conditions.
The Company anticipates that the closing of the Offering will extend the interest only period on the Company’s $15 million senior secured loan facility with Avenue Venture Opportunities Fund, L.P. (the “Avenue Note”) through its maturity date in January 2025.
Following and in connection with the closing of the Offering, Abhinav “Abi” Jain from Nantahala Capital Management is joining the Company’s Board of Directors.
“We are pleased to have priced this offering with these fundamental, healthcare-oriented institutional investors and look forward to having Abi join the Company’s board of directors,” stated Aytu Chief Executive Officer Josh Disbrow. “With the momentum we’re experiencing in the Rx Segment and our continued operational improvements, this additional capital enables us to advance the Company’s growth and accelerate expense reduction initiatives and is expected to bridge the Company to profitability. Our strategic mandate is to focus on the most profitable aspects of our business. Going forward we will accentuate our Rx Segment and de-emphasize our Consumer Health Segment with the objective of either monetizing or discontinuing the Consumer Health Segment altogether. We’re also continuing the indefinite suspension of all pipeline programs so as to minimize research and development expense until such time that we can fund those efforts with internally generated cash flow. We’re committed to driving long-term shareholder value, and we believe that focusing on the commercial Rx business and removing expenses associated Consumer Health and R&D is the optimal strategy in order to operate a sustainable, profitable specialty pharmaceutical business. With this financing soon to be closed and our anticipation that the Avenue Note’s interest only period will extend through maturity in 2025, we are well positioned to execute and grow our Rx operating business. We are grateful to these investors and look forward to a productive working relationship with Abi as he joins the board.”
Abi Jain of Nantahala Capital Management stated, “Nantahala is pleased to co-lead this investment in Aytu, and I’m looking forward to working with the Aytu board and management team to help them execute on the Company’s growth plans. We have been engaged in extensive dialogue with the Aytu management team and, through our discussions with management, have developed a solid understanding of the company, its growth drivers, and the opportunities for success that we believe lie ahead for Aytu. The Company has committed to drive growth, improve operations, manage expenses and deliver shareholder value, and we look forward to being a part of the Company’s success as we move forward together.”
Abi Jain is an Analyst at Nantahala, focused on investments in various sectors, including specialty and generic pharmaceuticals. Prior to joining Nantahala in 2019, Mr. Jain was an Associate at Angelo, Gordon & Co., an alternative asset manager based in New York from 2015-2017. At Angelo, Gordon & Co., Mr. Jain focused on private equity and structured credit investments. He graduated from Massachusetts Institute of Technology in 2012 with an S.B. in Chemical-Biological Engineering and from The Wharton School of the University of Pennsylvania in 2019 with an M.B.A. with honors in Finance and Entrepreneurial Management.
The shares of common stock and the Pre-Funded Warrants were each sold in combination with corresponding Common Warrants to purchase two shares of common stock for each share of common stock or each Pre-Funded Warrant sold. The offering price for each share of common stock and accompanying Common Warrants to purchase two shares of common stock is $1.84. The offering price for each Pre-Funded Warrant and accompanying Common Warrants to purchase two shares of common stock is $1.84 less $0.0001. The Pre-Funded Warrants have an exercise price of $0.0001 per share of common stock, and the Common Warrants have an exercise price of $1.59 per share of common stock. The Pre-Funded Warrants will be immediately exercisable and remain exercisable until exercised. The shares of common stock (or Pre-Funded Warrants in lieu thereof) and accompanying Common Warrants can only be purchased together in this Offering, but will be issued separately and will be immediately separable upon issuance. There is no established public trading market for the Common Warrants or Pre-Funded Warrants, and the Company does not expect a market to develop. Additionally, the Company does not intend to apply to list the Common Warrants or Pre-Funded Warrants on any national securities exchange or other nationally recognized trading system.
The Common Warrants may be exercised for either shares of Common Stock or pre-funded warrants to purchase Common Stock at a future exercise price of $0.0001 per share in the same form as the Pre-Funded Warrant (“Exchange Warrants”). The Common Warrants consist of Tranche A warrants and Tranche B warrants. The Tranche A warrants are immediately exercisable for an aggregate of 2,173,912 shares of common stock or Exchange Warrants at the holders election at $1.59 per share (or $1.59 less $0.0001 per Exchange Warrant) for a total of approximately $3.5 million, and expire upon the earlier of (i) five years after the date of issuance, and (ii) 30 days following the Company’s common stock equaling 200% of the exercise price for at least 40 consecutive trading days. The Tranche B warrants are immediately exercisable for an aggregate of 2,173,192 shares of common stock or Exchange Warrants at the holders election at $1.59 per share (or $1.59 less $0.0001 per Exchange Warrant) for a total of $3.5 million, and expire upon the earlier of (i) five years after the date of issuance, and (ii) 30 days following the Company’s achievement of consolidated trailing twelve-month adjusted EBITDA, as defined in the securities purchase agreement, of $12 million.
All securities sold in the Offering were sold by the Company. The Company intends to use the net proceeds from the Offering for working capital and general corporate purposes. Maxim Group LLC acted as the sole placement agent for the Offering.
The securities described above are being offered pursuant to a registration statement on Form S-1, as amended (File No. 333- 271556) (the “Registration Statement”), which was declared effective by the Securities and Exchange Commission (the “SEC”) on June 8, 2023. The Offering is being made only by means of a prospectus which is a part of the Registration Statement. A preliminary prospectus relating to the offering has been filed with the SEC. Copies of the final prospectus relating to this Offering, when available, will be filed with the SEC and may be obtained from Maxim Group LLC, 300 Park Avenue, 16th Floor, New York, NY 10022, at (212) 895-3745.
This press release shall not constitute an offer to sell or a solicitation of an offer to buy any of the securities described herein, nor shall there be any sale of these securities in any state or other jurisdiction in which such offer, solicitation or sale would be unlawful prior to the registration or qualification under the securities laws of any such state or other jurisdiction.
About Aytu BioPharma, Inc.
Aytu BioPharma is a pharmaceutical company commercializing a portfolio of commercial prescription therapeutics and consumer health products. The Company’s prescription products include Adzenys XR-ODT® (amphetamine) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING) and Cotempla XR-ODT® (methylphenidate) extended-release orally disintegrating tablets (see Full Prescribing Information, including Boxed WARNING) for the treatment of attention deficit hyperactivity disorder (ADHD), as well as Karbinal® ER (carbinoxamine maleate), an extended-release antihistamine suspension indicated to treat numerous allergic conditions, and Poly-Vi-Flor® and Tri-Vi-Flor®, two complementary fluoride-based prescription vitamin product lines available in various formulations for infants and children with fluoride deficiency. Aytu’s consumer health segment markets a range of over-the-counter medicines, personal care products, and dietary supplements addressing a range of common conditions including diabetes, allergy, hair regrowth, and gastrointestinal conditions. To learn more, please visit aytubio.com.
Safe Harbor Statement Under the Private Securities Litigation Reform Act of 1995
This press release contains "forward-looking statements" within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. In some cases, you can identify these statements by forward-looking words such as "anticipates," "believes," "continue," "estimates," "expects," "intends," "may," "might," "plans," "predicts," "projects," "should," "targets," "will," or the negative of these terms and other similar terminology. Forward-looking statements in this press release include, but are not limited to, statements regarding the anticipated closing of the Offering, its effect on the Avenue Note, prospects for the Company’s growth and profitability, changes to the Company’s operations, and the expected uses of the proceeds from the Offering. Completion of the Offering is subject to numerous factors, many of which are beyond Aytu's control, including, without limitation, market conditions, failure of customary closing conditions and the risk factors and other matters set forth in the prospectus supplement and accompanying prospectus included in the registration statement and the documents incorporated by reference therein. You are cautioned not to place undue reliance on any forward-looking statements made by Aytu's management, which are based only on information currently available to it when, and speak only as of the date, such statement is made. Aytu does not assume any obligation to publicly provide revisions or updates to any forward-looking statements, whether as a result of new information, future developments or otherwise, should circumstances change, except as otherwise required by law. We also refer you to the risks described in ''Risk Factors'' in Aytu's Annual Report on Form 10-K, in Quarterly Reports filed on Form 10-Q, and in the other reports and documents it files with the Securities and Exchange Commission.
Contacts for Investors:
Mark Oki, Chief Financial Officer
Aytu BioPharma, Inc.
moki@aytubio.com
Robert Blum or Roger Weiss
Lytham Partners
AYTU@lythampartners.com
Source: Aytu BioPharma, Inc.