Aytu BioPharma, Inc. (AYTU) 2023年年度報告「NASDAQ」.pdf

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1、Table of ContentsUNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549FORM10-KANNUAL REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscalyear ended June 30,2023ORTRANSITION REPORT PURSUANT TO SECTION13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934C

2、ommission File Number 001-38247AYTU BIOPHARMA,INC.(Exact Name of Registrant as Specified in Its Charter)Delaware47-0883144(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)7900 East Union Avenue Suite920 Denver,Colorado80237(Address of principal exec

3、utive offices)(Zip Code)(720)437-6580(Registrants telephone number,including area code)Securities registered pursuant to Section12(b)of the Act:Title of Each ClassTrading SymbolName of each exchange on which registeredCommon Stock,par value$0.0001 per shareAYTUThe NASDAQ Capital MarketSecurities reg

4、istered pursuant to Section12(g)of the Act:NoneIndicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule405 of the Securities Act.Yes No Indicate by check mark if the Registrant is not required to file reports pursuant to Section13 or Section15(d)of the Exchange Act

5、.Yes No Indicate by a check mark whether the Registrant:(1)has filed all reports required to be filed by Section13 or 15(d)of the Securities Exchange Act of 1934 during the preceding12months(or for such shorter period that the Registrant was required to file such reports)and(2)has been subject to su

6、ch filing requirements for the past 90days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule405 of Regulation S-T during thepreceding 12months(or for such shorter period that the registrant was requ

7、ired to submit such files).Yes No Indicate by check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer,or a smaller reporting company.See definition of“largeaccelerated filer”,“accelerated filer”and“smaller reporting company”in Rule12b-2 of the Exch

8、ange Act.(check one):Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth companyIf 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 financi

9、alaccounting standards provided pursuant to Section13a)of the Exchange Act.Indicate by check mark whether the registrant has filed a report on and attestation to its managements assessment of the effectiveness of its internal control over financial reportingunder Section 404(b)of the Sarbanes-Oxley

10、Act(15 U.S.C.7262(b)by the registered public accounting firm that prepared or issued its audit report.If securities are registered pursuant to Section 12(b)of the Act,indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction ofan error to

11、 previously issued financial statements.Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrantsexecutive officers during the relevant recovery period pursuant to 240.10D-1(b).I

12、ndicate by check mark whether the Registrant is a shell company(as defined in Rule12b-2 of the Exchange Act).Yes No The aggregate market value of common stock held by non-affiliates of the Registrant as of December30,2022 was$12.3 million based on the closing price of$3.80 as of that date.As of Sept

13、ember 20,2023,there were 5,530,027 shares of common stock issued and outstanding.Table of Contents2TABLE OF CONTENTSPAGEPARTIItem1BUSINESS7Item1ARISK FACTORS22Item1BUNRESOLVED STAFF COMMENTS53Item2PROPERTIES53Item3LEGAL PROCEEDINGS53Item4MINE SAFETY DISCLOSURES54PARTIIItem5MARKET FOR REGISTRANTS COM

14、MON EQUITY,RELATED STOCKHOLDER MATTERS ANDISSUER PURCHASES OF EQUITY SECURITIES55Item7MANAGEMENTS DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OFOPERATIONS57Item7AQUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK69Item8FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA69Item9CHANGES

15、IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING ANDFINANCIAL DISCLOSURE69Item9ACONTROLS AND PROCEDURES69Item9BOTHER INFORMATION71Item 9CDISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS71PARTIIIItem10DIRECTORS,EXECUTIVE OFFICERS,AND CORPORATE GOVERNANCE72Item11EXECUTIVE COMPENS

16、ATION76Item12SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT ANDRELATED STOCKHOLDER MATTERS80Item13CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,AND DIRECTOR INDEPENDENCE81Item14PRINCIPAL ACCOUNTANT FEES AND SERVICES83PARTIVItem15EXHIBITS AND FINANCIAL STATEMENT SCHEDULES85Item 16FOR

17、M 10-K SUMMARY90SIGNATURES91Table of Contents3Forward-Looking StatementsThis Annual Report on Form10-K,or Annual Report,includes forward-looking statements within the meaning ofSection27A of the Securities Act of 1933,as amended,and Section21E of the Securities Exchange Act of 1934,or the Exchange A

18、ct.All statements other than statements of historical facts contained in this Annual Report,including statements regarding our anticipatedfuture clinical and regulatory events,future financial position,business strategy and plans and objectives of management for futureoperations,are forward-looking

19、statements.Forward-looking statements are generally written in the future tense and/or are preceded bywords 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 variati

20、ons on such terms or comparable terminology.Suchforward-looking statements include,without limitation,statements regarding the markets for our approved products and our plans forour approved products,the anticipated start dates,durations and completion dates,as well as the potential future results,o

21、f our ongoingand future clinical trials,the anticipated designs of our future clinical trials,anticipated future regulatory submissions and events,thepotential future commercialization of our product candidates,our anticipated future cash position and future events under our currentand potential fut

22、ure collaborations.These forward-looking statements are subject to a number of risks,uncertainties,and assumptions,including without limitation the risks described in“Risk Factors”in PartI,Item1A of this Annual Report.These risks are notexhaustive.Other sections of this Annual Report include additio

23、nal factors that could adversely impact our business and financialperformance.Moreover,we operate in a very competitive and rapidly changing environment.New risk factors emerge from time totime and it is not possible for our management to predict all risk factors,nor can we assess the impact of all

24、factors on our business orthe extent to which any factor,or combination of factors,may cause actual results to differ materially from those contained in anyforward-looking statements.You should not rely upon forward-looking statements as predictions of future events.We cannot assureyou that the even

25、ts and circumstances reflected in the forward-looking statements will be achieved or occur and actual results coulddiffer materially from those projected in the forward-looking statements.We assume no obligation to update or supplement forward-looking statements.Unless otherwise indicated or unless

26、the context otherwise requires,references in this Form10-K to the“Company,”“Aytu,”“we,”“us,”or“our”are to Aytu BioPharma,Inc.and its wholly owned subsidiaries.This Annual Report on Form 10-K refers to trademarks,such as Aytu,Adzenys XR-ODT,Cotempla XR-ODT,FlutiCare,Innovus Pharma,Neos,OmepraCare,Pol

27、y-Vi-Flor,Regoxidine,and Tri-Vi-Flor which are protected under applicable intellectual property laws and are our property or the property of our subsidiaries.This Form 10-K also contains trademarks,service marks,copyrights and trade names of other companies which are the property of their respective

28、 owners.Solely for convenience,our trademarks and tradenames referred to in this Form 10-K may appear without the or symbols,but such references are not intended to indicate in any way that we will not assert,to the fullest extent under applicable law,our rights to these trademarks and tradenames.We

29、 obtained statistical data,market and product data,and forecasts used throughout this Form10-K from market research,publicly available information and industry publications.While we believe that the statistical data,industry data and forecasts andmarket research are reliable,we have not independentl

30、y verified the data,and we do not make any representation as to the accuracy ofthe information.Table of Contents4Summary of Risk FactorsThe following list summarizes what we believe to be the principal risks relevant to our company.The following summary isfurther elaborated on by the full text of th

31、e risk factors provided in the“Risk Factors”section of this Annual Report on Form 10-K forthe year ended June 30,2023.All capitalized terms in this section not defined herein shall have the meanings given to them elsewherein this Annual Report.Material risks that may affect our business,operating re

32、sults and financial condition include,but are notnecessarily limited to,the following:Risks Related to Our Business and Financial PositionWe have incurred losses since our inception and may incur continued losses in the future.We may never achieve or maintainprofitability,and we may require addition

33、al capital to fund our operations.Our failure to comply with the covenants or other terms of the loan and security agreement with Avenue Capital and oursecured revolving loans with Eclipse could result in a default under those agreements that could materially and adverselyaffect the ongoing viabilit

34、y of our business.Our credit facility agreements contain restrictions that limit our flexibility in operating our business.We have indefinitely suspended development of our AR101(enzastaurin)clinical development program and shifted ourstrategic focus towards accelerating the growth of our commercial

35、 business.Risks Related to CommercializationIf we are unable to successfully commercialize our commercial prescription products,our business,financial condition andresults of operations may be materially adversely affected,and the price of our common stock may decline.The commercial success of our c

36、ommercial prescription products will depend upon their acceptance by multiple stakeholders,including physicians,patients,and healthcare payors.If we are unable to differentiate our commercial prescription products from current and future products or existing methods oftreatments or if the market opp

37、ortunities for our commercial prescription products are smaller than we believe,our ability tosuccessfully commercialize our commercial prescription products would be adversely affected and our revenue may beadversely affected.If we or our contract manufacturing organizations(“CMOs”)fail to manufact

38、ure sufficient quantities of our attentiondeficit/hyperactivity disorder(“ADHD”)prescription products,we may be unable to meet market demand and our ability togenerate revenues could be affected.We may encounter manufacturing problems resulting in insufficient quantities being produced or not having

39、 access to therequisite supplies.If we do not secure collaborations with strategic partners to test,commercialize and manufacture product candidates,we maynot be able to successfully develop products and generate meaningful revenues.If third-party payors do not reimburse pharmacies or patients for o

40、ur commercial prescription products or if reimbursementlevels are set too low for us to sell our commercial prescription products at a profit,our ability to successfully commercializeour commercial prescription products and our results of operations will be harmed.If we cannot implement and maintain

41、 effective patient affordability programs or improve formulary access for our commercialprescription products in the face of increasing payor pressures,the adoption of our commercial prescription products byphysicians and patients may decline.Table of Contents5If the U.S.Food and Drug Administration

42、(“FDA”)or other applicable regulatory authorities approve generic or similarproducts that compete with our commercial prescription products,or if the FDA or other applicable regulatory authoritieschange or create new pathways that may expedite approval of such products,it could decrease our expected

43、 sales of ourcommercial prescription products.Even though we have obtained regulatory approval for our commercial prescription products,we still face extensive FDAregulatory requirements and may face future regulatory difficulties.Our relationships with physicians,patients,payors,and pharmacies in t

44、he U.S.are subject to applicable anti-kickback,fraudand abuse laws and regulations.Our failure to comply with these laws could expose us to criminal,civil and administrativesanctions,reputational harm,and could harm our results of operations and financial conditions.Risks Related to Our Intellectual

45、 PropertyIf we are unable to protect our intellectual property rights or if our intellectual property rights are inadequate to protect ourtechnology,our commercial prescription products or our other product candidates,our competitors could develop andcommercialize technology similar to ours,and our

46、competitive position could be harmed.We may become involved in lawsuits to protect or enforce our patents or the patents of our licensors,which could beexpensive,time consuming and unsuccessful.Third parties may initiate legal proceedings alleging that we are infringing their intellectual property r

47、ights,the outcome ofwhich could be uncertain and could harm our business.Risks Related to Our Organization,Structure and OperationsOur efforts to expand and transform our business may require significant investments and may be unsuccessful.We may have difficulties integrating acquired businesses and

48、 as a result,our business,results of operations and/or financialcondition may be materially adversely affected.Product liability and other lawsuits could divert our resources,result in substantial liabilities and reduce the commercialpotential of our product candidates.Risks Related to Securities Ma

49、rkets and Investment in Our SecuritiesOur failure to meet the continued listing requirements of the Nasdaq Capital Market could result in a delisting of our commonstock.The price of our common stock may be volatile,and you may lose all or part of your investment.Future issuances of our common stock

50、or rights to purchase common stock,including pursuant to our equity incentive plans,could result in additional dilution of the percentage ownership of our stockholders and could cause our stock price to fall.Some provisions of our charter documents and Delaware law may have anti-takeover effects tha

51、t could discourage anacquisition of us by others.General Risk FactorsOur business and operations would suffer in the event of system failures or security breaches whether such failure or breachwas physically affected or affected via a cybersecurity failure.Table of Contents6Our sales force and other

52、 employees,third party logistics partners,CMOs,contract research organizations(“CROs”),principalinvestigators,collaborators,independent contractors,consultants and other vendors may engage in misconduct or otherimproper activities,including noncompliance with regulatory standards and requirements.In

53、vesting in our securities includes a high degree of risk.You should consider carefully the specific factors discussed below,together with all of the other information contained in this Annual Report on Form 10-K.If any of the following risks actuallyoccurs,our business,financial condition,results of

54、 operations and future prospects would likely be materially and adverselyaffected.This could cause the market price of our securities to decline and could cause you to lose all or part of yourinvestment.Table of Contents7AYTU BIOPHARMA,INC.PARTIITEM1.BUSINESSCOMPANY OVERVIEWAytu BioPharma,Inc.(“Aytu

55、,”the“Company”,“we”)is a pharmaceutical company focused on commercializing noveltherapeutics and consumer healthcare products.The Company operates through two business segments(i)the Rx Segment,consistingof prescription pharmaceutical products and(ii)the Consumer Health Segment,which consists of var

56、ious consumer healthcareproducts(the“Consumer Health Portfolio”).We were originally incorporated as Rosewind Corporation on August 9,2002 in the Stateof Colorado and were re-incorporated as Aytu BioScience,Inc in the state of Delaware on June 8,2015.Following the acquisition ofNeos Therapeutics,Inc.

57、(“Neos”)in March 2021(the“Neos Acquisition”),we changed our name to Aytu BioPharma,Inc.We have incurred significant losses in each year since inception.Our net loss was$17.1 million for the year ended June 30,2023,and as of June 30,2023,we had an accumulated deficit of$304.1 million.We expect to con

58、tinue to incur significant expenses inconnection with our ongoing activities,including the integration of our acquisitions,although we do expect to become profitablefollowing that integration and through continued growth of our commercial business.Effective January 6,2023,we effected a 1-for-20 reve

59、rse stock split of our outstanding shares of common stock.Unlessspecifically provided otherwise herein,the share and per share information that follows in this Annual Report,other than in thehistorical financial statements and related notes included elsewhere in this Form 10-K,assumes the effect of

60、the reverse stock split.RECENT BUSINESS DEVELOPMENTAs part of our ongoing strategic evaluation and go-forward operating plan,we are prioritizing growing our Rx Segment giventhe encouraging prescription trends for both our attention deficit hyperactivity disorder(“ADHD”)Portfolio and Pediatric Portfo

61、lio,and the current market trends supporting our products growth.We believe focusing resources on our most profitable,rapidly growingproducts and business segments provides the most effective pathway to achieve near-term companywide profitability and continuedgrowth.As part of our plan,we expect to

62、monetize,divest,or otherwise discontinue the Consumer Health Segment in order tomaximize profitability and,if a divestiture is made,provide us with non-dilutive capital.In fiscal year 2023,we recorded net revenue of$73.8 million in our Rx Segment,the highest revenue achieved in our history.During th

63、e year,the ADHD market encountered several supply chain interruptions,causing a shortage of medications for these patients.We were able to increase the production of our ADHD medications,Adzenys XR-ODT(“Adzenys”),and Cotempla XR-ODT(“Cotempla”)to provide patients with alternative solutions to produc

64、ts that have experienced supply chain interruptions.As a result,we recorded the highest prescription levels for both Adzenys and Cotempla in 2023.Our Pediatric Portfolio products,Poly-VI-Flor,Tri-Vi-Flor and Karbinal,also recorded record prescriptions in our fiscal 2023,which was largely attributabl

65、e to sales force execution and our Aytu Rx Connect program.We currently manufacture both Adzenys and Cotempla in our facility in Grand Prairie,Texas.In an effort to reduce costs,weare in the process of transferring the manufacture of these products to a third-party manufacturer.In April 2023,we rece

66、ived approvalfrom the U.S.Food&Drug Administration(“FDA”)of the Adzenys Prior Approval Supplement(“PAS”),which enables the transferof manufacturing of Adzenys to a third-party manufacturer.In June 2023,we submitted the Cotempla PAS to the FDA.We expect tohave a six-month review process for the Cotem

67、pla PAS.Table of Contents8AR101(enzastaurin)is a development-stage asset we had been developing as an investigational treatment for Vascular Ehlers-Danlos Syndrome(“VEDS”),a rare connective tissue disorder for which there are no approved treatments.AR101 has received OrphanDrug Designation from both

68、 the FDA and from the European Commission,thus making AR101 eligible for market exclusivity uponproduct approval.AR101 also received Fast Track Designation from the FDA given the urgent,unmet need in VEDS.We do notexpect the development of AR101 to advance until we are able to either fund developmen

69、t through operating cash flows,or through anout-license or sale to a strategic partner as we focus our resources to commercial operations.In April 2020,we entered into a licensing agreement with Cedars-Sinai Medical Center(“Cedars-Sinai”)to secure worldwiderights to various potential esophageal and

70、nasopharyngeal uses of Healight,an investigational ultraviolet light-based medical deviceplatform being investigated as a prospective treatment for severe respiratory infections.The licensing agreement with Cedars-Sinaigrants us a license to all patent and development related technology rights for t

71、he intra-corporeal therapeutic use of ultraviolet light inthe field of endotracheal and nasopharyngeal applications.We terminated the Healight license on May 9,2023 and are in the process ofreturning materials and transferring all intellectual property to Cedars-Sinai as we shift our resources to co

72、mmercial purposes.In October 2018,we entered into an Exclusive License Agreement(“NeuRx License”)with NeuRx Pharmaceuticals LLC(“NeuRx”),pursuant to which NeuRx granted Neos an exclusive,worldwide,royalty-bearing license to research,develop,manufacture,and commercialize certain pharmaceutical produc

73、ts containing NeuRxs proprietary compound designated as NRX 101,subsequently referred to as NT0502.NT0502 is a new chemical entity that was being developed for the treatment of sialorrhea,whichis excessive salivation or drooling.In April 2023,and in order to focus our resources on commercial operati

74、ons,we returned theNT0502 rights to NeuRx in exchange for royalties and milestone payments on monies received by NeuRx from future licensingagreements,asset sales or revenue generated on NT0502.Debt and Equity FinancingsAvenue Capital AgreementOn January 26,2022,we entered into a Loan and Security A

75、greement(the“Avenue Capital Agreement”)with AvenueVenture Opportunities Fund II,L.P.and Avenue Venture Opportunities Fund II,L.P.(the“Avenue Capital Lenders”),collectively(“Avenue Capital”),pursuant to which the Avenue Capital Lenders provided the Company and certain of its subsidiaries with a secur

76、ed$15.0million loan.The interest rate on the loan is the greater of the prime rate and3.25%,plus7.4%,payable monthly in arrears.Thematurity date of the loan is January 26,2025.The proceeds from the Avenue Capital Agreement were used towards the repayment ofexisting debt,which was assumed through the

77、 acquisition of Neos Therapeutics.On June 13,2023,in conjunction with the equity financing described below,we announced that the interest-only period of theAvenue Capital Agreement was extended further upon the achievement of both the revenue-based milestone and equity raise-basedmilestone stipulate

78、d in the Avenue Capital Agreement.The interest-only period now extends to the January 26,2025 maturity date.Eclipse Loan AgreementIn connection with the Avenue Capital Agreement,we entered into a Consent,Waiver and Second Amendment to EclipseLoan Agreement with Eclipse Business Capital LLC(f/k/a Enc

79、ina Business Credit,LLC)(“Eclipse”),dated as of January 26,2022(the“Eclipse Loan Agreement”).Pursuant to the Eclipse Loan Agreement,we,among other things,extended the maturity date of theEclipse Loan Agreement to January 26,2025 and reduced the maximum availability under the Eclipse Loan Agreement f

80、rom$25.0million to$12.5million minus a$3.5million availability block.On March 24,2023,the Company and certain of its subsidiaries entered into Amendment No.4(the Eclipse Amendment”)tothe Loan and Security Agreement dated October 2,2019.The Eclipse Amendment,among other things,increased the maximumam

81、ount available under the revolving credit facility provided under the Eclipse LoanTable of Contents9Agreement to$14.5 million.The ability to make borrowings and obtain advances of revolving loans under the Eclipse Loan Agreementremains subject to a borrowing base and reserve,and availability blockag

82、e requirements.Equity FinancingsIn August 2022,we raised gross proceeds of$10.0 million from the issuance of(i)1,075,290 shares of our common stock,andin lieu of common stock to certain investors that so chose,pre-funded warrants to purchase 87,500 shares of its common stock(the“Pre-Funded Warrants”

83、),and(ii)accompanying warrants(the Common Warrants)to purchase 1,265,547 shares,as adjusted,of ourcommon stock.We received$9.1 million in proceeds net of underwriting fees and other expenses.In August 2022,the Pre-FundedWarrants were exercised in full.In June 2023,we raised gross proceeds of$4.0 mil

84、lion from the issuance of(i)1,743,695 shares of our common stock,and(ii)in lieu of common stock to certain investors that so chose,pre-funded warrants to purchase 430,217 shares of common stock and(iii),accompanying Tranche A warrants to purchase 2,173,912 shares of common stock,(iv)and accompanying

85、 Tranche B warrants topurchase 2,173,912 shares of common stock.We received approximately$3.4 million in proceeds net of underwriting fees and otherexpenses.COMMERCIAL BUSINESS OVERVIEWWe operate through two business segments(i)the Rx Segment,consisting of various prescription pharmaceutical product

86、ssold through third parties,and(ii)the Consumer Health Segment,which consists of various consumer health products sold directly toconsumers.We generate revenue by selling our products through third party intermediaries in our marketing channels as well asdirectly to our customers.We currently manufa

87、cture our ADHD products at our facility in Grand Prairie,Texas,and use third partymanufacturers for our other prescription and consumer health products.Rx SegmentOur Rx Segment consists of our ADHD Portfolio and our Pediatric Portfolio.Our prescription products are sold solely in theUnited States an

88、d are distributed through multiple channels,including sales to pharmaceutical wholesalers and pharmacies,using third-party logistics enterprises.We acquired our ADHD Portfolio in March 2021 with the acquisition of Neos Therapeutics.These commercial ADHDproducts are extended-release(“XR”)medications

89、formulated in patient-friendly,orally disintegrating tablets(“ODT”)that utilize theNeos-developed microparticle modified-release drug delivery technology platform.Products containing amphetamine ormethylphenidate are the most commonly prescribed medications in the United States for the treatment of

90、ADHD.Adzenys(for patientssix years of age and above)and Cotempla(for patients six to seventeen years of age)are the first and only FDA-approvedamphetamine and methylphenidate extended-release,orally disintegrating tablets,respectively,for the treatment of ADHD.Our prescription Pediatric Portfolio in

91、cludes Karbinal ER,an extended-release carbinoxamine(antihistamine)suspensionindicated to treat numerous allergic conditions for patients two years and above and Poly-Vi-Flor and Tri-Vi-Flor,twocomplementary prescription fluoride-based multi-vitamin product lines containing combinations of fluoride

92、and vitamins in liquid andchewable tablet form for infants and children with fluoride deficiency(Karbinal ER,Poly-Vi-Flor and Tri-Vi-Flor are collectively the“Pediatric Portfolio”).These products serve established pediatric markets and offer distinct clinical features and patient benefits.We commerc

93、ialize our Rx Portfolio through our internal commercial organization that includes approximately forty salesterritories for our ADHD Portfolio and approximately six sales territories for our Pediatric Portfolio.Our Aytu RxConnect patient support program operates through a network of approximately 1,

94、000 pharmacies to offeraffordable,predictable copays and hassle-free availability to all commercially insured patients,regardless of their individual insuranceplan.In addition,RxConnect seeks to significantly reduce the challenges andTable of Contents10frustrations that health care professionals and

95、 their office staff can face when prescribing branded medications,including ourmedications,for their patients.In July 2023,we entered into an exclusive collaboration,distribution and supply agreement with Medomie Pharma Ltd,(“Medomie”)a privately owned pharmaceutical company,for Medomie to sell Adze

96、nys and Cotempla in Israel and the PalestinianAuthority.We will supply Adzenys and Cotempla to Medomie and Medomie will seek local regulatory approvals and marketingauthorizations for each.This agreement represents Aytus first international commercial agreement for Adzenys and Cotempla.Consumer Heal

97、th SegmentOur Consumer Health Segment is dedicated to commercializing safe and effective“over-the-counter”(“OTC”)medicines,personal care products,and dietary supplements to improve health and vitality.Our core products compete in categories such as hairloss,digestive health,urological health,diabete

98、s management,and allergy.All products are intended to be used by consumers on aregular basis,and as such,we offer a monthly subscription program to allow for ongoing use and to simplify product ordering and useby patients.We acquired our Consumer Health Segment,previously known as Innovus Pharmaceut

99、icals,Inc.,in February 2020(the“Innovus Acquisition”).The Consumer Health Segment currently sells directly to consumers primarily in the United States through e-commerceplatforms,including branded websites and A which utilize marketing strategies focused on search engine optimization,search marketin

100、g and affiliate marketing.Additionally,the segment sells products through direct mail solicitations and advertisements,allowing consumers to purchase directly through business reply mail,through call centers,or online with shipment directly to theirhomes.We expect to monetize,divest,or otherwise dis

101、continue the Consumer Health Segment in order to maximize profitability and,if a divestiture is made,provide us with non-dilutive capital.Development Portfolio AR101On April 12,2021,we entered into an asset purchase agreement with Rumpus VEDS,LLC,Rumpus Therapeutics,LLC,andRumpus Vascular,LLC(togeth

102、er“Rumpus”)pursuant to which we acquired commercial global licenses,relating primarily to thepediatric-onset rare disease development asset enzastaurin,or AR101.AR101 is initially being studied for the treatment of VEDS.AR101 is an orally available investigational first-in-class small molecule,serin

103、e/threonine kinase inhibitor of the PKC beta,PI3K and AKT pathways.AR101 has been studied in more than 3,300 patients across a range of solid and hematological tumor typesin trials previously conducted by Eli Lilly&Company.Harry“Hal”C.Dietz III,M.D.developed the first preclinical model thatmimics th

104、e human condition and recapitulates VEDS,and this model serves as the basis for the plausible clinical benefit and rationalefor conducting a clinical trial with AR101 in VEDS.This novel knock-in mouse model has the same genetic mutation most prevalent inVEDS patients and is representative of the hum

105、an condition in both the timing and location of VEDS-related vascular events.Themodel has generated identical structural histology and mechanical characteristics,and unbiased findings demonstrated that vascularstructure alone does not lead to vascular events.Objective comparative transcriptional pro

106、filing by high-throughput RNA sequencingof the aorta displayed a molecular signature for excessive PKC/ERK cell signaling that is the purported driver of disease.PKCinhibitors proved efficacious in multiple pre-clinical and murine(mice)models and indeed prevented death due to vascular rupture.We hav

107、e secured exclusive global rights to AR101 in the fields of rare genetic pediatric onset or congenital disorders outsideof oncology.AR101 is protected by a suite of pending patents being pursued in major markets globally which have been licensed fromThe Johns Hopkins University(“Johns Hopkins”)and h

108、ave an earliest priority date of March 2017.In December 2021,the FDAgranted Orphan Drug Designation(“ODD”)to AR101 for the treatment of EDS,inclusive of VEDS,allowing for seven years ofmarketing exclusivity in the United States.The FDA has cleared the IND application for AR101,although,we do not exp

109、ect toadvance development of AR101 until we are able to either fund development through operating cash flows or through an out-license orsale to a strategic partner.Table of Contents11OUR STRATEGYOur goal is to become a leading pharmaceutical company that improves the lives of patients and healthcar

110、e consumers.Wewill do this by employing a focused approach of in-licensing,acquiring,developing,and commercializing novel prescriptiontherapeutics and consumer health products.Our primary focus is on commercializing innovative prescription products that addressconditions frequently developed or diag

111、nosed in childhood,including ADHD.We also commercialize consumer healthcare productsthrough efficient e-commerce and direct-to-patient platforms,although we expect to monetize,divest,or discontinue the ConsumerHealth Segment in favor of focusing on the Rx Segment and attaining profitability.Our stra

112、tegic priorities are to continue to increase revenues from our Rx Segment and enhance our financial performancethrough operational and manufacturing efficiencies and portfolio prioritization.Specifically,we intend to:continue to grow our commercial branded,revenue-generating products,by increasing p

113、roduct sales and improvingpatient access.Our primary commercial objective is to drive revenue growth of our ADHD and pediatric brands,whichconsists of Adzenys,Cotempla,Poly-Vi-Flor,Tri-Vi-Flor,and Karbinal ER.We expect to increase market share using ourinternal commercial organization and leveraging

114、 our advanced analytics platform to optimize sales force performanceand increase both the breadth,or number of healthcare professionals(“HCPs”)prescribing our medicines,and the depth,or the number of appropriate patients per HCP for our products;leverage our novel Aytu RxConnect patient support plat

115、form,which is designed to reduce access barriers to medicinesfacing patients and HCPs by providing coverage for all commercially insured patients,regardless of their individualinsurance plan,thus establishing an affordable and predictable monthly co-pay for patients,and eliminating many of thehassle

116、s facing HCPs and their staffs by improving availability of Aytu products at participating pharmacies;improve gross margins for our ADHD product franchise through the manufacturing transfer of Adzenys and Cotempla toa contract manufacturing organization,a transition that is expected to occur in earl

117、y calendar 2024;We believe our history of acquiring companies and in-licensing and acquiring products and pipeline assets,along with oursuccess in building out commercial organizations and executing product launch and growth strategies,is a distinct competitiveadvantage.Our transactional adeptness a

118、nd execution orientation enable us to continue to seek growth opportunities through bothorganic growth and opportunistic in-licensing or strategic acquisitions.Further,our commercial infrastructure and distributioncapability is scalable and lends itself to additional on-market assets and future prod

119、uct candidates that fit within our core therapeuticfocus or within our commercial capabilities and infrastructure.As such,in the near term,we may seek to leverage our commercialmodel and infrastructure by expanding our commercial portfolio with external product opportunities as we have done since ou

120、rinception.OUR PRODUCTS AND MARKETSPrescription ProductsADHD PortfolioADHD Market and Treatment OptionsADHD is a neurobehavioral disorder characterized by a persistent pattern of inattention and/or hyperactivity/impulsivity thatinterferes with functioning and/or development.ADHD can have a profound

121、impact on an individuals life,causing disruption atschool,work,home and in relationships.It is one of the most common developmental disorders in children and often persists intoadulthood.The Centers for Disease Control and Prevention(“CDC”)reported that six million children in the United States ages

122、 3 to 17had previously received an ADHD diagnosisTable of Contents12between 2016-2019,up 36%since 2003.Current ADHD treatment guidelines recommend a multi-faceted approach that usesmedications in conjunction with behavioral interventions.In 2022,approximately 83.5 million prescriptions for medicatio

123、ns with ADHD labeling were written in the United Statesgenerating$21.2 billion in sales.Approximately 91%of these prescriptions were for stimulant medications,such as amphetamine andmethylphenidate,which are and have remained the standard of care for several decades.The market for ADHD medications o

124、utside ofthe United States is less developed,but we believe it will continue to grow as recognition and awareness of the disorder increase.Extended-release,or long-acting,dosage forms of stimulant medications are the standard of care for treating ADHD,makingup approximately 43%of ADHD prescriptions.

125、The most prescribed extended-release medications for ADHD,Adderall XR andConcerta(and each of their generic equivalents),are long-acting versions of previously short-acting amphetamine andmethylphenidate medications,respectively.Most of these extended-release dosage forms allow for once-daily dosing

126、 in the morning,which eliminates the need to re-dose during the day.Our products,Adzenys XR-ODT and Cotempla XR-ODT,are extended-releaseorally disintegrating tablets that allow for once-daily dosing based upon our internally developed proprietary microparticle deliverytechnology and are the only app

127、roved extended-release orally disintegrating tablet formulations of amphetamine and methylphenidatefor the treatment of ADHD.There is significant competition in the ADHD market,including from well-established companies,many of whom havesubstantially greater financial,technical and commercial resourc

128、es than we do,and entrenched existing ADHD products.For example:Extended-release amphetamine products are currently marketed in the United States by(i)Takeda PharmaceuticalCompany Limited under the brand names Adderall XR,Vyvanse and Mydayis and(ii)Tris Pharma,Inc.(“Tris”),under the brand names Dyan

129、avel XR,Dyanavel XR tablets;Extended-release methylphenidate products are marketed in the United States by(i)Janssen Pharmaceuticals,Inc.underthe brand name Concerta,(ii)Tris under the brand names Quillivant XR and QuilliChew ER,(iii)RhodesPharmaceuticals LP under the brand name Aptensio XR,(iv)Iron

130、shore Pharmaceuticals Inc.under the brand nameJornay PM,(v)Alora Pharmaceuticals under the name Methylphenidate HCl ER 72 mg Tablets,(vi)Novartis under thebrand names Focalin XR and Ritalin LA and(vii)Azstarys,a product developed by KemPharm(now ZevraTherapeutics)and sold by Corium;anda non-stimulan

131、t treatment for ADHD was approved by the FDA and commercially launched by Supernus in the U.S in2021 is being sold under the brand name Qelbree.Further,makers of branded drugs could also enhance their own formulations in a manner that competes with ourenhancements of these drugs.We are also aware of

132、 efforts by several pharmaceutical companies with ADHD medications in clinicaldevelopment,including Cingulate Therapeutics,NLS Pharma and Neurovance,a subsidiary of Otsuka Pharmaceutical Co.,Ltd.Our ADHD Product PortfolioOur modified-release drug delivery technology platform has enabled us to create

133、 extended-release ODT formulations ofamphetamine and methylphenidate.This was achieved by developing an extended-release profile that allows for once daily dosing andan ODT formulation that allows for easier administration and ingestion and twelve-hour duration of action.Adzenys XR-ODT and Cotempla

134、XR-ODT are the first and only XR-ODT products for the treatment of ADHD.These XR-ODT products offer unique attributes to ADHD patients and caregivers,including:ease of administration and ingestion because they disintegrate rapidly in the mouth and may be taken without water;Table of Contents13taste-

135、masking of bitter ADHD medications,with pleasant-tasting flavor;prevention of“cheeking,”the practice of hiding medication in the mouth and later spitting it out rather than swallowingit;andAdzenys XR-ODT:Amphetamine XR-ODT for the treatment of ADHDAdzenys XR-ODT is approved by the FDA for the treatm

136、ent of ADHD in patients six years and older and is the first FDA-approved amphetamine XR-ODT for the treatment of ADHD.The New Drug Application(“NDA”)for Adzenys XR-ODT relies on theefficacy and safety data that formed the basis of FDA approval for the reference listed drug,Adderall XR,30 mg,togethe

137、r withbioequivalence,bioavailability,and aggregate safety data from the Adzenys XR-ODT clinical program.Adzenys XR-ODT containsamphetamine loaded onto a mixture of immediate-release and polymer-coated delayed-release resin particles,which are formulated andcompressed into an ODT along with other tab

138、leting excipients using our patented Rapidly Disintegrating Ionic Masking(“RDIM”)technology.The result is amphetamine with an in vivo extended-release profile delivered through a tablet that quickly disintegrates inthe mouth without the need for water.Adzenys XR-ODT is available in 30-day supply,chi

139、ld-resistant blister packs.The suite of composition-of-matter patents for Adzenys XR-ODT are scheduled to expire in 2026 and 2032.These patents arelisted in the FDAs publication of approved drug products with therapeutic equivalence evaluations(the“Orange Book”).In addition,we entered into a settlem

140、ent agreement with Actavis Laboratories FL,Inc.(“Actavis”)(acquired by Teva Pharmaceutical Industries),which resolved all ongoing litigation involving Adzenys XR-ODT patents and Actavis ANDA with the FDA for a generic version ofAdzenys XR-ODT.Under the agreement with Actavis,Actavis has the right to

141、 manufacture and market its approved generic version ofAdzenys XR-ODT under the ANDA beginning on September 1,2025,or earlier under certain circumstances.In conjunction with the approval of the Adzenys XR-ODT NDA,the FDA has required us to conduct certain clinical studiesin preschool(age four to fiv

142、e years)children with ADHD as a post-marketing requirement.A pharmacokinetic study in this populationwas completed in 2018,and we are in discussions with the FDA to further clarify the design protocols required to conduct theremaining studies.Cotempla XR-ODT:Methylphenidate XR-ODT for the treatment

143、of ADHDThe FDA approved Cotempla XR-ODT for the treatment of ADHD in patients six to seventeen years old.The Cotempla XR-ODT NDA relies on the efficacy and safety data that formed the basis of FDA approval for the reference listed drug,Metadate CD,together with bioavailability/bioequivalence data an

144、d efficacy/safety data from the Cotempla XR-ODT clinical program.The results ofthe Cotempla XR-ODT Phase 3 clinical efficacy and safety trial showed a statistically significant improvement in ADHD symptomcontrol compared to placebo across the school day.Onset of effect was observed within one hour p

145、ost-dose and persisted through 12hours.No serious adverse events were reported during the study,and the adverse event profile was consistent with the drugsmechanism of action.Cotempla XR-ODT contains methylphenidate loaded onto a mixture of immediate-release and polymer-coated delayed-release resin

146、particles,which are formulated and compressed into an ODT along with other tableting excipients using our RDIMtechnology.The result is methylphenidate with an in vivo extended-release profile delivered through a tablet that quickly disintegratesin the mouth.Cotempla XR-ODT is available in 30-day sup

147、ply,child-resistant blister packs.Cotempla XR-ODT is the first FDA-approved methylphenidate XR-ODT for the treatment of ADHD.We hold composition-of-matter patents in the U.S.which we expect will provide Cotempla XR-ODT intellectual propertyprotection until 2032,and a method-of-use patent was issued

148、which will extend protection until 2038.These patents are listed in theOrange Book.In addition,Neos entered into a settlement agreement with Teva Pharmaceuticals USA,Inc.(“Teva”),which resolved allongoing litigation involving the Cotempla XR-ODT patents and Tevas ANDA with the FDA for a generic vers

149、ion of Cotempla XR-ODT.Under the agreement with Teva,Neos granted Teva the right to manufacture and market its approved generic version ofCotempla XR-ODT under the ANDA beginning on July 1,2026,or earlier under certain circumstances.Table of Contents14In conjunction with the approval of the Cotempla

150、 XR-ODT NDA,the FDA required us to perform additional clinical studiesin preschool(age four to five years)children with ADHD as a post-marketing requirement.A pharmacokinetic study in this populationwas completed in 2019.In light of a new draft guidance for industry that was published in May 2019,“A

151、ttention Deficit HyperactivityDisorder:Developing Stimulant Drugs for Treatment Guidance for Industry,”we remain in discussions with the FDA to gainconcurrence on the design of the protocols required to meet the remaining post-marketing requirements.Pediatric PortfolioPoly-Vi-Flor and Tri-Vi-Flor:Ou

152、r fluoride-based multivitamin prescription supplement product line for infants andchildrenPoly-Vi-Flor and Tri-Vi-Flor are two complementary prescription fluoride-based supplement product lines containingcombinations of vitamins and sodium fluoride in various oral formulations.These prescription sup

153、plements are prescribed for infantsand children to treat or prevent fluoride deficiency due to poor diet or low levels of fluoride in drinking water and other sources whilealso providing multi-vitamin support and folic acid supplementation.Because these products contain at least.25 mg of sodiumfluor

154、ide,Poly-Vi-Flor and Tri-Vi-Flor are classified as products that should be administered under the supervision of a licensedprescriber.Fluoride supplementation has been proven to protect teeth from decay.Community water fluoridation prevents tooth decay byproviding frequent and consistent contact wit

155、h low levels of fluoride.By keeping the teeth strong and solid,fluoride stops cavities fromforming and can rebuild the tooths surface.Community water fluoridation began in the United States in 1945 and is the process ofadjusting the amount of fluoride in drinking water to a level recommended for pre

156、venting tooth decay.As of 2016,more than 200million people,or nearly 3 in 4 Americans who use public water supplies,drank water with enough fluoride to prevent tooth decay.However,Americans living in municipalities that do not fluoridate the water supply or in rural areas that rely on well water sup

157、plies donot receive recommended levels of fluoride through fluoridation.Therefore,many children living in these areas often require dailyfluoride supplementation as part of their mineral and vitamin intake.In many instances,physicians prescribe fluoride-based multi-vitamins(Vitamins A,B,C,D and foli

158、c acid)regularly to supplement their fluoride intake and enable convenient supplementation.Infants are prescribed easier-to-take multi-vitamin drops while older children are prescribed tablet formulations.In 2022,8 million multi-vitamin prescriptions were written in the U.S.Of those prescriptions,mu

159、lti-vitamins containingsodium fluoride accounted for 1.1 million total prescriptions.Common multi-vitamin combinations contain vitamins A,B,C,D and E,but no other prescription pediatric multi-vitamin products contain Metafolin,which makes the Poly-Vi-Flor and Tri-Vi-Flor productlines distinct,single

160、-source brands.Other brands include Tri-Vite(marketed by Method Pharmaceuticals),Floriva(marketed byBonGeo Pharmaceuticals)and Quflora(marketed by Carwin Pharmaceutical Associates).Poly-Vi-Flor is available in both chewable tablet and oral liquid suspension multivitamin formulations in six different

161、 productpresentations:Poly-Vi-Flor Chewable Tablets.25 mg,.50 mg,and 1 mg tablets,Poly-Vi-Flor Chewable Tablets with Iron,Poly-Vi-FlorOral Suspension and Poly-Vi-Flor Oral Suspension with Iron.Poly-Vi-Flor contains Vitamin A,Vitamins B1,B2,B3,and B6,VitaminC,Sodium Fluoride in various doses and Meta

162、folin,a proprietary,trademarked L-methylfolate form of folic acid developed by andlicensed from Merck&Cie(“Merck”).Beginning in the second half of fiscal 2023,we introduced Poly-Vi-Flor and Tri-Vi-Florcontaining Arcofolin,Arcofolin offers an improved profile over Metafolin as a body ready L-methylfo

163、late.Arcofolins low watercontent and low molecular weight of the counterion yield higher levels of assayed folate than other forms of L-methylfolate currentlyavailable on the market.It also has an improved purity profile,enhanced water solubility and an excellent overall stability profile.Theadditio

164、n of Arcofolin also broadens the brands IP protection and extends the patent life and provides further differentiation with thisnovel ingredient.Tri-Vi-Flor is available as an oral liquid suspension in two different strengths(.25 mg and.50 mg fluoride)containing VitaminA,Vitamin C,Vitamin D3,Sodium

165、Fluoride,Sodium Benzoate and L-methylfolate.By virtue of itsTable of Contents15L-methylfolate content,Tri-Vi-Flor offers a similar clinical profile:a fluoride-based multivitamin containing a proprietary,body-readyL-methylfolate.Arcofolin,which we also licensed exclusively in our field of use,is Merc

166、ks manufactured calcium salt of L-5-methyltetrahydrofolic or L-methylfolate.It is a body ready alternative to folic acid and offers good stability,solubility,andbioavailability.Folic acid supplementation is recommended in various patient groups,but a significant number of patients havedifficulty met

167、abolizing folate due to an enzymatic deficiency caused by a genetic mutation affecting the enzymemethylenetetrahydrofolate reductase,or MTHFR.MTHFR converts ingested folate(such as supplemented folic acid)into L-methylfolate,the bodys usable form.Clinical studies have demonstrated that 75%of patient

168、s may have at least one MTHFR geneticmutation while 40%may have two mutations.These mutations lead to impaired function of the enzyme and result in folate deficiency.Both Arcofolin and Metafolin are unaffected by the MTHFR mutation,thereby directly delivering bioavailable L-methylfolate,andoffering

169、a distinct clinical advantage over other folic acid supplements.The core family of patent covering Arcofolin has a priority date of March 31,2017 and describes a crystalline sodium salt of5-methyl-(6S)-tetrahydrofolic acid wherein the molar ratio of 5-methyl-(6S)-tetrahydrofolic acid to sodium is fr

170、om 1:0.5 to 1:1.5(inmol/mol)and/or hydrates and/or solvates thereof,as well as a process of obtaining the same.Upon issuance,the standard 20-yearexclusivity for this patent would expire in 2037.The prescription multi-vitamin market is dominated by generic products,with brands accounting for 9.5%of t

171、he multivitaminplus fluoride market for the year ending December 31,2022.Poly-Vi-Flor and Tri-Vi-Flor primarily compete in the genericprescription multi-vitamin fluoride market and with the branded products FLORIVA and QFLORA.Karbinal ER:Extended release carbinoxamine oral suspension for the treatme

172、nt of seasonal and perennial allergiesKarbinal ER(carbinoxamine maleate extended-release oral suspension)is an H1 receptor antagonist(antihistamine)indicated to treat seasonal and perennial allergic rhinitis,vasomotor rhinitis,allergic conjunctivitis due to inhalant allergens and food,mild,uncomplic

173、ated allergic skin manifestations of urticaria and angioedema,dermatographism,as therapy for anaphylactic reactionsadjunctive to epinephrine and other standard measures after the acute manifestations have been controlled,and amelioration of theseverity of allergic reactions to blood or plasma for pa

174、tients two years of age and above.Over 50 million Americans suffer from allergies in any given year,and allergies are the sixth leading cause of chronic illnessin the U.S.Numerous allergy treatments exist to address allergies and allergic symptoms depending upon the symptom(s).Oralantihistamines are

175、 considered a mainstay of allergy treatment,and the prescription antihistamine market is a large category withapproximately 52 million prescriptions written in 2021.The prescription antihistamine category is dominated by generic products andconsists of first generation and second-generation molecule

176、s.Generally,first-generation antihistamines block both histaminic andmuscarinic receptors and pass the blood-brain barrier.Second-generation antihistamines mainly block histaminic receptors,but they donot pass the blood-brain barrier.First generation antihistamines,which are generally characterized

177、as more sedating,accounted for 6%of 2021 total prescriptions,while non-sedating,second generation antihistamines accounted for 94%of total prescriptions.The mostwidely prescribed oral,second-generation antihistamines are cetirizine(brand name Zyrtec)and loratadine(brand name Claritin).Diphenhydramin

178、e(brand name Benadryl)is the most widely prescribed first-generation molecule.Karbinal ER is the only FDA-approved,12-hour carbinoxamine oral suspension and is an effective antihistamine with a broadrange of indications.Karbinal ER is positioned as a second-line allergy treatment for patients who co

179、ntinue to suffer from allergicsymptoms following initial treatment with a second-generation,non-sedating antihistamine.Further,as Karbinal ER is an oralsuspension formulation,children are the primary target patient given their preference for liquid treatments and,in many cases,theirinability to swal

180、low tablets or capsules.Karbinal ER is indicated for children as young as two years of age.Karbinal has a pleasantstrawberry-banana taste and is available in 480 mL bottles.Table of Contents16Through a supply and distribution agreement with Tris,we own exclusive rights to distribute Karbinal ER in t

181、he U.S.throughAugust 2032,unless the agreement is terminated earlier pursuant to the termination provisions in the agreement.As part of theagreement,we pay sales-based royalties based on net revenue.Additionally,we are committed to make annual minimum payments toTris through 2025.Two core patents pr

182、otect Karbinal ER in the U.S.,and both parents are listed in the FDAs Orange Book.The first patentdescribes a coated drug-ion exchange resin complex comprising a core composed of a drug complexed with a pharmaceuticallyacceptable ion-exchange resin.The priority date for this family is March 29,2009,

183、so the standard 20-year exclusivity for this patentwill expire in 2029.The second patent describes an aqueous liquid suspension containing a coated drug-ion exchange resin complexcomprising a core molecule complexed with a pharmaceutically acceptable ion-exchange resin and an uncoated ion exchange r

184、esincomplex.The priority date for this family is June 15,2007,so the standard 20-year exclusivity for this patent will expire in 2027.Karbinal ER faces competition from OTC products such as non-sedating antihistamines,sedating antihistamines as well asnasal steroids,nasal antihistamines,and antichol

185、inergics.Consumer Health SegmentWe acquired our consumer health business through the acquisition of Innovus Pharmaceuticals,Inc.in February 2020.Theconsumer health business is focused on OTC medicines and consumer health products designed to address common conditions.Nowdoing business as Aytu Consum

186、er Health,we commercialize numerous products in the U.S.and Canada through two distinct marketingchannels:e-commerce platforms including our websites and A and via direct mail campaigns.We classify our products into three categories:ANDA/Medical Device OTC products,which compete in large consumer he

187、alth categories and are marketed primarilythrough A;OTC monograph products,which compete in large consumer health categories;andDietary supplements and personal care products,which are proprietary products with strong scientific evidence andclinical support.The following represents the core Aytu Con

188、sumer Health OTC medicines,which are expected to be the Consumer HealthSegments primary profit drivers:Regoxidine-for Men&Women proprietary over-the-counter aerosol foam that works to treat hair loss in both menand women.OmepraCareDR-acid reducer to treat frequent heartburn.EsomepraCareDR-acid reduc

189、er to treat frequent heartburn.Given the companys shift in focus and objective of generating near-term profitability,we expect to divest,monetize,ordiscontinue the Consumer Health operations by the end of fiscal 2024 or shortly thereafter.We own over 200 trademarks for products in our Consumer Healt

190、h Portfolio and own or license patents covering 9 of theseproducts,some of which we plan to either license,sell,or discontinue as part of the planned divestiture,sale,or discontinuation of theConsumer Health Segment.Table of Contents17MANUFACTURINGADHD Product PortfolioFor the production of our ADHD

191、 products,we lease a manufacturing site in Grand Prairie,Texas.This facility has 77,112square feet of manufacturing and laboratory space and contains dedicated current Good Manufacturing Practices(“cGMP”)manufacturing suites for both Adzenys XR-ODT and Cotempla XR-ODT.We hold U.S.Drug Enforcement Ad

192、ministration(“DEA”)manufacturing and analytical licenses and maintain storage and use of Schedule II through IV controlled substances.The manufactureof our products is subject to extensive cGMP regulations,which impose various procedural and documentation requirements andgovern all areas of record k

193、eeping,production processes and controls,personnel and quality control.We are in the process of transferring the manufacturing of our ADHD products to a contract manufacturing organization(“CMO”).The transfer of the manufacturing of pharmaceutical products requires several steps including knowledge

194、and methodtransfer,manufacturing of materials for feasibility studies and confirmation batch materials,bioequivalence studies,inspections fromregulatory agencies,and regulatory filings.We have completed the required activities,including the successful completion ofbioequivalence studies,which are re

195、quired in order to enable the transfer of both Adzenys XR-ODT and Cotempla XR-ODT.TheAdzenys XR-ODT Prior Approval Supplement(“PAS”)was approved by the FDA in April 2023,and the Cotempla XR-ODT PAS wassubmitted to the FDA in June 2023.We expect to receive approval for the Cotempla XR-ODT PAS by earl

196、y calendar 2024.Thus,weexpect the CMO to begin manufacturing both ADHD products in early calendar 2024.In conjunction with transferring the manufacturing of our ADHD products to a CMO,we entered into an agreement withAMT Manufacturing Solutions,LLC,a newly established,full service CMO,to sublease 22

197、,909 square feet of our Grand Prairie,Texas manufacturing facility.This sublease represents over 30%of our facility.In addition,commencing as early as April 1,2024,butno later than December 31,2024,the sublease will be expanded to include the remaining portion of the manufacturing facility.Thisagree

198、ment enables us to reduce costs associated with exiting the facility and allows for increased supply chain flexibility.Pediatric Product PortfolioWe contract with CMOs for the manufacture and testing of our Pediatric Portfolio products.We have entered into thefollowing key supply agreements for the

199、commercial manufacture and supply of certain of these products:Poly-Vi-Flor and Tri-Vi-Flor drops are purchased through a supply agreement with a CMO based in the U.S.,and weexpect to add our multivitamin chewable tables to this supply agreement.Until that time,the chewable tablets are beingproduced

200、 and purchased without a supply agreement specifically covering those purchases.Merck&Cie is responsiblefor providing Metafolin and Arcofolin to our designated CMO.A supply agreement with Tris Pharma for the supply of Karbinal.This agreement terminates in August 2033,subject toearlier termination or

201、 extension in accordance with the terms of the agreement.We believe the third-party manufacturers of our Pediatric Portfolio products have adequate capacity to manufacture sufficientquantities of these products to meet anticipated commercial demands.As we rely on CMOs,we employ personnel with extens

202、ivetechnical,manufacturing,supply chain management,and analytical and quality experience to oversee contract manufacturing andtesting activities,and to compile manufacturing and quality information for our regulatory submissions.Manufacturing is subject toextensive regulations that impose various pr

203、ocedural and documentation requirements,and which govern record-keeping,manufacturing processes and controls,personnel,quality control and quality assurance,among other activities.Our systems and ourcontractors are required to comply with these regulations,and we assess this compliance regularly thr

204、ough monitoring of performanceand a formal audit program.Table of Contents18Consumer Health SegmentThe Consumer Health Segment maintains relationships with a number of manufacturers and brokers from which it obtains itsproducts.We attempt to work with a variety of manufacturers to broaden our suppli

205、er base and to optimize product acquisition costsand delivery schedules.For our OTC medicines we have relationships with three primary suppliers and one broker through which wesource our consumer health products.RESEARCH AND DEVELOPMENTWe have indefinitely suspended product candidate research and de

206、velopment activities in favor of focusing our resources onour commercialization efforts.With this re-focusing on commercial operations,development of our lead product candidate,AR101,ison indefinite hold.We are pursuing strategic partnerships in order to advance this program but have no assurance th

207、at a partnership willbe consummated.Our Development Pipeline:AR101(enzastaurin for the treatment of Vascular Ehlers-Danlos Syndrome(VEDS)AR101(enzastaurin)is an orally available investigational first-in-class small molecule,serine/threonine kinase inhibitor of theprotein kinase C(“PKC”)beta,PI3K and

208、 AKT pathways.AR101 has been studied in more than 3,300 patients across a range of solidand hematological tumor types.AR101 was originally developed by Eli Lilly and Company(“Lilly”),and worldwide rights wereacquired by Denovo Biopharma in September 2014 following Lillys discontinuation of the enzas

209、taurin development program.VEDS is a rare genetic disorder typically diagnosed in childhood and characterized by arterial aneurysm,dissection andrupture,bowel rupture and rupture of the gravid uterus.VEDS is the severe subtype of Ehlers-Danlos Syndrome,affecting 1 in 50,000people worldwide.VEDS resu

210、lts from pathogenic variants in the COL3A1 gene,which encodes the chains of type III procollagen,amajor protein in vessel walls and hollow organs.Twenty-five percent of VEDS patients have a first complication by the age of 20years,and more than 80 percent have at least one complication by the age of

211、 40.VEDS patients have a median lifespan of 51 years.There are currently no FDA approved treatments for VEDS.The research underpinning the application of enzastaurin for the treatment of VEDS has been conducted by Dr.Harry(Hal)Dietz and his research colleagues.Dr.Dietz is the Victor A.McKusick Profe

212、ssor of Genetics in the departments of medicine,pediatrics,and molecular biology and genetics at The Johns Hopkins University School of Medicine and director of the William S.Smilow Center for Marfan Syndrome Research.He has also been an investigator at Howard Hughes Medical Institute since 1997.Dr.

213、Dietz is a leading scientist in the field of genetic connective tissue disorders and developed the first preclinical model that mimics thehuman condition and recapitulates VEDS.His groups research findings were published in the Journal of Clinical Investigation inFebruary 2020.The VEDS knock-in muri

214、ne(mouse)preclinical model from Dr.Dietz has the same genetic mutation most prevalent inVEDS patients and is representative of the human condition in both the timing and location of vascular events.The model hasgenerated identical structural histology and mechanical characteristics,and unbiased find

215、ings demonstrated that structure alone doesnot lead to vascular events.Objective comparative transcriptional profiling by high-throughput RNA sequencing of the aorta displayeda consistent molecular signature for excessive PKC/ERK cell signaling that is now known to be the driver of disease.Based on

216、thescientific rationale for intervention along the PKC/ERK pathway,PKC inhibition and treatment with PKC inhibitors provedefficacious in multiple pre-clinical and murine studies and indeed prevented death due to vascular rupture.In fiscal 2022 we received Orphan Drug Designation for AR101 in Ehlers-

217、Danlos Syndrome including VEDS and in Europe,allowing for seven years marketing exclusivity in the United States and ten years in Europe.We also received Fast Track designationfor AR101 in VEDS by the FDA,allowing for an accelerated review timeline upon submission of the New Drug Application(“NDA”)a

218、nd more frequent interaction with the FDA during the development process.AR101 is protected by a suite of five pending patents being pursued in major markets globally which have been licensed fromJohns Hopkins and have an earliest priority date of March 2017.The cornerstone of the intellectualTable

219、of Contents19property family surrounds enzastaurin initially targeting the treatment of VEDS focused on the U.S.and certain foreign jurisdictionswhich include Europe,Japan,China,Brazil,Mexico,Canada,Israel,Australia,New Zealand,and South Korea.This pending patentprovides compositions and methods for

220、 treating VEDS and associated connective tissue disorders and has a priority date of October2018.The second pending patent provides methods and compositions for the diagnosis,treatment,and prevention of Marfan syndromeand related diseases,disorders and conditions and has a priority date of March 201

221、7,in select geographies.The third pending patent,titled“Targeted Epigenetic Therapy for Inherited Aortic Aneurysm Conditions,”broadens the coverage of the potential therapeuticapplication of AR101/Enzastaurin and has a priority date of September 2017.The fourth pending patent,titled“Pathway Targets

222、for theTreatment of Vascular Ehlers-Danlos Syndrome”,and the fifth pending patent,titled“Endothelin-1 Signaling Contributes to VascularRupture Risk”,deepens the scientific evidence of the pathophysiology of Vascular Ehlers-Danlos Syndrome and are highlyconfirmatory of the therapeutic approach for AR

223、101/Enzastaurin.These pending patents have priority dates of September 2020 andFebruary 2022 respectively.Additional molecule intellectual property is afforded through the license with Denovo whose pendingpatent provides methods and compositions for the prediction of the activity of enzastaurin and

224、has a priority date of September 1,2016.INTELLECTUAL PROPERTYWe seek trademark protection in the United States when appropriate.We currently own or license registered trademarks forAytu,Aytu Biopharma,Neos Therapeutics,Innovus Pharma,Healight,Poly-Vi-Flor,Adzenys,Adzenys XR-ODT,Adzenys ER andCotempl

225、a XR-ODT in the United States,as well as trademarks related to our DTRS technology.From time to time,we may find it necessary or prudent to obtain licenses from third party intellectual property holders.GOVERNMENT REGULATIONWe are subject to extensive regulation by the FDA and other federal,state,an

226、d local regulatory agencies.The FDCA and theFDAs implementing regulations set forth,among other things,requirements for the testing,development,manufacture,quality control,safety,effectiveness,approval,labeling,storage,record-keeping,reporting,distribution,import,export,sale,advertising and promotio

227、nof our products and product candidates.We may seek approval for,and market,our products in other countries in the future.Generally,our activities in other countries will be subject to regulation that is similar in nature and scope as that imposed in the U.S.,althoughthere can be important differenc

228、es.Development and ApprovalUnder the FDCA,FDA approval of an NDA is required before any new drug can be marketed in the U.S.NDAs in the case ofnew drugs,or PMAs or 510(k)s in the case of medical devices,may require extensive studies and submission of a large amount of databy the applicant,including

229、the following:Preclinical Testing.Preclinical testing generally includes laboratory evaluation of product chemistry and formulation,as wellas toxicological and pharmacological studies in several animal species to assess the toxicity and dosing of the product.Clinical Trials.Clinical trials involve t

230、he administration of a drug to healthy human volunteers or to patients,under thesupervision of a qualified investigator.Phase 1 clinical trials involve the initial administration of the investigational drug to humans,typically to a smallgroup of healthy human subjects,but occasionally to a group of

231、patients with the targeted disease or disorder.Phase1 clinical trials generally are intended to evaluate the safety,metabolism and pharmacologic actions of the drug,theside effects associated with increasing doses,and,if possible,to gain early evidence of effectiveness.Table of Contents20Phase 2 cli

232、nical trials generally are controlled studies that involve a relatively small sample of the intended patientpopulation and are designed to develop initial data regarding the products effectiveness,to determine dose responseand the optimal dose range,and to gather additional information relating to s

233、afety and potential AEs.Phase 3 clinical trials are conducted after preliminary evidence of effectiveness has been obtained and are intendedto gather the additional information about safety and effectiveness necessary to evaluate the drugs overall risk-benefit profile,and to provide a basis for phys

234、ician labeling.Generally,Phase 3 clinical development programsconsist of expanded,multi-site,large-scale studies of patients with the target disease or disorder to obtain statisticalevidence of the efficacy and safety of the drug at the proposed dosing regimen.Phase 3 data often form the corebasis o

235、n which the FDA evaluates a drugs safety and effectiveness when considering the product application.Post-Approval RegulationOnce approved,drug products are subject to continuing regulation by the FDA.If ongoing regulatory requirements are notmet or if safety or manufacturing problems occur after the

236、 product reaches the market,the FDA may at any time withdraw productapproval or take actions that would limit or suspend marketing.Additionally,the FDA may require post-marketing studies or clinicaltrials,changes to a products approved labeling,including the addition of new warnings and contraindica

237、tions,or the implementation ofother risk management measures,including distribution-related restrictions,if there are new safety information developments.DEA RegulationOur ADHD products are considered a“controlled substance”as defined in the Controlled Substances Act of 1970,or CSA,because Adzenys X

238、R-ODT contains amphetamine and Cotempla XR-ODT contains methylphenidate.Because amphetamine andmethylphenidate are Schedule II controlled substances,the DEA has Adzenys XR-ODT and Cotempla XR-ODT listed and regulated asSchedule II controlled substances.None of our pediatric products(Poly-Vi-Flor,Tri

239、-Vi-Flor and Karbinal ER)are considered“controlled substances.”Annual registration is required for any facility that manufactures,distributes,dispenses,imports or exports any controlledsubstance.The registration is specific to the particular location,activity and controlled substance schedule.The DE

240、A establishes annually an aggregate quota for how much of a controlled substance may be produced in and/orimported into the U.S.based on the DEAs estimate of the quantity needed to meet legitimate scientific and medicinal needs.The DEAmay adjust aggregate production quotas and individual production

241、and procurement quotas from time to time during the year,althoughthe DEA has substantial discretion in whether or not to make such adjustments.Our or our manufacturers quotas of an activeingredient may not be sufficient to meet commercial demand or complete clinical trials.Any delay,limitation or re

242、fusal by the DEA inestablishing our or our manufacturers quota for controlled substances could delay or stop our clinical trials or product launches,whichcould have a material adverse effect on our business,financial position and results of operations.Individual states also independently regulate co

243、ntrolled substances.We and our manufacturers will be subject to stateregulation on distribution of these products,including,for example,state requirements for licensures or registration.Additionally,weuse third-party logistics firms to inventory and fill sales orders for our commercial portfolio.We

244、contract with third parties for the manufacture and testing of Karbinal,Poly-Vi-Flor and Tri-Vi-Flor.Poly-Vi-Flor and Tri-Vi-Flor are not supplied under any contract.We have entered into the following key supply agreements for the commercialmanufacture and supply of certain of these products:A suppl

245、y agreement with Tris for the supply of Karbinal.This agreement terminates in August 2033,subject to earliertermination or extension in accordance with the terms of the agreement.Table of Contents21Poly-Vi-Flor and Tri-Vi-Flor drops are produced under a supply agreement with a CMO based in the U.S.,

246、and we expectto expand that agreement to include the chewable tablet formations.Until that time,the Ploy-Vi-Flor chewable tablets areproduced by the same CMO on a purchase order-to-purchase order basis,Merck&Cie is responsible for providingMetafolin and Arcofolin to our designated CMO.We believe our

247、 third-party manufacturers have adequate capacity to manufacture sufficient quantities of these products tomeet anticipated commercial demands.Because we rely on CMOs,we employ personnel with extensive technical,manufacturing,supply chain management,and analytical and quality experience to oversee c

248、ontract manufacturing and testing activities,and tocompile manufacturing and quality information for our regulatory submissions.Manufacturing is subject to extensive regulations thatimpose various procedural and documentation requirements,and which govern record-keeping,manufacturing processes and c

249、ontrols,personnel,quality control and quality assurance,among other activities.Our systems and our contractors are required to comply withthese regulations,and we assess this compliance regularly through monitoring of performance and a formal audit program.For the production of our ADHD products,we

250、lease one manufacturing site in Grand Prairie,Texas.This facility has 77,112square feet of manufacturing and laboratory space,and contains dedicated cGMP manufacturing suites for both Adzenys XR-ODT andCotempla XR-ODT.We hold DEA manufacturing and analytical licenses,and maintain storage and use of

251、Schedule II through IVcontrolled substances.The manufacture of our products is subject to extensive cGMP regulations,which impose various proceduraland documentation requirements and govern all areas of record keeping,production processes and controls,personnel,and qualitycontrol.We are in the proce

252、ss of a technology transfer to outsource the manufacturing of our ADHD products to a CMO.The transferof the manufacturing of pharmaceutical products requires several steps including knowledge and method transfer,manufacturing ofmaterials for feasibility study and confirmation batch materials,bioequi

253、valence studies and regulatory filings.We have completed therequired activities,including the successful completion of bioequivalence studies,which are required in order to enable the transfer ofboth Adzenys XR-ODT and Cotempla XR-ODT.The Adzenys XR-ODT Prior Approval Supplement(“PAS”)was approved b

254、y theFDA in April 2023,and the Cotempla XR-ODT PAS was submitted to the FDA in June 2023.We expect to receive approval for theCotempla XR-ODT PAS by early calendar 2024.We expect the CMO to begin manufacturing both ADHD products in early calendar2024.HUMAN CAPITALAs of June 30,2023,we employed 150 f

255、ull-time employees,including 53 who are involved in operations,5 who are directlyinvolved in research and development,60 who are involved in commercialization and 32 who are involved in general andadministrative activities.All of our colleagues are located in the U.S.Of these colleagues,45%are femal

256、e and 55%are male.Ourcolleagues are not represented by a labor union.Our values team-oriented,hard-working,relentlessly determined,integrity,visionary,entrepreneurial,and servant-minded-are built on the foundation that the colleagues we hire and the way we treat one another promote creativity,innova

257、tion,andproductivity,which spur our success.This culture depends in large part on our ability to attract,retain and develop a diverse populationof talents and high-performing employees at all levels of our organization.Providing market competitive pay and benefit programs,opportunities to participat

258、e in the success they help create,while engaging colleagues in important dialogue regarding organizationperformance,we create a culture of inclusion in which all colleagues have the opportunity to thrive.AVAILABLE INFORMATIONOur principal executive offices are located at 7900 East Union Avenue,Suite

259、920,Denver,Colorado 80237 USA,and ourphone number is(720)437-6580.We maintain a website on the internet at http:/.We make available,free of charge,through our website,by wayof a hyperlink to a third-party site that includes filings we make with the SEC website(www.sec.gov),our annual reports on Form

260、10-K,quarterly reports on Form10-Q,current reports on Form8-K and amendments toTable of Contents22those reports electronically filed or furnished pursuant to Section15(d)of the Exchange Act.The information on our website is not,and shall not be deemed to be,a part of this Annual Report on Form10-K o

261、r incorporated into any other filings we make with the SEC.In addition,the public may read and copy any materials we file with the SEC at the SECs Public Reference Roomat 100 F Street,N.E.,Washington D.C.,20549.Information on the operation of the Public Reference Roommay be obtained by calling the S

262、EC at 1-800-SEC-0330.CODE OF ETHICSWe have adopted a written code of ethics that applies to our officers,directors,and employees,including our principalexecutive officer and principal accounting officer.We intend to disclose any amendments to,or waivers from,our code of ethics thatare required to be

263、 publicly disclosed pursuant to rulesof the SEC by filing such amendment or waiver with the SEC.This code ofethics and business conduct can be found in the corporate governance section of our website,https:/ FACTORSInvesting in our securities includes a high degree of risk.You should consider carefu

264、lly the specific factors discussed below,together with all of the other information contained in this Annual Report on Form 10-K.If any of the following risks actually occurs,our business,financial condition,results of operations and future prospects would likely be materially and adversely affected

265、.Thiscould cause the market price of our securities to decline and could cause you to lose all or part of your investment.RISKS RELATED TO OUR BUSINESS AND FINANCIAL POSITIONWe have incurred losses to date and can give no assurance of profitability.We have incurred losses in each year since our ince

266、ption.As of the filing of this Annual Report on Form 10-K,there is asubstantial doubt regarding our ability to continue as a going concern.Our net loss for the years ended June 30,2023 and 2022 was$17.1 million and$108.8 million,respectively.We have not demonstrated the ability to be a profit-genera

267、ting enterprise to date.Eventhough we expect to have revenue growth in the next several fiscal years,it is uncertain that the revenue growth will be significantenough to offset our expenses and generate a profit in the future.Potential investors should evaluate us in light of the expenses,delays,unc

268、ertainties,and complications typically encountered by healthcare businesses,many of which will be beyond our control.These risksinclude the following:uncertain market acceptance of our products;difficulties in maintaining coverage and reimbursement for our products;lack of sufficient capital;U.S.and

269、 foreign regulatory approval of our products;unanticipated problems,delays,and expense relating to product development and implementation;lack of sufficient intellectual property;the ability to attract and retain qualified employees;competition;andtechnological changes.As a result of the increasingl

270、y competitive nature of the markets in which we compete,our historical financial data is oflimited value in anticipating future operating expenses.Our planned expense levels will be based in part on ourTable of Contents23expectations concerning future operations,which is difficult to forecast accura

271、tely based on our historical strategy of product and/orbusiness acquisition to develop our product and business portfolio.We may be unable to adjust spending in a timely manner tocompensate for any unexpected budgetary shortfall.To obtain revenues from our products,we must succeed,either alone or wi

272、th others,in a range of challenging activities,including expanding markets for our existing products,manufacturing,marketing and selling our existing products,satisfying any post-marketing requirements,and obtaining reimbursement for our products from private insurance or government payors.We,and ou

273、rcollaborators,as applicable,may not be successful in these activities and,even if we or our collaborators do,we may never generaterevenues that are sufficient to achieve profitability.We have not established sources of ongoing revenue sufficient to cover operating costs and allow us to continue as

274、a goingconcern.Since our inception,we have had significant operating losses.As of June 30,2023,we had accumulated deficit of$304.1million.Even though we plan to mitigate the conditions that raise substantial doubt about our ability to continue as a going concern,wemay continue to incur net losses,an

275、d our ability to generate positive cash flows from operating activities is uncertain for theforeseeable future.We have not established an ongoing source of revenue sufficient to cover operating costs.Our ability to continue asagoingconcernis dependent on our continued operational improvements,refina

276、ncing,or obtaining adequate capital to fund operatinglosses until we become profitable.If we are unable to generate sufficient cash flows or obtain adequate capital,we may be unable todevelop and commercialize our product offerings and we could be forced to cease operations.We may need to raise addi

277、tional funding,which may not be available on acceptable terms,or at all.Failure to obtain necessarycapital when needed may force us to delay,limit or terminate our product expansion efforts or other operations.Further,future sales and issuances of our common stock or rights to purchase common stock

278、will result in dilution of the percentageownership of our existing stockholders and could cause our stock price to fall.We are expending resources to commercialize our prescription products and to service our debt obligations.We may requireadditional funding through public or private equity or debt

279、financings,government or other third-party funding,marketing anddistribution arrangements and other collaborations,strategic alliances and licensing arrangements,or a combination of theseapproaches.As of June 30,2023,our cash and cash equivalents totaled$23.0 million.During the year ended June 30,20

280、23,we raisedapproximately$15.6 million,net of fees,from a combination of common stock offerings.Our operating plans may change as a result of many factors currently unknown to us,and we could need additional capital inthe future to continue our operations and may need to seek additional funds sooner

281、 than planned.Raising funds in the current economicenvironment may present additional challenges.Even if we believe we have sufficient funds for our current or future operating plans,we may seek additional capital if market conditions are favorable or if we have specific strategic considerations.If

282、we sell common stock,convertible securities or other equity securities in more than one transaction,any such sales mayresult in material dilution to our existing stockholders,and new investors could gain rights,preferences,and privileges senior to thoseof our existing common stockholders.Further,any

283、 future sales of our common stock by us or resales of our common stock by ourexisting stockholders could cause the market price of our common stock to decline.Any future grants of securities exercisable orconvertible into our common stock,or the exercise or conversion of such shares,and any sales of

284、 such shares in the market,could alsohave an adverse effect on the market price of our common stock.In addition,we cannot guarantee that future financing will be available in sufficient amounts or on terms acceptable to us,if atall.The incurrence of additional indebtedness would result in increased

285、fixed payment obligations and we may be required to agree toadditional restrictive covenants,such as further limitations on our ability to incur additional debt,additional limitations on our ability toacquire,sell or license intellectual property rights and other operating restrictions that could ad

286、versely impact our ability to conduct ourbusiness.We could also be required to seekTable of Contents24funds through arrangements with collaborative partners or otherwise at an earlier stage than otherwise would be desirable and we maybe required to relinquish rights to some of our technologies or pr

287、oducts or otherwise agree to terms unfavorable to us,any of whichmay have a material adverse effect on our business,operating results and prospects.If we are unable to obtain funding on a timely basis,we may be unable to expand the market for our products or expand ouroperations generally or otherwi

288、se capitalize on our business opportunities,as desired,which could materially affect our business,financial condition and results of operations.We may not have cash available to us in an amount sufficient to enable us to make interest or principal payments on ourindebtedness when due.We have a$15.0

289、million term loan with Avenue Capital and up to$14.5 million of secured revolving loans with Eclipse.As ofJune 30,2023,$1.6 million was outstanding under the secured revolving loan.All obligations under our loans are secured bysubstantially all of our existing property and assets subject to certain

290、exceptions.These debt financings and any future debt financingsmay create additional financial risk for us,particularly if our business or prevailing financial market conditions are not conducive topaying off or refinancing our outstanding debt obligations at maturity.As a result,we may not have suf

291、ficient funds,or may be unable to arrange for additional financing,to pay the amounts due onour outstanding indebtedness under our debt agreements.Further,funds from external sources may not be available on economicallyacceptable terms,if at all.For example,if we raise additional funds through colla

292、boration,licensing or other similar arrangements,itmay be necessary to relinquish potentially valuable rights to our products or technologies,or to grant licenses on terms that are notfavorable to us.If adequate funds are not available when and if needed,our ability to make interest or principal pay

293、ments on our debtobligations,and finance our operations and other general corporate activities would be significantly limited and we may be required todelay,significantly curtail,or eliminate one or more of our programs.Failure to satisfy our current and future debt obligations under our loan agreem

294、ents with Avenue Capital or Eclipse couldresult in an event of default and,as a result,our lenders could accelerate all of the amounts due.In the event of an acceleration ofamounts due under one or both of our debt agreements as a result of an event of default,we may not have sufficient funds or may

295、 beunable to arrange for additional financing to repay our indebtedness.In addition,our lenders could seek to enforce their securityinterests in any collateral securing such indebtedness.The terms of our loan agreement place restrictions on our operating and financial flexibility.If we raise additio

296、nal capitalthrough debt financing,the terms of any new debt could further restrict our operating and financial flexibility.The loan agreements with Avenue Capital and Eclipse subject us to financial covenants and restrictions on our ability to incurliens,incur additional indebtedness,make certain di

297、vidends and distributions with respect to equity securities,engage in mergers andacquisitions or make asset sales without the prior written consent of the lender.Failure to comply with such covenants could permit thelenders to declare our obligations under the loan agreements,together with accrued i

298、nterest and fees,to be immediately due andpayable,plus any applicable additional amounts relating to a prepayment or termination.These restrictive covenants could limit our flexibility in operating our business and our ability to pursue businessopportunities that we or our stockholders may consider

299、beneficial.Any declaration by the lender of an event of default couldsignificantly harm our business and prospects and could cause the price of our common stock to decline.We may not have enoughavailable cash or be able to raise additional funds through equity or debt financings to repay these outst

300、anding obligations at the timeany event of default occurs.Further,if we raise any additional capital through debt financing,the terms of such additional debt couldfurther restrict our operating and financial flexibility.Table of Contents25We recently announced that we have been engaged in discussion

301、s with various parties regarding potential strategic transactionsand potential financing options.There can be no assurance that this process will result in the pursuit or consummation of anypotential transaction,or that any such potential transaction,if implemented,will provide sufficient funding to

302、 continue ouroperations.We recently announced that we are engaged in discussions with various parties regarding potential strategic transactions andpotential financing,which could include a financing,sale or licensing of assets,acquisition,merger,business combination,and/or otherstrategic transactio

303、n or series of related transactions.This process,including any uncertainty created by this process,involves a numberof risks which could impact our business and our stockholders,including the following:significant fluctuations in our stock price could occur in response to developments relating to th

304、e process or marketspeculation regarding any such developments;we may encounter difficulties in hiring,retaining and motivating key personnel during this process or as a result ofuncertainties generated by this process or any developments or actions relating to it;we may incur substantial increases

305、in general and administrative expense associated with increased legal fees and theneed to retain and compensate third-party advisors;andwe may experience difficulties in preserving the commercially sensitive information that may need to be disclosed tothird parties during this process or in connecti

306、on with an assessment of our strategic options.The review process also requires significant time and attention from management,which could distract them from other tasksin operating our business or otherwise disrupt our business.Such disruptions could cause concern to our suppliers,strategic partner

307、s orother constituencies and may have a material impact on our business and operating results and volatility in our share price.There can be no assurance that this process will result in the pursuit or consummation of any potential transaction or strategy,or that any such potential transaction or st

308、rategy,if implemented,will provide sufficient funding to conduct our operations.Anyoutcome of this process would be dependent upon a number of factors that may be beyond our control,including,among other things,market conditions,industry trends,regulatory approvals,and the availability of financing

309、on reasonable terms.The occurrence of anyone or more of the above risks could have a material adverse impact on our business,financial condition,results of operations and cashflows.We have indefinitely suspended development of our AR101(enzastaurin)clinical development program and shifted ourstrateg

310、ic focus towards accelerating the growth of our commercial business.If we fail to execute successfully on thisreprioritized strategic focus,our business,results of operations and financial condition could be materially and adverselyaffected.We have indefinitely suspended our AR101(enzastaurin)clinic

311、al development program and shifted our focus towardsaccelerating the growth of our commercial business and achieving operating cash flows.Though we expect that the suspension of thisprogram will save over$20 million in projected future study costs over the next three fiscal years,the process of reor

312、ienting ourbusiness strategy may be costly,time consuming and complex,and we have incurred,and may in the future incur,costs related to thisstrategic shift.Our strategic reprioritization may result in unexpected expenses or liabilities and/or write-offs.There is no assurancethat we will be successfu

313、l at executing on our revised strategy or that any particular course of action,business arrangement ortransaction,or series of transactions,will be pursued,successfully consummated,lead to increased stockholder value,or achieve theanticipated results.If we are unable to execute successfully on our r

314、eprioritized strategic focus,our cash resources may not last as long asestimated and our business,results of operations and financial condition could be materially and adversely affected.Table of Contents26Our ability to use our net operating loss carryforwards and certain other tax attributes may b

315、e limited.As of June 30,2023,we had federal net operating loss carryforwards of approximately$504.0 million.The available netoperating losses,if not utilized to offset taxable income in future periods,will begin to expire in 2024 and,except for certain indefinite-lived net operating loss carryforwar

316、ds,will completely expire in 2037.Under the Internal Revenue Code of 1986,as amended(the“Code”)and the regulations promulgated thereunder,including,without limitation,the consolidated income tax return regulations,various corporate ownership changes could limit our ability to use our net operating l

317、oss carryforwards and other tax attributes to offsetour income.An“ownership change”(generally a 50%change in equity ownership over a three-year period)under Section 382 of the Codecould limit our ability to offset,post-change,our U.S.federal taxable income.Section 382 of the Code imposes an annual l

318、imitation onthe amount of post-ownership change taxable income a corporation may offset with pre-ownership change net operating losscarryforwards and certain recognized built-in losses.We believe that the June 2021 acquisition of Neos caused an ownership change ofNeos,resulting in a limitation in ou

319、r ability to use their pre-acquisition net operating loss carryovers.We also believe that the financingtransactions in fiscal 2022 and 2023 may have caused,together with equity ownership changes in the past three years,an ownershipchange resulting in a limitation of our ability to use our pre-acquis

320、ition net operating loss carryovers.The ownership change scenariocould result in an increased future tax liability to us.If we fail to establish and maintain proper internal controls,our ability to produce accurate financial statements or complywith applicable regulations could be impaired.Our manag

321、ement is responsible for establishing and maintaining adequate internal control over financial reporting.Pursuant toSection 404 of the Sarbanes-Oxley Act,our management conducted an assessment of the effectiveness of our internal controls overfinancial reporting for the quarter ended September 30,20

322、22,and concluded that a certain control was not effective.We concluded thatwe had a material weakness in internal control over financial reporting related to accounting for complex warrant issuances and theclassification of these issued warrants.In addition,we concluded that we had a material weakne

323、ss in internal control over financialreporting for the year ended June 30,2023 related to our analysis for the accounting for valuation of our inventory.Our AuditCommittee conducted an internal investigation to identify and determine plans to remediate the material weaknesses and to enhanceour overa

324、ll control environment.We will not consider the material weaknesses remediated until our enhanced control is operational fora sufficient period of time and tested,enabling management to conclude that the enhanced controls are operating effectively.Ourremediation plan includes the implementation of c

325、ontrols over the process of reviewing significant and complex contracts andagreements and we believe that the issues have been remediated.If in the future we were to conclude that our internal controls over financial reporting were not effective,we cannot be certainas to the timing of completion of

326、our evaluation,testing and remediation actions or their effect on our operations because there ispresently no precedent available by which to measure compliance adequacy.As a consequence,we may not be able to complete anynecessary remediation process in time to meet our deadline for compliance with

327、Section 404 of the Sarbanes-Oxley Act.Also,therecan be no assurance that we will not identify one or more material weaknesses in our internal controls in connection with evaluatingour compliance with Section 404 of the Sarbanes-Oxley Act.The presence of material weaknesses could result in financial

328、statementerrors which,in turn,could require us to restate our operating results.If we are unable to conclude that we have effective internal controls over financial reporting or if our independent auditors areunwilling or unable to provide us,when required,with an attestation report on the effective

329、ness of internal controls over financialreporting as required by Section 404 of the Sarbanes-Oxley Act,investors may lose confidence in our operating results,our stock pricecould decline and we may be subject to litigation or regulatory enforcement actions.In addition,if we are unable to meet thereq

330、uirements of Section 404 of the Sarbanes-Oxley Act,we may not be able to maintain listing on the NASDAQ Capital Market.Dueto our current filing status,we are not required to have our independent registered public accounting firm deliver an attestation reporton the effectiveness of our internal contr

331、ol over financial reporting.Table of Contents27We have been and in the future may become a defendant in one or more stockholder derivative,class-action,and otherlitigation,and any such lawsuits may adversely affect our business,financial condition,results of operations and cash flows.We and certain

332、of our officers and directors have been and may in the future become defendants in one or more stockholder derivative actions or other class-action lawsuits.For example:Two putative class action lawsuits were filed on February 9,2022 and March 7,2022 derivatively and on behalf ofall Aytu stockholder

333、s,challenging the grant in 2021 of certain stock option awards to directors and officers,andseeking rescission of the awards,unspecified damages to stockholders as a result of the awards,and attorneys fees.A shareholder derivative suit was filed on September 12,2022,derivatively and on behalf of all Aytu stockholders,against certain of our current and former directors and stockholders,alleging bre