Aytu BioPharma, Inc. (AYTU) 2024年年度報告「NASDAQ」.pdf

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1、 UNITED STATESSECURITIES AND EXCHANGE COMMISSIONWashington,D.C.20549 FORM 10-K ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended June 30,2024 or TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)OF THE SECURITIES EXCHANGE ACT OF 1934Commissi

2、on file number 001-38247 AYTU BIOPHARMA,INC.(Exact name of registrant as specified in its charter)Delaware 47-0883144(State or other jurisdiction of incorporation or organization)(I.R.S.Employer Identification No.)7900 East Union Avenue,Suite 920,Denver,Colorado 80237(Address of principal executive

3、offices)(Zip Code)(720)437-6580(Registrants telephone number,including area code)Securities registered pursuant to Section 12(b)of the Act:Title of each class Trading Symbol(s)Name of each exchange on which registeredCommon Stock,par value$0.0001 per share AYTU The Nasdaq Capital Market Securities r

4、egistered pursuant to Section 12(g)of the Act:None Indicate by check mark if the registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes No Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d)of the Act.Y

5、es No Indicate by a check mark whether the registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 months(or forsuch 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 90 days.Yes No Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period

7、that the registrant was required 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,smaller reporting company,or an emerging growth company.See thedefinitions of“large accelerated filer,”“accelerated fi

8、ler,”“smaller reporting company,”and“emerging growth company”in Rule 12b-2 of the Exchange Act.Large accelerated filerAccelerated filerNon-accelerated filerSmaller reporting companyEmerging growth company If an emerging growth company,indicate by check mark if the registrant has elected not to use t

9、he extended transition period for complying with any new or revised financial accountingstandards provided pursuant to Section 13(a)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 intern

10、al control over financial reporting under Section404(b)of the Sarbanes-Oxley 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

11、of the registrant included in the filing reflect the correction of an error topreviously 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 registrants exe

12、cutiveofficers during the relevant recovery period pursuant to 240.10D-1(b).Indicate by check mark whether the registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes No As of December 29,2023,the aggregate market value of common stock held by non-affiliates of the registrant was$10,7

13、12,951 based on the last reported sales price of$2.84 as quoted on theNasdaq Capital Market on such date.As of September 16,2024,there were 6,148,993 shares of common stock outstanding.Table of Contents AYTU BIOPHARMA,INC.FORM 10-K TABLE OF CONTENTS PageCautionary Information Regarding Forward-Looki

14、ng Statements3Summary of Risk Factors4 PART I 6 Item 1.Business 6 Item 1A.Risk Factors19 Item 1B.Unresolved Staff Comments47 Item 1C.Cybersecurity47 Item 2.Properties49 Item 3.Legal Proceedings49 Item 4.Mine Safety Disclosures50 PART II 51Item 5.Market for Registrants Common Equity,Related Stockhold

15、er Matters and Issuer Purchases of Equity Securities51 Item 6.Reserved52 Item 7.Managements Discussion and Analysis of Financial Condition and Results of Operations52Item 7A.Quantitative and Qualitative Disclosures About Market Risk62Item 8.Financial Statements and Supplementary Data63 Item 9.Change

16、s in and Disagreements with Accountants on Accounting and Financial Disclosure106 Item 9A.Controls and Procedures106 Item 9B.Other Information108 Item 9C.Disclosure Regarding Foreign Jurisdictions that Prevent Inspections108 PART III 109 Item 10.Directors,Executive Officers and Corporate Governance1

17、09 Item 11.Executive Compensation113 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters117 Item 13.Certain Relationships and Related Transactions,and Director Independence119 Item 14.Principal Accountant Fees and Services120 PART IV 121 Item 15.Exh

18、ibits and Financial Statement Schedules121 Item 16.Form 10K Summary126 SIGNATURES127 2Table of Contents CAUTIONARY INFORMATION REGARDING FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K for the year ended June 30,2024,(“Form 10-K”or“Annual Report”),includes forward-looking statementswithin

19、 the meaning of Section 27A of the Securities Act of 1933,as amended(the“Securities Act”),and Section 21E of the Securities Exchange Act of1934,as amended(the“Exchange Act”).All statements other than statements of historical facts contained in this Annual Report,including statementsregarding our ant

20、icipated future clinical and regulatory events,future financial position,business strategy and plans and objectives of management forfuture operations,are forward-looking statements.Forward-looking statements are generally written in the future tense and/or are preceded by words suchas“may,”“will,”“

21、should,”“forecast,”“could,”“expect,”“suggest,”“believe,”“estimate,”“continue,”“anticipate,”“intend,”“plan,”“potential,”orsimilar words,or the negatives of such terms or other variations on such terms or comparable terminology.Such forward-looking statements include,without limitation,statements rega

22、rding the markets for our approved products and our plans for our approved products,the anticipated start dates,durations and completion dates,as well as the potential future results,of our ongoing and future clinical trials,the anticipated designs of our future clinicaltrials,anticipated future reg

23、ulatory submissions and events,the potential future commercialization of our product candidates,our anticipated future cashposition and future events under our current and potential future collaborations.These forward-looking statements are subject to a number of risks,uncertainties,and assumptions,

24、including without limitation the risks described in Part I,Item 1A,Risk Factors below and elsewhere in this Annual Report.These risks are not exhaustive.Other sections of this Annual Report include additional factors that could adversely impact our business and financialperformance.Moreover,we opera

25、te in a very competitive and rapidly changing environment.New risk factors emerge from time to time,and it is notpossible for our management to predict all risk factors,nor can we assess the impact of all factors on our business or the extent to which any factor,orcombination of factors,may cause ac

26、tual results to differ materially from those contained in any forward-looking statements.You should not rely uponforward-looking statements as predictions of future events.We cannot assure you that the events and circumstances reflected in the forward-lookingstatements will be achieved or occur and

27、actual results could differ materially from those projected in the forward-looking statements.We assume noobligation to update or supplement forward-looking statements.Unless otherwise indicated or unless the context otherwise requires,references in this Form 10-K to the“Company,”“Aytu,”“we,”“us,”or

28、“our”are to Aytu BioPharma,Inc.and its wholly owned subsidiaries.This Form 10-K refers to registered trademarks that we currently own or license,such as Aytu,Aytu BioPharma,Aytu RxConnect,NeosTherapeutics,Adzenys,Adzenys ER,Adzenys XR-ODT,Cotempla,Cotempla XR-ODT,Karbinal,Poly-Vi-Flor and Tri-Vi-Flo

29、r,which are protected underapplicable 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 owners.Solely for convenience,our t

30、rademarks and tradenamesreferred 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 obtained statistical data,market and

31、 product data,and forecasts used throughout this Form 10-K from market research,publicly availableinformation and industry publications.While we believe that the statistical data,industry data and forecasts and market research are reliable,we have notindependently verified the data,and we do not mak

32、e any representation as to the accuracy of the information.3Table of Contents SUMMARY OF RISK FACTORS The following list summarizes what we believe to be the principal risks relevant to our company.The following summary is further elaborated onby the full text of the risk factors provided in Part I,

33、Item 1A,Risk Factors of this Annual Report.All capitalized terms in this section not defined hereinshall have the meanings given to them elsewhere in this Annual Report.Material risks that may affect our business,operating results and financialcondition include,but are not necessarily limited to,the

34、 following:Risks Related to Our Business and Financial Position We have incurred losses to date and can give no assurance of profitability.We have not established sources of ongoing revenue sufficient to cover operating costs.We may need to raise additional funding,which may not be available on acce

35、ptable terms,or at all.We may not have cash available to us in an amount sufficient to enable us to make interest or principal payments on our indebtedness whendue.The terms of our loan agreement place restrictions on our operating and financial flexibility.If we raise additional capital through deb

36、tfinancing,the terms of any new debt could further restrict our operating and financial flexibility.We are currently engaged in discussions with various parties regarding potential strategic transactions and there can be no assurance that thesediscussions will result in the pursuit or consummation o

37、f any potential transaction.We have indefinitely suspended development of our AR101(enzastaurin)clinical development program and shifted our strategic focustowards accelerating the growth of our commercial business.If we fail to execute successfully on this reprioritized strategic focus,ourbusiness,

38、results of operations and financial condition could be materially and adversely affected.We have been and,in the future,may become a defendant in one or more stockholder derivative,class-action,and other litigation,and anysuch lawsuits may adversely affect our business,financial condition,results of

39、 operations and cash flows.Risks Related to Commercialization We are heavily dependent on the commercial success of our commercial products.To date,we have not generated sufficient revenues from thesales of these products to achieve companywide profitability and we may never achieve or maintain prof

40、itability.We rely on third parties to manufacture certain products,and third-party manufacturing risks and inefficiencies may result in costs and delaysthat prevent us from successfully commercializing products and adversely affect our ability to produce our products.If our contract manufacturer fai

41、ls to manufacture our ADHD products in sufficient quantities and at acceptable quality and pricing levels,orfails to obtain adequate DEA quotas for controlled substances,or to fully comply with cGMP regulations,we may face delays in thecommercialization of these products,or be unable to meet market

42、demand,and may be unable to generate potential revenues.4Table of Contents Government restrictions on pricing and reimbursement,as well as other healthcare payor cost-containment initiatives,may negatively impactour ability to generate revenues.Our financial results will depend on the acceptance amo

43、ng clinicians,third-party payors and the medical community of our products.If third-party payors do not reimburse our customers for the products we sell or if reimbursement levels are set too low for us to sell ourproducts at a profit,our ability to sell those products and our results of operations

44、will be harmed.Adzenys and Cotempla contain controlled substances,and their manufacture,use,sale,importation,exportation,prescribing and distributionare subject to regulation by the DEA.Risks Related to Our Intellectual Property We are dependent on our relationships and license agreements,and we rel

45、y on the intellectual property rights granted to us pursuant to thelicense agreements.The expiration or loss of patent protection may adversely affect our future revenues and operating results.Our ability to compete may decline if we do not adequately protect or enforce our intellectual property rig

46、hts.Risks Related to Our Organization,Structure and Operations Our efforts to expand and transform our businesses may require significant investments;if our strategies are unsuccessful,our business,results of operations and/or financial condition may be materially adversely affected.We may have diff

47、iculties integrating acquired businesses and as a result,our business,results of operations and/or financial condition may bematerially adversely affected.In fiscal 2024,the great majority of our gross revenue and gross accounts receivable were due to three significant customers,the loss of whichcou

48、ld materially and adversely affect our results of operations.Our accounts receivable subjects us to credit risk.Claims for indemnification by our directors and officers may reduce our available funds to satisfy successful third-party claims against us andmay reduce the amount of money available to t

49、he Company.Public concern over the abuse of medications that are controlled substances,including increased legislative,legal and regulatory action,couldnegatively affect our business.Certain of our stockholders own a significant percentage of our stock and their interests may conflict with yours.5Ta

50、ble of Contents PART I ITEM 1.BUSINESS Company Overview Aytu BioPharma,Inc.(“Aytu,”the“Company,”“we,”“us,”or“our”)is a pharmaceutical company focused on commercializing noveltherapeutics.The Company was originally incorporated as Rosewind Corporation on August 9,2002,in the state of Colorado and was

51、 re-incorporated asAytu BioScience,Inc.in the state of Delaware on June 8,2015.Following the acquisition of Neos Therapeutics,Inc.(“Neos”)in March 2021(the“NeosAcquisition”),the Company changed its name to Aytu BioPharma,Inc.Our common stock trades on the Nasdaq Capital Market under the ticker symbo

52、l“AYTU.”Our principal office is located at 7900 East Union Avenue,Suite 920,Denver,Colorado 80237,and our telephone number is(720)437-6580.We operate through two business segments:(i)the Rx segment,consisting of prescription pharmaceutical products sold primarily through thirdparty wholesalers(the“R

53、x Segment”)and(ii)the consumer health segment,which consists of various consumer healthcare products sold directly toconsumers through certain e-commerce platforms(the“Consumer Health Segment”).The Rx Segment primarily consists of two product portfolios.The first consists of Adzenys XR-ODT(amphetami

54、ne)extended-release orallydisintegrating tablets(“Adzenys”)and Cotempla XR-ODT(methylphenidate)extended-release orally disintegrating tablets(“Cotempla”)for the treatmentof attention deficit hyperactivity disorder(“ADHD”)(the“ADHD Portfolio”).The second consists primarily of Karbinal ER(carbinoxamin

55、e maleateextended-release oral suspension)(“Karbinal”),an extended-release first-generation antihistamine suspension containing carbinoxamine indicated to treatnumerous allergic conditions,and Poly-Vi-Flor and Tri-Vi-Flor,two complementary prescription fluoride-based supplement product lines contain

56、ingcombinations of fluoride and vitamins in various formulations for infants and children with fluoride deficiency(the“Pediatric Portfolio”).The Consumer Health Segment consists of multiple consumer health products competing in large healthcare categories,including allergy,hairregrowth,diabetes supp

57、ort,digestive health,sexual and urological health,and general wellness,commercialized through direct mail and e-commercemarketing channels.To date,the Consumer Health Segment has generated negative cash flows.We began to wind down the Consumer Health Segment infiscal 2024.During the first quarter of

58、 fiscal 2025,we completed the wind down of operations and entered into a definitive agreement to divestthe Consumer Health Segment to a private,e-commerce focused company(the“Consumer Health Divestiture”).The divested business encompasses theestablished e-commerce platform,certain inventory and asso

59、ciated consumer brands,intellectual property,contracts and liabilities,and provides for us toreceive up to$0.5 million of revenue-based royalty payments on future sales of former Consumer Health Segment products.We expect the savings realizedfrom the strategic shift away from the Consumer Health bus

60、iness,coupled with incremental margin improvements expected from the previouslyannounced closure of our Grand Prairie,Texas manufacturing site,to significantly enhance our operating results and drive stockholder value.We have incurred significant losses in each year since inception.Our net loss was$

61、15.8 million for the year ended June 30,2024,and as of June30,2024,we had an accumulated deficit of$320.0 million.We expect to continue to incur significant expenses in connection with our ongoing activities,although we do expect to become profitable through the continued growth of our commercial bu

62、siness.In light of our own business activities and external developments in the biotechnology and biopharmaceutical industries,Aytu management andour board of directors(the“Board”or the“Board of Directors”)regularly reviews our performance,prospects and risks such as the potential impact to ourbusin

63、ess resulting from the Companys competitive landscape(i.e.,entry of generic competitors,payer pressures,new branded entrants,etc.).Thesereviews have included consideration of potential partnerships,collaborations,and other strategic transactions such as acquisitions or divestitures ofprograms or tec

64、hnology to enhance stockholder value.Aytus management and Board continues to evaluate potential strategic transactions and businesscombinations.6Table of Contents Recent Business Development As part of our ongoing strategic evaluation and go-forward operating plan,we continue to prioritize growing o

65、ur Rx Segment given theencouraging prescription trends for our ADHD Portfolio and the current market trends supporting our products growth.We believe focusing resources onour most profitable,growing products provides the most effective pathway to achieve companywide profitability and continued growt

66、h.As part of our plan,we began winding down the Consumer Health Segment in fiscal 2024 and completed the wind down of operations and entered into a definitive agreementto effect the Consumer Health Divestiture in the first quarter of fiscal 2025.For fiscal 2024,our Rx Segment recorded net revenue of

67、$65.2 million.During the year,the ADHD market continued to encounter several supplychain interruptions,causing a shortage of medications for patients receiving stimulant prescriptions for the treatment of ADHD.We were able to continueto increase the production of our ADHD medications,Adzenys and Cot

68、empla,to provide patients with alternative solutions to products that haveexperienced supply interruptions.As a result,we recorded the highest prescription levels for both Adzenys and Cotempla during fiscal 2024,resulting in$57.8 million of net revenue for our ADHD Portfolio,the highest achieved in

69、our history.We saw a reduction in net revenue from our Pediatric Portfolioproducts,largely due to payor changes impacting coverage and recusing prescriptions.To reduce the costs associated with the manufacture of Adzenys and Cotempla we transferred the manufacturing of these products to a UnitedStat

70、es-based third-party manufacturer in the fourth quarter of fiscal 2024.Prior to this,we manufactured these products in our facility in Grand Prairie,Texas.As an additional result of focusing on building the portfolio of revenue-generating products and generating profitability,in fiscal 2023we indefi

71、nitely suspended active development of our clinical development programs including AR101(enzastaurin)and terminated our license agreementsrelating to Healight and NT0502(N-desethyloxybutynin).AR101 is a development-stage asset we had been developing as an investigational treatment forVascular Ehlers

72、-Danlos Syndrome(“VEDS”),a rare connective tissue disorder for which there are no approved treatments.AR101 has received OrphanDrug Designation from both the United States Food and Drug Administration(“FDA”)and from the European Commission,thus making AR101 eligiblefor market exclusivity upon produc

73、t approval.AR101 also received Fast Track Designation from the FDA given the urgent,unmet need in VEDS.We donot expect the development of AR101 to advance until we are able to either fund development through operating cash flows,or through an out-license orsale to a strategic partner as we focus our

74、 resources on our commercial operations.Debt and Equity Financings Eclipse Agreement In June 2024,we and certain of our subsidiaries entered into a Consent,Joinder and Amendment No.5(the“Eclipse Amendment No.5”)to theloan and security agreement dated October 2,2019,as amended by Amendment No.1,dated

75、 March 19,2021,Amendment No.2,dated January 26,2022,Amendment No.3,dated June 1,2022,Amendment No.4 dated March 24,2023,and the Eclipse Amendment No.5(together the“Eclipse Agreement”)with Eclipse Business Capital LLC(“Eclipse”),as agent,and the lenders party thereto(agent and such lenders,collective

76、ly,the“Eclipse Lender”).Underthe Eclipse Amendment No.5,we have two loan agreements,a term loan(the“Eclipse Term Loan”)and a revolving credit facility(the“Eclipse RevolvingLoan”).The Eclipse Term Loan consists of a principal amount of$13.0 million,at an interest rate of the secured overnight financi

77、ng rate as administeredby the SOFR Administrator(“SOFR”)plus 7.0%,with a four-year term and a straight-line loan amortization period of seven years,which would providefor a loan balance at the end of the four-year term of$5.6 million to be repaid on June 12,2028,the maturity date.We used the proceed

78、s of the EclipseTerm Loan and a portion of the proceeds from warrant exercises described below to repay in full a$15.0 million term loan.The Eclipse Revolving Loan allows us to borrow up to$14.5 million at an interest rate of SOFR plus 4.5%.In addition,we are required to pay anunused line fee of 0.5

79、%of the average unused portion of the maximum Eclipse Revolving Loan amount during the immediately preceding month.Theability to make borrowings and obtain advances of the Eclipse Revolving Loan remains subject to a borrowing base and reserve,and availability blockagerequirements and the maturity da

80、te,as amended,is June 12,2028.7Table of Contents Equity Financings In June 2023,we raised gross proceeds of$4.0 million from the issuance of(i)1,743,695 shares of our common stock,and(ii)in lieu of commonstock to certain investors that so chose,pre-funded warrants to purchase 430,217 shares of commo

81、n stock(the“June 2023 Pre-Funded Warrants”)and(iii),accompanying Tranche A warrants to purchase 2,173,912 shares of common stock at an exercise price of$1.59(the“Tranche A Warrants”),(iv)andaccompanying Tranche B warrants to purchase 2,173,912 shares of common stock at an exercise price of$1.59(the“

82、Tranche B Warrants”).Wereceived$3.4 million in proceeds net of underwriting fees and other expenses.In June 2024,the Tranche B Warrants were exercised,generating proceeds of$3.5 million.The Tranche B Warrants were converted into 367,478shares of common stock and 1,806,434“pre-funded”warrants to purc

83、hase shares of common stock with an exercise price of$0.0001 per share(the“Tranche B Pre-Funded Warrants”).We used a portion of these proceeds as part of the$15.0 million term loan repayment described above.Commercial Business Overview We operate through two business segments(i)the Rx Segment,consis

84、ting of various prescription pharmaceutical products sold through thirdparties,and(ii)the Consumer Health Segment,which consists of various consumer health products sold directly to consumers.We completed the winddown of the Consumer Health Segment and entered into a definitive agreement to effect t

85、he Consumer Health Divestiture in the first quarter of fiscal 2025.We generate revenue by selling our products through third party intermediaries in our marketing channels as well as directly to our customers.Wetransitioned the manufacturing of our ADHD products to a third-party manufacturer during

86、the fourth quarter of fiscal 2024 and continue to use third partymanufacturers for all other products.Rx Segment Our Rx Segment consists of our ADHD Portfolio and our Pediatric Portfolio.Our prescription products are sold primarily in the United States andare distributed through multiple channels,in

87、cluding sales to pharmaceutical wholesalers,distributors and pharmacies,using third-party logisticsenterprises.Our ADHD products are extended-release(“XR”)medications formulated in patient-friendly,orally disintegrating tablets(“ODT”)that utilize theinternally developed microparticle modified-releas

88、e drug delivery technology platform.Products containing amphetamine or methylphenidate are the mostcommonly prescribed medications in the United States for the treatment of ADHD.Adzenys(for patients six years of age and above)and Cotempla(forpatients six to seventeen years of age)are the first and o

89、nly FDA-approved amphetamine and methylphenidate extended-release,orally disintegratingtablets,respectively,for the treatment of ADHD.Our prescription Pediatric Portfolio includes Karbinal,an extended-release carbinoxamine(a first-generation antihistamine)suspension indicatedto treat numerous allerg

90、ic conditions for patients two years of age and above and Poly-Vi-Flor and Tri-Vi-Flor,two complementary prescriptionfluoride-based multi-vitamin product lines containing combinations of fluoride and vitamins in liquid and chewable tablet form for infants and childrenwith fluoride deficiency(Karbina

91、l,Poly-Vi-Flor and Tri-Vi-Flor are collectively the“Pediatric Portfolio”).These products serve established pediatricmarkets and offer distinct clinical features and patient benefits.We commercialize our Rx Portfolio through our internal commercial organization that includes approximately forty sales

92、 territories for our ADHDPortfolio and approximately five sales territories for our Pediatric Portfolio.Our Aytu RxConnect patient support program operates through a network of approximately 1,000 pharmacies to offer affordable,predictablecopays and hassle-free availability to all commercially insur

93、ed patients,regardless of their individual insurance plan.In addition,RxConnect seeks tosignificantly reduce the challenges and frustrations that health care professionals and their office staff can face when prescribing branded medications,including our medications,for their patients.In July 2023,w

94、e entered into an exclusive collaboration,distribution and supply agreement with Medomie Pharma Ltd(“Medomie”),a privatelyowned pharmaceutical company,for Medomie to sell Adzenys and Cotempla in Israel and the Palestinian Authority.We will supply Adzenys and Cotemplato Medomie,who will be responsibl

95、e for seeking local regulatory approvals and marketing authorizations for each product.This agreement representsAytus first international commercial agreement for Adzenys and Cotempla.8Table of Contents Consumer Health Segment Our Consumer Health Segment was dedicated to commercializing safe and eff

96、ective“over-the-counter”(“OTC”)medicines,personal careproducts,and dietary supplements to improve health and vitality.Our core products competed in categories such as hair loss,digestive health,urologicalhealth,diabetes management,and allergy.The Consumer Health Segment sold directly to consumers pr

97、imarily in the United States through e-commerce platforms,including brandedwebsites and A,which utilized marketing strategies focused on search engine optimization,search marketing and affiliate marketing.Additionally,the segment sold products through direct mail solicitations and advertisements,all

98、owing consumers to purchase directly through businessreply mail,through call centers,or online with shipment directly to their homes.In fiscal 2023,we announced we would wind down the Consumer Health Segment.We completed the wind down of the Consumer HealthSegment and entered into a definitive agree

99、ment to effect the Consumer Health Divestiture in the first quarter of fiscal 2025.Development Portfolio AR101 In April 2021,we entered into an asset purchase agreement with Rumpus VEDS,LLC,Rumpus Therapeutics,LLC,and Rumpus Vascular,LLC(together“Rumpus”)pursuant to which we acquired commercial glob

100、al licenses,relating primarily to the pediatric-onset rare disease development assetenzastaurin,or AR101.AR101 is initially being developed for the treatment of VEDS with the potential to treat other connective tissue disorder diseasessuch as Marfans syndrome.AR101 is an orally available investigati

101、onal first-in-class small molecule,serine/threonine kinase inhibitor of the PKC beta,PI3K and AKTpathways.AR101 has been studied in more than 3,300 patients across a range of solid and hematological tumor types in trials previously conducted by EliLilly&Company.Harry“Hal”C.Dietz III,M.D.developed th

102、e first preclinical model that mimics the human condition and recapitulates VEDS,and thismodel serves as the basis for the plausible clinical benefit and rationale for conducting a clinical trial with AR101 in VEDS.This novel knock-in mousemodel has the same genetic mutation most prevalent in VEDS p

103、atients and is representative of the human condition in both the timing and location ofVEDS-related vascular events.The model has generated identical structural histology and mechanical characteristics,and unbiased findings demonstratedthat vascular structure alone does not lead to vascular events.O

104、bjective comparative transcriptional profiling by high-throughput RNA sequencing of theaorta displayed a molecular signature for excessive PKC/ERK cell signaling that is the purported driver of disease.PKC inhibitors proved efficacious inmultiple pre-clinical and murine models and indeed prevented d

105、eath due to vascular rupture.We have secured exclusive global rights to AR101 in the field of connective tissue disorders with the initial license covering VEDS.AR101 isprotected by a suite of pending patents being pursued in major markets globally which have been licensed from The Johns Hopkins Uni

106、versity(“JohnsHopkins”)and have an earliest priority date of March 2017.In December 2021,the FDA granted Orphan Drug Designation(“ODD”)to AR101 for thetreatment of EDS,inclusive of VEDS,allowing for seven years of marketing exclusivity in the United States.The FDA has cleared the IND application for

107、AR101,although,we do not expect to advance development of AR101 until we are able to either fund development through operating cash flows orthrough an out-license or sale to a strategic partner.9Table of Contents Strategy Our goal is to become a leading pharmaceutical company that improves the lives

108、 of patients.We will do this by employing a focused approach ofin-licensing,acquiring,developing,and commercializing novel prescription therapeutics.Our primary focus is on commercializing innovative prescriptionproducts that address conditions frequently developed or diagnosed in childhood,includin

109、g ADHD.Our strategic priorities are to continue to increase revenues from our Rx Segment and enhance our financial performance through operational andmanufacturing efficiencies and portfolio prioritization.Specifically,we intend to:continue to grow our commercial branded,revenue-generating products,

110、by increasing product sales and improving patient access.Ourprimary commercial objective is to drive revenue growth of our brands,which consist primarily of Adzenys,Cotempla,Karbinal,Poly-Vi-Flor and Tri-Vi-Flor.We expect to increase market share using our internal commercial organization and levera

111、ging our advanced analyticsplatform to increase prescribing our medicines;leverage our novel Aytu RxConnect patient support platform,which is designed to reduce access barriers to medicines facing patients andHCPs by providing coverage for all commercially insured patients,regardless of their indivi

112、dual insurance plan,thus establishing anaffordable and predictable monthly co-pay for patients,and eliminating many of the hassles facing HCPs and their staffs by improvingavailability of Aytu products at participating pharmacies;and improve gross margins for our ADHD product franchise through the m

113、anufacturing transfer of Adzenys and Cotempla to a contractmanufacturing organization,a transition that was completed in the fourth quarter of fiscal 2024.We believe our history of acquiring companies and in-licensing and acquiring products and pipeline assets,along with our success in building outc

114、ommercial organizations and executing product growth strategies,is a distinct competitive advantage.Our transactional adeptness and executionorientation enable us to continue to seek growth opportunities through both organic growth and opportunistic in-licensing or strategic acquisitions.Further,our

115、 commercial infrastructure and advanced analytics capability is scalable and lends itself to additional on-market assets and future product candidates thatfit within our commercial capabilities and infrastructure.As such,in the near term,we may seek to leverage our commercial model and infrastructur

116、e byexpanding our commercial portfolio with external product opportunities as we have done since our inception.Products and Markets Prescription Products:ADHD Portfolio ADHD Market and Treatment Options ADHD is a neurobehavioral disorder characterized by a persistent pattern of inattention and/or hy

117、peractivity/impulsivity that interferes withfunctioning and/or development.ADHD can have a profound impact on an individuals life,causing disruption at school,work,home and in relationships.It is one of the most common developmental disorders in children and often persists into adulthood.The Centers

118、 for Disease Control and Prevention(“CDC”)reported that six million children in the United States ages 3 to 17 had previously received an ADHD diagnosis between 2016-2019,up 36%since2003.Current ADHD treatment guidelines recommend a multi-faceted approach that uses medications in conjunction with be

119、havioral interventions.In 2023,approximately 96.0 million prescriptions for medications with ADHD labeling were written in the United States,generating$27.4 billionin sales.Approximately 89%of these prescriptions were for stimulant medications,such as amphetamine and methylphenidate,which are and ha

120、veremained the standard of care for several decades.The market for ADHD medications outside of the United States is less developed,but we believe it willcontinue to grow as recognition and awareness of the disorder increase.10Table of Contents Extended-release,or long-acting,dosage forms of stimulan

121、t medications are the standard of care for treating ADHD,making up approximately59%of ADHD prescriptions.The most prescribed extended-release medications for ADHD,Adderall XR and Concerta(and each of their genericequivalents),are long-acting versions of previously short-acting amphetamine and methyl

122、phenidate medications,respectively.Most of these extended-release dosage forms allow for once-daily dosing in the morning,which eliminates the need to re-dose during the day.Our products,Adzenys XR-ODT andCotempla XR-ODT,are extended-release orally disintegrating tablets that allow for once-daily do

123、sing based upon our internally developed proprietarymicroparticle delivery technology and are the only approved extended-release orally disintegrating tablet formulations of amphetamine andmethylphenidate for the treatment of ADHD.There is significant competition in the ADHD market,including from we

124、ll-established companies,many of whom have substantially greaterfinancial,technical and commercial resources than we do,and entrenched existing ADHD products.For example:Extended-release amphetamine products are currently marketed in the United States by(i)Takeda Pharmaceutical Company Limited under

125、the brand names Adderall XR,Vyvanse and Mydayis and(ii)Tris Pharma,Inc.(“Tris”),under the brand names Dyanavel XR,Dyanavel XR tablets;Extended-release methylphenidate products are marketed in the United States by(i)Janssen Pharmaceuticals,Inc.under the brand nameConcerta,(ii)Tris under the brand nam

126、es Quillivant XR and QuilliChew ER,(iii)Rhodes Pharmaceuticals LP under the brand nameAptensio XR,(iv)Ironshore Pharmaceuticals Inc.under the brand name Jornay PM,(v)Alora Pharmaceuticals under the nameMethylphenidate HCl ER 72 mg Tablets,(vi)Novartis under the brand names Focalin XR and Ritalin LA

127、and(vii)Azstarys,a productdeveloped by KemPharm(now Zevra Therapeutics)and sold by Corium;and A non-stimulant treatment for ADHD was approved by the FDA and commercially launched by Supernus in the United States in 2021 isbeing sold under the brand name Qelbree.Other branded and generic non-stimulan

128、t treatments remain available in the United States but areno longer promoted.Further,makers of branded drugs could also enhance their own formulations in a manner that competes with our enhancements of these drugs.Weare also aware of efforts by several pharmaceutical companies with ADHD medications

129、in clinical development,including Cingulate Therapeutics,NLSPharma,Tris Pharma and Neurovance,a subsidiary of Otsuka Pharmaceutical Co.,Ltd.ADHD Product Portfolio Overview Our modified-release drug delivery technology platform has enabled us to create extended-release ODT formulations of amphetamine

130、 andmethylphenidate.This was achieved by developing an extended-release profile that allows for once daily dosing and an ODT formulation that allows foreasier administration and ingestion and twelve-hour duration of action.Adzenys and Cotempla are the first and only XR-ODT products for the treatment

131、 of ADHD.These XR-ODT products offer unique attributes toADHD patients and caregivers,including:ease of administration and ingestion because they disintegrate rapidly in the mouth and may be taken without water;taste-masking of bitter ADHD medications,with pleasant-tasting flavor;and prevention of“c

132、heeking,”the practice of hiding medication in the mouth and later spitting it out rather than swallowing it.11Table of Contents Adzenys XR-ODT:Amphetamine XR-ODT for the treatment of ADHD Adzenys is approved by the FDA for the treatment of ADHD in patients six years and older and is the first FDA-ap

133、proved amphetamine XR-ODTfor the treatment of ADHD.The New Drug Application(“NDA”)for Adzenys relies on the efficacy and safety data that formed the basis of FDA approvalfor the reference listed drug,Adderall XR,30 mg,together with bioequivalence,bioavailability,and aggregate safety data from the Ad

134、zenys clinicalprogram.Adzenys contains amphetamine loaded onto a mixture of immediate-release and polymer-coated delayed-release resin particles,which areformulated and compressed into an ODT along with other tableting excipients using our patented Rapidly Disintegrating Ionic Masking(“RDIM”)technol

135、ogy.The result is amphetamine with an in vivo extended-release profile delivered through a tablet that quickly disintegrates in the mouth without theneed for water.Adzenys is available in 30-day supply,child-resistant blister packs.The suite of composition-of-matter patents for Adzenys are scheduled

136、 to expire in 2026 and 2032.These patents are listed in the FDAspublication of approved drug products with therapeutic equivalence evaluations(the“Orange Book”).In addition,we entered into a settlement agreementwith Actavis Laboratories FL,Inc.(“Actavis”)(acquired by Teva Pharmaceutical Industries),

137、which resolved all ongoing litigation involving Adzenyspatents and Actavis ANDA with the FDA for a generic version of Adzenys.Under the agreement with Actavis,Actavis has the right to manufacture andmarket its approved generic version of Adzenys under the ANDA beginning on September 1,2025,or earlie

138、r under certain circumstances.In conjunction with the approval of the Adzenys NDA,the FDA has required us to conduct certain clinical studies in preschool(age four to fiveyears)children with ADHD as a post-marketing requirement.A pharmacokinetic study in this population was completed in 2018,and we

139、are in discussionswith the FDA to further clarify the design protocols required to conduct the remaining studies.Cotempla XR-ODT:Methylphenidate XR-ODT for the treatment of ADHD The FDA approved Cotempla for the treatment of ADHD in patients six to seventeen years old.The Cotempla NDA relies on the

140、efficacy andsafety data that formed the basis of FDA approval for the reference listed drug,Metadate CD,together with bioavailability/bioequivalence data andefficacy/safety data from the Cotempla clinical program.The results of the Cotempla Phase 3 clinical efficacy and safety trial showed a statist

141、icallysignificant improvement in ADHD symptom control compared to placebo across the school day.Onset of effect was observed within one-hour post-doseand persisted through 12 hours.No serious adverse events were reported during the study,and the adverse event profile was consistent with the drugsmec

142、hanism of action.Cotempla contains methylphenidate loaded onto a mixture of immediate-release and polymer-coated delayed-release resin particles,which areformulated and compressed into an ODT along with other tableting excipients using our RDIM technology.The result is methylphenidate with an in viv

143、oextended-release profile delivered through a tablet that quickly disintegrates in the mouth.Cotempla is available in 30-day supply,child-resistant blisterpacks.Cotempla is the first FDA-approved methylphenidate XR-ODT for the treatment of ADHD.We hold composition-of-matter patents in the United Sta

144、tes which we expect will provide Cotempla intellectual property protection until 2032,and a method-of-use patent was issued which extends protection to 2038.These patents are listed in the Orange Book.In addition,we entered into asettlement agreement with Teva Pharmaceuticals USA,Inc.(“Teva”),which

145、resolved all ongoing litigation involving the Cotempla patents and TevasANDA with the FDA for a generic version of Cotempla.Under the agreement with Teva,we granted Teva the right to manufacture and market its approvedgeneric version of Cotempla under the ANDA beginning on July 1,2026,or earlier und

146、er certain circumstances.In conjunction with the approval of the Cotempla NDA,the FDA required us to perform additional clinical studies in preschool(age four to fiveyears)children with ADHD as a post-marketing requirement.A pharmacokinetic study in this population was completed in 2019.In light of

147、a new draftguidance for industry that was published in May 2019,“Attention Deficit Hyperactivity Disorder:Developing Stimulant Drugs for Treatment Guidance forIndustry,”we remain in discussions with the FDA to gain concurrence on the design of the protocols required to meet the remaining post-market

148、ingrequirements.12Table of Contents Prescription Products:Pediatric Portfolio Karbinal:Extended release carbinoxamine oral suspension for the treatment of seasonal and perennial allergies Karbinal ER(carbinoxamine maleate extended-release oral suspension)is an H1 receptor antagonist(antihistamine)in

149、dicated to treat seasonaland perennial allergic rhinitis,vasomotor rhinitis,allergic conjunctivitis due to inhalant allergens and food,mild,uncomplicated allergic skinmanifestations of urticaria and angioedema,dermatographism,as therapy for anaphylactic reactions adjunctive to epinephrine and other

150、standard measuresafter the acute manifestations have been controlled,and amelioration of the severity of allergic reactions to blood or plasma for patients two years of ageand above.More than 100 million people in the United States experience various types of allergies each year.Allergic conditions

151、are one of the most commonhealth issues affecting children in the United States.Numerous allergy treatments exist to address allergies and allergic symptoms depending upon thesymptom(s).Oral antihistamines are considered a mainstay of allergy treatment,and the prescription antihistamine market is a

152、large category withapproximately 54 million antihistamine prescriptions written in 2023.The prescription antihistamine category is dominated by generic products andconsists of first-generation and second-generation molecules.Generally,first-generation antihistamines block both histaminic and muscari

153、nic receptors andpass the blood-brain barrier.Second-generation antihistamines mainly block histaminic receptors,but they do not pass the blood-brain barrier.First-generation antihistamines,which are generally characterized as more sedating,accounted for 6%of 2023 total prescriptions,while non-sedat

154、ing,second-generation antihistamines accounted for 94%of total prescriptions.The most widely prescribed oral,second-generation antihistamines are cetirizine(brandname Zyrtec)and loratadine(brand name Claritin).Diphenhydramine(brand name Benadryl)is the most widely prescribed first-generation molecul

155、e.Karbinal is the only FDA-approved,12-hour carbinoxamine oral suspension and is an effective antihistamine with a broad range of indications.Karbinal is positioned as a second-line allergy treatment for patients who continue to suffer from allergic symptoms following initial treatment with asecond-

156、generation,non-sedating antihistamine.Further,as Karbinal is an oral suspension formulation,children are the primary target patient given theirpreference for liquid treatments and,in many cases,their inability to swallow tablets or capsules.Karbinal is indicated for children as young as two years of

157、age.Karbinal has a pleasant strawberry-banana taste and is available in 480 mL bottles.Through a supply and distribution agreement with Tris,we own exclusive rights to distribute Karbinal in the United States through August 2032,unless the agreement is terminated earlier pursuant to the termination

158、provisions in the agreement.As part of the agreement,we pay sales-based royaltiesbased on net revenue.Additionally,we are committed to making annual minimum payments to Tris through August 2025.Two core patents protect Karbinal in the United States,and both patents are listed in the FDAs Orange Book

159、.The first patent describes a coateddrug-ion exchange resin complex comprising a core composed of a drug complexed with a pharmaceutically acceptable ion-exchange resin.The prioritydate for this family is March 29,2009,so the standard 20-year exclusivity for this patent will expire in 2029.The secon

160、d patent describes an aqueous liquidsuspension containing a coated drug-ion exchange resin complex comprising a core molecule complexed with a pharmaceutically acceptable ion-exchangeresin and an uncoated ion exchange resin complex.The priority date for this family is June 15,2007,so the standard 20

161、-year exclusivity for this patent willexpire in 2027.Along with second-generation prescription oral antihistamines,Karbinal also faces competition from OTC products such as non-sedatingantihistamines,sedating antihistamines as well as nasal steroids,nasal antihistamines,and anticholinergics.Poly-Vi-

162、Flor and Tri-Vi-Flor:Our fluoride-based multivitamin prescription supplement product line for infants and children Poly-Vi-Flor and Tri-Vi-Flor are two complementary prescription fluoride-based supplement product lines containing combinations of vitaminsand sodium fluoride in various oral formulatio

163、ns.These prescription supplements are prescribed for infants and children to treat or prevent fluoridedeficiency due to poor diet or low levels of fluoride in drinking water and other sources while also providing multi-vitamin support and folic acidsupplementation.Because these products contain at l

164、east.25 mg of sodium fluoride,Poly-Vi-Flor and Tri-Vi-Flor are classified as products that should beadministered under the supervision of a licensed prescriber.13Table of Contents Fluoride supplementation has been proven to protect teeth from decay.Community water fluoridation prevents tooth decay b

165、y providing frequentand consistent contact with low levels of fluoride.By keeping the teeth strong and solid,fluoride stops cavities from forming and can rebuild the toothssurface.Community water fluoridation began in the United States in 1945 and as of 2016,more than 200 million people,or nearly 3

166、in 4 Americans whouse public water supplies,drank water with enough fluoride to prevent tooth decay.However,Americans living in municipalities that do not fluoridate thewater supply or in rural areas that rely on well water supplies frequently do not receive recommended levels of fluoride through fl

167、uoridation.Therefore,many children living in these areas often require daily fluoride supplementation as part of their mineral and vitamin intake.In many instances,physiciansprescribe fluoride-based multi-vitamins(Vitamins A,B,C,D and folic acid)regularly to supplement their fluoride intake and enab

168、le convenientsupplementation.Infants are prescribed easier-to-take multi-vitamin drops while older children are prescribed tablet formulations.In 2023,7.1 million multi-vitamin prescriptions were written in the United States.Of those prescriptions,multi-vitamins containing sodiumfluoride accounted f

169、or 0.9 million total prescriptions.Common multi-vitamin combinations contain vitamins A,B,C,D and E,but no other prescriptionpediatric multi-vitamin products contain Metafolin,which makes the Poly-Vi-Flor and Tri-Vi-Flor product lines distinct,single-source brands.Other brandsinclude Tri-Vite(market

170、ed by Method Pharmaceuticals),Floriva(marketed by BonGeo Pharmaceuticals)and Quflora(marketed by Carwin PharmaceuticalAssociates).Poly-Vi-Flor is available in both chewable tablet and oral liquid suspension multivitamin formulations in six different product presentations:Poly-Vi-Flor Chewable Tablet

171、s.25 mg,.50 mg,and 1 mg tablets,Poly-Vi-Flor Chewable Tablets with Iron,Poly-Vi-Flor Oral Suspension and Poly-Vi-Flor OralSuspension with Iron.Poly-Vi-Flor contains Vitamin A,Vitamins B1,B2,B3,and B6,Vitamin C,Sodium Fluoride in various doses and Metafolin,aproprietary,trademarked L-methylfolate for

172、m of folic acid developed by and licensed from Merck&Cie(“Merck”).Beginning in the second half of fiscal2023,we introduced Poly-Vi-Flor and Tri-Vi-Flor containing Arcofolin,Arcofolin offers an improved profile over Metafolin as a body ready L-methylfolate.Arcofolins low water content and low molecul

173、ar weight of the counterion yield higher levels of assayed folate than other forms of L-methylfolate currently available on the market.It also has an improved purity profile,enhanced water solubility and an excellent overall stability profile.The addition of Arcofolin also broadens the brands IP pro

174、tection and extends the patent life and provides further differentiation with this novel ingredient.Tri-Vi-Flor is available as an oral liquid suspension(.25 mg fluoride)containing Vitamin A,Vitamin C,Vitamin D3,Sodium Fluoride,SodiumBenzoate and L-methylfolate.By virtue of its L-methylfolate conten

175、t,Tri-Vi-Flor offers a similar clinical profile:a fluoride-based multivitamin containinga proprietary,body-ready L-methylfolate.Arcofolin,which we also licensed exclusively in our field of use,is Mercks manufactured calcium salt of L-5-methyltetrahydrofolic or L-methylfolate.Arcofolin is a body read

176、y alternative to folic acid and offers good stability,solubility,and bioavailability.Folic acid supplementation isrecommended in various patient groups,but a significant number of patients have difficulty metabolizing folate due to an enzymatic deficiency caused by agenetic mutation affecting the en

177、zyme methylenetetrahydrofolate reductase,or MTHFR.MTHFR converts ingested folate(such as supplemented folicacid)into L-methylfolate,the bodys usable form.Clinical studies have demonstrated that 75%of patients may have at least one MTHFR genetic mutationwhile 40%may have two mutations.These mutations

178、 lead to impaired function of the enzyme and result in folate deficiency.Both Arcofolin and Metafolinare unaffected by the MTHFR mutation,thereby directly delivering bioavailable L-methylfolate,and offering a distinct clinical advantage over other folicacid supplements.The core family of patent cove

179、ring Arcofolin has a priority date of March 31,2017 and describes a crystalline sodium salt of 5-methyl-(6S)-tetrahydrofolic acid wherein the molar ratio of 5-methyl-(6S)-tetrahydrofolic acid to sodium is from 1:0.5 to 1:1.5(in mol/mol)and/or hydrates and/orsolvates thereof,as well as a process of o

180、btaining the same.Upon issuance,the standard 20-year exclusivity for this patent would expire in 2037.The prescription multi-vitamin market is dominated by generic products,with brands accounting for 12.3%of the multivitamin plus fluoridemarket for the calendar year ending December 31,2023.Poly-Vi-F

181、lor and Tri-Vi-Flor primarily compete in the generic prescription multi-vitamin fluoridemarket and with the branded products FLORIVA and QFLORA.14Table of Contents Manufacturing ADHD Product Portfolio During fiscal 2024 we completed the process of transferring the manufacturing of our ADHD products

182、to a United States-based contractmanufacturing organization(“CMO”).The transfer of the manufacturing of pharmaceutical products required several steps including knowledge andmethod transfer,manufacturing of materials for feasibility studies and confirmation batch materials,bioequivalence studies,ins

183、pections from regulatoryagencies,and regulatory filings.We completed the required steps,including the successful completion of bioequivalence studies,which were required inorder to enable the transfer of both Adzenys and Cotempla.Our CMO started manufacturing both Adzenys and Cotempla during the thi

184、rd quarter of the2024 fiscal year and will manufacture all of our ADHD products going forward.We are responsible for supplying the active pharmaceutical ingredients forthe ADHD products to our CMO.Our CMO is responsible for manufacturing the products,conducting quality control,quality assurance,vali

185、dationactivities,stability testing,packaging and providing related services for the manufacture of the products.We are required to purchase all of our ADHDproducts from them,with certain exceptions.Our agreement with this CMO has an initial term beginning in November 2023,and ending in November2028,

186、and automatically renews after the initial term for successive terms of three years,with certain termination rights for both parties as outlined in theagreement Pediatric Product Portfolio We contract with CMOs for the manufacture and testing of our Pediatric Portfolio products.We have entered into

187、the following key supplyagreements for the commercial manufacture and supply of certain of these products:Karbinal is purchased through a supply agreement with Tris.This agreement terminates in August 2033,subject to earlier termination orextension in accordance with the terms of the agreement.Poly-

188、Vi-Flor and Tri-Vi-Flor drops are purchased through supply agreements with CMOs based in the United States.Merck&Cie isresponsible for providing Metafolin and Arcofolin to our designated CMO.We believe the third-party manufacturers have adequate capacity to manufacture sufficient quantities of our p

189、roducts to meet anticipatedcommercial demands.As we rely on CMOs,we continue to employ personnel with extensive technical,manufacturing,supply chain management,analytical and quality experience to oversee contract manufacturing and testing activities,and to compile manufacturing and quality informat

190、ion for ourregulatory submissions.Manufacturing is subject to extensive regulations that impose various procedural and documentation requirements,and whichgovern record-keeping,manufacturing processes and controls,personnel,quality control and quality assurance,among other activities.Our systems and

191、 ourcontractors are required to comply with these regulations,and we assess this compliance regularly through monitoring of performance and a formal auditprogram.Research and Development We have indefinitely suspended product candidate research and development activities in order to focus our resour

192、ces on our commercializationefforts.Due to the suspension of product candidate research and development,the development of AR101,our lead product candidate,is on indefinite hold.We are pursuing strategic partnerships in order to advance this program but can make no assurance that a partnership will

193、be 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 the protein kinase C(“PKC”)beta,PI3K and AKT pathways.AR101

194、has been studied in more than 3,300 patients across a range of solid and hematological tumor types.AR101 was originally developed by Eli Lilly and Company(“Lilly”),and worldwide rights were acquired by Denovo Biopharma in September 2014following Lillys discontinuation of the enzastaurin development

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

196、 variants in the COL3A1 gene,which encodes the chains of type III procollagen,a major protein in vessel walls and hollow organs.Twenty-fivepercent of VEDS patients have a first complication by the age of 20 years,and more than 80 percent have at least one complication by the age of 40.VEDSpatients h

197、ave a median lifespan of 51 years.There are currently no FDA approved treatments for VEDS.15Table of Contents The research underpinning the application of enzastaurin for the treatment of VEDS has been conducted by Dr.Harry(Hal)Dietz and his researchcolleagues.Dr.Dietz is the Victor A.McKusick Profe

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

199、etz is a leading scientist in the field of genetic connective tissue disorders anddeveloped the first preclinical model that mimics the human condition and recapitulates VEDS.His groups research findings were published in the Journalof Clinical Investigation in February 2020.The VEDS knock-in murine

200、 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 has generated identical structuralhistology and mechanical characteristics,and unbiased findings dem

201、onstrated that structure alone does not lead to vascular events.Objective comparativetranscriptional profiling by high-throughput RNA sequencing of the aorta displayed a consistent molecular signature for excessive PKC/ERK cell signalingthat is now known to be the driver of disease.Based on the scie

202、ntific rationale for intervention along the PKC/ERK pathway,PKC inhibition and treatmentwith PKC inhibitors proved efficacious 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-Danlos

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

204、 frequent interaction with the FDA duringthe development process.AR101 is protected by a suite of five pending patents being pursued in major markets globally which have been licensed from Johns Hopkins andhave an earliest priority date of March 2017.The cornerstone of the intellectual property fami

205、ly surrounds enzastaurin initially targeting the treatment ofVEDS focused on the United States and certain foreign jurisdictions which include Europe,Japan,China,Brazil,Mexico,Canada,Israel,Australia,NewZealand and South Korea.This pending patent provides compositions and methods for treating VEDS a

206、nd associated connective tissue disorders and has apriority date of October 2018.The second pending patent provides methods and compositions for the diagnosis,treatment,and prevention of Marfansyndrome and related diseases,disorders and conditions and has a priority date of March 2017,in select geog

207、raphies.The third pending patent,titled“Targeted Epigenetic Therapy for Inherited Aortic Aneurysm Conditions,”broadens the coverage of the potential therapeutic application ofAR101/Enzastaurin and has a priority date of September 2017.The fourth pending patent,titled“Pathway Targets for the Treatmen

208、t of Vascular Ehlers-Danlos Syndrome”,and the fifth pending patent,titled“Endothelin-1 Signaling Contributes to Vascular Rupture Risk”,deepens the scientific evidence ofthe pathophysiology of Vascular Ehlers-Danlos Syndrome and are highly confirmatory of the therapeutic approach for AR101/Enzastauri

209、n.These pendingpatents have priority dates of September 2020 and February 2022 respectively.Additional molecule specific intellectual property is afforded through thelicense with Denovo whose pending patent provides methods and compositions for the prediction of the activity of enzastaurin and has a

210、 priority date ofSeptember 1,2016.Intellectual Property We seek trademark protection in the United States when appropriate.We currently own or license registered trademarks for Aytu,AytuBioPharma,Aytu RxConnect,Neos Therapeutics,Adzenys,Adzenys ER,Adzenys XR-ODT,Cotempla,Cotempla XR-ODT,Karbinal,Pol

211、y-Vi-Flor andTri-Vi-Flor 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 Regulation We are subject to extensive regulation by the FDA and other

212、 federal,state,and local regulatory agencies.The FDCA and the FDAs implementingregulations 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,adverti

213、sing and promotion of our products and product candidates.We may seekapproval for,and market,our products in other countries in the future.Generally,our activities in other countries will be subject to regulation that is similarin nature and scope as that imposed in the United States,although there

214、can be important differences.16Table of Contents Development and Approval Under the FDCA,FDA approval of an NDA is required before any new drug can be marketed in the United States.NDAs in the case of newdrugs may require extensive studies and submission of a large amount of data by the applicant,in

215、cluding the following:Preclinical Testing Preclinical testing generally includes laboratory evaluation of product chemistry and formulation,as well as toxicological and pharmacologicalstudies in several animal species to assess the toxicity and dosing of the product.Clinical Trials Clinical trials i

216、nvolve the administration of a drug to healthy human volunteers or to patients,under the supervision of a qualified investigator.Phase 1 clinical trials involve the initial administration of the investigational drug to humans,typically to a small group of healthy humansubjects,but occasionally to a

217、group of patients with the targeted disease or disorder.Phase 1 clinical trials generally are intended to evaluatethe safety,metabolism and pharmacologic actions of the drug,the side effects associated with increasing doses,and,if possible,to gain earlyevidence of effectiveness.Phase 2 clinical tria

218、ls generally are controlled studies that involve a relatively small sample of the intended patient population and aredesigned to develop initial data regarding the products effectiveness,to determine dose response and the optimal dose range,and to gatheradditional information relating to safety and

219、potential adverse effects(“AEs”).Phase 3 clinical trials are conducted after preliminary evidence of effectiveness has been obtained and are intended to gather the additionalinformation about safety and effectiveness necessary to evaluate the drugs overall risk-benefit profile,and to provide a basis

220、 for physicianlabeling.Generally,Phase 3 clinical development programs consist of expanded,multi-site,large-scale studies of patients with the targetdisease or disorder to obtain statistical evidence of the efficacy and safety of the drug at the proposed dosing regimen.Phase 3 data often formthe pri

221、mary basis on which the FDA evaluates a drugs safety and effectiveness when considering the product application.Post-Approval Regulation Once approved,drug products are subject to continuing regulation by the FDA.If ongoing regulatory requirements are not met or if safety ormanufacturing problems oc

222、cur after the product reaches the market,the FDA may at any time withdraw product approval or take actions that would limit orsuspend marketing.Additionally,the FDA may require post-marketing studies or clinical trials,changes to a products approved labeling,including theaddition of new warnings and

223、 contraindications,or the implementation of other risk management measures,including distribution-related restrictions,ifthere are new safety information developments.DEA Regulation Our ADHD products are considered a“controlled substance”as defined in the Controlled Substances Act of 1970,or CSA,bec

224、ause Adzenyscontains amphetamine and Cotempla contains methylphenidate.Because amphetamine and methylphenidate are Schedule II controlled substances,theDEA has Adzenys and Cotempla listed and regulated as Schedule II controlled substances.None of our pediatric products(Karbinal,Poly-Vi-Flor and Tri-

225、Vi-Flor)are considered“controlled substances.”Annual registration is required for any facility that manufactures,distributes,dispenses,imports or exports any controlled substance.Theregistration is specific to the particular location,activity and controlled substance schedule.The DEA establishes ann

226、ually an aggregate quota for how much of a controlled substance may be produced in and/or imported into the UnitedStates-based on the DEAs estimate of the quantity needed to meet legitimate scientific and medicinal needs.The DEA may adjust aggregate productionquotas and individual production and pro

227、curement quotas from time to time during the year,although the DEA has substantial discretion in whether or notto make such adjustments.Our manufacturers quotas of an active ingredient may not be sufficient to meet commercial demand or complete clinical trials.Any delay,limitation or refusal by the

228、DEA in establishing our manufacturers quota for controlled substances could delay or stop our clinical trials orproduct launches,which could have a material adverse effect on our business,financial position and results of operations.17Table of Contents Individual states also independently regulate c

229、ontrolled substances.We and our manufacturers will be subject to state regulation on distribution ofthese products,including,for example,state requirements for licensures or registration.Additionally,we use third-party logistics firms to inventory and fillsales orders for our commercial portfolio.Hu

230、man Capital As of September 16,2024,we employed 102 employees,of which 99 were full-time employees.Of our 102 employees,14 are involved inoperations,58 are involved in commercialization and 30 are involved in general and administrative activities.All of our colleagues are located in theUnited States

231、.Of these colleagues,50%are female and 50%are male.Our colleagues are not represented by a labor union.Our values team-oriented,hard-working,relentlessly determined,integrity,visionary,entrepreneurial,and servant-minded are built on thefoundation that the colleagues we hire and the way we treat one

232、another promote innovation,and high productivity,which spur our success.This culturedepends in large part on our ability to attract,retain and develop a diverse population of talents and high-performing employees at all levels of ourorganization.Providing market competitive pay and benefit programs,

233、opportunities to participate in the success they help create,while engagingcolleagues in important dialogue regarding organization performance,we create a culture of inclusion in which all colleagues have the opportunity tothrive.Available Information Our principal executive offices are located at 7

234、900 East Union Avenue,Suite 920,Denver,Colorado 80237,and our phone number is(720)437-6580.We maintain a website on the internet at https:/.We make available,free of charge,through our website,by way of a hyperlink to athird-party site that includes filings we make with the United States Securities

235、and Exchange Commission(“SEC”)website(www.sec.gov),our annualreports on Form 10-K,quarterly reports on Form 10-Q,current reports on Form 8-K and amendments to those reports electronically filed or furnishedpursuant to Section 15(d)of the Exchange Act.The information on our website is not,and shall n

236、ot be deemed to be,a part of this Annual Report orincorporated 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 SECsPublic Reference Room at 100 F Street,N.E.,Washington D.C.,20549.Information on the operation of the Publi

237、c Reference Room may be obtained bycalling the SEC at 1-800-SEC-0330.Code of Ethics We have adopted a written code of ethics that applies to our officers,directors,and employees,including our principal executive officer andprincipal accounting officer.We intend to disclose any amendments to,or waive

238、rs from,our code of ethics that are required to be publicly disclosedpursuant to rules of the SEC by filing such amendment or waiver with the SEC.This code of ethics and business conduct can be found in the corporategovernance section of our website,https:/ of Contents ITEM 1A.RISK FACTORS Investing

239、 in our securities includes a high degree of risk.You should consider carefully the specific factors discussed below,together with all ofthe other information contained in this Annual Report.If any of the following risks actually occurs,our business,financial condition,results of operationsand futur

240、e prospects would likely be materially and adversely affected.This could cause the market price of our securities to decline and could cause youto lose all or part of your investment.Risks Related to Our Business and Financial Position We have incurred losses to date and can give no assurance of pro

241、fitability.We have incurred losses in each year since our inception.Our net loss for the years ended June 30,2024,and 2023,was$15.8 million and$17.1 million,respectively.We have not demonstrated the ability to be a profit-generating enterprise to date.Even though we expect to have revenuegrowth in t

242、he next several fiscal years,it is uncertain that the revenue growth will be significant enough to offset our expenses and generate a profit in thefuture.Potential investors should evaluate us in light of the expenses,delays,uncertainties,and complications typically encountered by healthcarebusiness

243、es,many of which will be beyond our control.These risks include the following:uncertain market acceptance of our products;difficulties in maintaining coverage and reimbursement for our products;lack of sufficient capital;United States and foreign regulatory approval of our products;unanticipated pro

244、blems,delays,and expense relating to product development and implementation;lack of sufficient intellectual property;the ability to attract and retain qualified employees;the introduction of generic competition;competition;and technological changes.As a result of the increasingly competitive nature

245、of the markets in which we compete,our historical financial data is of limited value inanticipating future operating expenses.Our planned expense levels will be based in part on our expectations concerning future operations,which is difficultto forecast accurately based on our historical strategy of

246、 product and/or business acquisition to develop our product and business portfolio.We may beunable to adjust spending in a timely manner to compensate for any unexpected budgetary shortfall.To obtain revenues from our products,we must succeed,either alone or with others,in a range of challenging act

247、ivities,including expandingmarkets for our existing products,manufacturing,marketing and selling our existing products,satisfying any post-marketing requirements,and obtainingreimbursement for our products from private insurance or government payors.We,and our collaborators,as applicable,may not be

248、successful in theseactivities and,even if we or our collaborators do,we may never generate revenues that are sufficient to achieve profitability.19Table of Contents We have not established sources of ongoing revenue sufficient to cover operating costs.Since our inception,we have had significant oper

249、ating losses.As of June 30,2024,we had accumulated deficit of$320.0 million.Even thoughduring fiscal 2024 we mitigated the conditions that gave rise to substantial doubt about our ability to continue as a going concern,we may continue to incurnet losses,and our ability to generate positive cash flow

250、s from operating activities is uncertain for the foreseeable future.We have not established anongoing source of revenue sufficient to cover operating costs.Our ability to continue as a going concern is dependent on our continued operationalimprovements,refinancing,or obtaining adequate capital to fu

251、nd operating losses until we become profitable.If we are unable to generate sufficient cashflows or obtain adequate capital,we may be unable to develop and commercialize our product offerings and we could be forced to cease operations.We may need to raise additional funding,which may not be availabl

252、e on acceptable terms,or at all.Failure to obtain necessary capital when neededmay force us to delay,limit or terminate our growth efforts or other operations.Further,future sales and issuances of our common stock or rights topurchase common stock will result in dilution of the percentage ownership

253、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 require additional fundingthrough public or private equity or debt financings,government or other third-party funding,

254、marketing and distribution arrangements and othercollaborations,strategic alliances and licensing arrangements,or a combination of these approaches.As of June 30,2024,our cash and cash equivalentstotaled$20.0 million.During the year ended June 30,2024,we received$13.0 million of proceeds from the Ec

255、lipse Term Loanand$3.6 million of proceeds from the exercise of warrants,a portion of which was used for the repayment of a$15.0 million term loan,which was replacedby the Eclipse Term Loan.Our operating plans may change as a result of many factors currently unknown to us,and we could need additiona

256、l capital in the future to continueour operations and may need to seek additional funds sooner than planned.Raising funds in the current economic environment may present additionalchallenges.Even if we believe we have sufficient funds for our current or future operating plans,we may seek additional

257、capital if market conditions arefavorable or if we have specific strategic considerations.If we sell common stock,convertible securities or other equity securities in more than one transaction,any such sales may result in materialdilution to our existing stockholders,and new investors could gain rig

258、hts,preferences,and privileges senior to those of our existing common stockholders.Further,any future sales of our common stock by us or resales of our common stock by our existing stockholders could cause the market price of ourcommon stock to decline.Any future grants of securities exercisable or

259、convertible into our common stock,or the exercise or conversion of such shares,and any sales of such shares in the market,could also have 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 term

260、s acceptable to us,if at all.The incurrenceof additional indebtedness would result in increased fixed payment obligations,and we may be required to agree to additional restrictive covenants,such asfurther limitations on our ability to incur additional debt,additional limitations on our ability to ac

261、quire,sell or license intellectual property rights and otheroperating restrictions that could adversely impact our ability to conduct our business.We could also be required to seek funds through arrangements withcollaborative partners or otherwise at an earlier stage than otherwise would be desirabl

262、e and we may be required to relinquish rights to some of ourtechnologies or products or otherwise agree to terms unfavorable to us,any of which may have a material adverse effect on our business,operating resultsand prospects.If we are unable to obtain funding on a timely basis,we may be unable to e

263、xpand the market for our products or expand our operations generallyor otherwise capitalize on our business opportunities,as desired,which could materially affect our business,financial condition and results of operations.20Table of Contents We may not have cash available to us in an amount sufficie

264、nt to enable us to make interest or principal payments on our indebtedness when due.We have a$13.0 million term loan and up to$14.5 million of secured revolving loans with the Eclipse Lender.As of June 30,2024,$2.4 millionwas outstanding under the secured revolving loan.All obligations under our loa

265、ns are secured by substantially all of our existing property and assetssubject to certain exceptions.These debt financings and any future debt financings may create additional financial risk for us,particularly if our business orprevailing financial market conditions are not conducive to paying off

266、or refinancing our outstanding debt obligations at maturity.As a result,we may not have sufficient funds,or may be unable to arrange for additional financing,to pay the amounts due on our outstandingindebtedness under our debt agreements.Further,funds from external sources may not be available on ec

267、onomically acceptable terms,if at all.Forexample,if we raise additional funds through collaboration,licensing or other similar arrangements,it may be necessary to relinquish potentially valuablerights to our products or technologies,or to grant licenses on terms that are not favorable to us.If adequ

268、ate funds are not available when and if needed,ourability to make interest or principal payments on our debt obligations,and finance our operations and other general corporate activities would besignificantly limited and we may be required to delay,significantly curtail,or eliminate one or more of o

269、ur programs.Failure to satisfy our current and future debt obligations under our loan agreements with the Eclipse Lender could result in an event of default and,as a result,our lenders could accelerate all of the amounts due.In the event of an acceleration of amounts due under one or both of our deb

270、t agreements as aresult of an event of default,we may not have sufficient funds or may be unable to arrange for additional financing to repay our indebtedness.In addition,our lenders could seek to enforce their security interests in any collateral securing such indebtedness.The terms of our loan agr

271、eement place restrictions on our operating and financial flexibility.If we raise additional capital through debt financing,theterms of any new debt could further restrict our operating and financial flexibility.The loan agreements with the Eclipse Lender subject us to financial covenants and restric

272、tions on our ability to incur liens,incur additionalindebtedness,make certain dividends and distributions with respect to equity securities,engage in mergers and acquisitions or make asset sales without theprior written consent of the lender.Failure to comply with such covenants could permit the len

273、ders to declare our obligations under the loan agreements,together with accrued interest and fees,to be immediately due and payable,plus any applicable additional amounts relating to a prepayment or termination.These restrictive covenants could limit our flexibility in operating our business and our

274、 ability to pursue business opportunities that we or ourstockholders may consider beneficial.Any declaration by the lender of an event of default could significantly harm our business and prospects and couldcause the price of our common stock to decline.We may not have enough available cash or be ab

275、le to raise additional funds through equity or debtfinancings to repay these outstanding obligations at the time any event of default occurs.Further,if we raise any additional capital through debt financing,the terms of such additional debt could further restrict our operating and financial flexibil

276、ity.We are actively engaged in discussions regarding a potential strategic transaction.There can be no assurance that this process will result in the pursuitor consummation of any potential transaction.We are engaged in discussions regarding a potential strategic transaction which could include a sa

277、le or licensing of assets,acquisition,merger,business combination,and/or other strategic transaction or series of related transactions.This process,including any uncertainty created by this process,involves a number of risks which could impact our business and our stockholders,including the followin

278、g:significant fluctuations in our stock price could occur in response to developments relating to the process or market speculation regarding anysuch developments;we may encounter difficulties in hiring,retaining and motivating key personnel during this process or as a result of uncertainties genera

279、ted bythis process or any developments or actions relating to it;we may incur substantial increases in general and administrative expense associated with increased legal fees and the need to retain andcompensate third-party advisors;and we may experience difficulties in preserving the commercially s

280、ensitive information that may need to be disclosed to third parties during thisprocess or in connection with an assessment of our strategic options.21Table of Contents The review process also requires significant time and attention from management,which could distract them from other tasks in operat

281、ing ourbusiness or otherwise disrupt our business.Such disruptions could cause concern to our suppliers,strategic partners or other constituencies and may have amaterial impact on our business and operating results and volatility in our share price.There can be no assurance that this process will re

282、sult in the pursuit or consummation of any potential transaction or strategy,or that any suchpotential transaction or strategy,if implemented,will provide sufficient funding to conduct our operations.Any outcome of this process would bedependent upon a number of factors that may be beyond our contro

283、l,including,among other things,market conditions,industry trends,regulatoryapprovals,and the availability of financing on reasonable terms.The occurrence of any one or more of the above risks could have a material adverse impacton our business,financial condition,results of operations and cash flows

284、.We have indefinitely suspended development of our AR101(enzastaurin)clinical development program and shifted our strategic focus towardsaccelerating the growth of our commercial business.If we fail to execute successfully on this reprioritized strategic focus,our business,results ofoperations and f

285、inancial condition could be materially and adversely affected.We have indefinitely suspended our AR101(enzastaurin)clinical development program and shifted our focus towards accelerating the growth ofour commercial business and achieving operating cash flows.Though we expect that the suspension of t

286、his program will save us costs related to a projectedfuture study that if started would cost over$20 million and take three years to complete,the process of reorienting our business strategy may be costly,timeconsuming and complex,and we have incurred,and may in the future incur,costs related to thi

287、s strategic shift.Our strategic reprioritization may result inunexpected expenses or liabilities and/or write-offs.There is no assurance that we will be successful at executing on our revised strategy or that anyparticular course of action,business arrangement or transaction,or series of transaction

288、s,will be pursued,successfully consummated,lead to increasedstockholder value,or achieve the anticipated results.If we are unable to execute successfully on our reprioritized strategic focus,our cash resources may not last as long as estimated and our business,results of operations and financial con

289、dition could be materially and adversely affected.Our ability to use our net operating loss carryforwards and certain other tax attributes may be limited.As of June 30,2024,we had federal net operating loss carryforwards of$519.6 million.The available net operating losses,if not utilized to offsetta

290、xable income in future periods,will continue to expire and,except for certain indefinite-lived net operating loss carryforwards,will completely expire in2037.Under the Internal Revenue Code of 1986,as amended(the“IRC”)and the regulations promulgated thereunder,including,without limitation,theconsoli

291、dated income tax return regulations,various corporate ownership changes limit our ability to use our net operating loss carryforwards and other taxattributes to offset our income.Ownership changes have limited our ability to offset,post-change,United States federal taxable income.Section 382 of the

292、IRC imposes anannual limitation on the amount of post-ownership change taxable income a corporation may offset with pre-ownership change net operating losscarryforwards and certain recognized built-in losses.Previous acquisitions,financing transactions,and equity ownership changes in the past five y

293、ears havecaused a significant limitation on our ability to use all$519.6 million of pre-acquisition net operating loss carryovers.The ownership changes result inincreased future tax liability and are a driver of the change from a zero percent effective tax rate.22Table of Contents If we fail to esta

294、blish and maintain proper internal controls,our ability to produce accurate financial statements or comply with applicable regulationscould be impaired.Our management is responsible for establishing and maintaining adequate internal control over financial reporting.Pursuant to Section 404 of theSarb

295、anes-Oxley Act,our management conducted an assessment of the effectiveness of our internal controls over financial reporting for the quarter endedSeptember 30,2022,and concluded that a certain control was not effective.We concluded that we had a material weakness in internal control over financialre

296、porting related to accounting for complex warrant issuances and the classification of these issued warrants.In addition,we concluded that we had amaterial weakness in internal control over financial reporting for the year ended June 30,2023,related to our analysis for the accounting for valuation of

297、our inventory.As previously reported in our public reports,our Audit Committee conducted an internal investigation to identify and determine a plan toremediate the material weaknesses described above and to enhance our overall control environment.We undertook steps to remediate these deficiencies an

298、dstrengthen our internal control over financial reporting by enhancing existing controls and establishing additional review and procedure controls over theprocess of reviewing significant and complex contracts and agreements,and the valuation of inventory.Given the remediation efforts and that a suf

299、ficientperiod of time has passed with successful testing performed,management has concluded that the material weaknesses set forth above were remediated as ofMarch 31,2024.If in the future we were to conclude that our internal controls over financial reporting were not effective,we cannot be certain

300、 as to the timing ofcompletion of our evaluation,testing and remediation actions or their effect on our operations because there is presently no precedent available by which tomeasure compliance adequacy.As a consequence,we may not be able to complete any necessary remediation process in time to mee

301、t our deadline forcompliance with Section 404 of the Sarbanes-Oxley Act.Also,there can be no assurance that we will not identify one or more material weaknesses in ourinternal controls in connection with evaluating our compliance with Section 404 of the Sarbanes-Oxley Act.The presence of material we

302、aknesses couldresult in financial statement errors 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 are unwilling or unableto provide us,when required,with an

303、attestation report on the effectiveness of internal controls over financial reporting as required by Section 404 of theSarbanes-Oxley Act,investors may lose confidence in our operating results,our stock price could decline and we may be subject to litigation or regulatoryenforcement actions.In addit

304、ion,if we are unable to meet the requirements of Section 404 of the Sarbanes-Oxley Act,we may not be able to maintainlisting on the Nasdaq Capital Market.Due to our current filing status,we are not required to have our independent registered public accounting firm deliveran attestation report on the

305、 effectiveness of our internal control over financial reporting.We have been and,in the future,may become a defendant in one or more stockholder derivative,class-action,and other litigation,and any suchlawsuits may adversely affect our business,financial condition,results of operations and cash flow

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

307、 Aytu stockholders,challenging the grant in 2021 of certain stock option awards to directors and officers,and seeking rescission of the awards,unspecifieddamages to stockholders as a result of the awards,and attorneys fees.A stockholder derivative suit was filed on September 12,2022,derivatively and

308、 on behalf of all Aytu stockholders,against certain of ourcurrent and former directors and stockholders,alleging breaches of fiduciary duties in connection with certain acquisitions,and seekingunspecified damages,equitable relief,restitution,disgorgement of profits,enhanced governance and internal p

309、rocedures,and attorneys fees.See Part I,Item 3,Legal Proceedings for more information on these lawsuits.23Table of Contents These lawsuits can divert our managements attention and resources from our ordinary business operations,and we would likely incur significantexpenses associated with their defe

310、nse(including,without limitation,substantial attorneys fees and other fees of professional advisors and potentialobligations to indemnify current and former officers and directors who are or may become parties to such actions).In connection with these lawsuits,wemay be required to pay material damag

311、es,consent to injunctions on future conduct and/or suffer other penalties,remedies or sanctions,or issue additionalshares upon the exercise of certain warrants,which may cause additional dilution.In addition,any such future lawsuits could adversely impact ourreputation and/or ability to launch and c

312、ommercialize our products,thereby harming our ability to generate revenue.Accordingly,the ultimate resolution ofthese matters and any future matters could have a material adverse effect on our business,financial condition,results of operation and cash flow and,consequently,could negatively impact th

313、e trading price of our common stock.Risks Related to Commercialization We are heavily dependent on the commercial success of our commercial products.To date,we have not generated sufficient revenues from the sales ofthese products to achieve companywide profitability and we may never achieve or main

314、tain profitability.Our ability to become profitable depends upon our ability to generate increased revenues from sales of our prescription portfolios.While we havebeen selling pharmaceutical products for several years,we have limited commercial experience selling our current lineup of pharmaceutical

315、 products,having only generated revenues from the sale of our pediatric products since acquiring that portfolio in November 2019 and from our ADHD productssince acquiring that portfolio in March 2021.None of our marketed prescription have thus far generated product revenue at levels sufficient for u

316、s to attainprofitability.We have not generated any revenue from product sales of any other product candidates and,to date,have incurred significant operating losses.Due to the completion of our wind down and divestiture of our Consumer Health Segment in the first quarter of fiscal 2025,we will not g

317、eneratesignificant revenue from the Consumer Health Segment in the future.We have incurred,and anticipate continuing to incur,significant costs associated with commercialization of our approved products and,ifapproved,any other product candidates that we may develop.It is possible that we will never

318、 attain sufficient product sales revenues to achieveprofitability.If we are unable to differentiate our products from branded drugs or existing generic therapies for similar treatments,or if the FDA or other applicableregulatory authorities approve additional generic products that compete with any o

319、f our products,our ability to successfully commercialize suchproducts would be adversely affected.We expect to compete against branded drugs with distinct clinical attributes and to compete with their generic counterparts that will be sold for alower price.Although we believe that our Rx Portfolio i

320、s or will be differentiated from branded drugs and their generic counterparts,if any,includingthrough clinical efficacy or through improved patient compliance,ease of administration,and our patient support programs,it is possible that suchdifferentiation will not impact our market position.If we are

321、 unable to achieve significant differentiation for our products and accompanying supportservices against other drugs,the opportunity for our products to achieve premium pricing and be commercialized successfully would be adversely affected.After a New Drug Application(“NDA”),including a 505(b)(2)app

322、lication,is approved,the covered product becomes a“listed drug”that,in turn,can be cited by potential competitors in support of approval of an abbreviated new drug application,or ANDA.The FDCA,implementing regulations andother applicable laws provide incentives to manufacturers to create modified,no

323、n-infringing versions of a drug to facilitate the approval of an ANDA orother application for generic substitutes.These manufacturers might only be required to conduct a relatively inexpensive study to show that their producthas the same active ingredient(s),dosage form,strength,route of administrat

324、ion,and conditions of use,or labeling as our product candidate and that thegeneric product is bioequivalent to ours,meaning it is absorbed in the body at the same rate and to the same extent as our product candidate.These genericequivalents,which must meet the same quality standards as the listed dr

325、ugs,would be significantly less costly than ours to bring to market and companiesthat produce generic equivalents are generally able to offer their products at lower prices.24Table of Contents Thus,after the introduction of a generic competitor,a significant percentage of the sales of any branded pr

326、oduct,such as our Rx Portfolioproducts,can be lost to the generic version.Accordingly,competition from generic equivalents to our products could materially adversely impact ourrevenues,profitability and cash flows and substantially limit our ability to obtain a return on the investments we have made

327、 in our products.For example,on July 25,2016,we received a paragraph IV certification from Actavis advising them that Actavis filed an ANDA with the FDA for a generic version ofAdzenys XR-ODT.On October 17,2017,we entered into a Settlement Agreement and a Licensing Agreement with Actavis(which is no

328、w owned by Teva),pursuant to which we granted Actavis the right to manufacture and market its now approved generic version of Adzenys XR-ODT under the ANDAbeginning on September 1,2025,or earlier under certain circumstances.On October 31,2017,we received a paragraph IV certification from Teva advisi

329、ngthem that Teva filed an ANDA with the FDA for a generic version of Cotempla XR-ODT.On December 21,2018,we entered into a Settlement Agreementand a Licensing Agreement with Teva,pursuant to which we have granted Teva the right to manufacture and market its now approved generic version ofCotempla XR

330、-ODT under the ANDA beginning on July 1,2026,or earlier under certain circumstances.Our pharmaceutical products may prove to be difficult to effectively commercialize as planned or on the timeframes we announce and expect.Various commercial,regulatory,and manufacturing factors may impact our ability

331、 to maintain or grow revenues from sales of our pharmaceuticalproduct offerings.Moreover,we have limited experience selling some of our current products given their acquisition from other companies or their recentapproval.We sometimes estimate for planning purposes the timing of the accomplishment o

332、f various scientific,clinical,regulatory,and other productdevelopment objectives and,from time to time,we may publicly announce the expected timing of some of these milestones.The achievement of many ofthese milestones may be outside of our control and if we fail to achieve announced milestones in t

333、he timeframes we announce and expect,thecommercialization of our products may be delayed and our business,prospects and results of operations may be harmed.Specifically,we may encounterdifficulty by virtue of the following,each of which could be negatively impacted if expected timeframe goals are not achieved:our available capital resources;our inability to have clear proprietary rights to the pro