Item 1.01 Entry into a Material Definitive Agreement.
On June 8, 2023, Aytu BioPharma, Inc. (the "Company") entered into a securities
purchase agreement (the "Purchase Agreement") with certain investors named
therein (the "Purchasers"), and a placement agency agreement (the "PAA") with
Maxim Group LLC (the "Placement Agent"), pursuant to which the Company agreed to
issue and sell to investors in the offering (the "Offering") an aggregate of
1,743,695 shares (the "Offered Shares") of the Company's common stock, par value
$0.0001 per share (the "Common Stock"), pre-funded warrants in lieu of Offered
Shares to purchase 430,217 shares of Common Stock (the "Pre-Funded Warrants"),
accompanying Tranche A warrants to purchase 2,173,912 shares of Common Stock
(the "Tranche A Warrants"), and accompanying Tranche B warrants to purchase
2,173,912 shares of Common Stock (the "Tranche B Warrants", and together with
the Tranche A Warrants, the "Common Warrants") in a best-efforts offering. The
Common Warrants may be exercised for either shares of Common Stock or pre-funded
warrants to purchase Common Stock at a future exercise price of $0.0001 per
share in the same form as the Pre-Funded Warrant (the "Exchange Warrants"). The
aggregate proceeds to the Company from the Offering are expected to be
approximately $4 million before deducting placement agent fees and other
estimated offering expense payable by the Company, and excluding the proceeds,
if any, from the exercise of the Pre-Funded Warrants or Common Warrants. The
Offering is expected to close on June 13, 2023, subject to customary closing
conditions.
Each Offered Share, together with the accompanying Common Warrants, is being
sold at a public offering price of $1.84. Each Pre-Funded Warrant, together with
the accompanying Common Warrants, is being sold at a public offering price of
$1.8399.
Each Pre-Funded Warrant will be exercisable for one share of common stock at an
exercise price of $0.0001 per share. The Pre-Funded Warrants will be immediately
exercisable and may be exercised at any time until all of the Pre-Funded
Warrants are exercised in full. A holder (together with its affiliates) may not
exercise any portion of the Common Warrants, Pre-Funded Warrants, or Exchange
Warrants if, immediately after exercise, such holder shall own more than 4.99%
of the number of shares of Common Stock outstanding immediately after giving
effect to the exercise, except that upon at least 61 days' prior notice from the
holder to us, the holder may increase the amount of ownership of outstanding
stock after exercising the holder's warrants up to 9.99% or 19.99% of the number
of shares of Common Stock outstanding immediately after giving effect to the
exercise, as such percentage ownership is determined in accordance with the
terms of the warrants.
The Common Warrants will be immediately exercisable at a price of $1.59 per
share (or $1.5899 per Exchange Warrant). The Tranche A Warrants will expire upon
the earlier of (i) five years after the date of issuance, and (ii) 30 days
following the closing price of the Company's Common Stock equaling 200% of the
exercise price for at least 40 consecutive trading days. The Tranche B Warrants
will expire upon the earlier of (x) five years after the date of issuance, and
(y) 30 days following the Company's achievement of consolidated trailing
twelve-month adjusted EBITDA, as defined in the Purchase Agreement, of $12
million.
Additionally, pursuant to the terms of the Purchase Agreement, the Company will
provide Nantahala Capital Management, LLC ("Nantahala"), an investor in the
Offering, the right to appoint one member of the Company's Board of Directors
(the "Board") and one member of each Board Committee as well as the right to
nominate an additional Board member mutually agreeable to Nantahala and the
Company. Upon the closing of the Offering, the Company shall appoint Abhinav
Jain to the Board and to each of the Audit Committee, Compensation Committee,
and Nominating and Governance Committee of the Board, pursuant to such right.
The Purchase Agreement and PAA contain customary representations, warranties and
agreements by the Company, customary conditions to closing, and indemnification
obligations of the Company and the Purchasers. The representations, warranties
and covenants contained in the Purchase Agreement and PAA were made only for
purposes of such agreements and as of a specific date, were solely for the
benefit of the parties to such agreements, and may be subject to limitations
agreed upon by the contracting parties.
The Company engaged Maxim Group LLC as the Company's sole placement agent for
the Offering pursuant to the PAA. Pursuant to the PAA, the Company agreed to pay
the Placement Agent a cash placement fee equal to 7.0% of the gross proceeds of
the Offering, plus reimbursement of certain expenses and legal fees.
Copies of the forms of Pre-Funded Warrant, Tranche A Warrant, and Tranche B
Warrant are filed hereto as Exhibits 4.1, 4.2, and 4.3, respectively. Copies of
the forms of Purchase Agreement and PAA are filed hereto as Exhibits 10.1 and
10.2. The foregoing descriptions of the terms of the Pre-Funded Warrant, Tranche
A Warrant, Tranche B Warrant, the Purchase Agreement and the PAA are qualified
in their entirety by reference to such exhibits.
Item 5.02. Departure of Directors or Principal Officers; Election of Directors;
Appointment of Certain Officers; Compensatory Arrangements of Certain Officers.
The information contained above in Item 1.01 is hereby incorporated by reference
into this Item 5.02.
Pursuant to the terms of the Purchase Agreement, effective as of the closing of
the Offering, the size of the Board will be increased from four (4) to five (5),
and Abhinav Jain shall be appointed to the Board. Mr. Jain's term will expire at
the 2024 annual meeting of stockholders, until his successor is duly elected and
qualified or until his earlier death, resignation or removal. In connection with
Mr. Jain's appointment to the Board, upon the closing of the Offering, Mr. Jain
will be appointed to the Company's Audit Committee, Compensation Committee, and
Nominating and Governance Committee.
Mr. Jain will participate in the Company's non-employee director compensation
program. A complete description of the non-employee director compensation
program is set forth in the Company's proxy statement for the 2023 Annual
Meeting of Stockholders, filed with the Securities and Exchange Commission on
April 7, 2023 and is incorporated herein by this reference.
There are no family relationships between Mr. Jain and any director or executive
officer of the Company, and he has no direct or indirect material interest in
any transaction required to be disclosed pursuant to Item 404(a) of Regulation
S-K, other than the transactions contemplated by the Purchase Agreement.
Item 8.01 Other Events.
On June 9, 2023, the Company issued a press release announcing the Offering and
Board appointment. A copy of the press release is attached as Exhibit 99.1 to
this Current Report on Form 8-K and is incorporated herein by reference.
Forward-Looking Statements
This current report on Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 ("PSLRA"). Such
forward-looking statements include but are not limited to statements about the
Offering and other statements that are not historical facts. These
forward-looking statements are subject to risks and uncertainties that may cause
actual results or events to differ materially from those projected, including
but not limited to the risks that the Offering does not occur when expected or
at all because required conditions to closing are not satisfied on a timely
basis or at all. Readers are cautioned not to place undue reliance on the
forward-looking statements, which speak only as of the date on which they are
made and reflect management's current estimates, projections, expectations and
beliefs. The Company undertakes no obligation to publicly revise or update the
forward-looking statements to reflect events or circumstances that arise after
the date of this report.
Item 9.01 Financial Statements and Exhibits.
Exhibit Description
No.
4.1 Form of Pre-Funded Warrant (incorporated by reference to Exhibit 4.10
to the Registration Statement on Form S-1/A (File No. 333-271556) filed
with the SEC on June 5, 2023)
4.2 Form of Tranche A Warrant (incorporated by reference to Exhibit 4.11
to the Registration Statement on Form S-1/A (File No. 333-271556) filed
with the SEC on June 5, 2023)
4.3 Form of Tranche B Warrant (incorporated by reference to Exhibit 4.12
to the Registration Statement on Form S-1/A (File No. 333-271556) filed
with the SEC on June 5, 2023)
5.1 Opinion of Dorsey & Whitney LLP
10.1 Form of Placement Agency Agreement (incorporated by reference to
Exhibit 10.42 to the Registration Statement on Form S-1/A (File No.
333-271556) filed with the SEC on June 5, 2023)
10.2 Form of Securities Purchase Agreement (incorporated by reference to
Exhibit 10.43 to the Registration Statement on Form S-1/A (File No.
333-271556) filed with the SEC on June 5, 2023)
23.2 Consent of Dorsey & Whitney LLP (included in Exhibit 5.1)
99.1 Press Release dated June 9, 2023
104 Cover Page Interactive Data File (embedded within the Inline XBRL
document)
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