AYTU BIOSCIENCE, INC. (OTCMKTS:AYTU) Files An 8-K Entry into a Material Definitive Agreement
Item1.01.
| Entry into a Material Definitive Agreement. |
On May 3, 2017, we entered into a Merger Agreement with Nuelle,
Inc. and its stockholders, to which Nuelle would become our
wholly owned subsidiary (the Merger). The Merger closed on May 5,
2017.
In the Merger, (i) each share of Nuelle common stock and each
option or warrant to purchase Nuelle stock was cancelled, and
(ii) each share of Nuelle preferred stock was converted into the
right to receive shares of our common stock. We issued to the
Nuelle preferred stockholders an aggregate of 2,500,000 shares of
our common stock.
In addition, Nuelle preferred stockholders will be entitled to
revenue earn-out payments equal to a designated percentage of net
sales on tiers of net sales up to $100,000,000, with an average
rate for all tiers in the mid-single digit range and a maximum
aggregate payout of $6.9 million.
Nuelle stockholders additionally will be entitled to milestone
earn-out payments of up to a potential aggregate of $24 million,
upon the attainment by us of designated net sales thresholds over
any sequential four calendar quarter period.
The first $1.0 million of earn-out payments will be paid in
shares of our common stock and all other earn-out payments will
be comprised of 60% cash and 40% shares of our common stock. The
stock portion of any earn-out will be calculated by dividing each
Nuelle stockholders portion of the earn-out by the average
closing price of our common stock for the 10 trading days prior
to the earlier of the date we deliver notice to the Nuelle
stockholders of the earn-out or any public disclosure by us of
the earn-out being due and payable.
In the event that we do not make all of the required earn-out
payments to the Nuelle stockholders before May 3, 2022, and we
also close a divestiture before May 3, 2022 of any of the
products acquired in the Merger, we will pay the Nuelle
stockholders a combination of (i) cash in an amount equal to 10%
of the value of all cash, securities and other property paid to
us in the divestiture (cash is to be 60% of the total
consideration), and (ii) shares of our common stock equal to the
Nuelle stockholders portion of the divestiture payment divided by
the average closing price of our common stock for the 10 trading
days prior to the earlier of the closing date of the divestiture
or the public disclosure of the divestiture (shares of common
stock are to be 40% of the total consideration).
No officer or director of Nuelle will become an officer or
director of Aytu as a result of the Merger.
In the Merger Agreement, we agreed to indemnify all past and
present officers and directors of Nuelle to the fullest extent
under applicable law for six years for acts or omissions that
occurred prior to the Merger. We also agreed to indemnify each
Nuelle stockholder and their respective affiliates for any fraud
by us or a subsidiary of ours, any breach by us or a subsidiary
of any covenant in the Merger Agreement, and any design, sale,
manufacture or any other activities primarily associated with our
products in development before the Merger. Each Nuelle
stockholder agreed to indemnify us for any fraud by Nuelle or any
of its stockholders, any breach by Nuelle of any covenant in the
Merger Agreement, and any pre-Merger tax liability.
The foregoing summary of the material terms of the Merger
Agreement does not purport to be complete and is subject to, and
qualified in its entirety by, the full text of the Merger
Agreement. The Merger Agreement will be filed as an exhibit to
our Form 10-K for the year ending June 30, 2017. The press
release announcing the Merger is filed herewith as Exhibit 99.1
and is incorporated by reference into this Current Report on Form
8-K.
We are in the process of preparing the financial statements
required by Rules 8-04 and 8-05 of Regulation S-X as a result of
the Merger, which we plan to file no later than July 19, 2017.
| Item 3.02. | Unregistered Sales of Equity Securities |
The information in Item 1.01 of this Current Report is
incorporated herein by reference. The shares of common stock that
we issued in the Merger were issued in a transaction exempt from
registration under the Securities Act of 1933, as amended, in
reliance upon Section 4(a)(2) of that Act and Regulation D
promulgated under that Act.
| Item 9.01. | Financial Statements and Exhibits |
(d)Exhibits.
| Exhibit No. |
Description of Exhibit |
|
| 99.1 | Press release dated May 9, 2017. |
About AYTU BIOSCIENCE, INC. (OTCMKTS:AYTU)
Aytu BioScience, Inc. is a commercial-stage healthcare company focused on acquiring, developing and commercializing products in the field of urology. The Company focuses on hypogonadism, prostate cancer, urinary tract infections and male infertility. The Company markets ProstaScint (capromab pendetide), a radio imaging agent indicated to detect the prostate specific membrane antigen (PSMA) in the assessment and staging of prostate cancer. The Company also markets Primsol (trimethoprim hydrochloride), a trimethoprim-only oral solution for urinary tract infections. The Company’s pipeline includes MiOXSYS, an in vitro diagnostic device. MiOXSYS system is a point-of-care semen analysis system, used for diagnosis and management of male infertility. The Company holds the United States rights to Natesto (testosterone), a formulation of testosterone delivered through a nasal gel. Natesto is used for the treatment of hypogonadism (low testosterone) in men. AYTU BIOSCIENCE, INC. (OTCMKTS:AYTU) Recent Trading Information
AYTU BIOSCIENCE, INC. (OTCMKTS:AYTU) closed its last trading session down -0.045 at 0.690 with 38,407 shares trading hands.
