Acquisitions

12 Months Ended

Jun. 30, 2022

Business Combination and Asset Acquisition [Abstract]

Acquisitions - Neos Acquisition

Neos Acquisition

On March 19, 2021, the Company acquired Neos, a commercial-stage pharmaceutical company. Neos merged into, a subsidiary of the Company (“the Neos Acquisition”) and all outstanding Neos common stock was exchanged for approximately 5.5 million shares of the Company’s common stock. The Company incurred (i) approximately $2.9 million of acquisition related costs, recognized as part of operating expense, and (ii) $0.1 million of issuance costs, recognized as a component of stockholders’ equity.

The following table summarizes the fair value of assets acquired and liabilities assumed in the acquisition:

	March 19, 2021
	(In thousands, except share and per-share)
Considerations:
Fair Value of Aytu Common Stock
Total shares issued at close		5,471,804
Fair value per share of Aytu common stock	$	9.73
Fair value of equity consideration transferred	$	53,241
Cash		15,383
Estimated fair value of replacement equity awards		432
Total consideration transferred	$	69,056

	March 19, 2021
	(In thousands)
Total consideration transferred	$	69,056
Recognized amounts of identified assets acquired and liabilities assumed
Cash and cash equivalents	$	15,722
Accounts receivable		24,696
Inventory		10,984
Prepaid expenses and other current assets		2,929
Operating leases right-to-use assets		3,515
Property, plant and equipment		5,519
Intangible assets		56,530
Other long-term assets		149
Accounts payable and accrued expenses		(56,718)
Short-term line of credit		(10,707)
Long-term debt, including current portion		(17,678)
Operating lease liabilities		(3,515)
Other long-term liabilities		(82)
Total identifiable net assets		31,344
Goodwill	$	37,712

The fair values of the identifiable intangible assets acquired were as follows;

	March 19, 2021
	(In thousands)
Identified intangible assets acquired:
Developed technology right	$	30,200
Developed products technology		22,700
In-process R&D		2,600
RxConnect		630
Trade name		400
Total intangible assets acquired	$	56,530

The fair value of the Neos trade name, in-process R&D and developed product technology, which is the proprietary technology for the development of Adzenys XR-ODT, Adzenys ER, Cotempla XR-ODT and generic Tussionex, were determined using the relief from royalty method. The fair value of the developed technology right, which is a proprietary modified-release drug delivery technology, was determined using multi-period excess earnings method. The fair value of RxConnect was determined using the cost to recreate method. The finite-lived intangible assets are being amortized over a range of 1 to 17 years.

The following supplemental unaudited proforma financial information presents the Company’s results as if the Neos acquisition had occurred on July 1, 2020:

	Year Ended
	June 30,
	2022		2021
			Pro forma
	Unaudited		Unaudited
	(In thousands)
Total revenues, net	$	96,669	$	98,085
Net loss	$	(110,173)	$	(74,710)

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