According to the Complaint, Neos Therapeutics, Inc. is a pharmaceutical company that develops, manufactures, and commercializes products for the treatment of attention deficit hyperactivity disorder (ADHD) using its drug delivery technology platform.

On December 10, 2020, Neos and Aytu Bioscience, Inc issued a joint press release announcing the Proposed Transaction. Under the terms of the Merger Agreement, Neos will become an indirect wholly-owned subsidiary of Parent, a subsidiary of Aytu. Neos public stockholders will receive, in exchange for each share of Neos common stock they own, 0.1088 shares of Aytu. This implies a per share value of $0.74 for Neos based on Aytu’s closing price on December 9, 2020 of $6.84 per share. The transaction will result in NEOS stockholders owning only approximately 30% of the fully diluted common shares of Aytu.

On January 27, 2021, Aytu filed a Registration Statement on Form S-4 (the “Registration Statement”) with the SEC in support of the Proposed Transaction. The Complaint alleges that the Registration Statement is materially deficient, deprives Neos stockholders of the information they need to make an intelligent, informed and rational decision of whether to vote their shares in favor of the Proposed Transaction, and is thus in breach of the Defendants’ fiduciary duties. Specifically, the Complaint alleges the Registration Statement omits and/or misrepresents material information concerning, among other things: (a) the sales process and in particular certain conflicts of interest for management; (b) the financial projections for Neos and Aytu, provided by Neos and Aytu to the Company’s financial advisor and to Aytu’s financial advisor; and (c) the data and inputs underlying the financial valuation analyses, if any, that purport to support the fairness opinions created by the financial advisors and provided to the Company and the Board. The Complaint further alleges the Registration Statement also fails to disclose a reconciliation of all non-GAAP to GAAP metrics utilized in the projections.