<SEC-DOCUMENT>0001213900-20-004510.txt : 20200221
<SEC-HEADER>0001213900-20-004510.hdr.sgml : 20200221
<ACCEPTANCE-DATETIME>20200221172119
ACCESSION NUMBER:		0001213900-20-004510
CONFORMED SUBMISSION TYPE:	424B3
PUBLIC DOCUMENT COUNT:		4
FILED AS OF DATE:		20200221
DATE AS OF CHANGE:		20200221

FILER:

	COMPANY DATA:	
		COMPANY CONFORMED NAME:			AYTU BIOSCIENCE, INC
		CENTRAL INDEX KEY:			0001385818
		STANDARD INDUSTRIAL CLASSIFICATION:	PHARMACEUTICAL PREPARATIONS [2834]
		IRS NUMBER:				470883144
		STATE OF INCORPORATION:			DE
		FISCAL YEAR END:			0630

	FILING VALUES:
		FORM TYPE:		424B3
		SEC ACT:		1933 Act
		SEC FILE NUMBER:	333-235695
		FILM NUMBER:		20641221

	BUSINESS ADDRESS:	
		STREET 1:		373 INVERNESS PARKWAY
		STREET 2:		SUITE 206
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80112
		BUSINESS PHONE:		(720) 437-6580

	MAIL ADDRESS:	
		STREET 1:		373 INVERNESS PARKWAY
		STREET 2:		SUITE 206
		CITY:			ENGLEWOOD
		STATE:			CO
		ZIP:			80112

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	AYTU BIOSCIENCE, INC.
		DATE OF NAME CHANGE:	20150609

	FORMER COMPANY:	
		FORMER CONFORMED NAME:	Rosewind CORP
		DATE OF NAME CHANGE:	20070110
</SEC-HEADER>
<DOCUMENT>
<TYPE>424B3
<SEQUENCE>1
<FILENAME>f424b3022120_aytubiosci.htm
<DESCRIPTION>PROSPECTUS SUPPLEMENT NO. 4
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 5.25pt 0 0; text-align: right"><B>Prospectus Supplement No. 4</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>Filed Pursuant to Rule 424(b)(3)</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right"><B>File No. 333-235695</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right">&nbsp;&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Prospectus Supplement No. 4 Dated February 21,
2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">To Prospectus Dated January 15, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">This prospectus supplement No. 4 supplements
the prospectus dated January 15, 2020 relating to the offering and sale by Aytu BioScience, Inc. of shares of its common stock
relating to the potential merger with Innovus Pharmaceuticals, Inc. This prospectus supplement should be read in conjunction with
the prospectus which is to be delivered with this prospectus supplement. Any statement contained in the prospectus shall be deemed
to be modified or superseded to the extent that information in this prospectus supplement modifies or supersedes such statement.
Any statement that is modified or superseded shall not be deemed to constitute a part of the prospectus except as modified or superseded
by this prospectus supplement.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">This prospectus supplement
is being filed to update and supplement the information in the prospectus with, (i) our Current Report on <A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495420001521/aytu_8k.htm" STYLE="-sec-extract: exhibit">Form 8-K</A> filed with the
SEC on February 13, 2020, (ii) our Quarterly Report on <A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495420001622/aytu_10q.htm" STYLE="-sec-extract: exhibit">Form 10-Q</A> for the Quarter Ending December 31, 2019 filed with the SEC on
February 14, 2020, (iii) our Current Report on <A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000121390020004010/f8k021320_aytubioscience.htm" STYLE="-sec-extract: exhibit">Form 8-K</A> filed with the SEC on February 14, 2020 and (iv) our Current Report on
<A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000121390020004505/f8k022120_aytubioscience.htm" STYLE="-sec-extract: exhibit">Form 8-K</A> filed with the SEC on February 21, 2020.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Investing in our common stock involves a
high degree of risk. Before making an investment decision, please read &ldquo;Risk Factors&rdquo; beginning on page 26 of this
prospectus.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in"><B>Neither the Securities and Exchange Commission
nor any state securities commission has approved or disapproved of the securities to be issued in connection with the transaction
described in the Prospectus or determined whether the Prospectus is truthful or complete. Any representation to the contrary is
a criminal offense.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">This date of this prospectus
supplement is February 21, 2020</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center; text-indent: 0.5in"></P>

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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Date of Report (Date of earliest event reported):&nbsp;&nbsp;<B>February
13, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>AYTU BIOSCIENCE, INC.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">(Exact name of registrant as specified in its
charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 34%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Delaware</B></FONT></TD>
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>001-38247</B></FONT></TD>
    <TD STYLE="width: 33%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>47-0883144</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(State or other jurisdiction of incorporation)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Commission File Number)</FONT></TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(IRS Employer Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>373 Inverness Parkway, Suite 206</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>Englewood, CO 80112</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">(Address of principal executive offices, including
Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">Registrant&rsquo;s telephone number, including
area code: <B>(720) 437-6580</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0; margin-bottom: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center"><B>N/A</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">(Former name or former address, if changed since
last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Check the appropriate box below if the Form&nbsp;8-K filing is intended
to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">&#9746;</TD><TD STYLE="text-align: justify">Written communications pursuant to Rule&nbsp;425 under
the Securities Act (17 CFR 230.425)</TD>
</TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">&#9744;</TD><TD STYLE="text-align: justify">Soliciting material pursuant to Rule&nbsp;14a-12 under
the Exchange Act (17 CFR 240.14a-12)</TD>
</TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">&#9744;</TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;14d-2(b)
under the Exchange Act (17 CFR 240.14d-2(b))</TD>
</TR></TABLE>


<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">&#9744;</TD><TD STYLE="text-align: justify">Pre-commencement communications pursuant to Rule&nbsp;13e-4(c)
under the Exchange Act (17 CFR 240.13e-4(c))</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">Securities registered pursuant to Section 12(b)
of the Act:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="vertical-align: bottom; background-color: white">
    <TD STYLE="border-bottom: black 1.5pt solid; width: 34%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Title of each class</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Trading Symbol(s)</B></FONT></TD>
    <TD STYLE="width: 1%">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Name of each exchange on which registered</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Common Stock, par value $0.0001 per share</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">AYTU</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The NASDAQ Stock Market LLC</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; color: white">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">Indicate by check mark whether the registrant is an emerging growth
company as defined in Rule 405 of the Securities Act of 1933 (&sect;230.405 of this chapter) or Rule 12b-2 of the Securities Exchange
Act of 1934 (&sect;240.12b-2 of this chapter).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: right; text-indent: -0.25in">Emerging growth company
&#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">If an emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. &#9744;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4.5pt; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 4.5pt; text-align: center"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Item 5.07 Submission of Matters to a Vote of Security Holders.</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">The special meeting of stockholders for Aytu BioScience, Inc. (the
&ldquo;Company&rdquo;) was held on February 13, 2020. Of the 20,733,052 shares outstanding on the record date for the meeting,
a total of 11,896,412 shares were present or represented at the meeting. <FONT STYLE="background-color: white">The matters voted
on as described in the Company&rsquo;s definitive proxy statement, as filed on January 13, 2020, and the results of the votes are
as follows:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">1.</TD><TD STYLE="text-align: justify">The &ldquo;Approval of the Merger Proposal&rdquo; described
in the Company&rsquo;s definitive proxy statement was approved with 11,682,333 votes in favor, 187,508 votes against and 26,571
abstentions. The number of broker non-votes was 0.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">2.</TD><TD STYLE="text-align: justify">The &ldquo;2015 Stock Option and Incentive Plan Proposal&rdquo;
described in the Company&rsquo;s definitive proxy statement was approved with 11,104,234 votes in favor, 411,115 votes against
and 381,063 abstentions. The number of broker non-votes was 0.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">3.</TD><TD STYLE="text-align: justify">The &ldquo;Virtual Meeting Proposal&rdquo; described in
the Company&rsquo;s definitive proxy statement was approved with 11,662,309 votes in favor, 222,803 votes against and 11,300 abstentions.
The number of broker non-votes was 0.</TD>
</TR></TABLE>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 6pt; width: 100%"><TR STYLE="vertical-align: top; text-align: justify">
<TD STYLE="width: 0pt"></TD><TD STYLE="width: 20pt; text-align: left">4.</TD><TD STYLE="text-align: justify">The proposal to approve the adjournment of the Special
Meeting, if necessary, to continue to solicit votes for the Nasdaq Rule 5635(d) Proposal and/or the Authorized Share Increase
Proposal&nbsp;was approved with 11,531,688 votes in favor, 323,058 votes against and 41,666 abstentions. The number of broker
non-votes was 0.</TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; text-align: center">SIGNATURES</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.75in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD COLSPAN="2" STYLE="vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>AYTU BIOSCIENCE, INC.</B></FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="width: 60%">&nbsp;</TD>
    <TD STYLE="width: 4%">&nbsp;</TD>
    <TD STYLE="width: 31%">&nbsp;</TD>
    <TD STYLE="width: 5%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: white 3pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Date: February 13, 2020</FONT></TD>
    <TD STYLE="border-bottom: white 3pt solid"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">By:&nbsp;&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; white-space: nowrap"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Joshua R. Disbrow &nbsp;</FONT></TD>
    <TD STYLE="border-bottom: white 3pt solid">&nbsp;</TD></TR>
<TR>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD>
    <TD STYLE="white-space: nowrap; vertical-align: bottom"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Joshua R. Disbrow</FONT></TD>
    <TD STYLE="vertical-align: top">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD>&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer</FONT></TD>
    <TD>&nbsp;</TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0 0 8pt">&nbsp;</P>

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<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="hdr">
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<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
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UNITED STATES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
SECURITIES AND EXCHANGE COMMISSION</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
WASHINGTON, D.C. 20549</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
FORM 10-Q</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman"><FONT>
&#x2612;</FONT> <FONT STYLE="font-weight: bold">QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934</FONT></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
For the Quarterly Period Ended: December 31, 2019</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
or</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman"><FONT>
&#x2610;</FONT> <FONT STYLE="font-weight: bold">TRANSITION REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934</FONT></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
For the transition period from <FONT STYLE="text-decoration: underline">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</FONT>
to <FONT STYLE="text-decoration: underline">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;</FONT></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Commission File No.&#xA0;001-38247</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px"><IMG SRC="aytu_s3000.jpg">
<DIV><FONT>&#xA0;</FONT></DIV>
</DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
AYTU BIOSCIENCE, INC.</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">(www.aytubio.com)</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Delaware</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
47-0883144</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(State or other jurisdiction of incorporation or
organization)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(IRS Employer Identification No.)</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
373 Inverness Parkway, Suite 206</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Englewood, Colorado 80112</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(Address of principal executive offices, including zip
code)</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(720) 437-6580</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(Registrant&#x2019;s telephone number, including area
code)</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Indicate by check
mark whether the registrant (1)&#xA0;has filed all reports required
to be filed by Section&#xA0;13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and
(2)&#xA0;has been subject to such filing requirements for the past
90 days.&#xA0;&#xA0;&#xA0;&#xA0;Yes&#xA0;&#xA0;<FONT>&#x2612;</FONT>&#xA0;&#xA0;&#xA0;&#xA0;No&#xA0;&#xA0;<FONT>&#x2610;</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Indicate by check
mark whether the registrant has submitted electronically and posted
on its corporate web site, if any, every Interactive Data File
required to be submitted and posted pursuant to Rule&#xA0;405 of
Regulation S-T during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such
files).&#xA0;&#xA0;&#xA0;&#xA0;Yes&#xA0;&#xA0;<FONT>&#x2612;</FONT>&#xA0;&#xA0;&#xA0;&#xA0;No&#xA0;&#xA0;<FONT>&#x2610;</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">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 the definitions of
&#x201C;large accelerated filer,&#x201D; &#x201C;accelerated
filer,&#x201D; &#x201C;smaller reporting company,&#x201D; and
&#x201C;emerging growth company&#x201D; in Rule 12b-2 of the Exchange
Act.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Large
accelerated filer</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 13px">&#x2610;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Accelerated
filer</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 13px">&#x2610;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Non-accelerated
filer</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 13px">&#x2612;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Smaller
reporting company</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 13px">&#x2612;</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="2" STYLE="vertical-align: top; width: 50%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Emerging
growth company</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 25%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 13px">&#x2610;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">If an
emerging growth company, indicate by check mark if the registrant
has elected not to use the extended transition period for complying
with any new or revised financial accounting standards provided
pursuant to Section 13(a) of the Exchange Act. <FONT>&#x2610;</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Indicate by check
mark whether the registrant is a shell company (as defined in Rule
12b-2 of the Exchange
Act).&#xA0;&#xA0;&#xA0;&#xA0;Yes&#xA0;&#xA0;<FONT>&#x2610;</FONT>&#xA0;&#xA0;&#xA0;&#xA0;No&#xA0;&#xA0;
<FONT>&#x2612;</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Title of each class</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Trading Symbol(s)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Name of each exchange on which registered</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Common
Stock, par value $0.0001 per share</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">AYTU</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 20%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">The
NASDAQ Stock Market LLC</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">As of
February 1, 2019, there were 23,018,052 shares of Common Stock
outstanding.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
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<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
AYTU BIOSCIENCE, INC. AND SUBSIDIARIES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
FOR THE QUARTER ENDED DECEMBER 31, 2019</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
INDEX</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
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<TR>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Page</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
PART&#xA0;I&#x2014;FINANCIAL INFORMATION</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#11"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;1.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#11"><FONT STYLE="font: 13px Times New Roman">Consolidated
Financial Statements</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;4</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#bs"><FONT STYLE="font: 13px Times New Roman">Consolidated
Balance Sheets as of December 31, 2019 (unaudited) and June 30,
2019</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;4</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#so"><FONT STYLE="font: 13px Times New Roman">Consolidated
Statements of Operations for the three and six months ended
December 31, 2019 (unaudited) and the three and six months ended
December 31, 2018 (unaudited)</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;5</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#e"><FONT STYLE="font: 13px Times New Roman">Consolidated
Statement of Stockholders&#x2019; Equity for the year-to-date
interim periods ended December 31, 2019 (unaudited) and December
31, 2018 (unaudited)</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;6</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#cf"><FONT STYLE="font: 13px Times New Roman">Consolidated
Statements of Cash Flows for the six months ended December 31, 2019
(unaudited) and the six months ended December 31, 2018
(unaudited)</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;7</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#n"><FONT STYLE="font: 13px Times New Roman">Notes to
Consolidated Financial Statements (unaudited)</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;8</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#12"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;2.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#12"><FONT STYLE="font: 13px Times New Roman">Management&#x2019;s
Discussion and Analysis of Financial Condition and Results of
Operations</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;28</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#13"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;3.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#13"><FONT STYLE="font: 13px Times New Roman">Quantitative and
Qualitative Disclosures About Market Risk</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;33</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#14"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;4.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#14"><FONT STYLE="font: 13px Times New Roman">Controls and
Procedures</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;33</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
PART&#xA0;II&#x2014;OTHER INFORMATION</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#21"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;1.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#21"><FONT STYLE="font: 13px Times New Roman">Legal
Proceeding</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;34</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#21a"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;1A.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#21a"><FONT STYLE="font: 13px Times New Roman">Risk
Factors</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;34</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#22"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;2.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#22"><FONT STYLE="font: 13px Times New Roman">Unregistered Sales
of Equity Securities and Use of Proceeds</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;44</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#23"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;3.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#23"><FONT STYLE="font: 13px Times New Roman">Defaults Upon
Senior Securities</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;44</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#24"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;4.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#24"><FONT STYLE="font: 13px Times New Roman">Mine Safety
Disclosures</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;44</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#25"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;5.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#25"><FONT STYLE="font: 13px Times New Roman">Other
Information</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;44</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 24px; margin-right: 0px; text-indent: -24px"><A HREF="#26"><FONT STYLE="font: 13px Times New Roman">Item&#xA0;6.</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#26"><FONT STYLE="font: 13px Times New Roman">Exhibits</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;44</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="2" STYLE="vertical-align: middle; width: 94%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="2" STYLE="vertical-align: top; width: 94%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><A HREF="#sig"><FONT STYLE="font: bold 13px Times New Roman">SIGNATURES</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;45</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">2</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
This Quarterly Report on Form 10-Q includes forward-looking
statements within the meaning of Section&#xA0;27A of the Securities
Act of 1933, as amended, and Section&#xA0;21E of the Securities
Exchange Act of 1934, or the Exchange Act. All statements other
than statements of historical facts contained in this Quarterly
Report, including statements regarding our anticipated future
clinical and regulatory events, future financial position, business
strategy and plans and objectives of management for future
operations, are forward-looking statements. Forward looking
statements are generally written in the future tense and/or are
preceded by words such as &#x201C;may,&#x201D; &#x201C;will,&#x201D;
&#x201C;should,&#x201D; &#x201C;forecast,&#x201D; &#x201C;could,&#x201D;
&#x201C;expect,&#x201D; &#x201C;suggest,&#x201D; &#x201C;believe,&#x201D;
&#x201C;estimate,&#x201D; &#x201C;continue,&#x201D;
&#x201C;anticipate,&#x201D; &#x201C;intend,&#x201D; &#x201C;plan,&#x201D;
or similar words, or the negatives of such terms or other
variations on such terms or comparable terminology. Such
forward-looking statements include, without limitation: the planned
expanded commercialization of our products and the potential future
commercialization of our product candidates, our anticipated future
cash position; our plan to acquire additional assets; our
anticipated future growth rates;<FONT STYLE="color: #0000FF; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="color: #000000; font-family: Times New Roman">anticipated
sales increases; anticipated net revenue increases;</FONT>
<FONT STYLE="color: #000000">amounts of certain future expenses and
costs of goods sold;</FONT> <FONT STYLE="color: #000000; font-family: Times New Roman">anticipated
increases to operating expenses, research and development expenses,
and selling, general, and administrative expenses;</FONT> and
future events under our current and potential future
collaborations. These forward-looking statements are subject to a
number of risks, uncertainties and assumptions, including without
limitation the risks described in &#x201C;Risk Factors&#x201D; in
Part&#xA0;I, Item&#xA0;1A of our most recent Annual Report on Form
10-K, and in the reports we file with the Securities and Exchange
Commission. These risks are not exhaustive. Moreover, we operate in
a very competitive and rapidly changing environment. New risk
factors emerge from time to time and it is not possible 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, or combination of factors, may cause actual results to
differ materially from those contained in any forward-looking
statements. Forward-looking statements should not be relied upon as
predictions of future events. We can provide no assurance that the
events and circumstances reflected in the forward-looking
statements will be achieved or occur and actual results could
differ materially from those projected in the forward-looking
statements. We assume no obligation to update or supplement
forward-looking statements, except as may be required under
applicable law.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: italic 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">This
Quarterly Report on Form 10-Q includes trademarks, such as Aytu,
Natesto, Tuzistra, ZolpiMist, MiOXSYS, AcipHex&#xAE;
Sprinkle&#x2122;, Cefaclor for Oral Suspension, Karbinal&#xAE; ER,
Flexichamber&#x2122;, Poly-Vi-Flor&#xAE; and Tri-Vi-Flor&#x2122;
which are protected under applicable intellectual property laws and
we own or have the rights to. Solely for convenience, our
trademarks and trade names referred to in this Quarterly Report on
Form 10-Q may appear without the <FONT STYLE="font-size: 70%; vertical-align: top">&#xAE;</FONT> or <FONT STYLE="font-size: 70%; vertical-align: top">TM</FONT> 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 trade names. &#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">3</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<FONT STYLE="font-weight: bold">PART
I&#x2014;FINANCIAL INFORMATION</FONT></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: bold 13px Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="11">I</A>tem&#xA0;1. Consolidated Financial
Statements</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="bs">A</A>YTU BIOSCIENCE, INC. AND
SUBSIDIARIES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Consolidated Balance Sheets</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD COLSPAN="1" ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;December
31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;June
30,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;(Unaudited)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">Assets</FONT></DIV>
</TD>
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 90%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Current
assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Cash and cash
equivalents</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,259,492</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">11,044,227</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Restricted
cash</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">251,396</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">250,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Accounts
receivable, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,197,151</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,740,787</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Inventory,
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,491,807</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,440,069</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Prepaid
expenses and other</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,361,249</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">957,781</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Note
receivable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,350,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Other current
assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,426,617</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total current
assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">18,337,712</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15,432,864</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Fixed assets,
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">122,064</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">203,733</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Licensed
assets, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">17,724,416</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">18,861,983</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Patents,
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">207,944</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">220,611</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Right-of-use
asset</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">374,568</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Product
technology rights</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">22,321,667</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Deposits</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,200</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,200</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Goodwill</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">15,387,064</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
long-term assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">56,139,923</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">19,288,527</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">74,477,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">34,721,391</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">Liabilities</FONT></DIV>
</TD>
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 90%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Current
liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Accounts
payable and other</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">9,598,567</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,297,270</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Accrued
liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,114,060</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,147,740</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Accrued
compensation</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">786,769</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">849,498</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Current lease
liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">82,755</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Current
contingent consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">705,880</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,078,068</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Current
portion of fixed payment arrangements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,661,456</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total current
liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15,949,487</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,372,576</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Long-term
contingent consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">17,739,964</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">22,247,796</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Long-term
lease liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">291,813</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Long-term
fixed payment arrangements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">23,394,761</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block"><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Warrant
derivative liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,371</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">13,201</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">57,387,395</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">27,633,573</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Commitments
and contingencies (Note 12)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Stockholders'
equity</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Preferred
Stock, par value $.0001; 50,000,000 shares authorized; shares
issued and outstanding 10,215,845 and 3,594,981, respectively as of
December 31, 2019 (unaudited) and June 30, 2019.</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,022</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">359</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Common Stock,
par value $.0001; 100,000,000 shares authorized; shares issued and
outstanding 20,733,052 and 17,538,071, respectively as of December
31, 2019 (unaudited) and June 30, 2019.</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,073</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,754</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Additional
paid-in capital</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">128,619,922</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">113,475,205</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Accumulated
deficit</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(111,532,777</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(106,389,500</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
stockholders' equity</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">16,758,367</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">7,087,818</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
liabilities and stockholders' equity</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">74,477,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">34,721,391</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center"><FONT>See the accompanying Notes to the
Consolidated Financial Statements</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">4</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="so">A</A>YTU BIOSCIENCE, INC. AND
SUBSIDIARIES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Consolidated Statements of Operations</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(unaudited)</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;
<FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Three Months Ended December 31,</FONT></FONT> </DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Six Months Ended December 31,</FONT> <FONT STYLE="font-family: Times New Roman">&#xA0;</FONT>&#xA0;</DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
&#xA0;Revenues</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Product
revenue, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">3,175,236</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">1,795,011</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">4,615,062</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">3,226,820</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
&#xA0;Operating expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px">&#xA0;<FONT STYLE="font: 13px Times New Roman; color: #000000">Cost
of sales</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">606,046</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">525,138</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">981,766</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">936,097</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Research
and development</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">66,675</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">149,029</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">144,695</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">304,907</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Selling,
general and administrative</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">6,516,160</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">5,046,174</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">11,662,603</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">8,622,754</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Selling,
general and administrative - related party</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%"><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">91,337</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%"><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">345,046</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Amortization
of intangible assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">953,450</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">534,063</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,528,567</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">986,020</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Total
operating expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">8,142,331</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6,345,741</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">14,317,631</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,194,824</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 24px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Loss
from operations</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,967,095</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,550,730</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(9,702,569</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(7,968,004</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
&#xA0;Other (expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Other
(expense), net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(446,958</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(127,569</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(642,344</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(204,130</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;<FONT STYLE="font: 13px Times New Roman; color: #000000">Gain
from derecognition of contingent consideration
liability</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%"><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%"><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Gain
from warrant derivative liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%"><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">20,637</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,830</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">67,989</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Total
other (expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,752,848</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(106,932</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,559,292</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(136,141</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
&#xA0;Net loss</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(214,247</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,657,662</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(5,143,277</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(8,104,145</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Weighted
average number of common shares outstanding</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">17,538,148</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6,477,004</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">16,425,990</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,183,591</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;Basic
and diluted net loss per common share</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.01</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.72</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.31</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(1.94</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>

<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">See the
accompanying Notes to the Consolidated Financial
Statements</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">5</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="e">A</A>YTU BIOSCIENCE, INC. AND
SUBSIDIARIES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Consolidated Statement of Stockholders&#x2019; Equity</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(unaudited unless indicated otherwise)</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 20%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Preferred Stock</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 20%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Common Stock</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="1" ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 2px; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Additional paid-in</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 2px; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Accumulated</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 2px; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Total Stockholders'</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Shares</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Amount</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Shares</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Amount</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;capital</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Deficit</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Equity</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE - June
30, 2019<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">3,594,981</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">359</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">17,538,071</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,754</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">113,475,205</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(106,389,500</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">7,087,818</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Stock-based
compensation (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">165,171</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">165,171</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Preferred
stock converted in common stock (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(443,833</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(44</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">443,833</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">44</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Net loss
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,929,030</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,929,030</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE -
September 30, 2019 (unaudited)<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">3,151,148</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">315</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">17,981,904</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">1,798</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">113,640,376</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">(111,318,530</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">2,323,959</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Stock-based
compensation (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">162,264</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">162,264</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Issuance of
Series F preferred stock from October 2019 private placement
financing, net of $741,650 issuance costs
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">10,000</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,249,483</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,249,484</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Warrants
issued in connection with the private placement
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,008,866</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,008,866</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Issuance of
Series G preferred stock due to acquisition of the Cerecor
portfolio of pediatrics therapeutics
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">9,805,845</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">981</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,558,933</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,559,914</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Preferred
stock converted in common stock (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(2,751,148</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(275</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,751,148</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">275</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Net loss
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(214,247</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(214,247</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE -
December 31, 2019 (unaudited)<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">10,215,845</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">1,022</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">20,733,052</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">2,073</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">128,619,922</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">(111,532,777</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">17,090,240</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px"><BR></FONT></FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 20%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Preferred Stock</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 20%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Common Stock</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="1" ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Additional paid-in</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Accumulated</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Total Stockholders'</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Shares</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Amount</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Shares</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Amount</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;capital</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Deficit</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Equity</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE - June
30, 2018</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,794,762</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">179</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">92,681,918</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(79,257,592</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">13,424,505</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Stock-based
compensation (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">152,114</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">152,114</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Adjustment for
rounding of shares due to stock split<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6,649</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(1</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Net loss
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(3,446,483</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(3,446,483</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE -
September 30, 2018 (unaudited)<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">1,801,411</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">180</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">92,834,031</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">(82,704,075</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">10,130,136</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Stock-based
compensation (unaudited)<BR></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,707,022</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">270</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">193,792</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">194,062</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Common stock
issued to employee (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">9,000</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,689</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,690</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Issuance of
preferred and common stock, net of $1,479,963 in cash&#xA0;issuance
costs (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">8,342,993</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">834</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,777,007</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">178</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,810,373</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,811,385</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Warrants
issued in connection with the registered offering
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,827,628</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,827,628</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Warrants
issued in connection with the registered offering&#xA0;to the
placement agents, non-cash issuance costs
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">61,024</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">61,024</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Preferred
stocks issued in connection with the purchase of assets
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">400,000</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">40</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">519,560</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">519,600</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Preferred
stocks converted into common stock (unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,210,329</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(421</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,210,329</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">421</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">Net loss
(unaudited)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,657,662</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="text-align: right; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,657,662</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font-size: 11px"><FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">BALANCE -
December 31, 2018 <FONT STYLE="color: rgb(0, 0, 0); font-family: Times New Roman">(unaudited)</FONT></FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">4,532,664</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">453</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">10,504,769</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">1,050</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">107,258,097</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">(87,361,737</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 5%; font-family: Times New Roman">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; color: rgb(0, 0, 0); vertical-align: bottom; display: inline-block; width: 75%; font-family: Times New Roman">19,897,863</FONT><FONT STYLE="text-align: left; color: rgb(0, 0, 0); font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;See
the accompanying Notes to the Consolidated Financial
Statements</FONT></DIV>
<DIV>&#xA0; <FONT STYLE="font: 10 Times New Roman"><BR></FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">6</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="cf">A</A>YTU BIOSCIENCE, INC. AND
SUBSIDIARIES</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Consolidated Statements of Cash Flows</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(unaudited)</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Six Months Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Operating Activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
loss</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(5,143,277</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(8,104,145</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="text-align: center; vertical-align: bottom; display: inline-block">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;&#xA0;
Adjustments to reconcile net loss to cash used in operating
activities:</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Depreciation,
amortization and accretion</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">2,157,540</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">1,230,671</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Stock-based
compensation expense</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">327,435</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">346,176</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Derecognition
of contingent consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
of common stock to employee</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">11,690</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Derivative
income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(1,830</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(67,989</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Changes
in operating assets and liabilities:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Increase)
in accounts receivable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(3,456,364</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(903,708</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Increase)
in inventory</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(132,199</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(305,888</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Increase)
in prepaid expenses and other</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(171,430</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(504,757</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Increase)
in other current assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(136,694</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Increase
in accounts payable and other</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">2,806,973</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">252,113</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Increase
in accrued liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">145,467</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">760,798</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Decrease)
Increase in accrued compensation</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(62,729</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">203,160</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Decrease)
in fixed payment arrangements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(216,150</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Increase
in interest payable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">36,164</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">(Decrease)
in deferred rent</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(3,990</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(1,450</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 36px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
cash used in operating activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(9,087,054</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(7,047,165</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Investing Activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Deposit</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">2,888</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Purchases
of fixed assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(12,954</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Contingent
consideration payment</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(104,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(50,221</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Note
receivable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(1,350,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Purchase
of assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,500,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(800,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 36px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
cash used in investing activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(5,954,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(860,287</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Financing Activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
of preferred, common stock and warrants</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">10,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">15,180,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
costs related to preferred, common stock and warrants</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(741,650</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(1,479,963</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 24px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
of debt</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 36px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
cash provided by financing activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">9,258,350</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,700,037</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
change in cash, restricted cash and cash equivalents</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(5,783,339</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">10,792,585</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Cash,
restricted cash and cash equivalents at beginning of
period</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,294,227</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">7,112,527</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Cash,
restricted cash and cash equivalents at end of period</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,510,888</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">17,905,112</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD COLSPAN="3" STYLE="vertical-align: bottom; width: 100%">
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Supplemental disclosures of cash and non-cash investing and
financing transactions</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Cash
paid for interest</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">161,890</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Fair
value of right-to-use asset and related lease
liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">374,568</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
of Series G preferred stock due to acquisition of the Cerecor
portfolio of pediatrics therapeutics (unaudited)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">5,559,914</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Inventory
payment included in accounts payable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">460,416</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Contingent
consideration included in accounts payable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">16,014</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Fixed
payment arrangements included in accounts payable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">291,666</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Exchange
of convertible preferred stock into common stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">319</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Return
deductions received by Cerecor</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">1,309,365</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Fair
value of warrants issued to investors and underwriters</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">1,888,652</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Issuance
of preferred stock related to purchase of asset</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">519,600</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Contingent
consideration related to purchase of asset</FONT></DIV>
</TD>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">8,833,219</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">See the
accompanying Notes to the Consolidated Financial
Statements</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">7</FONT></DIV>
</DIV>
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<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="n">A</A>YTU BIOSCIENCE, INC. AND
SUBSIDIARIES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Notes to Consolidated Financial Statements</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
(unaudited)</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="margin-left: 0px; text-indent: 0px"><FONT STYLE="font: bold 13px Times New Roman">1.</FONT><FONT ID="tab2" STYLE="letter-spacing: 12px; color: black">&#xA0;</FONT><FONT STYLE="font: bold 13px Times New Roman">Nature
of Business, Financial Condition, Basis of
Presentation</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Nature of Business.</FONT> Aytu BioScience,
Inc. (&#x201C;Aytu&#x201D;, the &#x201C;Company&#x201D; or
&#x201C;we&#x201D;) was incorporated as Rosewind Corporation on
August&#xA0;9, 2002 in the State of Colorado. Aytu was
re-incorporated in the state of Delaware on June&#xA0;8, 2015. Aytu
is a specialty pharmaceutical company focused on global
commercialization of novel products addressing significant medical
needs such as hypogonadism (low testosterone), cough and upper
respiratory symptoms, insomnia, male infertility, various pediatric
conditions and the Company plans to expand opportunistically into
other therapeutic areas.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
Company is currently focused on commercialization of the following
products (i) Natesto&#xAE;, a testosterone replacement therapy, or
TRT, (ii) Tuzistra&#xAE; XR, a codeine&#x2013;based antitussive,
(iii) ZolpiMist&#x2122;, a short-term insomnia treatment and (iv),
MiOXSYS&#xAE;, a novel in vitro diagnostic system for male
infertility assessment. Additionally, the Company completed an
Asset Purchase Agreement (the &#x201C;Purchase Agreement&#x201D;)
with Cerecor, Inc (&#x201C;Cerecor&#x201D;) on November 1, 2019,
acquiring six products, (i) AcipHex&#xAE; Sprinkle&#x2122;, (ii)
Cefaclor for Oral Suspension, (iii) Karbinal&#xAE; ER, (iv)
Flexichamber&#x2122;, (v) Poly-Vi-Flor&#xAE; and Tri-Vi-Flor&#x2122;
(the &#x201C;Pediatric Portfolio&#x201D;) (see below and Note 2). The
Company immediately began to include the acquired Pediatric
Portfolio in its commercialization efforts.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In the
future the Company will seek to acquire additional commercial-stage
or near-market products, including existing products the Company
believes can offer distinct clinical advantages and patient
benefits over other marketed products. The management team&#x2019;s
prior experience has involved identifying both clinical-stage and
commercial-stage assets that can be launched or re-launched to
increase value, with a focused commercial infrastructure
specializing in novel, niche products.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Financial Condition.</FONT> As of December 31,
2019, the Company had approximately $5.5 million of cash, cash
equivalents and restricted cash. The Company&#x2019;s operations
have historically consumed cash and are expected to continue to
require cash, but at a declining rate.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">On
November&#xA0;1, 2019, the Company closed an asset acquisition with
Cerecor, Inc. (&#x201C;Cerecor&#x201D;) whereby the Company acquired
certain of Cerecor&#x2019;s Portfolio of Pediatric Therapeutics (the
&#x201C;Pediatric Portfolio&#x201D;) for $4.5&#xA0;million in cash,
approximately 9.8&#xA0;million shares of Series G Convertible
Preferred Stock, the assumption of Cerecor&#x2019;s financial and
royalty obligations, which includes not more than $3.5&#xA0;million
of Medicaid rebates and products returns as they come due, and
other assumed liabilities associated with the Pediatric Portfolio
(see Note 2).</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
addition, the Company has assumed obligations in connection with
the Pediatric Portfolio acquisition due to an investor including
fixed and variable payments. The Company assumed fixed monthly
payments equal to $0.1 million from November 2019 through January
2021 plus $15 million due in January 2021. Monthly variable
payments due to the same investor are equal to 15% of net revenue
generated from a subset of the Product Portfolio, subject to an
aggregate monthly minimum of $0.1 million, except for January 2020,
when a one-time payment of $0.2 million is due. The variable
payment obligation continues until the earlier of: (i) aggregate
variable payments of approximately $9.5 million have been made, or
(ii) February 12, 2026.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
Company expects to require capital beyond operating need to
complete and integrate the Pediatric Portfolio acquisition and the
merger with Innovus Pharmaceuticals, Inc. (&#x201C;Innovus&#x201D;),
approved by the shareholders of both companies on February 13,
2020, and expected to close February 14, 2020 (the
&#x201C;Merger&#x201D;) (see below). Revenues for the three-months
ended December 31, 2019 increased 77% compared to the three-months
ended December 31, 2018, and revenues increased 100% and 14% for
each of the years ended June 30, 2019 and 2018, respectively.
Revenue is expected to continue to increase long-term, allowing the
Company to rely less on our existing cash and cash equivalents, and
proceeds from financing transactions. Cash used in operations
during the six-months ended December 31, 2019 was $9.1 million
compared to $7.0 million for the six-months ended December 31,
2018, due primarily to the Company&#x2019;s acquisition and
integration of the Pediatric Portfolio, which consumed additional
cash resources.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">On
October 11, 2019, the Company entered into Securities Purchase
Agreements (the &#x201C;Purchase Agreement&#x201D;) with two
institutional investors (the &#x201C;Investors&#x201D;) providing for
the issuance and sale by the Company (the &#x201C;October 2019
Offering&#x201D;) of $10.0 million of, (i) shares of the
Company&#x2019;s Series F Convertible Preferred Stock (the
&#x201C;Preferred Stock&#x201D;) which are convertible into shares of
common stock (the &#x201C;Conversion Shares&#x201D;) and (ii)
warrants (the &#x201C;Warrants&#x201D;) which are exercisable for
shares of common stock (the &#x201C;Warrant Shares&#x201D;), which
expire January 10, 2025, for a stated value of $1,000 per unit. The
closing of the October 2019 offering occurred on October 16, 2019.
The Warrants had an exercise price equal to $1.25 and contain a
cashless exercise provision. This provision was dependent on (i)
performance of the Company&#x2019;s stock price between October 11,
2019 and the date of exercise of all, or a portion of the Warrants,
and (ii) subject to shareholder approval of the October 2019
Offering, which was approved January 24, 2020. On January 27, 2020,
2.0 million cashless warrants were exercised to acquire 2.0 million
shares of the Company&#x2019;s common stock.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
net proceeds that the Company received from the October 2019
Offering were approximately $9.3 million.&#xA0;The net proceeds
received by the Company from the October 2019 Offering will be used
for general corporate purposes, including working
capital.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">8</FONT></DIV>
</DIV>
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<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">As of
the date of this Report, the Company expects its commercial costs
for its current operation to increase modestly as the Company
integrates the acquisition of the Pediatrics Portfolio and
continues to focus on revenue growth through increasing product
sales. The Company&#x2019;s total asset position totaling $74.5
million plus the proceeds expected from ongoing product sales will
be used to fund operations. The Company will access the capital
markets to fund operations when needed, and to the extent it is
required. The timing and amount of capital that may be raised is
dependent on market conditions and the terms and conditions upon
which investors would require to provide such capital. There is no
guarantee that capital will be available on terms favorable to the
Company and its stockholders, or at all. However, the Company has
been successful in accessing the capital markets in the past and is
confident in its ability to access the capital markets again, if
needed. Since the Company does not have sufficient cash and cash
equivalents on-hand as of December 31, 2019 to cover potential net
cash outflows for the twelve months following the filing date of
this Quarterly Report, ASU 2014-15, Presentation of Financial
Statements&#x2014;Going Concern (Subtopic 205-40) requires the
Company to report that there exists an indication of substantial
doubt about its ability to continue as a going
concern.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font: 13px Times New Roman; color: #000000">As
of the date of this report, the Company has inadequate capital
resources to complete its near-term operating and transaction
objectives. In anticipation of the cash outlays related to the
merger, the Pediatric Portfolio acquisition, and funding the
Company&#x2019;s operations, the Company has taken the following
steps to address its post-closing&#xA0;cash needs, including, but
not limited to (i) engaging a placement agent to refinance the
fixed obligation, and (ii) engaging in discussions with lenders to
establish a debt facility to provide the Company with capital while
considering other funding strategies. The Company will also require
the investors that participated in the October PIPE to waive the
financing prohibition which expires in April 2020. There is no
guarantee that capital will be available on terms that the Company
considers to be favorable. However, the Company has been successful
in accessing the capital markets in the past and the Company is
confident in its ability to access the capital markets again, if
needed.</FONT><BR></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">If the
Company is unable to raise adequate capital in the future when it
is required, the Company can adjust its operating plans to reduce
the magnitude of the capital need under its existing operating
plan. Some of the adjustments that could be made include delays of
and reductions to commercial programs, reductions in headcount,
narrowing the scope of the Company&#x2019;s commercial plans, or
reductions to its research and development programs. Without
sufficient operating capital, the Company could be required to
relinquish rights to products or renegotiate to maintain such
rights on less favorable terms than it would otherwise choose. This
may lead to impairment or other charges, which could materially
affect the Company&#x2019;s balance sheet and operating
results.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic; color: #000000">The Pending</FONT>
<FONT STYLE="font-style: italic">Merger.</FONT> The Company entered
into a definitive merger agreement (the &#x201C;Merger
Agreement&#x201D;) between the Company and Innovus on September 12,
2019. The Merger was approved by the shareholders of both companies
February 13, 2020 and is expected to close February 14,
2020.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Upon
closing, the Merger will cause for the Company to retire all of the
outstanding common stock of Innovus for an estimate of (i) up to
approximately 3.7 million in shares of the Company&#x2019;s common
stock and, (ii) up to $16 million in milestone payments in the form
of contingent value rights (CVRs) may be paid to Innovus
shareholders in cash or stock over the next five years if certain
revenue and profitability milestones are achieved. Innovus
specializes in commercializing, licensing and developing safe and
effective over-the-counter consumer health products and
supplements. The Company anticipates that this transaction will
formally close on February 14, 2020, subject to shareholder
approval. The outstanding Innovus warrants with cash out rights
will receive Aytu preferred stock and such warrants will be
retired. The remaining outstanding Innovus warrants will retain the
right to be exercised for merger consideration.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Nasdaq Listing Compliance.</FONT> The
Company&#x2019;s common stock is listed on The Nasdaq Capital
Market. In order to maintain compliance with Nasdaq listing
standards<FONT STYLE="font-style: italic">,</FONT> the Company
must, amongst other requirements, maintain a stockholders&#x2019;
equity balance of at least $2.5 million pursuant to Nasdaq Listing
Rule 5550(b). In that regard, on September 30, 2019, the
Company&#x2019;s stockholders&#x2019; equity totaled approximately
$2.3 million, thereby potentially resulting in a
stockholders&#x2019; equity deficiency upon the filing of the
September 30, 2019 Form 10-Q. However, subsequent to September 30,
2019, the Company completed (i) the Offering with the Investors,
raising approximately $9.3 million, net in equity financing (see
Note 1), and (ii) the &#x201C;Asset Purchase Agreement&#x201D; in
which the Company issued approximately 9.8 million shares of Series
G Convertible Preferred Stock worth approximately $5.6 million,
resulting in an increase in stockholders&#x2019; equity of
approximately $14.8 million in the aggregate. Accordingly, as of
the filing of this Form 10-Q for the three and six months ended
December 31, 2019, the Company&#x2019;s stockholders&#x2019; equity
balance exceeds the minimum $2.5 million threshold and, therefore,
the Company believes it is currently in compliance with all
applicable Nasdaq Listing Requirements. No formal communication has
been received from the Nasdaq Capital Markets indicating anything
to the contrary. &#xA0;<FONT STYLE="font-weight: bold">&#xA0;</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Basis of Presentation.</FONT> The unaudited
consolidated financial statements contained in this report
represent the financial statements of Aytu and its wholly-owned
subsidiaries, Aytu Women&#x2019;s Health, LLC, Aytu Acquisition Sub,
LLC, and Aytu Therapeutics, LLC. The unaudited consolidated
financial statements should be read in conjunction with
Aytu&#x2019;s Annual Report on Form 10-K for the year ended June 30,
2019, which included all disclosures required by generally accepted
accounting principles in the United States (&#x201C;GAAP&#x201D;). In
the opinion of management, these unaudited consolidated financial
statements contain all adjustments necessary to present fairly the
financial position of Aytu and the results of operations and cash
flows for the interim periods presented. The results of operations
for the period ended December 31, 2019 are not necessarily
indicative of expected operating results for the full year. The
information presented throughout this report, as of and for the
three- and six- month periods ended December 31, 2019, and 2018, is
unaudited.</FONT></DIV>
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<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;<BR>
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">9</FONT></DIV>
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</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Adoption of New Accounting Pronouncements</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-weight: bold; font-style: italic; color: #000000">Leases
(&#x201C;ASU 2016-02&#x201D;).</FONT><FONT STYLE="font-style: italic; color: #000000">&#xA0;</FONT><FONT STYLE="color: #000000">In February 2016, the Financial Accounting
Standards Board (&#x201C;FASB&#x201D;) issued ASU No. 2016-02
&#x2013;</FONT> <FONT STYLE="font-style: italic; color: #000000">Topic 842 Leases.</FONT>
<FONT STYLE="color: #000000">ASU 2016-02 requires that most leases
be recognized on the financial statements, specifically the
recognition of right-to-use assets and related lease liabilities,
and enhanced disclosures about leasing arrangements. The objective
is to provide improved transparency and comparability among
organizations. ASU 2016-02 is effective for fiscal years beginning
after December 15, 2018, including interim periods within those
fiscal years. The standard requires using the modified
retrospective transition method and apply ASU 2016-02 either at (i)
latter of the earliest comparative period presented in the
financial statements or commencement date of the lease, or (ii) the
beginning of the period of adoption. The Company has elected to
apply the standard at the beginning period of adoption, July 1,
2019 which resulted in no cumulative adjustment to retained
earnings.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company has elected to apply the short-term scope exception for
leases with terms of 12 months or less at the inception of the
lease and will continue to recognize rent expense on a
straight-line basis. As a result of the adoption, on July 1, 2019,
the Company recognized a lease liability of approximately $0.4
million, which represented the present value of the remaining
minimum lease payments using an estimated incremental borrowing
rate of 8%. As of December 31, 2019, the Company recognized a
right-to-use asset of approximately $0.4 million. Lease expense did
not change materially as a result of the adoption of ASU
2016-02.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-weight: bold; font-style: italic; color: #000000">Earnings
Per Share (Topic 260), Distinguishing Liabilities from Equity
(Topic 480), Derivatives and Hedging (Topic 815) (&#x201C;ASU
2017-11&#x201D;)</FONT><FONT STYLE="font-style: italic; color: #000000">.</FONT> <FONT STYLE="color: #000000">In July 2017, the FASB issued ASU No. 2017-11
&#x2014;</FONT> <FONT STYLE="font-style: italic; color: #000000">Earnings Per Share (Topic
260), Distinguishing Liabilities from Equity (Topic 480),
Derivatives and Hedging (Topic 815)</FONT><FONT STYLE="color: #000000">. Part I to ASU 2017-11 eliminates the requirement
to consider &#x201C;down round&#x201D; features when determining
whether certain equity-linked financial instruments or embedded
features are indexed to an entity&#x2019;s own stock. In addition,
entities will have to make new disclosures for financial
instruments with down round features and other terms that change
conversion or exercise prices. Part I to ASU 2017-11 is effective
for fiscal years beginning after December 31, 2018. The Company
adopted this standard update as a result of the issuance of the
Series F Preferred stock as a result of the October 2019
Offering.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Recently Accounting Pronouncements</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-weight: bold; font-style: italic; color: #000000; background-color: #FFFFFF">
Fair Value Measurements (&#x201C;ASU 2018-03&#x201D;).</FONT>
<FONT STYLE="color: #000000; background-color: #FFFFFF">In August
2018, the FASB issued ASU 2018-13, &#x201C;Fair Value Measurement
(Topic 820) Disclosure Framework-Changes to the Disclosure
Requirements for Fair Value Measurement.&#x201D; The amendments in
the standard apply to all entities that are required, under
existing GAAP, to make disclosures about recurring or nonrecurring
fair value measurements. ASU 2018-13 removes, modifies, and adds
certain disclosure requirements in ASC 820, Fair Value Measurement.
The standard is effective for all entities for fiscal years, and
interim periods within those fiscal years, beginning after December
15, 2019.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000; background-color: #FFFFFF">The amendments on
changes in unrealized gains and losses, the range and weighted
average of significant unobservable inputs used to develop Level 3
fair value measurements, and the narrative description of
measurement uncertainty should be applied prospectively for only
the most recent interim or annual period presented in the initial
fiscal year of adoption. All other amendments should be applied
retrospectively to all periods presented upon their effective date.
Early adoption is permitted upon issuance of ASU 2018-13. An entity
is permitted to early adopt any removed or modified disclosures
upon issuance of ASU 2018-13 and delay adoption of the additional
disclosures until their effective date. The Company is currently
assessing the impact that ASU 2018-13 will have on its financial
statements</FONT><FONT STYLE="color: #000000">, with the impact
mostly related to certain assets acquired or liabilities assumed
that comprise Level 3 inputs.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-weight: bold; font-style: italic; color: #000000">Financial
Instruments &#x2013; Credit Losses (&#x201C;ASU
2016-13&#x201D;).</FONT> <FONT STYLE="color: #000000">In June 2016,
the FASB issued ASU 2016-13, &#x201C;Financial Instruments &#x2013;
Credit Losses&#x201D; to require the measurement of expected credit
losses for financial instruments held at the reporting date based
on historical experience, current conditions and reasonable
forecasts. The main objective of this ASU is to provide financial
statement users with more decision-useful information about the
expected credit losses on financial instruments and other
commitments to extend credit held by a reporting entity at each
reporting date. The standard is effective for interim and annual
reporting periods beginning after December 15, 2019. However, in
October 2019, the FASB approved deferral of the adoption date for
smaller reporting companies for fiscal periods beginning after
December 15, 2022. Accordingly, the Company&#x2019;s fiscal year of
adoption will be the fiscal year ended June 30, 2024. Early
adoption is permitted for interim and annual reporting periods
beginning after December 15, 2018, but the Company did not elect to
early adopt. The Company is currently assessing the impact that ASU
2016-13 will have on its consolidated financial
statements.</FONT><FONT STYLE="font-size: 1px">&#xA0;</FONT>&#xA0;<BR></FONT></DIV>
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">10</FONT></DIV>
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</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">This
Quarterly Report on Form 10-Q does not discuss recent
pronouncements that are not anticipated to have an impact on or are
unrelated to its financial condition, results of operations, cash
flows or disclosures.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
2. Acquisitions</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
October 10, 2019, the Company entered into the Purchase Agreement
with Cerecor, Inc. (&#x201C;Cerecor&#x201D;) to purchase and acquire
Cerecor&#x2019;s Pediatric Portfolio, which closed on November 1,
2019. The Pediatric Portfolio consists of six prescription products
consisting of (i) AcipHex&#xAE; Sprinkle&#x2122;, (ii) Cefaclor for
Oral Suspension, (iii) Karbinal&#xAE; ER, (iv) Flexichamber&#x2122;,
(v) Poly-Vi-Flor&#xAE; and Tri-Vi-Flor&#x2122;. Total consideration
transferred to Cerecor consisted of $4.5 million cash and
approximately 9.8 million shares of Series G Convertible Preferred
Stock. The Company also assumed certain of Cerecor&#x2019;s
financial and royalty obligations, and not more than $3.5 million
of Medicaid rebates and products returns. The Company also retained
the majority of Cerecor&#x2019;s workforce focused on commercial
sales, commercial contracts and customer
relationships.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
addition, the Company assumed Cerecor obligations due to an
investor that include fixed and variable payments aggregating to
$25.6 million. The Company assumed fixed monthly payments equal to
$0.1 million from November 2019 through January 2021 plus $15
million due in January 2021. Monthly variable payments due to the
same investor are equal to 15% of net revenue generated from a
subset of the Product Portfolio, subject to an aggregate monthly
minimum of $0.1 million, except for January 2020, when a one-time
payment of $0.2 million is due to the investor. The variable
payment obligation continues until the earlier of: (i) aggregate
variable payments of approximately $9.5 million have been made, or
(ii) February 12, 2026.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Further, certain of
the products in the Product Portfolio require royalty payments
ranging from 12% to 15% of net revenue. One of the products in the
Product Portfolio requires the Company to generate minimum annual
sales sufficient to represent annual royalties of approximately
$1.8 million, in the event the minimum sales volume is not
satisfied.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">While
no equity was acquired by the Company, the transaction was
accounted for as a business combination under the acquisition
method of accounting pursuant to Topic 805. Accordingly, the
tangible and identifiable intangible assets acquired and
liabilities assumed were recorded at fair value as of the date of
acquisition, with the remaining purchase price recorded as
goodwill. The goodwill recognized is attributable primarily to
strategic opportunities related to an expanded commercial footprint
and diversified pediatric product portfolio that is expected to
provide revenue and cost synergies. Transaction costs of $0.3
million were included as general and administrative expense in the
consolidated statements of operations for the three and six months
ended December 31, 2019.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
following table summarized the preliminary fair value of assets
acquired and liabilities assumed at the date of acquisition. These
estimates are preliminary, pending final evaluation of certain
assets, and therefore, are subject to revisions that may result in
adjustments to the values presented below:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;As of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
November 1, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Cash
and cash equivalents</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">4,500,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Fair
value of Series G Convertible Preferred Stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Total
shares issued</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">9,805,845</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Estimated
fair value per share of Aytu common stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">0.567</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Estimated
fair value of equity consideration transferred</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,559,914</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Total consideration transferred</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">10,059,914</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Recognized amounts of identifiable assets acquired and liabilities
assumed</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Inventory,
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">459,123</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Prepaid
assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">1,743,555</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Other
current assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">2,548,187</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Intangible
assets &#x2013; product technology rights</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">22,700,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
product program liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(6,320,853</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Assumed
fixed payment obligations</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(26,457,162</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Total identifiable net assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(5,327,150</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Goodwill</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; padding-bottom: 2px; width: 10%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; color: #000000; font: bold 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; color: #000000; font: bold 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">15,387,064</FONT><FONT STYLE="font: bold 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; padding-bottom: 2px; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">11</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0;<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT>&#xA0;</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
fair values of intangible assets, including product technology
rights were determined using variations of the income approach.
Varying discount rates were also applied to the projected net cash
flows. The Company believes the assumptions are representative of
those a market participant would use in estimating fair value (see
Note 10).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
As of November 1, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Acquired
product technology rights</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">22,700,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
fair value of the net identifiable asset acquired was determined to
be $22.7 million, which is being amortized over ten years. The
aggregate amortization expense was $0.4 and $0, for the three and
six months ended December 31, 2019 and 2018
respectively.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<BR>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Pro Forma Impact of Business Combination</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
following supplemental unaudited proforma financial information
presents the Company&#x2019;s results as if the acquisition of the
Pediatric Portfolio, which was completed on November 1, 2019, had
occurred on July 1, 2018. Due to limitations on information on
revenues and expenses for certain gap periods within each fiscal
year, this unaudited proforma financial information may not fully
reflect how the acquisition would impact the Company had the
acquisition occurred at the beginning of the earliest fiscal year
presented in these financial statements.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Three Months Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Six Months Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
&#xA0;Unaudited (aa)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Pro forma Unaudited</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Pro forma Unaudited</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Pro forma Unaudited</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Total
revenues, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">3,175,236</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">8,016,356</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">8,027,106</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">14,207,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
income (loss)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">306,314</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(2,532,910</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(5,997,071</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(3,854,640</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Net
income / (loss) per share (bb)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">0.01</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.39</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.38</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">(0.92</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">)</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="vertical-align: top; width: 3%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">(aa)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 97%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Due to
a lack of financial information covering the period from October 1,
2019 through November 1, 2019, the Company was not able to provide
pro forma adjusted financial statements without making estimated
extrapolations that the Company did not believe would be useful to
users of the above pro forma information.</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 3%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 97%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 3%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">(bb)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 97%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Pro
forma net loss per share calculations excluded the impact of the
issuance of the Series G Convertible Preferred under the assumption
those shares would continue to remain non-participatory until the
July 1, 2020 effective registration.</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">12</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
3. Revenue Recognition</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company sells its products principally to a limited number of
wholesale distributors and pharmacies in the United States, which
account for the largest portion of our total revenue. International
sales are made primarily to specialty distributors, as well as to
hospitals, laboratories, and clinics, some of which are government
owned or supported (collectively, its &#x201C;Customers&#x201D;). The
Company&#x2019;s Customers in the United States subsequently resell
the products to pharmacies and patients. Revenue from product sales
is recorded at the established net sales price, or
&#x201C;transaction price,&#x201D; which includes estimates of
variable consideration that result from coupons, discounts,
chargebacks and distributor fees, processing fees, as well as
allowances for returns and government rebates.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
accordance with ASC 606, the Company recognizes net revenues from
product sales when the Customer obtains control of the
Company&#x2019;s product, which typically occurs upon delivery to
the Customer. The Company&#x2019;s payment terms are between 30 to
60 days in the United States and consistent with prevailing
practice in international markets.&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<BR>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Revenues
by Geographic location</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
following table reflects our product revenues by geographic
location as determined by the billing address of our
customers:</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; padding-bottom: 2px; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">Three Months
Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; padding-bottom: 2px; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; padding-bottom: 2px; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">Six Months Ended
December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; padding-bottom: 2px; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">U.S.</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,047,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,730,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">4,309,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,001,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">International</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">128,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">65,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">306,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">226,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Total net
revenue</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,175,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,795,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">4,615,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,227,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000">
4. Product Licenses and Acquisitions</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company licensed three of its existing product offerings from third
parties: (i) Natesto, (ii) ZolpiMist, and (iii) Tuzistra XR. Each
of these license agreements are subject to terms and conditions
specific to each agreement. The Company acquired an additional six
pharmaceutical products upon the closing of the Asset Purchase
Agreement with Cerecor. The Company recognized an intangible asset
of approximately $22.7 million relating the Product technology
rights acquired from the Pediatric Portfolio.</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
License and Supply Agreement&#x2014;Natesto</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
April 2016, Aytu entered into a license and supply agreement to
acquire the exclusive U.S. rights to commercialize Natesto&#xAE;
(testosterone) nasal gel from Acerus Pharmaceuticals Corporation,
or Acerus. We acquired the rights effective upon the expiration of
the former licensee&#x2019;s rights, which occurred on June 30,
2016. The term of the license runs for the greater of eight years
or until the expiry of the latest to expire patent, including
claims covering Natesto or until the entry on the market of at
least one AB-rated generic product.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
July 29, 2019, the Company and Acerus agreed-to an Amended and
Restated License and Supply Agreement (the &#x201C;Acerus
Amendment&#x201D;), subject to certain conditions being satisfied
prior to the Acerus Amendment becoming effective and
enforceable.&#xA0;The Acerus Amendment eliminated the previously
disclosed revenue-based milestone payments expected to-be-made to
Acerus.The maximum aggregate milestones payable under the original
agreement was $37.5 million. Upon the effectiveness of the Acerus
Amendment on December 1, 2019, all royalty and milestone
liabilities were eliminated. Upon the effectiveness of the Acerus
Amendment, Acerus was granted the right to earn commissions on
certain filled Natesto prescriptions. Additionally, Acerus assumed
certain ongoing sales, marketing and regulatory obligations from
the Company. <FONT STYLE="font: 13px Times New Roman">This Acerus
Amendment became effective December 1, 2020, resulting in a $5.2
million unrealized gain for the three and six months ended December
31, 2019, due to the elimination of the revenue-based product
milestones.</FONT><BR></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">13</FONT></DIV>
</DIV>
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<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
fair value of the net identifiable Natesto asset acquired was
determined to be $10.5 million, which is being amortized over eight
years. The aggregate amortization expense for each of the
three-month periods ended December 31, 2019 and 2018 was $0.3
million. <FONT STYLE="color: #000000">The aggregate amortization
expense for each of the six-month periods ended December 31, 2019
and 2018 was $0.7 million.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
contingent consideration, reflecting the risk-adjusted value of
Natesto milestone liability, was initially valued at $3.2 million
using a Monte Carlo simulation, as of June 30, 2016. As of June 30,
2019, the contingent consideration was revalued at $5.1 million
using the same Monte Carlo simulation methodology, and based on
current interest rates, expected sales potential, and Aytu stock
trading variables. The Company reevaluates the contingent
consideration on a quarterly basis for changes in the fair value
recognized after the acquisition date, such as measurement period
adjustments.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
contingent consideration accretion expense for each of the
three-month periods ended December 31, 2019 and 2018 was $54,000,
and $16,000, respectively. <FONT STYLE="color: #000000">The
contingent consideration accretion expense for each of the
six-month periods ended December 31, 2019 and 2018 was $133,000,
and $31,000, respectively.&#xA0;Upon the effective date of the
Acerus Amendment, the contingent consideration liability of $5.2
million was removed from the balance sheet as a result. As of
December 31, 2019, none of the milestones had been achieved, and
therefore, no milestone payment was made.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
License Agreement&#x2014;ZolpiMist</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In June
2018, Aytu signed an exclusive license agreement for
ZolpiMist&#x2122; (zolpidem tartrate oral spray) from Magna
Pharmaceuticals, Inc., (&#x201C;Magna&#x201D;). This agreement allows
for Aytu&#x2019;s exclusive commercialization of ZolpiMist in the
U.S. and Canada.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Aytu
made an upfront payment of $0.4 million to Magna upon execution of
the agreement. In July 2018, the Company paid an additional $0.3
million, of which, $0.3 million was included in current contingent
consideration at June 30, 2018.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
ZolpiMist license agreement was valued at $3.2 million and will be
amortized over the life of the license agreement up to seven years.
The amortization expense for each of the three months ended
December 31, 2019 and 2018 was $116,000. <FONT STYLE="color: #000000">The aggregate amortization expense for each of the
six-month periods ended December 31, 2019 and 2018 was
$232,000.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We also
agreed to make certain royalty payments to Magna which will be
calculated as a percentage of ZolpiMist net sales and are payable
within 45 days of the end of the quarter during which the
applicable net sales occur.&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
contingent consideration related to these royalty payments was
valued at $2.6 million using a Monte Carlo simulation, as of June
11, 2018. As of June 30, 2019, the contingent consideration was
revalued at $2.3 million using the same Monte Carlo simulation
methodology, and based on current interest rates, expected sales
potential, and Aytu stock trading variables. The Company
reevaluates the contingent consideration on a quarterly basis for
changes in the fair value recognized after the acquisition date,
such as measurement period adjustments.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
contingent consideration accretion expense for the three months
ended December 31, 2019 and 2018 was $56,000 and $61,000,
respectively. <FONT STYLE="color: #000000">The contingent
consideration accretion expense for each of the six-month periods
ended December 31, 2019 and 2018 was $110,000, and $120,000,
respectively.&#xA0;As of December 31, 2019, none of the milestones
had been achieved, and therefore, no milestone payment was
made.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
License, Development, Manufacturing and Supply
Agreement&#x2014;Tuzistra XR</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
November 2, 2018, the Company entered into a License, Development,
Manufacturing and Supply Agreement (the &#x201C;Tris License
Agreement&#x201D;) with TRIS Pharma, Inc. (&#x201C;TRIS&#x201D;).
Pursuant to the Tris License Agreement, TRIS granted the Company an
exclusive license in the United States to commercialize Tuzistra
XR. In addition, TRIS granted the Company an exclusive license in
the United States to commercialize a complementary antitussive
referred to as &#x201C;CCP-08&#x201D; (together with Tuzistra XR, the
&#x201C;Products&#x201D;) for which marketing approval has been
sought by TRIS under a New Drug Application filed with the Food and
Drug Administration (&#x201C;FDA&#x201D;). As consideration for the
Products license, the Company: (i) made an upfront cash payment to
TRIS; (ii) issued shares of Series D Convertible preferred stock to
TRIS; and (iii) will pay certain royalties to TRIS throughout the
license term in accordance with the Tris License
Agreement.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">14</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
Tris License Agreement was valued at $9.9 million and will be
amortized over the life of the Tris License Agreement up to twenty
years. The amortization expense for each of the three-month periods
ended December 31, 2019 and 2018 was $123,000 and $82,000,
respectively. <FONT STYLE="color: #000000">The aggregate
amortization expense for each of the six-month periods ended
December 31, 2019 and 2018 was $246,000 and
$82,000.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We also
agreed to make certain quarterly royalty payments to TRIS which
will be calculated as a percentage of our Tuzistra XR net sales,
payable within 45 days of the end of the applicable
quarter.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">As of
November 2, 2018, the contingent consideration, related to this
asset, was valued at $8.8 million using a Monte Carlo simulation.
As of June 30, 2019, the contingent consideration was revalued at
$16.0 million using the same Monte Carlo simulation methodology,
and based on current interest rates, expected sales potential, and
Aytu stock trading variables. The Company reevaluates the
contingent consideration on a quarterly basis for changes in the
fair value recognized after the acquisition date, such as
measurement period adjustments.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
contingent consideration accretion expense for the three months
ended December 31, 2019 and 2018 was $101,000, and $46,000,
respectively. <FONT STYLE="color: #000000">The contingent
consideration accretion expense for each of the six-month periods
ended December 31, 2019 and 2018 was $197,000, and $46,000,
respectively.&#xA0;As of December 31, 2019, none of the milestones
had been achieved, and therefore, no milestone payment was
made.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
<FONT STYLE="color: #000000">Asset Purchase
Agreement</FONT>&#x2014;Cerecor Products</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000">In November 2019, Aytu Therapeutics, LLC., a
wholly-owned subsidiary of Aytu, acquired the portfolio of
pediatric therapeutic commercial products from Cerecor, Inc. This
transaction expanded our product portfolio with the addition of
six</FONT> pharmaceutical and other prescription products, (i)
AcipHex&#xAE; Sprinkle&#x2122;, (ii) Cefaclor for Oral Suspension,
(iii) Karbinal&#xAE; ER, (iv) Flexichamber&#x2122;, (v)
Poly-Vi-Flor&#xAE; and Tri-Vi-Flor&#x2122;.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000">Aytu</FONT> paid $4.5 million in cash, issued
approximately 9.8 million shares of Series G Convertible Preferred
Stock and assume certain of Seller&#x2019;s financial and royalty
obligations, and not more than $3.5 million of Medicaid rebates and
products returns.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
addition, the Company has assumed obligations due to an investor
including fixed and variable payments. The Company assumed fixed
monthly payments equal to $0.1 million from November 2019 through
January 2021 plus $15 million due in January 2021. Monthly variable
payments due to the same investor are equal to 15% of net revenue
generated from a subset of the Product Portfolio, subject to an
aggregate monthly minimum of $0.1 million, except for January 2020,
when a one-time payment of $0.2 million is due. The variable
payment obligation continues until the earlier of: (i) aggregate
variable payments of approximately $9.5 million have been made, or
(ii) February 12, 2026.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
Supply and Distribution Agreement, As Amended &#x2013;
Karbinal&#xAE; ER</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company acquired and assumed all rights and obligations pursuant to
the Supply and Distribution Agreement, as Amended, with TRIS for
the exclusive rights to commercialize Karbinal&#xAE; ER in the
United States (the &#x201C;TRIS Karbinal Agreement&#x201D;). The TRIS
Karbinal Agreement&#x2019;s initial term terminates in August of
2033, with an optional initial 20-year extension.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company owes royalties on sales of Karbinal of 23.5% of net
revenues on a quarterly basis. As part of the agreement, the
Company has agreed to pay TRIS a product make-whole payment of
approximately $1.8 million per year through July 2023, totaling a
minimum of $6.6 million (see Note 12).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
Supply and License Agreement &#x2013; Poly-vi-Flor &amp;
Tri-vi-Flor</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company acquired and assumed all rights and obligations pursuant to
a Supply and License Agreement and various assignment and release
agreements, including a previously agreed to Settlement and License
Agreements (the &#x201C;Poly-Tri Agreements&#x201D;) for the
exclusive rights to commercialize Poly-vi-Flor and Tri-vi-Flor in
the United States.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">15</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company owes royalties to multiple parties totaling approximately
29.0% of net revenues on a quarterly basis. There are no
milestones, make-whole payments other otherwise any contingencies
related to these agreements.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
License and Assignment Agreement &#x2013; AcipHex
Sprinkle</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company acquired and assumed all rights and obligations pursuant to
the License and Assignment Agreement with Eisai, Inc. for exclusive
rights to commercialized AcipHex Sprinkle in the United States (the
&#x201C;Eisai AcipHex Agreement&#x201D;).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Eisai AcipHex Agreement includes quarterly royalties totaling 15%
of net revenues, but offset by amounts paid for certain regulatory
costs otherwise the responsibility of Eisai Co., Ltd. In addition,
there are certain milestone provisions triggering potential
payments of between $3.0 - $5.0 million, for which the Company has
preliminarily estimated to have a value of $0.00.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
License, Supply and Distribution Agreement &#x2013;
Cefaclor</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Company acquired and assumed all rights and obligations pursuant to
the License, Supply and Distribution Agreement involving multiple
counterparties to commercialize Cefaclor in the United States. (the
&#x201C;Cefaclor Agreement&#x201D;).</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">The
Cefaclor Agreement includes quarterly royalties totaling
approximately 15% of net products sales. In addition, there are
certain milestone provisions triggering potential payments of
between $0.5 - $2.5 million, for which the Company has
preliminarily estimated to have a value of $0.00.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000">
5. Inventories</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Inventories
consist of raw materials, work in process and finished goods and
are recorded at the lower of cost or net realizable value, with
cost determined on a first-in, first-out basis. Aytu periodically
reviews the composition of its inventories to identify obsolete,
slow-moving or otherwise unsaleable items. If unsaleable items are
observed and there are no alternate uses for the inventory, Aytu
will record a write-down to net realizable value in the period that
the impairment is first recognized. There was no inventory
write-down during the three and six months ended December 31, 2019
or 2018, respectively.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 12px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Inventory
balances consist of the following:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">December
31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">June
30,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: rgb(0, 0, 0)">
Raw materials</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">$</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">182,000</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; font-family: Times New Roman; display: inline-block">$</FONT><FONT STYLE="text-align: right; vertical-align: bottom; width: 75%; font-family: Times New Roman; display: inline-block">117,000</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; font-family: Times New Roman; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: rgb(0, 0, 0)">
Finished goods</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,310,000</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,323,000</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font-size: 13px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,492,000</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 13px"><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 4px double; text-align: right; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,440,000</FONT><FONT STYLE="text-align: left; font-family: Times New Roman; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">16</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
6. Fixed Assets</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Fixed
assets are recorded at cost and, once placed in service, are
depreciated on a straight-line basis over the estimated useful
lives. Leasehold improvements are amortized over the shorter of the
estimated economic life or related lease term. Fixed assets consist
of the following:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">Estimated Useful
Lives in<BR></FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">June
30,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">years</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Manufacturing
equipment</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">2 - 5</FONT><FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">83,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">83,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Leasehold
improvements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">3</FONT><FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">112,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">112,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Office equipment,
furniture and other</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman">2 - 5</FONT><FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">265,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">315,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Lab
equipment</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">3 - 5</FONT><FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">90,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">90,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Less accumulated
depreciation and amortization</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(428,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(396,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 5%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; display: inline-block; width: 75%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;Fixed
assets, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 5%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; display: inline-block; width: 75%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">122,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">204,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Depreciation and
amortization expense totaled $16,000 for each of the three-months
ended December 31, 2019 and 2018, respectively, and $32,000 and
$44,000 for the six months ended December 31, 2019 and
2018.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
7. Leases, Right-to-Use Assets and Related Liabilities</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
September 2015, the Company entered into a 37-month operating lease
in Englewood, Colorado. This lease had an initial base rent of
approximately $9 thousand a month with a total base rent over the
term of the lease of approximately $318,000. In October 2017, the
Company signed an amendment to the 37-month operating lease in
Englewood, Colorado, extending the lease for an additional 24
months beginning October 1, 2018. The base rent remained
approximately $9 thousand per month. In April 2019, the Company
extended the lease for an additional 36 months beginning October 1,
2020.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
June 2018, the Company entered into a 12-month operating lease,
beginning on August 1, 2018, for office space in Raleigh, North
Carolina. This lease has base rent of approximately $1 thousand a
month, with total rent over the term of the lease of approximately
$13 thousand.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000">As discussed within&#xA0;</FONT><FONT STYLE="font-style: italic; color: #000000">Note 1</FONT><FONT STYLE="color: #000000">, the Company adopted the&#xA0;FASB issued ASU
2016-02,&#xA0;</FONT><FONT STYLE="font-style: italic; color: #000000">&#x201C;Leases
(Topic&#xA0;842)&#x201D;&#xA0;</FONT><FONT STYLE="color: #000000">as
of July 1, 2019. With the adoption of ASU 2016-02, the Company
recorded an operating right-of-use asset and an operating lease
liability on its balance sheet associated with its lease of its
corporate headquarters. The right-of-use asset represents the
Company&#x2019;s right to use the underlying asset for the lease
term and the lease obligation represents the Company&#x2019;s
commitment to make the lease payments arising from the lease.
Right-of-use lease assets and obligations are recognized at the
later of the commencement date or July 1, 2019; the date of
adoption of Topic 842; based on the present value of remaining
lease payments over the lease term. As the Company&#x2019;s lease
does not provide an implicit rate, the Company used an estimated
incremental borrowing rate based on the information available at
the commencement date in determining the present value of the lease
payments. Rent expense is recognized on a straight-line basis over
the lease term, subject to any changes in the lease or expectations
regarding the terms. The&#xA0;lease liability is classified as
current or long-term on the balance sheet.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">17</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0;
<FONT STYLE="font: 13px Times New Roman"><BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">Total</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">2020</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">2021</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">2022</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">2023</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">2024</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: #000">Thereafter</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Remaining
Office leases</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">445,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">54,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">113,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">117,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">121,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">40,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; color: #000000; vertical-align: bottom; display: inline-block; width: 75%">&#x2212;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; color: #000000; vertical-align: bottom; display: inline-block; width: 10%">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Less:
Discount Adjustment</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(70,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Total
lease liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">375,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Lease
liability - current portion</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">83,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Long-term
lease liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">292,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Rent
expense for the three months ended December 31, 2019 and 2018
totaled $30 thousand and $31 thousand, respectively. Rent expense
for the six months ended December 31, 2019 and 2018 totaled $63
thousand and $63 thousand, respectively</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
8. Patents</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
cost of the oxidation-reduction potential (&#x201C;ORP&#x201D;)
technology related patents for the MiOXSYS Systems was $380,000
when they were acquired and are being amortized over the remaining
U.S. patent life of approximately 15 years as of the date, which
expires in March 2028. Patents consist of the
following:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">June
30,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Patents</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">380,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">380,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Less
accumulated amortization</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(172,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(159,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;Patents,
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">208,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">221,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
amortization expense was $7 thousand for the three months ended
December 31, 2019 and 2018, respectively, and $13 thousand for the
six months ended December 31, 2019 and 2018
respectively.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
9. Accrued liabilities</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
liabilities consist of the following:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">June
30,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
accounting fee</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">63,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">85,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
program liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,087,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">736,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
product-related fees</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">601,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">295,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Other
accrued liabilities*</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">100,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">32,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Accrued
note payable</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">263,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Total
accrued liabilities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,114,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,148,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">* Other
accrued liabilities consist of franchise tax, samples and
consultants, none of which individually represent greater than five
percent of total current liabilities.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">18</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0;<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
10. Fair Value Considerations</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company&#x2019;s financial instruments include cash and cash
equivalents, restricted cash, accounts receivable, accounts
payable, accrued liabilities, warrant derivative liability, and
contingent consideration. The carrying amounts of financial
instruments, including cash and cash equivalents, restricted cash,
accounts receivable, accounts payable, and accrued liabilities
approximate their fair value due to their short maturities,
including those acquired or assumed on November 1, 2019 as a result
of the acquisition of the Cerecor Portfolio of Pediatrics
Therapeutics. The fair value of the warrant derivative liability
was valued using the lattice valuation methodology. The fair value
of acquisition-related contingent consideration is based on a
Monte-Carlo methodology using estimated discounted future cash
flows and periodic assessments of the probability of occurrence of
potential future events. The valuation policies are determined by
management, and the Company&#x2019;s Board of Directors is informed
of any policy change.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Authoritative
guidance defines fair value as the price that would be received to
sell an asset or paid to transfer a liability (an exit price) in an
orderly transaction between market participants at the measurement
date. The guidance establishes a hierarchy for inputs used in
measuring fair value that maximizes the use of observable inputs
and minimizes the use of unobservable inputs by requiring that the
most observable inputs be used when available. Observable inputs
are inputs that market participants would use in pricing the asset
or liability developed based on market data obtained from sources
independent of the Company. Unobservable inputs are inputs that
reflect the Company&#x2019;s assumptions of what market participants
would use in pricing the asset or liability developed based on the
best information available in the circumstances. The hierarchy is
broken down into three levels based on reliability of the inputs as
follows:</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; width: 100%">
<TR>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Level&#xA0;1:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 94%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Inputs
that reflect unadjusted quoted prices in active markets that are
accessible to Aytu for identical assets or
liabilities;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 94%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Level&#xA0;2:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 94%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Inputs
that include quoted prices for similar assets and liabilities in
active or inactive markets or that are observable for the asset or
liability either directly or indirectly; and</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 6%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 94%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: top; width: 6%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Level&#xA0;3:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 94%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Unobservable
inputs that are supported by little or no market
activity.</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company&#x2019;s assets and liabilities which are measured at fair
value are classified in their entirety based on the lowest level of
input that is significant to their fair value measurement. The
Company&#x2019;s policy is to recognize transfers in and/or out of
fair value hierarchy as of the date in which the event or change in
circumstances caused the transfer. Aytu has consistently applied
the valuation techniques discussed below in all periods
presented.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Recurring Fair Value Measurements</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
following table presents the Company&#x2019;s financial liabilities
that were accounted for at fair value on a recurring basis as of
December 31, 2019 and June 30, 2019, by level within the fair value
hierarchy.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px; padding-bottom: 2px">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="3" ROWSPAN="1" STYLE="vertical-align: bottom; width: 36%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 94%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Fair Value
Measurements at December 31, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Fair Value at
December 31, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Quoted Priced
in Active Markets for Identical Assets (Level 1)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Significant
Other Observable Inputs (Level 2)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Significant
Unobservable Inputs (Level 3)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Recurring:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrant derivative
liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">11,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">11,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Contingent
consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,446,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,446,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,457,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,457,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">19</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV>&#xA0;&#xA0;
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 2px; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="3" ROWSPAN="1" STYLE="vertical-align: bottom; width: 36%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 94%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Fair Value
Measurements at June 30, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Fair Value
at June 30, 2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Quoted
Priced in Active Markets for Identical Assets (Level
1)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Significant
Other Observable Inputs (Level 2)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Significant
Unobservable Inputs (Level 3)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Recurring:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Warrant
derivative liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">13,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">13,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Contingent
consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">23,326,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">23,326,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px">
<FONT>&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">23,339,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">23,339,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-size: 13px">&#xA0;</FONT><FONT STYLE="font-style: italic; color: #000000; font-size: 13px">Derivative
Warrant Liability.</FONT> <FONT STYLE="color: #000000; font-size: 13px">The warrant derivative liability
was historically valued using the lattice valuation methodology
because that model embodies the relevant assumptions that address
the features underlying these instruments. The warrants related to
the warrant derivative liability are not actively traded and are,
therefore, classified as Level 3 liabilities. As a result of the
immaterial value of the balance as of both June 30, 2019 and
September 30, 2019, coupled with continued further declines in the
Company&#x2019;s stock price, the Company elected to waive on
adjusting the current fair value of the derivative warrant
liability as any adjustment was deemed de
minimus.</FONT></FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31,</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">June
30,</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Warrant
Derivative Liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Volatility</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">163.2</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">163.2</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Equivalent
term (years)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2.88</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3.13</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Risk-free
interest rate</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.71</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.71</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Dividend
yield</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">0.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">0.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic; color: #000000">Contingent
Consideration.</FONT> <FONT STYLE="color: #000000">The Company
classifies its contingent consideration liability in connection
with the acquisition of Natesto, Tuzistra XR and</FONT> ZolpiMist,
within Level 3 as factors used to develop the estimated fair value
are unobservable inputs that are not supported by market activity.
The Company estimates the fair value of our contingent
consideration liability based on projected payment dates, discount
rates, probabilities of payment, and projected revenues. Projected
contingent payment amounts are discounted back to the current
period using a discounted cash flow methodology.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
Company derecognized the contingent consideration liability related
to Natesto as a result of the December 1, 2019 effectiveness of the
Acerus Amendment, which eliminated product milestone payments
underlying the contingent consideration liability. Due to the
derecognition of the Natesto contingent consideration, the Company
recognized a, non-operating gain of approximately $5.2 million
during the three and six months ended December 31,
2019.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Non-Recurring Fair Value Measurements</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
following table represents those asset and liabilities measured on
a non-recurring basis as a result</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 13px Times New Roman"><BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; width: 100%">
<TR>
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="6" STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 51%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;Fair Value Measurements at December 31, 2019</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;Fair Value at December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;Quoted Priced in Active Markets for Identical Assets (Level
1)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;Significant Other Observable Inputs(Level 2)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 19%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;Significant Unobservable Inputs(Level 3)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Non-recurring</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 19%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ddf1fa">
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 24px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Product
technology rights</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">$</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">22,321,667</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">$</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 19%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">22,321,667</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 24px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Goodwill</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 24px">
<FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">15,387,064</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 19%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">15,387,064</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ddf1fa">
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 24px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Fixed payment
arrangements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 24px">
<FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">26,056,217</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 19%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">26,056,217</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 31%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">$</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">63,764,948</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 13%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#x2013;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">$</FONT></DIV>
</TD>
<TD STYLE="border-bottom: #000000 2px solid; vertical-align: bottom; width: 19%">
<DIV STYLE="text-align: right; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">63,764,948</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 2%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">20</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV>&#xA0;&#xA0;
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block; padding-bottom: 2px; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="3" ROWSPAN="1" STYLE="vertical-align: bottom; width: 36%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 94%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Fair Value
Measurements at November 1, 2019 (*)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 3%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Fair Value
at November 1, 2019 (*)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Quoted
Priced in Active Markets for Identical Assets (Level
1)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Significant
Other Observable Inputs (Level 2)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Significant
Unobservable Inputs (Level 3)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman">Product technology
rights</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">22,700,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">22,700,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman">Goodwill</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15,387,064</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15,387,064</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 12px"><FONT STYLE="font: 13px Times New Roman">Fixed payment
arrangements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">26,457,162</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">26,457,162</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px">
<FONT>&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">64,544,226</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">64,544,226</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px"><BR></FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic; color: #000000">Product technology
rights.</FONT> <FONT STYLE="color: #000000">The Company recognized
the product technology right intangible asset acquired as part of
the November 1, 2019 acquisition of the Pediatric Portfolio. This
intangible asset consists of the acquired product technology rights
consisting of (i) AcipHex Sprinkle, (ii) Karbinal &#xAE; ER, (iii)
Cefaclor, and (iv) Poly-vi-Flor and Tri-vi-Flor. The Company
utilized a Multiple-Period Excess Earnings Method
model.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="1" ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">As
of</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">November
1,</FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019
(*)</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Product
technology rights</FONT></DIV>
</TD>
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Re-levered
Beta</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.60</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Market risk
premium</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">6.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Small stock
risk premium</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5.20</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Risk-free
interest rate</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Company
specific discount</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">25.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">(*)
Valuation performed as of November 1, 2019. As a non-recurring fair
value measurement, there is no remeasurement at each reporting
period unless indications exist that the fair value of the asset
has been impaired. There were no indicators as of December 31, 2019
that the fair value of the Product technology rights was
impaired.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Goodwill.</FONT> Goodwill represents the fair
value of consideration transferred and liabilities assumed in
excess of the fair value of assets acquired. Remeasurement of the
fair value of goodwill only arises upon either (i) indicators that
the fair value of goodwill has been impaired, or (ii) during the
annual impairment test performed at June 30 of each fiscal year.
There were no indicators observed or identified during and as of
the period from November 1, 2019 through December 31,
2019.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Fixed payment arrangements.</FONT> The Company
assumed obligations due to an investor including fixed and variable
payments. The Company assumed fixed monthly payments equal to $0.1
million from November 2019 through January 2021 plus $15 million
due in January 2021. Monthly variable payments due to the same
investor are equal to 15% of net revenue generated from a subset of
the Product Portfolio, subject to an aggregate monthly minimum of
$0.1 million, except for January 2020, when a one-time payment of
$0.2 million is due. The variable payment obligation continues
until the earlier of: (i) aggregate variable payments of
approximately $9.3 million have been made, or (ii) February 12,
2026. In addition, the Company assumed fixed, product minimums
royalties of approximately $1.75 million per annum through February
2023.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">21</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="vertical-align: bottom; width: 83%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font-size: 11px"><FONT STYLE="font-weight: bold; font-family: Times New Roman">As of November
1, 2019 (&#x2260;)</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 84%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Fixed
payment obligations</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ddf1fa">
<TD STYLE="vertical-align: bottom; width: 83%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;Discount
rate</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;1.8%
to 12.4%</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">(&#x2260;)
<FONT STYLE="color: #000000">Valuation performed as of November 1,
2019. As a non-recurring fair value measurement, there is no
remeasurement at each reporting period unless indicates that the
circumstances that existed as of the November 1, 2019 measurement
date indicate that the carrying value is no longer indicative of
fair value.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Summary of Level 3 Input Changes</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
following table sets forth a summary of changes to those fair value
measures using Level 3 inputs for the six months ended December 31,
2019:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Product
Technology Rights</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Goodwill</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Liability
Classified Warrants</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Contingent
Consideration</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Fixed Payment
Arrangements</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Balance as of
June 30, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">13,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">23,326,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Transfers
into Level 3</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Transfer out
of Level 3</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total gains,
losses, amortization or accretion in period</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(378,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Included in
earnings</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(2,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(4,760,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)<BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">264,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Included in
other comprehensive income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 12px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Purchases,
issues, sales and settlements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Purchases</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">22,700,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15,387,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Issues</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">26,457,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Sales</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Settlements</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(120,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(665,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 50%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Balance as of
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">22,322,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">15,387,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">18,446,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">26,056,000<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
11. Note Receivable</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
September 12, 2019, the Company announced it had entered into a
definitive merger agreement with Innovus (see Note 1) to acquire
Innovus which specializes in commercializing, licensing and
developing safe and effective supplements and over-the-counter
consumer health products. As part of the negotiations with Innovus,
the Company agreed to provide a short-term, loan in the form of a
$1.0 promissory note on August 8, 2019 (the &#x201C;Innovus
Note&#x201D;). The Innovus Note will be used to offset a portion of
the purchase price upon closing of the Innovus Merger Agreement
(see Note 1) or, in the event the Merger Agreement does not close
the Innovus Note matures on February 29, 2020, accruing interest at
10.0% per annum to be paid upon principal pay down. In the event of
default, the interest rate increases to 15.0% per annum. In
addition, on October 11, 2019, the Company amended the original
promissory note, providing an additional approximately $0.4 million
of bridge financing under the same terms and conditions as the
Innovus Note.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
12. Commitments and Contingencies</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Commitments
and contingencies are described below and summarized by the
following as of December 31, 2019:</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Total</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2020</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2021</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2022</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2023</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
2024</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman; color: rgb(0, 0, 0)">
Thereafter</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Prescription
database</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,342,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">296,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">534,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">512,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Pediatric
portfolio fixed payments and product minimums</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">29,824,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,107,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">18,471,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,950,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,950,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,346,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman; color: #000000">Product
milestone payments</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">3,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">3,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 30%">
<DIV STYLE="margin-left: 0px; padding-bottom: 4px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">34,166,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,403,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">19,005,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">3,462,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">5,950,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,346,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 10%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">22</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Prescription Database</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In May
2016, the Company entered into an agreement with a vendor that will
provide it with prescription database information. The Company
agreed to pay approximately $1.6 million over three years for
access to the database of prescriptions written for Natesto. The
payments have been broken down into quarterly
payments.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Pediatric Portfolio Fixed Payments and Product
Milestone</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
Company assumed two fixed, periodic payment obligations to an
investor (the &#x201C;Fixed Obligation&#x201D;). Beginning November
1, 2019 through January 2021, the Company will pay monthly payments
of $86,840, with a balloon payment of $15,000,000 due in January
2021. A second fixed obligation requires the Company pay a minimum
of $100,000 monthly through February 2026, except for $210,767 due
January 2020. There is the potential for the second fixed
obligation to rise an additional $1.8 million depending on product
sales, which could trigger additional amounts to be
paid.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
addition, the Company acquired a Supply and Distribution Agreement
with TRIS Pharma (the &#x201C;Karbinal Agreement&#x201D;), under
which the Company is granted the exclusive right to distribute and
sell the product in the United States. The initial term of the
Karbinal Agreement is 20 years. The Company will pay TRIS a royalty
equal to 23.5% of net sales. Avadel has agreed to offset the 23.5%
royalty payable by 8.5%, for a net royalty equal to 15%, in fiscal
year 2018 and 2019 for net sales of Karbinal.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
make-whole payment is capped at $1,750,000 each year. The Karbinal
Agreement also contains minimum unit sales commitments, which is
based on a commercial year that spans from August 1 through July
31, of 70,000 units through 2023. The Company is required to pay
TRIS a royalty make whole payment of $30 for each unit under the
70,000 unit annual minimum sales commitment through 2033. The
annual payment is due in August of each year. The Karbinal
Agreement also has multiple commercial milestone obligations that
aggregate up to $3.0 million based on cumulative net sales, the
first of which is triggered at $40.0 million.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Milestone Payments</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
connection with the Company&#x2019;s intangible assets, Aytu has
certain milestone payments, totaling $3.0 million, payable at a
future date, are not directly tied to future sales, but upon other
events certain to happen. These obligations are included in the
valuation of the Company&#x2019;s contingent consideration (see Note
10).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
13. Capital Structure</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">At
December 31, 2019 and June 30, 2019, Aytu had 20,733,052 and
17,538,071 common shares outstanding, respectively, and 10,215,845
and 3,594,981 preferred shares outstanding, respectively. The
Company has 100&#xA0;million shares of common stock authorized with
a par value of $0.0001&#xA0;per share and 50&#xA0;million shares of
preferred stock authorized with a par value of $0.0001 per
share.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company has 50&#xA0;million shares of non-voting, non-cumulative
preferred stock authorized with a par value of $0.0001 per share,
of which, 400,000 are designated as Series D Convertible preferred
stock, and 10,000 are designated as Series F Convertible preferred
stock, and 9,805,845 are designated as Series G Convertible
preferred stock as of December 31, 2019. Liquidation rights for all
series of preferred stock are on an as-converted to common stock
basis.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Included
in the common stock outstanding are 2,307,854 shares of restricted
stock issued to executives, directors, employees and
consultants.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">During
the quarter ended September 30, 2019, investors holding shares of
Series C preferred stock exercised their right to convert 443,833
shares of Series C preferred stock into 443,833 shares of common
stock. As of September 30, 2019, there are no remaining Series C
preferred stock outstanding.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">23</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
October 2019, Armistice Capital converted 2,751,148 shares of
Series E Preferred Stock into 2,751,148 shares of common
stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
October 2019, the Company issued 10,000 shares of Series F
Convertible Preferred Stock, with a face value of $1,000 per share,
and convertible at a conversion price of $1.00 (the &#x201C;Current
Conversion Price&#x201D;). The terms of the Series F Convertible
Preferred include a conversion price reset provision in the event a
future financing transaction is priced below the Current Conversion
Price. The Company has determined that concurrent with the adoption
of ASU 2017-11, this down-round provision feature reflects a
beneficial conversion feature contingent on a future financing
transaction at a price lower than the Current Conversion Price. As
the Series F Convertible Preferred stock is an equity classified
instrument, any accounting arising from a future event giving rise
to the beneficial conversion feature would have no net impact on
the Company&#x2019;s financial statements, as all activity would be
recognized within Additional Paid-in-Capital and
offset.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
November 2019, in connection with the Cerecor acquisition, the
Company issued 9,805,845 shares of Series G Convertible Preferred
stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
14. Equity Incentive Plan</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Share-based Compensation Plans</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
June&#xA0;1, 2015, Aytu&#x2019;s stockholders approved the Aytu
BioScience 2015 Stock Option and Incentive Plan (the &#x201C;2015
Plan&#x201D;), which, as amended in July 2017, provides for the
award of stock options, stock appreciation rights, restricted stock
and other equity awards for up to an aggregate of 3.0 million
shares of common stock. The shares of common stock underlying any
awards that are forfeited, canceled, reacquired by Aytu prior to
vesting, satisfied without any issuance of stock, expire or are
otherwise terminated (other than by exercise) under the 2015 Plan
will be added back to the shares of common stock available for
issuance under the 2015 Plan. As of December 31, 2019, we have
692,204 shares that are available for grant under the 2015
Plan.&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">On
December 23, 2019, the Company filed Form S-4 related to the
proposed Innovus merger, in which shareholders are asked to approve
an increase to 5.0 million total shares of common stock in the 2015
Plan. As of the date of this report, Aytu shareholders [approved]
the proposal to increase the total number of common shares in the
2015 Plan.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Stock Options</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Employee Stock Options:</FONT> There were no
grants of stock options to employees during the quarters ended
December 31, 2019 and 2018, respectively, therefore, no assumptions
are used for this quarter.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Stock
option activity is as follows:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Number of
Options</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Exercise Price</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Remaining Contractual Life in Years</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding June
30, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,607</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">325.73</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">6.13</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;Expired</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(125</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">328.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,482</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">325.54</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6.07</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Exercisable at
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,482</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">325.54</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6.07</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">As
of&#xA0;December 31, 2019, there was&#xA0;$0 unrecognized
option-based compensation expense related to non-vested stock
options.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
January 2020, the Company granted 12,500 shares of stock options to
5 employees pursuant to the 2015 Plan, which vest immediately upon
grant. Compensation expense related to these options will be fully
recognized in the three months ended March 31, 2020.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">24</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Restricted Stock</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Restricted
stock activity is as follows:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Number of
Shares</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Grant Date Fair Value</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Remaining Contractual Life in Years</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Unvested at
June 30, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,346,214</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.83</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">9.1</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Granted</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Vested</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Forfeited</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(39,900</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2.57</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Unvested at
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,306,314</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1.81</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">8.6</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">During
the quarter ended September 30, 2019, 5,150 shares of restricted
stock were exchanged with common stock, and the Company recognized
an increase in aggregate stock compensation expense of
$2,600.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">During
the quarter ended December 31, 2019, 34,750 shares of restricted
stock were exchanged with common stock, and the Company recognized
an increase in aggregate stock compensation expense of
$6,200.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Under
the 2015 Plan, there was $3,573,000 of total unrecognized
stock-based compensation expense related to the non-vested
restricted stock as of December 31, 2019. The Company expects to
recognize this expense over a weighted-average period of 8.57
years.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
January 2020, the Company issued 285,000 shares of restricted stock
to directors and employees pursuant to the 2015 Plan. Of the
285,000 shares, 200,000 shares vest in November 2021 and
share-based compensation expense will be recognized over a two-year
period. 85,000 shares vest in January 2030 and share-based
compensation expense will be recognized over a ten-year
period.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
Company previously issued 1,540 shares of restricted stock outside
the Company&#x2019;s 2015 Plan, which vest in July 2026. The
unrecognized expense related to these shares was $1,297,000 as of
December 31, 2019 and is expected to be recognized over the
weighted average period of 6.52 years.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">Stock-based
compensation expense related to the fair value of stock options and
restricted stock was included in the statements of operations as
selling, general and administrative expenses as set forth in the
table below:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Three
Months Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Six Months
Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Selling,
general and administrative:</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Stock
options</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">41,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">7,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">107,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Restricted
stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">160,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">153,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">320,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">239,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
stock-based compensation expense</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">162,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">194,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">327,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">346,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0;
<FONT STYLE="font: 13px Times New Roman"><BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">25</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
15. Warrants</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In
connection with the October 2019 private placement financing, the
Company issued warrants (the October 2019 Warrants) to the
investors to purchase an aggregate of 10,000,000 shares of the
Company&#x2019;s common stock at an exercise price of $1.25 and a
term of five years. These warrants feature a contingent cashless
exercise provision. During the three months ended December 31,
2019, the cashless exercise contingency was satisfied, reducing the
strike price of the October 2019 Warrants to $0. In January 2020,
an investor exercised 2 million October 2019 Warrants using the
cashless exercise feature.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">While
these warrants are classified as a component of equity, in order to
allocate the fair value of the October 2019 private placement
between the Series F Convertible Preferred Stock and the October
2019 Warrants, the Company was required to calculate the fair value
of the October 2019 Warrants. These warrants issued had a relative
fair value of $4.0 million. All warrants issued in October 2019
were valued using a Monte Carlo model. In order to calculate the
fair value of the warrants, certain assumptions were made,
including the selling price or fair market value of the underlying
common stock, risk-free interest rate, volatility, expected
dividend yield, and contractual life. Changes to the assumptions
could cause significant adjustments to valuation. The Company
estimated a volatility factor utilizing a weighted average of
comparable published betas of peer companies. The risk-free
interest rate is based on the U.S. Treasury yield in effect at the
time of the grant for treasury securities of similar
maturity.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Significant
assumptions in valuing the warrants issued during the quarter are
as follows:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;As of
October<BR></FONT></DIV>
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">11,
2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Expected
volatility</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.53</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Equivalent term
(years)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Risk-free
rate</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1.59</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 88%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Dividend
yield</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">0.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">%</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">A
summary of equity-based warrants is as follows:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Number of
Warrants</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Exercise Price</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font-size: 11px"><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Remaining Contractual Life in Years</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block">&#xA0;</FONT></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding June
30, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">16,218,908</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3.15</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">4.36</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants issued
(*)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">10,000,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1.25</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block"><BR></FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants
expired</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants
exercised</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">26,218,908</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2.43</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4.21</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">(*) In
<FONT STYLE="color: #000000">January 2020, and investor exercised
2.0 million of the October 2019 private placement warrants under
the cashless exercise provision.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">26</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">A
summary of liability warrants is as follows:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Number of
Warrants</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Exercise Price</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">&#xA0;Weighted
Average Remaining Contractual Life in Years</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding June
30, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">240,755</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">72.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3.16</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants
expired</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants
exercised</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 64%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Outstanding
December 31, 2019</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">240,755</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">72.00</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2.65</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0;
<FONT STYLE="font: 13px Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
16. Net Loss Per Common Share.&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000">Basic income (loss) per common share is calculated
by dividing the net income (loss) available to the common
shareholders by the weighted average number of common shares
outstanding during that period.&#xA0;</FONT><FONT STYLE="color: #000000; background-color: #FFFFFF">Diluted net loss per
share reflects the potential of securities that could share in the
net loss of Aytu. For each three and six month period presented,
the basic and diluted loss per share were the same for 2019 and
2018, as they were not included in the calculation of the diluted
net loss per share because they would have been
anti-dilutive.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000; background-color: #FFFFFF">
The following table sets-forth securities that could be potentially
dilutive, but as of the quarters ended December 31, 2019 and 2018
are anti-dilutive, and therefore excluded from the calculation of
diluted earnings per share.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; text-align: left; margin: 0px auto 0px 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">Six Months
Ended</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 5%; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrants to
purchase common stock - liability classified</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
15)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">240,755</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">240,755</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Warrant to purchase
common stock - equity classified</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
15)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">26,218,908</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">12,065,506</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Employee stock
options</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
14)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,482</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,787</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Employee unvested
restricted stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
14)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,307,854</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">2,744,912</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Performance-based
options</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
14)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">75,000</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 61%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Convertible
preferred stock</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 15%">
<DIV STYLE="text-align: center; text-indent: 0px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;(Note
13)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">10,215,845</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,532,664</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD COLSPAN="2" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 4px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">38,984,844</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">19,660,624</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">In
January 2020, 2.0 million equity classified warrants were cashless
exercised pursuant to the terms of the October 2019
warrants.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
17. Subsequent Events</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">See
Footnotes 1, 14, 15 and 16 for information relating to events
occurring subsequent to December 31, 2019.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">27</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="12">I</A>tem&#xA0;2. Management&#x2019;s Discussion
and Analysis of Financial Condition and Results of
Operations.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
This discussion should be read in conjunction with Aytu BioScience,
Inc.&#x2019;s Annual Report on Form 10-K for the year ended June 30,
2019, filed on September 26, 2019. The following discussion and
analysis contains forward-looking statements that involve risks and
uncertainties. Actual results could differ materially from those
projected in the forward-looking statements. For additional
information regarding these risks and uncertainties, please see the
risk factors included in Aytu&#x2019;s Form 10-K filed with the
Securities and Exchange Commission on September 26,
2019.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Overview, Liquidity and Capital Resources</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><A NAME="_Hlk22152694"><!--anchor--></A>We are a specialty
pharmaceutical company focused on commercializing novel products
that address significant patient needs such as hypogonadism (low
testosterone), cough and upper respiratory symptoms, insomnia, male
infertility, various pediatric conditions and we plan to expand
opportunistically into other therapeutic areas as we continue to
execute on our growth plans.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We are
currently focused on commercialization of the following products
(i) Natesto&#xAE;, a testosterone replacement therapy, or TRT, (ii)
Tuzistra&#xAE; XR, a codeine&#x2013;based antitussive, (iii)
ZolpiMist&#x2122;, a short-term insomnia treatment and (iv),
MiOXSYS&#xAE;, a novel in vitro diagnostic system for male
infertility assessment. Additionally, we completed an Asset
Purchase Agreement (the &#x201C;Purchase Agreement&#x201D;) with
Cerecor, Inc (&#x201C;Cerecor&#x201D;) on November 1, 2019, acquiring
six products, (i) AcipHex&#xAE; Sprinkle&#x2122;, (ii) Cefaclor for
Oral Suspension, (iii) Karbinal&#xAE; ER, (iv) Flexichamber&#x2122;,
(v) Poly-Vi-Flor&#xAE; and Tri-Vi-Flor&#x2122; (the &#x201C;
&#x201C;Pediatric Portfolio&#x201D;). We immediately began to include
these acquired Pediatric Portfolio in our commercialization
efforts.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">In the
future we will seek to acquire additional commercial-stage or
near-market products, including existing products we believe can
offer distinct clinical advantages and patient benefits over
existing other marketed products. Our management team&#x2019;s prior
experience has involved identifying both clinical-stage and
commercial-stage assets that can be launched or re-launched to
increase value, with a focused commercial infrastructure
specializing in novel, niche products.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Our
operations have historically consumed cash and are expected to
continue to require cash, but at a declining rate. We expect to
require capital beyond operating needs to complete and integrate
the Pediatric Portfolio acquisition and the merger with Innovus
Pharmaceuticals, Inc. (&#x201C;Innovus&#x201D;), approved by the
shareholders of both Aytu and Innovus on on February 13, 2020, and
expected to close February 14, 2020 (the &#x201C;Merger&#x201D;) (see
below). Revenues for the three-months ended December 31, 2019
increased 77% compared to the three-months ended December 31, 2018,
and revenues increased 100% and 14% for each of the years ended
June 30, 2019 and 2018, respectively. Revenue is expected to
continue to increase long-term, allowing us to rely less on our
existing cash and cash equivalents, and proceeds from financing
transactions. Cash used in operations during the six months ended
December 31, 2019 was $9.1 million compared to $7.0 million for the
six months ended December 31, 2018, due primarily to our
acquisition of the Pediatric Portfolio on November 1, 2019, which
consumed additional cash resources.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font: 13px Times New Roman">In addition, we
assumed as part of the Pediatric Portfolio, (a) approximately $3.5
million of Medicaid rebates and product returns as they come due,
(b) payment obligations due to an investor including fixed and
variable payments consisting of (1) fixed monthly payments equal to
$0.1 million from November 2019 through January 2021 plus $15
million due in January 2021 and (2) monthly variable payments due
to the same investor are equal to 15% of net revenue generated from
a subset of the Product Portfolio, subject to an aggregate monthly
minimum of $0.1 million, except for January 2020, when a one-time
payment of $0.2 million is due. The variable payment obligation
continues until the earlier of: (i) aggregate variable payments of
approximately $9.5 million have been made, or (ii) February 12,
2026.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">On
October 11, 2019, we entered into Securities Purchase Agreements
(the &#x201C;Purchase Agreement&#x201D;) with two institutional
investors (the &#x201C;Investors&#x201D;) providing for the issuance
and sale by the Company (the &#x201C;October 2019 Offering&#x201D;)
of $10.0 million of, (i) shares of our Series F Convertible
Preferred Stock (the &#x201C;Preferred Stock&#x201D;) which are
convertible into shares of common stock (the &#x201C;Conversion
Shares&#x201D;) and (ii) warrants (the &#x201C;Warrants&#x201D;) which
are exercisable for shares of common stock (the &#x201C;Warrant
Shares&#x201D;), which expire January 10, 2025. The closing October
2019 Offering occurred on October 16, 2019. The Warrants had an
exercise price equal to $1.25 and contain cashless exercise
provisions. One such provision which was dependent on performance
of our stock price between October 11, 2019 and the date of
exercise of all, or a portion of the Warrants, subject to the
entire transaction receiving shareholder approval was satisfied.
Our shareholders approved the transaction on January 24, 2020. On
January 27, 2020, 2.0 million cashless warrants were exercised to
acquire 2.0 million shares of our common stock.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
net proceeds we received from the October 2019 Offering were
approximately $9.3 million.&#xA0;&#xA0;The net proceeds we receive
from the October 2019 Offering will be used for general corporate
purposes, including working capital.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">As of
the date of this Report, we expect our commercial costs for current
operation to increase modestly as we continue to focus on revenue
growth. The cost related to the addition of the Cerecor commercial
team was partially offset by a reduction in force completed by the
Company in October 2019. Our current asset position of $74.5
million plus the receipts expected from ongoing product sales will
be used to fund operations. We will access the capital markets to
fund operations when needed, and to the extent it becomes probable
that existing cash and cash equivalents, and other current assets
may become exhausted. The timing and amount of capital that may be
raised is dependent on market conditions and the terms and
conditions upon which investors would require to provide such
capital. There is no guarantee that capital will be available on
terms that we consider to be favorable to us and our stockholders,
or at all. However, we have been successful in accessing the
capital markets in the past and is confident in our ability to
access the capital markets again, if needed. Since we do not have
sufficient cash and cash equivalents on-hand as of December 31,
2019 to cover potential net cash outflows for the twelve months
following the filing date of this Quarterly Report, ASU 2014-15,
Presentation of Financial Statements&#x2014;Going Concern (Subtopic
205-40) requires us to report that there exists an indication of
substantial doubt about our ability to continue as a going
concern.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font: 13px Times New Roman; color: #000000">As
of the date of this report, we have inadequate capital resources to
complete our near-term operating and transaction objectives. In
anticipation of the cash outlays related to the merger, the
Pediatric Portfolio acquisition, and funding our operations, we
have taken the following steps to address its
post-closing&#xA0;cash needs, including, but not limited to (i)
engaging a placement agent to refinance the fixed obligation, and
(ii) engaging in discussions with lenders to establish a debt
facility to provide us with capital while considering other funding
strategies. We will also require the investors that participated in
the October PIPE to waive the financing prohibition which expires
in April 2020. There is no guarantee that capital will be available
on terms that we consider to be favorable. However, we have been
successful in accessing the capital markets in the past and we are
confident in our ability to access the capital markets again, if
needed.</FONT><BR></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">If we
are unable to raise adequate capital in the future when it is
required, we can adjust our operating plans to reduce the magnitude
of the capital need under its existing operating plan. Some of the
adjustments that could be made include delays of and reductions to
the Company&#x2019;s commercial programs, reductions in headcount,
narrowing the scope of our commercial efforts, or reductions to our
research and development programs. Without sufficient operating
capital, we could be required to relinquish rights to products or
renegotiate to retain such rights on less favorable terms than it
would otherwise choose. This may lead to impairment or other
charges, which could materially affect our balance sheet and
operating results.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Nasdaq Listing Compliance.</FONT> Our common
stock is listed on The Nasdaq Capital Market. In order to maintain
compliance with Nasdaq listing standards<FONT STYLE="font-style: italic">,</FONT> we must, amongst other requirements,
maintain a stockholders&#x2019; equity balance of at least $2.5
million pursuant to Nasdaq Listing Rule 5550(b). In that regard, on
September 30, 2019, our stockholders&#x2019; equity totaled
approximately $2.3 million, thereby potentially resulting in a
stockholders&#x2019; equity deficiency upon the filing of the
September 30, 2019 Form 10-Q. However, subsequent to September 30,
2019, we completed (i) the Offering with the Investors, raising
approximately $9.3 million in equity financing (see Note 1), and
(ii) the &#x201C;Asset Purchase Agreement&#x201D; in which we issued
approximately 9.8 million shares of Series G Convertible Preferred
Stock worth approximately $5.6 million, resulting in an increase in
stockholders&#x2019; equity of approximately $14.8 million in the
aggregate. Accordingly, as of the filing of this Form 10-Q for the
three and six months ended December 31, 2019, our
stockholders&#x2019; equity balance exceeds the minimum $2.5 million
threshold and, therefore, we believe we are currently in compliance
with all applicable Nasdaq Listing Requirements.</FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Strategic Growth Initiatives</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">Pursuant to our
strategy of identifying and acquiring complimentary assets, we have
entered into two transactions that will substantially increase the
revenue generating capacity of the Company and provide
opportunities to reduce the combined operating losses of Aytu. The
dual impact of the transactions on revenue and operating expenses
is expected to position the Company to achieve positive cash flow
earlier than previously expected.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Acquisition of Pediatric Portfolio.</FONT> On
October 10, 2019, we entered into the Purchase Agreement with
Cerecor, Inc. (&#x201C;Cerecor&#x201D;) to purchase and acquire
Cerecor&#x2019;s Portfolio of Pediatric Therapeutics (the
&#x201C;Pediatric Portfolio&#x201D;), which closed on November 1,
2019. The Pediatric Portfolio consists of six pharmaceutical and
other prescription products consisting of (i) AcipHex&#xAE;
Sprinkle&#x2122;, (ii) Cefaclor for Oral Suspension, (iii)
Karbinal&#xAE; ER, (iv) Flexichamber&#x2122;, (v) Poly-Vi-Flor&#xAE;
and Tri-Vi-Flor&#x2122;. Total consideration transferred consisted
of $4.5 million cash and approximately 9.8 million shares of Series
G Convertible Preferred Stock, plus the assumption not more than
$3.5 million of Medicaid rebates and products returns. In addition,
we absorbed the majority of the Cerecor&#x2019;s workforce focused
on commercial sales, commercial contracts and customer
relationships.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">We have
assumed obligations due to an investor including fixed and variable
payments. The Company assumed fixed monthly payments equal to $0.1
million from November 2019 through January 2021 plus $15 million
due in January 2021. Monthly variable payments due to the same
investor are equal to 15% of net revenue generated from a subset of
the Product Portfolio, subject to an aggregate monthly minimum of
$0.1 million, except for January 2020, when a one-time payment of
$0.2 million is due. The variable payment obligation continues
until the earlier of: (i) aggregate variable payments of
approximately $9.5 million have been made, or (ii) February 12,
2026.</FONT></DIV>
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</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Further, certain of
the products in the Product Portfolio require royalty payments
ranging from 15% to 38.0% of net revenue. One of the products in
the Product Portfolio requires us to generate minimum annual sales
sufficient to represent annual royalties of approximately $1.75
million.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic 13px Times New Roman">
Pending Merger</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We
entered into a definitive merger agreement (the &#x201C;Merger
Agreement&#x201D;) between us and Innovus Pharmaceuticals, Inc.
(&#x201C;Innovus&#x201D;) on September 12, 2019.The Merger was
approved by the shareholders of both Aytu and Innovus on February
13, 2020 and is expected to close February 14, 2020.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Upon
closing, the Merger will cause us to retire all of the outstanding
common stock of Innovus for an estimate of (i) up to approximately
3.7 million in shares of the Company&#x2019;s common stock, (ii) up
to $16 million in milestone payments in the form of contingent
value rights (CVRs) may be paid to Innovus shareholders in cash or
stock over the next five years if certain revenue and profitability
milestones are achieved. Innovus specializes in commercializing,
licensing and developing safe and effective supplements and
over-the-counter consumer health products. We anticipate that this
transaction will formally close on February 14, 2020, subject to
shareholder approval.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
ACCOUNTING POLICIES</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Significant Accounting Policies and Estimates</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Our
consolidated financial statements have been prepared in accordance
with accounting principles generally accepted in the United States
of America. The preparation of the consolidated financial
statements requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities at the
date of the consolidated financial statements, and the reported
amounts of expenses during the reporting period. On an on-going
basis, management evaluates its estimates and judgments, including
those related to recoverability and useful lives of&#xA0;long-lived
assets, stock compensation, valuation of derivative instruments,
allowances, contingencies and going concern. Management bases its
estimates and judgments on historical experience and on various
other factors that the Company believes to be reasonable under the
circumstances, the results of which form the basis for making
judgments about the carrying value of assets and liabilities that
are not readily apparent from other sources. Actual results may
differ from these estimates under different assumptions or
conditions. The methods, estimates, and judgments used by us in
applying these critical accounting policies have a significant
impact on the results we report in our consolidated financial
statements. Our significant accounting policies and estimates are
included in our Annual Report on Form 10-K for the fiscal year
ended June 30, 2019, filed with the SEC on September 26,
2019.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Information
regarding our accounting policies and estimates can be found in the
Notes to the consolidated Financial Statements.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Newly Issued Accounting Pronouncements</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Information
regarding the recently issued accounting standards (adopted and
pending adoption as of December 31, 2019) are presented in Note 1
to the consolidated financial statements.</FONT></DIV>
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</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
RESULTS OF OPERATIONS</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Results of Operations &#x2013; Three and Six months ended December
31, 2019 compared to December 31, 2018</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: bold 13px Times New Roman"><BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 90%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Three Months
Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 90%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">Change</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">%</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Revenues</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Product
revenue, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,175,236</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,795,011</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,380,225</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">77</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Operating
expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Cost
of sales</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">606,046<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">525,138</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">80,908<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">15</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Research and
development</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">66,675</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">149,029</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(82,354</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">-55.3</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Selling,
general and administrative</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">6,516,160</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,046,174</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,469,986</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">29.1</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Selling,
general and administrative - related party</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">91,337</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(91,337</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">-100</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Amortization
of intangible assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">953,450</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">534,063</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">419,387</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">79</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
operating expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">8,142,331<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">6,345,741</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,796,590<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">34</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Loss from
operations</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,967,095</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,550,730</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(416,365</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">9</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Other
(expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Other
(expense), net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(446,958</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(127,569</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(319,389</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">250</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Gain from
derecognition of contingent consideration</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">100</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Gain from
warrant derivative liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">&#x2013;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">20,637</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(20,637</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-100</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total other
(expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,752,848</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(106,932</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,859,780</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-4545</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Net
loss</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(214,247</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(4,657,662</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,443,415<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-95</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">%</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; margin-left: 0px; width: 100%">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 90%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">&#xA0;Six Months
Ended December 31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 90%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 5%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">Change</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT><FONT STYLE="border-bottom: #000 2px solid; text-align: center; vertical-align: bottom; width: 80%; font-size: 11px; display: inline-block">
<DIV><FONT STYLE="font-family: Times New Roman; font-weight: bold">$</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; padding-bottom: 2px; width: 10%; font-size: 11px; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Revenues</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Product
revenue, net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">4,615,062</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,226,820</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">1,388,242</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">43</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Operating
expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Cost
of sales</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">981,766<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">936,097</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">45,669<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Research and
development</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">144,695</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">304,907</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(160,212</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">-52.5</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Selling,
general and administrative</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">11,662,603</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">8,622,754</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">3,039,849</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">35.3</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Selling,
general and administrative - related party</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">345,046</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(345,046</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">-100</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Amortization
of intangible assets</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,528,567</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">986,020</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">542,547</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">55</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total
operating expenses</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">14,317,631<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">11,194,824</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">3,122,807<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">28</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Loss from
operations</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(9,702,569</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(7,968,004</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(1,734,565</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">22</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Other
(expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Other (expense),
net</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(642,344</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(204,130</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(438,214</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">215</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font: 13px Times New Roman; color: #000000">Gain
from derecognition of contingent consideration
liability</FONT></FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">-<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">5,199,806</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">100</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">Gain from warrant
derivative liability</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">1,830</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">67,989</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(66,159</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-97</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 36px; margin-right: 0px; padding-bottom: 2px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Total other
(expense) income</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,559,292</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(136,141</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">4,695,433</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 2px solid; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-3449</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 2px">%</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD COLSPAN="1" STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 52%">
<DIV STYLE="text-align: left; text-indent: 0px; margin-right: 0px; padding-bottom: 4px; margin-left: 0px"><FONT STYLE="font: bold 13px Times New Roman">&#xA0;Net
loss</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(5,143,277</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">(8,104,145</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">$</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">2,960,868<BR></FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: left; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 5%">&#xA0;</FONT><FONT STYLE="border-bottom: #000000 4px double; text-align: right; font: 13px Times New Roman; vertical-align: bottom; display: inline-block; width: 75%">-37</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; display: inline-block; width: 10%; padding-bottom: 4px">%</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">31</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Product revenue.</FONT> <FONT STYLE="color: #000000">We recognized net revenue from product sales of
$3.2 million and $1.8 million for the three months ended December
31, 2019 and 2018 respectively. We recognized net revenue from
product sales of $4.6 million and $3.2 million for the six months
ended December 31, 2019 and 2018 respectively. This increase was
primarily driven by the acquisition of the Portfolio of Pediatric
Therapeutics on November 1, 2019.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000"><FONT STYLE="font: 13px Times New Roman; color: #000000">
Our product portfolio includes Natesto, Tuzistra XR, ZolpiMist, and
the MiOXSYS Systems.&#xA0;In November 2019, we acquired the
portfolio of pediatric therapeutic commercial products from
Cerecor, Inc. This transaction expanded our product portfolio with
the addition of six pharmaceutical and other prescription products,
AcipHex Sprinkle, Cefaclor, Karbinal, Flexichamber, Poly-Vi-Flor
and Tri-Vi-Flor.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic; font-size: 13px">Cost of
sales</FONT><FONT STYLE="font-size: 13px">. The cost of sales of
$0.6 million and $0.5 million recognized for the three months ended
December 31, 2019 and 2018, respectively, and $1.0 million and $0.9
million recognized for the six months ended December 31, 2019 and
2018, respectively, are related to Natesto, Tuzistra XR,
ZolpiMist,</FONT> <FONT STYLE="color: #000000; font-size: 13px">AcipHex Sprinkl, Cefaclor,
Karbinal, Flexichamber, Poly-Vi-Flor, Tri-Vi-Flor</FONT>
<FONT STYLE="font-size: 13px">and the MiOXSYS System. We expect
cost of sales to increase in the future due to and in line with
growth in revenue from product sales, however, the decline in costs
of sales was the result of efforts to improve product
margins.</FONT>&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Research and Development.</FONT> Research and
development expenses decreased $0.1, or 55.3%, for the three months
ended December 31, 2019 compared to the three months ended December
31, 2018. <FONT STYLE="color: #000000">Research and development
expenses decreased $0.2, or 52.5%, for the six months ended
December 31, 2019 compared to the six months ended December 31,
2018.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">The
decrease was due primarily to <FONT STYLE="color: #000000">a
decrease in research and development costs associated with the
MiOXSYS System</FONT>. We anticipate research and development
expense to increase in fiscal 2020 as we anticipate funding a study
to further support the clinical application of our MiOXSYS
System.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Selling, General and Administrative.</FONT>
<FONT STYLE="color: #000000">Selling, general and administrative
costs increased $1.5 million, or 29.1%, for the three months ended
December 31, 2019 compared the three months ended December 31,
2018.&#xA0;Selling, general and administrative costs increased $3.0
million, or 35.3%, for the six months ended December 31, 2019,
compared to the six months ended December 31,
2018.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">The
primary increase was due to sales and marketing expenses related to
Cerecor acquisition, labor, occupancy, travel, expanding our
commercial team, and stock-based compensation.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic; color: #000000">Selling, General and
Administrative &#x2013; Related Party.</FONT> <FONT STYLE="color: #000000">Selling, general and administrative costs &#x2013;
related party comprise the cost of a services provided by TrialCard
Inc. (&#x201C;TrialCard&#x201D;), of which one of our Directors, Mr.
Donofrio, was an employee during the quarter ended December 31,
2018. Mr. Donofrio is no longer an employee of
TrialCard.</FONT><FONT STYLE="font-size: 13px">&#xA0;</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-weight: bold; color: #000000">&#xA0;</FONT><FONT STYLE="font-style: italic">Amortization of Intangible Assets.</FONT>
Amortization expense for the remaining intangible assets was
approximately $1.0 million and $0.5 million for the for the three
months ended December 31, 2019 and 2018, respectively. <FONT STYLE="color: #000000">Amortization of intangible assets was $1.5 million
and $1.0 million for the six months ended December 31, 2019 and
2018, respectively.</FONT> This expense is related to corresponding
amortization of our finite-lived intangible assets. The increase of
this expense is due to the Cerecor acquisition closed in this
quarter.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic"><FONT STYLE="font: 13px Times New Roman"><FONT STYLE="font-style: italic">Derecognition of contingent
consideration.</FONT> Gain of approximately $5.2 million from the
derecognition of the estimated contingent consideration liability
related to sales of Natesto with terms covered pursuant to the
Amended and Restated License and Supply Agreement (the
&#x201C;Acerus Amendment&#x201D;).</FONT></FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Liquidity and Capital Resources</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: inherit inherit; margin-right: 0px; width: 100%; margin-left: 0px">
<TR>
<TD ROWSPAN="1" STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" ROWSPAN="1" STYLE="vertical-align: bottom; width: 24%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 90%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">December
31,</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 5%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px; padding-bottom: 2px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2019</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT><FONT STYLE="border-bottom: rgb(0, 0, 0) 2px solid; text-align: center; vertical-align: bottom; width: 80%; display: inline-block; font-size: 11px">
<DIV><FONT STYLE="font-weight: bold; font-family: Times New Roman">2018</FONT></DIV>
</FONT><FONT STYLE="text-align: left; padding-bottom: 2px; width: 10%; vertical-align: bottom; display: inline-block; font-size: 11px">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="text-align: center; vertical-align: bottom; width: 80%; display: inline-block">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</FONT><FONT STYLE="text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Net cash used
in operating activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(9,087,054</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(7,047,165</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #ffffff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Net cash used
in investing activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(5,954,635</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">(860,287</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">)</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: #cceeff">
<TD STYLE="vertical-align: bottom; width: 76%">
<DIV STYLE="text-align: left; text-indent: 24px; margin-right: 0px; margin-left: 0px"><FONT STYLE="font: 13px Times New Roman">&#xA0;Net cash
provided by financing activities</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">9,258,350</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 5%; display: inline-block">$</FONT><FONT STYLE="font: 13px Times New Roman; text-align: right; vertical-align: bottom; width: 75%; display: inline-block">18,700,037</FONT><FONT STYLE="font: 13px Times New Roman; text-align: left; vertical-align: bottom; width: 10%; display: inline-block">&#xA0;</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">32</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Net Cash Used in Operating Activities</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000"><FONT STYLE="font: 13px Times New Roman">
<FONT STYLE="font: 13px Times New Roman; color: #000000">During
the six months ended December 31, 2019, our operating activities
used $9.1 million in cash, which was greater than the net loss of
$5.1 million, primarily as a result of derecognition of contingent
consideration and an increase in accounts receivable, offset by the
non-cash depreciation, amortization and accretion, stock-based
compensation charges to earnings, coupled with an increase in
accounts payable.</FONT></FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">During
the six months ended December 31, 2018, our operating activities
used $7.0 million in cash, which was less than the reported net
loss of $8.1 million. Our cash use was lower than our reported net
loss due to an increase in accounts payable and other, accrued
liabilities, and accrued compensation expense, along with the
recognition of non-cash expenses such as depreciation, amortization
and accretion, and stock-based compensation. These were offset by
derivative income, an increase in accounts receivable, inventory
and prepaid expenses and other.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Net Cash Used in Investing Activities</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000"><FONT STYLE="font: 13px Times New Roman; color: #000000">
During the six months ended December 31, 2019, we issued a note
receivable to Innovus totaling $1.4 million. We also used $4.5
million for the Cerecor acquisition and we paid $105,000 in
contingent consideration.</FONT></FONT></DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;During
the six months ended December 31, 2018, we used $860,000 of cash
for investing activities to purchase fixed and operating assets and
received a $3,000 refund of our deposit for office
space.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Net Cash from Financing Activities</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Net
cash provided by financing activities in the six months ended
December 31, 2019 was $9.3 million. <FONT STYLE="color: #000000">This was primarily related to the October 2019
Offering for gross proceeds of $10.0 million, offset by the
offering cost of $0.7 million which was paid in
cash.</FONT></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;&#xA0;Net
cash provided by financing activities in the six months ended
December 31, 2018 was $18.7 million. This was primarily related to
the October 9, 2018 public offering of $15.2 million, offset by the
offering cost of $1.5 million which was paid in cash. We also
closed on a debt agreement for $5.0 million.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Off Balance Sheet Arrangements</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We do
not have off-balance sheet arrangements, financings, or other
relationships with unconsolidated entities or other persons, also
known as &#x201C;variable interest entities.&#x201D;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Contractual Obligations and Commitments</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Information
regarding our Contractual Obligations and Commitments is contained
in Note 12 to the Financial</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Statements.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="13">I</A>tem&#xA0;3. Quantitative and Qualitative Disclosures
About Market Risk.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">We
are not currently exposed to material market risk arising from
financial instruments, changes in interest rates or commodity
prices, or fluctuations in foreign currencies. We have not
identified a need to hedge against any of the foregoing risks and
therefore currently engages in no hedging activities.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="14">I</A>tem&#xA0;4. Controls and Procedures.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">As
of the end of the period covered by this Quarterly Report on Form
10-Q, an evaluation was carried out by our management, with the
participation of the Chief Executive Officer and Chief Financial
Officer, of the effectiveness of our disclosure controls and
procedures, as defined in Rule 13a-15(e) and 15d-15(e) under the
Securities Exchange Act of 1934, as amended, or the Exchange
Act.&#xA0;Based on such evaluation, the Chief Executive Officer and
Chief Financial Officer concluded that our disclosure controls and
procedures are effective to ensure that information required to be
disclosed in the reports we file or submit under the Exchange Act
is recorded, processed, summarized and reported within the time
periods specified in the SEC&#x2019;s rules and forms, and are
operating in an effective manner.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Changes in Internal Control over Financial Reporting</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">There
were no changes in our internal controls over financial reporting
that occurred during the last fiscal quarter that has materially
affected, or is reasonably likely to materially affect, our
internal control over financial reporting.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">33</FONT></DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
&#xA0;&#xA0; <FONT STYLE="font: 13px Times New Roman"><BR></FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
PART II. OTHER INFORMATION</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="21">I</A>tem 1. Legal Proceedings.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 72px; margin-right: 0px; text-indent: -72px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">We are
currently not a party to any material pending legal
proceedings.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="21a">I</A>tem&#xA0;1A. Risk Factors.<BR></FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 72px; margin-right: 0px; text-indent: -72px">
<FONT STYLE="font: bold 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman; color: #000000; background-color: #FFFFFF">
In addition to other information set forth in this report, you
should carefully consider the risk factors discussed in Part I,
Item 1A. &#x201C;Risk Factors&#x201D; in our Annual Report, which
could materially affect our business, financial condition, cash
flows, and/or future results. The risk factors&#xA0;in our Annual
Report are not the only risks facing our Company. Additional risks
and uncertainties not currently known to us or that we currently
deem to be immaterial also may materially adversely affect our
business, financial condition, and/or future results. There have
been no material changes to the risk factors contained in our
Annual Report, except as outlined below.<BR></FONT></DIV>
<DIV><FONT STYLE="font: 10 Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: bold 13px Times New Roman; color: #FF0000; background-color: #FFFFFF">
</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
Risks Related to Our Financial Condition and Capital
Requirements</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
If we are unable to consummate the merger, our stock price may be
adversely affected and our financial condition may materially
suffer.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000; background-color: #FFFFFF">
If the merger is not completed for any reason, the trading price of
our common stock may decline to the extent that the market price of
our common stock reflects positive market assumptions that the
merger will be completed and the related benefits will be realized.
In addition, if the merger is not completed our financial condition
could materially suffer, including, but not limited
to:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">limiting our
ability to obtain additional financing in the future for working
capital, capital expenditures and acquisitions;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">limiting our
flexibility to plan for and adjust to changing business and market
conditions and increasing our vulnerability to general adverse
economic and industry conditions; and</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">potential
disruption to our business and dist<FONT STYLE="background-color: #FFFFFF">raction of our workforce and management
team</FONT></FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
We will incur substantial transaction fees and costs in connection
with the merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000; background-color: #FFFFFF">
We expect to incur a significant amount of non-recurring expenses
in connection with the merger, including legal, accounting,
financial advisory and other expenses. Additional unanticipated
costs may be incurred following consummation of the merger in the
course of the integration of our businesses with that of Innovus
and Cerecor. We cannot be certain that the elimination of
duplicative costs or the realization of other efficiencies related
to the integration of the businesses will offset the transaction
and integration costs in the near term, or at all.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
Risks Related to our Organization, Structure, and
Operation</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
We may not be able to realize anticipated cost synergies from the
pending acquisition.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The success of the merger and the Cerecor transaction will depend,
in part, on our ability to realize anticipated cost synergies. Our
success in realizing these cost synergies, and the timing of this
realization, depends on the successful integration of our business
and operations with the acquired business and operations. Even if
we are able to integrate the acquired businesses and operations
successfully, this integration may not result in the realization of
the full benefits of the cost synergies of the pending acquisition
that we currently expect within the anticipated time frame or at
all.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
We intend to acquire, through mergers, asset purchases or
in-licensing, businesses or products, or form strategic alliances,
in the future, and we may not realize the intended benefits of such
acquisitions or alliances.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
We intend to acquire, through mergers, asset purchases or
in-licensing, additional businesses or products, form strategic
alliances and/or create joint ventures with third parties that we
believe will complement or augment our existing business. If we
acquire businesses or assets with promising markets or
technologies, we may not be able to realize the benefit of
acquiring such businesses or assets if we are unable to
successfully integrate them with our existing operations and
company culture. We may encounter numerous difficulties in
developing, manufacturing and marketing any new products resulting
from a strategic alliance or acquisition that delay or prevent us
from realizing their expected benefits or enhancing our business.
We cannot assure you that, following any such acquisition or
alliance, we will achieve the expected synergies to justify the
transaction. These risks apply to our acquisition of Natesto in
April 2016, ZolpiMist in June 2018, Tuzistra XR in November 2018
and the Cerecor products in November 2019. As an example, we
acquired Primsol in October 2015, but sold it in March 2017.
Depending on the success or lack thereof of any of our existing or
future acquired products and product candidates, we might seek to
out-license, sell or otherwise dispose of any of those products or
product candidates, which could adversely impact our operations if
the dispositions triggers a loss, accounting charge or other
negative impact.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">34</FONT></DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Our business and operations could suffer in the event of
information technology security breaches.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Security breaches, phishing, spoofing, attempts by others to gain
unauthorized access to our information technology systems, and
other cyberattacks are becoming more sophisticated and are
sometimes successful. These incidents, which might be related to
industrial or other espionage, include covertly introducing malware
to our computers and networks (or to an electronic system operated
by a third party for our benefit) and impersonating authorized
users, among others. We seek to detect and investigate all security
incidents and to prevent their recurrence, but in some cases, we
might be unaware of an incident or its magnitude and effects. The
theft, unauthorized use, transfer, or publication of our
intellectual property, our confidential business information, or
the personal data of our employees by third parties or by our
employees could harm our competitive position, reduce the value of
our strategic initiatives or otherwise adversely affect our
business. To the extent that any security breach or other
cybersecurity incident results in inappropriate disclosure of our
customers&#x2019;, suppliers&#x2019;, licensees&#x2019; or
employees&#x2019; confidential information, we may incur liability
as a result. We expect to continue devoting significant resources
to the security of our information technology systems and the
training of our employees. However, we cannot ensure that our
efforts will be sufficient to prevent or mitigate the damage caused
by a cyberattack, cybersecurity incident or network
disruption.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
Our Amended and Restated Bylaws provides that the Court of Chancery
of the State of Delaware is the exclusive forum for certain
litigation that may be initiated by our stockholders, including
claims under the Securities Act, which could limit our
stockholders&#x2019; ability to obtain a favorable judicial forum
for disputes with us or our directors, officers or
employees.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Our
Amended and Restated Bylaws provides that the Court of Chancery of
the State of Delaware shall, to the fullest extent permitted by
law, be the sole and exclusive forum for (i) any derivative action
or proceeding brought on our behalf, (ii) any action asserting a
claim for breach of a fiduciary duty owed by any of our directors,
officers, employees or agents to us or our stockholders, (iii) any
action asserting a claim arising pursuant to any provision of the
Delaware General Corporation Law, our certificate of incorporation
or our bylaws or (iv) any action asserting a claim governed by the
internal affairs doctrine. The choice of forum provision may limit
a stockholder&#x2019;s ability to bring a claim in a judicial forum
that it finds favorable for disputes with us or our directors,
officers, employees or agents, which may discourage such lawsuits
against us and our directors, officers, employees and agents.
Stockholders who do bring a claim in the Court of Chancery could
face additional litigation costs in pursuing any such claim,
particularly if they do not reside in or near the State of
Delaware. The Court of Chancery may also reach different judgments
or results than would other courts, including courts where a
stockholder considering an action may be located or would otherwise
choose to bring the action, and such judgments or results may be
more favorable to us than to our stockholders. Alternatively, if a
court were to find the choice of forum provision contained in our
certificate of incorporation to be inapplicable or unenforceable in
an action, we may incur additional costs associated with resolving
such action in other jurisdictions, which could adversely affect
our business and financial condition. Notwithstanding the
foregoing, the exclusive provision shall not preclude or contract
the scope of exclusive federal or concurrent jurisdiction for
actions brought under the Securities Exchange Act of 1934, as
amended, or the Securities Act of 1933, as amended, or the
respective rules and regulations promulgated
thereunder.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
Risks Related to Securities Markets and Investment in our
Securities</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
We cannot assure you that the common stock will remain listed on
the NASDAQ Capital Market.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000; background-color: #FFFFFF">
The common stock is currently listed on the NASDAQ Capital
Market.&#xA0;Although we currently meet the listing standards of
the NASDAQ Capital Market, we cannot assure you that we will be
able to maintain the continued listing standards of the NASDAQ
Capital Market. &#xA0;If we fail to satisfy the continued listing
requirements of the NASDAQ Capital Market, such as the corporate
governance requirements, minimum bid price requirement or the
minimum stockholder&#x2019;s equity requirement, the NASDAQ Capital
Market may take steps to de-list our common stock. If we are
delisted from the NASDAQ Capital Market then our common stock will
trade, if at all, only on the over-the-counter market, such as the
OTC Bulletin Board securities market, and then only if one or more
registered broker-dealer market makers comply with quotation
requirements. In addition, delisting of our common stock could
depress our stock price, substantially limit liquidity of our
common stock and materially adversely affect our ability to raise
capital on terms acceptable to us, or at all. Delisting from the
NASDAQ Capital Market could also have other negative results,
including the potential loss of confidence by suppliers and
employees, the loss of institutional investor interest and fewer
business development opportunities.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
On September 30, 2019, our stockholders&#x2019; equity totaled
approximately $2.3 million, thereby potentially resulting in a
stockholders&#x2019; equity deficiency upon the filing of this Form
10-Q. However, subsequent to September 30, 2019, we completed (i)
the Offering with the Investors, raising approximately $9.2 million
in equity financing (see Note 1), and (ii) the &#x201C;Asset
Purchase Agreement&#x201D; in which we issued approximately 9.8
million shares of Series G Convertible Preferred Stock worth an
initial estimate of approximately $5.6 million, resulting in an
increase in stockholders&#x2019; equity of approximately $14.8
million in the aggregate. Accordingly, as of the filing of this
Form 10-Q for the three months ended September 30, 2019, our
stockholders&#x2019; equity balance exceeds the minimum $2.5 million
threshold and, therefore, we believe we are currently in compliance
with all applicable Nasdaq Listing Requirements.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
On April 9, 2018, we received a letter from NASDAQ indicating that
the Company has failed to comply with the minimum bid price
requirement of NASDAQ Listing Rule 5550(a)(2). NASDAQ Listing Rule
5550(a)(2) requires that companies listed on the Nasdaq Capital
Market maintain a minimum closing bid price of at least $1.00 per
share. However, on August 10, 2018, we effected a 1-for-20 reverse
stock split, which has brought us back into compliance with NASDAQ
Listing Rule 5550(a)(2).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
On November 1, 2019, Aytu became aware that as of September 30,
2019, Aytu stockholders&#x2019; equity fell below the $2.5 million
threshold. However, as of October 13, 2019, the deficiency was
remediated as a result of Aytu completing an offering, raising
approximately $9.3 million in equity financing. Aytu proactively
contacted the Nasdaq Capital Markets on November 5, 2019 to
disclose and discuss non-compliance with Rule 5550(b) as of
September 30, 2019 and the subsequent remediation. Aytu proposed
disclosures to be included in its Form 10-Q for the three months
ended September 30, 2019 to mitigate any need to address the matter
subsequent to the filing of the Company&#x2019;s Form
10-Q.</FONT></DIV>
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">35</FONT></DIV>
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<DIV ID="hdr">
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</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000; background-color: #FFFFFF">
Risks Related to the Merger</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000; background-color: #FFFFFF">
The following</FONT> <FONT STYLE="font-size: 13px">risk factors
relate to the potential merger between Aytu and
Innovus.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman">
<FONT STYLE="color: #000000">Because the exchange ratio is fixed
and the market price of shares of Aytu common stock have fluctuated
downwards and may continue to fluctuate, and because of the
uncertainty of the value of, and the ultimate realization on,
the</FONT> contingent value rights <FONT STYLE="color: #000000">(&#x201C;CVRs&#x201D;), Innovus stockholders cannot
be sure of the value of the merger consideration they will receive
in the merger.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Upon completion of the merger, each holder of shares of Innovus
common stock outstanding immediately prior to the completion of the
merger (other than excluded stock and dissenting stock) will be
converted into the right to receive (1) their proportionateshare of
Aytu common stock to be issued at closing having an aggregate value
of up to $8 million (subject to certain deductions) and based on an
Aytu share price of $1.69 per share, (2) cash in lieu of fractional
shares of Aytu common stock and (3) for each share of Innovus
stock, one CVR, as described in more detail in the joint proxy
statement/prospectus under the heading &#x201C;The Merger
Agreement&#x2014;Merger Consideration.&#x201D; Because the exchange
ratio is fixed, the value of the Equity Issuances will depend on
the market price of shares of Aytu common stock at the time the
merger is completed. The market price of shares of Aytu common
stock has fluctuated since the date of the announcement of the
merger agreement, closing as low as $0.67 since the execution of
the merger agreement, and may continue to fluctuate from the date
of the joint proxy statement/prospectus to the date of the Innovus
special meeting and the date the merger is completed, which could
occur a considerable amount of time after the date of the Innovus
special meeting, and thereafter. In addition, although an increase
in the price of shares of Aytu common stock may benefit Innovus
stockholders, in the event the price of shares of Aytu common stock
is less than $1.69 at the time of closing of the merger, Innovus
stockholders will realize a decrease in the value of the merger
consideration. Moreover, the CVRs are non-transferable and there is
also uncertainty regarding the value of the CVRs and whether any
payment will ultimately be realized on the CVRs.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The market price of shares of Aytu common stock after the merger
will continue to fluctuate and may be affected by factors different
from those that are currently affecting or historically have
affected the market price of shares of Innovus common stock or Aytu
common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Upon completion of the merger, holders of shares of Innovus common
stock will become holders of shares of Aytu common stock. The
market price of Aytu common stock may fluctuate significantly
following completion of the merger, and holders of shares of
Innovus common stock could lose the value of their investment in
Aytu common stock if, among other things, the combined company is
unable to achieve the expected growth in earnings, or if the
operational cost savings estimates in connection with the
integration of the Innovus and Aytu business are not realized, or
if the transaction costs relating to the merger are greater than
expected, or if the financing related to the merger is on
unfavorable terms. The market price also may decline if the
combined company does not achieve the perceived benefits of the
merger as rapidly or to the extent anticipated by financial or
industry analysts or if the effect of the merger on the combined
company&#x2019;s financial position, results of operations or cash
flows is not consistent with the expectations of financial or
industry analysts. The issuance of shares of Aytu common stock in
the merger could on its own have the effect of depressing the
market price for Aytu common stock. In addition, many Innovus
stockholders may decide not to hold the shares of Aytu common stock
they receive as a result of the merger. Other Innovus stockholders,
such as funds with limitations on their permitted holdings of stock
in individual issuers, may be required to sell the shares of Aytu
common stock they receive as a result of the merger. Any such sales
of Aytu common stock could have the effect of depressing the market
price for Aytu common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
In addition, in the future Aytu may issue additional securities to
raise capital. Aytu may also acquire interests in other companies
by issuing Aytu common stock to finance the acquisition, in whole
or in part. Aytu may also issue securities convertible into Aytu
common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Moreover, general fluctuations in stock markets could have a
material adverse effect on the market for, or liquidity of, the
Aytu common stock, regardless of Aytu&#x2019;s actual operating
performance.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The businesses of Aytu differ from those of Innovus in important
respects and, accordingly, the results of operations of the
combined company after the merger, as well as the market price of
shares of Aytu common stock, may be affected by factors different
from those that are currently affecting, historically have affected
or would in the future affect the results of operations of Innovus
and Aytu as stand-alone public companies, as well as the market
price of shares of Innovus common stock and Aytu common stock prior
to completion of the merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
On October 10, 2019, Aytu entered into an Asset Purchase Agreement
(the &#x201C;Asset Purchase Agreement&#x201D;) with Cerecor Inc.
(&#x201C;Cerecor&#x201D;) to purchase and acquire certain of
Cerecor&#x2019;s pediatric and primary care product lines.&#xA0;Upon
closing, as up-front consideration, Aytu paid a cash payment of
$4.5 million, issued Series G convertible preferred stock valued at
$12.5 million and assumed certain of Cerecor&#x2019;s financial and
royalty obligations, which include approximately $16.575 million of
fixed payment obligations to Deerfield CSF, LLC and not more than
$3.5 million of Medicaid rebates and products returns. The Series G
convertible preferred stock can only be converted following
approval of the Aytu shareholders. A preliminary proxy statement
was filed on November 21, 2019 in anticipation of a shareholder
meeting to vote on this proposal. The Series G convertible
preferred stock and shares of Aytu common stock will be subject to
a lock-up through July 1, 2020, restricting any transfers of such
securities per a lock-up agreement with Cerecor. The potential
issuance of shares of Aytu common stock underlying the convertible
preferred stock to be issued in the Cerecor transaction could have
the effect of depressing the market price for Aytu common
stock.</FONT></DIV>
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<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">36</FONT></DIV>
</DIV>
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</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu and Innovus may have difficulty attracting, motivating and
retaining executives and other key employees in light of the
merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu&#x2019;s success after the transaction will depend in part on
the ability of Aytu to retain key executives and other employees of
Innovus. Uncertainty about the effect of the merger on Aytu and
Innovus employees may have an adverse effect on each of Aytu and
Innovus separately and consequently the combined business. This
uncertainty may impair Aytu&#x2019;s and/or Innovus&#x2019; ability
to attract, retain and motivate key personnel. Employee retention
may be particularly challenging during the pendency of the merger,
as employees of Aytu and Innovus may experience uncertainty about
their future roles in the combined business.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Furthermore, if key employees of Aytu or Innovus depart or are at
risk of departing, including because of issues relating to the
uncertainty and difficulty of integration, financial security or a
desire not to become employees of the combined business, Aytu may
have to incur significant costs in retaining such individuals or in
identifying, hiring and retaining replacements for departing
employees and may lose significant expertise and talent, and the
combined company&#x2019;s ability to realize the anticipated
benefits of the merger may be materially and adversely affected. No
assurance can be given that the combined company will be able to
attract or retain key employees to the same extent that Innovus has
been able to attract or retain employees in the past.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Completion of the merger is subject to a number of other
conditions, and if these conditions are not satisfied or waived,
the merger will not be completed.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The obligations of Aytu and Innovus to complete the merger are
subject to satisfaction or waiver of a number of conditions
including, among other conditions: (1) the adoption of the merger
agreement by a majority of the holders of the outstanding shares of
Innovus common stock, (2) approval of the issuance of Aytu common
stock, the CVRs and any other securities issued in connection with
the merger by a majority of the votes cast by Aytu stockholders on
the matter, (3) approval for listing on the Nasdaq Capital Market
of Aytu common stock to be issued in connection with the merger,
(4) effectiveness of the registration statement for the Aytu common
stock to be issued in the merger and the absence of any stop order
suspending that effectiveness or any proceedings for that purpose
pending before the SEC, (5) Entry of the parties into the CVR
agreement, (6) the absence of any injunction or order issued by any
court or other governmental authority of competent jurisdiction
that enjoins, prevents or prohibits completion of the merger, (7)
all required consents, approvals and other authorizations of any
governmental entity, as described in the merger agreement, shall
have been obtained, (8) Aytu and certain officers of Innovus shall
have entered into an employment agreement or separation agreements,
as applicable, (9) accuracy of the other party&#x2019;s
representations and warranties, subject to certain materiality
standards set forth in the merger agreement and (10) compliance in
all material respects with the other party&#x2019;s obligations
under the merger agreement. For a more complete summary of the
conditions that must be satisfied or waived prior to completion of
the merger, see &#x201C;The Merger Agreement&#x2014; Conditions to
Closing the Merger&#x201D; beginning on page 179 of the joint proxy
statement/prospectus. There can be no assurance that the conditions
to closing the merger will be satisfied or waived or that the
merger will be completed within the expected time frame, or at
all.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu and Innovus may be targets of transaction related lawsuits
which could result in substantial costs and may delay or prevent
the merger from being completed. If the merger is completed, Aytu
will also assume Innovus&#x2019; risks arising from various legal
proceedings.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Securities class action lawsuits and derivative lawsuits are often
brought against public companies that have entered into merger
agreements. Even if the lawsuits are without merit, defending
against these claims can result in substantial costs and divert
management time and resources. An adverse judgment could result in
monetary damages, which could have a negative impact on
Aytu&#x2019;s and Innovus&#x2019; respective liquidity and financial
condition. Additionally, if a plaintiff is successful in obtaining
an injunction prohibiting completion of the merger, then that
injunction may delay or prevent the merger from being completed,
which may adversely affect Aytu&#x2019;s and Innovus&#x2019;
respective business, financial position and results of operation.
See &#x201C;Litigation Relating to the Merger&#x201D; beginning on
page 174 of the joint proxy statement/prospectus for more
information about any litigation related to the merger and
&#x201C;Legal Proceedings&#x201D; on page 107 of the joint proxy
statement/prospectus for more information about certain litigation
related to the Cerecor transaction that has been commenced prior to
the date of the joint proxy statement/prospectus. There can be no
assurance that no complaints will be filed with respect to the
merger, or that any additional complaints will be filed with
respect to the Cerecor transaction. Currently, with regard to the
merger, Aytu and Innovus are not aware of any securities class
action lawsuits or derivative lawsuits being filed with respect to
the merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
If the merger is completed, Aytu may fail to realize the
anticipated benefits and cost savings of the merger, which could
adversely affect the value of shares of Aytu common
stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The success of the merger will depend, in part, on Aytu&#x2019;s
ability to realize the anticipated benefits and cost savings from
combining the businesses of Aytu and Innovus. Aytu&#x2019;s ability
to realize these anticipated benefits and cost savings is subject
to certain risks, including, among others:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">Aytu&#x2019;s
ability to successfully combine the businesses of Aytu and
Innovus;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the risk that the
combined businesses will not perform as expected;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the extent to which
Aytu will be able to realize the expected synergies, which include
potential savings from re-assessing priority assets and aligning
investments, eliminating duplication and redundancy, adopting an
optimized operating model between both companies and leveraging
scale, and value creation resulting from the combination of the
businesses of Aytu and Innovus;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the possibility
that Aytu paid more for Innovus than the value it will derive from
the merger;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the assumption of
known and unknown liabilities of Innovus;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the possibility of
a decline of the credit ratings of the combined company following
the completion of the merger; and</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">the possibility of
costly litigation challenging the merger.</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">37</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
If Aytu is not able to successfully combine the businesses of Aytu
and Innovus within the anticipated time frame, or at all, the
anticipated cost savings and other benefits of the merger may not
be realized fully or may take longer to realize than expected, the
combined businesses may not perform as expected and the value of
the shares of Aytu common stock may be adversely
affected.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu and Innovus have operated and, until completion of the merger
will continue to operate, independently, and there can be no
assurances that their businesses can be integrated successfully. It
is possible that the integration process could result in the loss
of key Aytu or Innovus employees, the disruption of either
company&#x2019;s or both companies&#x2019; ongoing businesses or in
unexpected integration issues, higher than expected integration
costs and an overall post-completion integration process that takes
longer than originally anticipated. Specifically, issues that must
be addressed in integrating the operations of Innovus and Aytu in
order to realize the anticipated benefits of the merger so the
combined business performs as expected include, among
others:</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">combining the
companies&#x2019; separate operational, financial, reporting and
corporate functions;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">integrating the
companies&#x2019; technologies, products and services;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">identifying and
eliminating redundant and underperforming operations and
assets;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">harmonizing the
companies&#x2019; operating practices, employee development,
compensation and benefit programs, internal controls and other
policies, procedures and processes;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">addressing possible
differences in corporate cultures and management
philosophies;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">maintaining
employee morale and retaining key management and other
employees;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">attracting and
recruiting prospective employees;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">consolidating the
companies&#x2019; corporate, administrative and information
technology infrastructure;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">coordinating sales,
distribution and marketing efforts;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">managing the
movement of certain businesses and positions to different
locations;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">maintaining
existing agreements with customers and vendors and avoiding delays
in entering into new agreements with prospective customers and
vendors;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">coordinating
geographically dispersed organizations;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">consolidating
facilities of Innovus and Aytu that are currently in or near the
same location; and</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="margin-left: 48px; display: table">
<DIV STYLE="display: table-row">
<DIV STYLE="text-align: left; display: table-cell; width: 24px">
<FONT STYLE="color: #000000; font-size: 13px">&#x25CF;</FONT></DIV>
<DIV STYLE="text-align: justify; display: table-cell"><FONT STYLE="font: 13px Times New Roman">effecting potential
actions that may be required in connection with obtaining
regulatory approvals.</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<BR>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
In addition, at times, the attention of certain members of each
company&#x2019;s management and each company&#x2019;s resources may
be focused on completion of the merger and the integration of the
businesses of the two companies and diverted from day-to-day
business operations, which may disrupt each company&#x2019;s ongoing
business and the business of the combined company.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Innovus&#x2019; executive officers and directors have interests in
the merger that may be different from your interests as a
stockholder of Innovus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
When considering the recommendation of the Innovus Board that
Innovus stockholders vote in favor of the adoption of the merger
agreement, Innovus stockholders should be aware that Innovus&#x2019;
directors and executive officers have interests in the merger that
may be different from, or in addition to, the interests of Innovus
stockholders generally, including new employment agreements,
potential severance benefits, separation agreements, treatment of
outstanding Innovus equity awards pursuant to the merger agreement
and potential vesting of such awards in connection with a
qualifying termination of employment on or following the merger
(or, in certain circumstances, a termination of employment that
otherwise occurs in connection with the merger), and rights to
ongoing indemnification and insurance coverage. In addition, Steven
Boyd, who is a director of Aytu, is the Chief Investment Officer
and a director of Armistice, which is a substantial stockholder of
both Aytu and Innovus. As a substantial stockholder of both
companies, Armistice has significant influence over the outcome of
the vote of Innovus&#x2019; stockholders regarding the merger
consideration and will receive a substantial portion of the merger
consideration issuable in the merger. See &#x201C;Interests of
Innovus&#x2019; Directors and Executive Officers in the
Merger&#x201D; beginning on page 191 of the joint proxy
statement/prospectus for a more detailed description of these
interests. The Innovus Board was aware of these interests and
considered them, in addition to other matters, in evaluating and
negotiating the merger agreement and in recommending that Innovus
stockholders adopt the merger agreement.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
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<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">38</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu&#x2019;s executive officers and directors have interests in the
merger that may be different from your interests as a stockholder
of Innovus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 12px; margin-right: 1px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">In
considering the proposal to approve the merger agreement, as
recommended by the Aytu Board, Aytu stockholders should be aware
that Aytu&#x2019;s directors and executive officers have interests
in the merger that may be different from, or in addition to, the
interests of Aytu stockholders generally. Steven Boyd, who is a
director of Aytu, is the Chief Investment Officer and a director of
Armistice, which is a substantial stockholder of both Aytu and
Innovus.. As a substantial stockholder of both companies, Armistice
has the ability to control the outcome of the vote of Aytu&#x2019;s
stockholders regarding the merger consideration and will receive a
substantial portion of the merger consideration issuable in the
merger. These interests are described in further detail under
&#x201C;The Merger&#x2014;Interests of Aytu&#x2019;s Directors and
Executive Officers in the Merger&#x201D; and &#x201C;The Merger
Agreement&#x2014;Indemnification and Insurance&#x201D; beginning on
pages 199 and 187, respectively, of the joint proxy
statement/prospectus. The Aytu Board was aware of these interests
and considered them, among other matters, in evaluating and
negotiating the merger agreement, in reaching its decision to
approve the merger agreement and the transactions contemplated by
the merger agreement (including the merger consideration), and in
recommending to Aytu stockholders that the merger consideration be
approved.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The merger agreement contains provisions that make it more
difficult for Aytu and Innovus to pursue alternatives to the merger
and may discourage other companies from trying to acquire Innovus
for greater consideration than what Aytu has agreed to
pay.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The merger agreement contains provisions that make it more
difficult for Innovus to sell its business to a party other than
Aytu, or for Aytu to sell its business. These provisions include a
general prohibition on each party soliciting any acquisition
proposal. Further, there are only limited exceptions to each
party&#x2019;s agreement that its board of directors will not
withdraw or modify in a manner adverse to the other party the
recommendation of its board of directors in favor of the adoption
of the merger agreement, in the case of Innovus, or the approval of
the stock issuance, in the case of Aytu, and the other party
generally has a right to match any acquisition proposal that may be
made. However, at any time prior to the adoption of the merger
agreement by Innovus stockholders, in the case of Innovus, or the
approval of the stock issuance by Aytu stockholders, in the case of
Aytu, such party&#x2019;s board of directors is permitted to make an
adverse recommendation change if it determines in good faith that
the failure to take such action would be reasonably likely to be
inconsistent with its fiduciary duties under applicable law. In the
event that either the Innovus Board or the Aytu Board make an
adverse recommendation change, then such party may be required to
pay a $250,000 termination fee. Aytu and Innovus also will be
required to pay certain transaction expenses and other costs
incurred in connection with the merger, whether or not the merger
is completed, including certain fees and expenses of the other
party in connection with the Innovus fee reimbursement or the Aytu
fee reimbursement, as applicable. See &#x201C;The Merger
Agreement&#x2014;No Solicitation&#x201D; and &#x201C;The Merger
Agreement&#x2014;Termination Fees and Expenses&#x201D; beginning on
pages 184 and 189, respectively, of the joint proxy
statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The parties believe these provisions are reasonable and not
preclusive of other offers, but these restrictions might discourage
a third party that has an interest in acquiring all or a
significant part of either Innovus or Aytu from considering or
proposing an acquisition proposal, even if that party were prepared
to pay consideration with a higher per-share value than the
currently proposed merger consideration, in the case of Innovus, or
that party were prepared to enter into an agreement that may be
favorable to Aytu or its stockholders, in the case of Aytu.
Furthermore, the termination fees described above may result in a
potential competing acquirer proposing to pay a lower per-share
price to acquire the applicable party than it might otherwise have
proposed to pay because of the added expense of the termination fee
that may become payable by such party in certain
circumstances.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The shares of Aytu common stock to be received by Innovus
stockholders upon completion of the merger will have different
rights from shares of Innovus common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Upon completion of the merger, Innovus stockholders will no longer
be stockholders of Innovus, but will instead become stockholders of
Aytu, and their rights as Aytu stockholders will be governed by the
terms of Aytu&#x2019;s certificate of incorporation, as it may be
amended from time to time, which is referred to in the joint proxy
statement/prospectus as Aytu&#x2019;s certificate of incorporation,
and Aytu&#x2019;s amended and restated by-laws, as they may be
amended from time to time, which are referred to in the joint proxy
statement/prospectus as Aytu&#x2019;s by-laws. The terms of
Aytu&#x2019;s certificate of incorporation and Aytu&#x2019;s by-laws
are in some respects materially different than the terms of
Innovus&#x2019; certificate of incorporation, as they may be amended
from time to time, which is referred to in the joint proxy
statement/prospectus as Innovus&#x2019; certificate of
incorporation, and Innovus&#x2019; amended and restated by-laws, as
they may be amended from time to time, which are referred to in the
joint proxy statement/prospectus as Innovus&#x2019; by-laws, which
currently govern the rights of Innovus stockholders. See
&#x201C;Comparison of Stockholder Rights&#x201D; beginning on page
228 of the joint proxy statement/prospectus for a discussion of the
different rights associated with shares of Innovus common stock and
shares of Aytu common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
In general, current Aytu stockholders and Innovus stockholders will
have a reduced ownership and voting interest after the merger and
will exercise less influence over the management of the combined
company.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The total number of shares of Aytu common stock to be issued to
Innovus stockholders at closing is determined pursuant to a formula
set forth in Section 2.01(b)(i) of the merger agreement.
&#xA0;Under this formula, taking into account the amount of
additional debt incurred by Innovus since the date of signing and
the impact of certain other components that are currently
calculable, we do not expect the total number of shares of Aytu
common stock to be issued to exceed approximately 3.9 million. The
actual number of shares to be issued could be further decreased if
Innovus takes on additional debt, incurs other long-term
liabilities or suffers working capital decreases as compared to its
June 30, 2019 balance.&#xA0; Because each Innovus stockholder will
receive its proportionate share of the Aytu common stock to be
delivered at closing, the number of shares of Aytu common stock to
be issued to any particular Innovus stockholder will be determined
at the time of completion of the merger based on the number of
shares of Innovus common stock outstanding at such time.&#xA0; As a
result, the number of shares of Aytu common stock to be issued to a
particular Innovus stockholder will be reduced as a result of any
new issuances by Innovus of common stock or securities convertible
into common stock prior to the closing of the merger. Based on the
approximately 3.9 million shares of Aytu common stock expected to
be issued to Innovus stockholders at closing and the 20,733,052
shares of Aytu common stock outstanding as of December 20, 2019, it
is expected that, immediately after completion of the merger, Aytu
stockholders are expected to own approximately 84% of the
outstanding shares of Aytu common stock and former Innovus
stockholders are expected to own approximately 16% of the
outstanding shares of Aytu common stock (without consideration of
the shares of Aytu common stock underlying the CVRs, common stock
underlying the Aytu Series H convertible preferred stock to be
offered in exchange for certain Innovus warrants, and common stock
to be issued to certain employees of Innovus immediately
post-merger under the Aytu Incentive Plan).&#xA0; Aytu and Innovus
stockholders should be aware however that their ultimate percentage
ownership of Aytu could be diluted by other transactions relating
to the Merger.&#xA0; For example, shares of Aytu common stock will
be reserved for issuance pursuant to the terms of the CVRs, the
Aytu Series H convertible preferred stock to be offered in exchange
for certain Innovus warrants, and certain employee stock awards
currently held by Innovus executives and new awards to be issued
after closing of the Merger to Innovus executives who remain with
the combined company.&#xA0; In addition, shares of Aytu common
stock may be issued from time to time following the effective time
of the merger to holders of Innovus warrants on the terms set forth
in such warrants. See &#x201C;The Merger Agreement&#x2014;Treatment
of Innovus Warrants&#x201D; beginning on page 178 of the joint proxy
statement/prospectus for a more detailed explanation. In addition,
shares of Aytu common stock may be issued in payment of the CVRs.
See &#x201C;Description of the CVRs&#x2014;Contingent Value Rights
Agreement&#x201D; beginning on page 221. Consequently, current Aytu
stockholders in the aggregate will have less influence over the
management and policies of Aytu than they currently have over the
management and policies of Aytu, and Innovus stockholders in the
aggregate will have significantly less influence over the
management and policies of Aytu than they currently have over the
management and policies of Innovus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">39</FONT></DIV>
</DIV>
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<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Armistice, which is a significant stockholder of both Aytu and
Innovus, will be the largest stockholder of the combined company
following the merger and able to exercise control over
Aytu.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
If, on December 20, 2019, the conditions to closing the merger are
satisfied and the merger closes as described in the merger
agreement, and assuming approximately 3.9 million shares of common
stock are issued at close,&#xA0;Armistice would be expected to
receive up to 291,679 shares of Aytu common stock (not including
shares of Aytu common stock underlying CVRs and any shares of
Series H convertible preferred stock in the event Armistice elects
to exchange certain outstanding Innovus warrants with cash-out
rights for shares of such Series H convertible preferred stock
prior to the closing of the merger).</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman"><FONT STYLE="color: #000000">
After giving effect to Armistice&#x2019;s receipt of the merger
consideration (without considering any potential CVR payout or
shares of Series H convertible preferred stock in the event
Armistice elects to exchange certain outstanding Innovus warrants
with cash-out rights), Armistice would beneficially own up to
21,800,687 shares of Aytu common stock, including 13,637,796 shares
of common stock underlying Armistice owned preferred
stock/warrants, representing approximately 56.9% of the shares of
Aytu common stock expected to be outstanding after the merger,
including shares beneficially owned by Armistice. Armistice is, and
after the merger will continue to be, the largest stockholder of
Aytu and will be able to exercise control over Aytu. Armistice may
use such control to influence Aytu after the merger in ways that
could negatively affect Aytu&#x2019;s operations and financial
results.&#xA0;</FONT><FONT STYLE="font-style: italic; color: #000000">Notwithstanding the above,
Armistice is restricted from holding at any given time greater than
40.0% of the outstanding Aytu common stock.</FONT></FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
One of the conditions to closing the merger is the absence of any
injunction or order being in effect that prohibits completion of
the merger. Accordingly, if a plaintiff is successful in obtaining
any injunction or order prohibiting the completion of the merger,
then such injunction or order may prevent the merger from being
completed, or from being completed within the expected
timeframe.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
In addition, if Aytu completes the merger, it will assume
Innovus&#x2019; risks arising from legal proceedings. Like many
pharmaceutical companies, Innovus is involved in various trademark,
copyright, consumer, commercial, government investigations and
other legal proceedings that arise from time to time in the
ordinary course of its business. Aytu cannot predict with certainty
the eventual outcome of Innovus&#x2019; pending or future legal
proceedings and the ultimate outcome of such matters could be
material to the combined company&#x2019;s results of operations,
cash flows and financial condition.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The indebtedness of the combined company following completion of
the merger will be greater than Aytu&#x2019;s indebtedness on a
stand-alone basis and greater than the combined indebtedness of
Aytu and Innovus existing prior to the announcement of the merger
agreement. This increased level of indebtedness could adversely
affect the combined company&#x2019;s business flexibility, and
increase its borrowing costs. Any resulting downgrades in
Aytu&#x2019;s and/or Innovus&#x2019; credit ratings could adversely
affect Aytu&#x2019;s, Innovus&#x2019; and/or the combined
company&#x2019;s respective businesses, cash flows, financial
condition and operating results.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
As of December 18, 2019, the outstanding indebtedness of Innovus is
$3.6 million, which is subject to change between December 18, 2019
and the closing. As a result of the merger, Aytu will assume the
outstanding indebtedness of Innovus at the closing. In addition, in
connection with the Cerecor transaction, Aytu assumed approximately
$16.5 million of outstanding indebtedness of Cerecor. The amount of
cash required to service Aytu&#x2019;s increased indebtedness levels
and thus the demands on Aytu&#x2019;s cash resources will be greater
than the amount of cash flows required to service the indebtedness
of Aytu individually prior to the merger. The increased levels of
indebtedness could also reduce funds available to fund Aytu&#x2019;s
efforts to combine its business with Innovus and realize expected
benefits of the merger and/or engage in investments in product
development, capital expenditures, and other activities and may
create competitive disadvantages for Aytu relative to other
companies with lower debt levels. Aytu may be required to raise
additional financing for working capital, capital expenditures,
acquisitions or other general corporate purposes. Aytu&#x2019;s
ability to arrange additional financing or refinancing will depend
on, among other factors, Aytu&#x2019;s financial position and
performance, as well as prevailing market conditions and other
factors beyond Aytu&#x2019;s control. Aytu cannot assure you that it
will be able to obtain additional financing or refinancing on terms
acceptable to Aytu or at all.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu may not be able to service all of the combined company&#x2019;s
indebtedness and may be forced to take other actions to satisfy
Aytu&#x2019;s obligations under Aytu&#x2019;s indebtedness, which may
not be successful. Aytu&#x2019;s failure to meet its debt service
obligations could have a material adverse effect on the combined
company&#x2019;s business, financial condition and results of
operations.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu depends on cash on hand and revenue from operations to make
scheduled debt payments. Aytu expects to be able to meet the
estimated cash interest payments on the combined company&#x2019;s
debt following the merger through a combination of the expected
revenue from operations of the combined company. However,
Aytu&#x2019;s ability to generate sufficient revenue from operations
of the combined company and to utilize other methods to make
scheduled payments will depend on a range of economic, competitive
and business factors, many of which are outside of Aytu&#x2019;s
control. There can be no assurance that these sources will be
adequate. If Aytu is unable to service Aytu&#x2019;s indebtedness
and fund Aytu&#x2019;s operations, Aytu will be forced to reduce or
delay capital expenditures, seek additional capital, sell assets or
refinance Aytu&#x2019;s indebtedness. Any such action may not be
successful and Aytu may be unable to service Aytu&#x2019;s
indebtedness and fund Aytu&#x2019;s operations, which could have a
material adverse effect on the combined company&#x2019;s business,
financial condition or results of operations.</FONT></DIV>
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</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu will incur significant transaction and integration-related
costs in connection with the merger. In addition, the merger may
not be accretive, and may be dilutive, to Aytu&#x2019;s earnings per
share, which may negatively affect the market price of shares of
Aytu&#x2019;s common stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu expects to incur a number of non-recurring costs associated
with the merger and combining the operations of the two companies.
Aytu will incur significant transaction costs related to the
merger. Aytu also will incur significant integration-related fees
and costs related to formulating and implementing integration
plans, including facilities and systems consolidation costs and
employment-related costs. Aytu continues to assess the magnitude of
these costs, and additional unanticipated costs may be incurred in
the merger and the integration of the two companies&#x2019;
businesses. While Aytu has assumed that a certain level of
transaction expenses will be incurred, factors beyond Aytu&#x2019;s
control, such as certain of Innovus&#x2019; expenses, could affect
the total amount or the timing of these expenses. Although Aytu
expects that the elimination of duplicative costs, as well as the
realization of other efficiencies related to the integration of the
businesses, should allow Aytu to offset integration-related costs
over time, this net benefit may not be achieved in the near term,
or at all.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
In addition, future events and conditions could decrease or delay
the accretion that is currently projected or could result in
dilution, including the issuance of shares of Aytu common stock or
delivery of cash in payment of the CVRs upon the achievement of
milestones, adverse changes in market conditions, additional
transaction and integration-related costs and other factors such as
the failure to realize some or all of the anticipated benefits of
the merger. Any dilution of, decrease in or delay of any accretion
to, Aytu&#x2019;s earnings per share could cause the price of shares
of Aytu common stock to decline or grow at a reduced
rate.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Following the closing of the merger, there is a risk that a
significant amount of the combined company&#x2019;s total assets
will be related to acquired intangible assets and goodwill, which
are subject to annual impairment reviews, or more frequent reviews
if events or circumstances indicate that the carrying value may not
be recoverable. Because of the significance of these assets, any
charges for impairment as well as amortization of intangible assets
could have a material adverse effect on the combined
company&#x2019;s results of operations and financial
condition.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The combined company will be subject to the risks that Innovus
faces, in addition to the risks faced by Aytu. In particular, the
success of the combined company will depend on its ability to
obtain, commercialize and protect intellectual
property.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Innovus and Aytu currently have a limited number of products
(including products to be acquired by Aytu from Cerecor in the
Cerecor transaction) and the combined company may not be successful
in marketing and commercializing these products. In addition,
following the merger Aytu may seek to develop current or new
product candidates of both Aytu and Innovus. The testing,
manufacturing and marketing of these products would require
regulatory approvals, including approval from the FDA and similar
bodies in other countries. To the extent the combined company seeks
to develop product candidates, the future growth of the combined
company would be negatively affected if Aytu, Innovus or the
combined company fails to obtain requisite regulatory approvals
within the expected time frames, or at all, in the United States
and internationally for products in development and approvals for
Aytu&#x2019;s existing products for additional
indications.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
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<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Upon the expiration or loss of patent protection for any of
Aytu&#x2019;s or Innovus&#x2019; existing products, or upon the
&#x201C;at-risk&#x201D; launch (despite pending patent infringement
litigation against the generic product) by a manufacturer of a
generic version of one of these products, the combined company may
quickly lose a significant portion of its sales of that product.
Any such expiration or loss of patent protection that occurs sooner
than anticipated would be harmful to the combined company and could
have a material adverse effect on its business, financial condition
or results of operations.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The unaudited pro forma combined financial information and
prospective financial information included in the joint proxy
statement/prospectus are presented for illustrative purposes only
and do not represent the actual financial position or results of
operations of the combined company following completion of the
merger or reflect the effect of any divestitures that may be
required in connection with the merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The unaudited pro forma combined financial information and
prospective financial information contained in the joint proxy
statement/prospectus is presented for illustrative purposes only,
contains a variety of adjustments, assumptions and preliminary
estimates and does not represent the actual financial position or
results of operations of Aytu and Innovus prior to the merger or
that of the combined company following the merger for several
reasons. Among other things, the unaudited pro forma combined
financial information does not reflect the effect of any potential
divestitures that may occur prior to or subsequent to completion of
the merger, the projected realization of cost savings following
completion of the merger or any changes in applicable law
(including applicable tax law) after the date of the joint proxy
statement/prospectus. See the sections entitled &#x201C;Certain
Unaudited Pro Forma Condensed Combined Financial Statements,&#x201D;
&#x201C;Innovus Proposal I: Adoption of the Merger Agreement and
Aytu Proposal I: Approval of the Merger Consideration&#x2014;Certain
Unaudited Prospective Financial Information&#x201D; and
&#x201C;Comparative Historical and Unaudited Pro Forma Combined Per
Share Data&#x201D; beginning on pages 84, 152 and 83, respectively,
of the joint proxy statement/prospectus. The actual financial
positions and results of operations of Innovus and Aytu prior to
the merger and that of the combined company following the merger
may not be consistent with, or evident from, the unaudited pro
forma combined financial information or prospective financial
information included in the joint proxy statement/prospectus. In
addition, the assumptions used in preparing the unaudited pro forma
combined financial information and/or the prospective financial
information included in the joint proxy statement/prospectus may
not be realized and may be affected by other factors, which could
lead to material changes to the combined company&#x2019;s business
that are not reflected in the unaudited pro forma combined
financial information. Any significant changes in the market price
of shares of Aytu common stock may cause a significant change in
the purchase price used for Aytu&#x2019;s accounting purposes and
the pro forma combined financial information contained in the joint
proxy statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The opinion of Innovus&#x2019; financial advisor does not reflect
changes in circumstances that may have occurred or that may occur
between the signing of the merger agreement and the completion of
the merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The Innovus Board has not obtained an updated opinion from its
financial advisor as of the date of the joint proxy
statement/prospectus, nor does it expect to receive an updated,
revised or reaffirmed opinion prior to the completion of the
merger. Changes in the operations and prospects of Innovus, general
market and economic conditions and other factors that may be beyond
the control of Innovus, and on which Innovus&#x2019; financial
advisor&#x2019;s opinion was based, may significantly alter the
value of Innovus or the share price of Innovus common stock by the
time the merger is completed. The opinion does not speak as of the
time the merger will be completed or as of any date other than the
date of such opinion. Because Innovus&#x2019; financial advisor will
not be updating its opinion, the opinion will not address the
fairness of the merger consideration from a financial point of view
at the time the merger is completed. The Innovus Board&#x2019;s
recommendation that Innovus stockholders approve the merger
proposal, however, is made as of the date of the joint proxy
statement/prospectus. For a description of the opinion that the
Innovus Board received from its financial advisors, see
&#x201C;Innovus Proposal I: Adoption of the Merger Agreement and
Aytu Proposal I: Approval of the Merger Consideration&#x2014;Opinion
of Innovus&#x2019; Financial Advisors&#x201D; beginning on pages 152
of the joint proxy statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
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<DIV ID="ftr">
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</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Certain Innovus agreements may contain change of control provisions
that may have been triggered by the merger that, if acted upon or
not waived, could cause the combined company to lose the benefit of
such agreement and incur liabilities or replacement costs, which
could have a material adverse effect on the combined
company.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Innovus is party to, or may become party to after the date hereof,
various agreements with third parties that may contain change of
control provisions that may be triggered upon the completion of the
merger. Agreements with change of control provisions typically
provide for or permit the termination of the agreement upon the
occurrence of a change of control of one of the parties which can
be waived by the relevant counterparties. In the event that there
is such a contract or arrangement requiring a consent or waiver in
relation to the merger or the merger agreement, for which such
consent or waiver was not obtained, the combined company could lose
the benefit of the underlying agreement and incur liabilities or
replacement costs, which could have an adverse effect on the
operations of the combined company.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The future results of the combined company may be adversely
impacted if the combined company does not effectively manage its
expanded operations following completion of the
merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Following completion of the merger, the size of the combined
company&#x2019;s business will be significantly larger than the
current size of either Aytu&#x2019;s or Innovus&#x2019; respective
businesses. The combined company&#x2019;s ability to successfully
manage this expanded business will depend, in part, upon
management&#x2019;s ability to implement an effective integration of
the two companies and its ability to manage a combined business
with significantly larger size and scope with the associated
increased costs and complexity. There can be no assurances that the
management of the combined company will be successful or that the
combined company will realize the expected operating efficiencies,
cost savings and other benefits currently anticipated from the
merger.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman; color: #000000">
Risks Related to the CVRs</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
You may not receive any payment on the CVRs.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Your right to receive any future payment on the CVRs will be
contingent upon the achievement of certain agreed upon operational
milestones within the time periods specified in the CVR agreement.
If the CVR milestones, as defined in the section titled
&#x201C;Descriptions of the CVRs&#x2014;Milestone Payment&#x201D;
starting on page 221 of the joint proxy statement/prospectus, are
not achieved for any reason within the time periods specified in
the CVR agreement, no payment will be made under the CVRs, and the
CVRs will expire valueless. Accordingly, the value, if any, of the
CVRs is speculative, and the CVRs may ultimately have no value. See
&#x201C;Description of the CVRs&#x201D; beginning on page 221 of the
joint proxy statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Any payment on the CVRs may be made in shares of Aytu common stock
at a deemed minimum per share price of $6 per share, which means
you may receive shares of Aytu common stock with a value of less
than the applicable CVR payment if the closing price of
Aytu&#x2019;s common stock is less than $6 per share at the time of
payment.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
If a CVR milestone is achieved, the payment on such CVR will be
made in Aytu common stock and/or cash, at Aytu&#x2019;s option. Any
payment amounts made in Aytu common stock will be calculated using
the greater of (i) $6.00 per share or (ii) the weighted average
price of Aytu&#x2019;s common stock, as reported by Bloomberg, for a
twenty (20) day trading period immediately prior to the date for
calculating the payment amount owed. In the event Aytu&#x2019;s
common stock is trading at a value of less than $6.00 per share on
any particular payment date, Innovus stockholders will receive
shares of Aytu common stock valued at $6.00 per share as payment
for the achievement of that particular CVR milestone. However, the
sum of the fair value of such shares and any cash that is paid must
equal the total payment amount owed to CVR holder. The market price
of Aytu&#x2019;s common stock has fluctuated and will continue to
fluctuate over time, and no guarantee can be made that Aytu&#x2019;s
common stock will trade above $6 per share at or around the time of
any CVR payment. See &#x201C;Description of the CVRs&#x201D;
beginning on page 221 of the joint proxy
statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The CVRs are non-transferable and, therefore, the value of the CVRs
is only realizable to the extent that CVR milestones are
achieved.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Holders of the CVRs are not permitted to sell, assign, transfer,
pledge, encumber, or in any other manner dispose of the CVRs, in
whole or in part, other than in certain highly limited
circumstances specified in the CVR agreement. As a result of this
non-transferability, you will realize value from the CVRs only if a
CVR milestone is achieved. See &#x201C;Description of the
CVRs&#x201D; beginning on page 221 of the joint proxy
statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Payments on the CVRs, if any, will be made on an annual basis over
the next five years, only if CVR milestones are actually
achieved.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The determination of whether a CVR milestone has been achieved and
any payment is due on the CVRs is determined on an annual basis
after the end of each of the 2019, 2020, 2021, 2022 and 2023
calendar years. Unless a CVR milestone is achieved earlier, any
payment due will be made, in shares of Aytu common stock or cash,
at Aytu&#x2019;s option, after the end of each such calendar year.
Therefore, Innovus stockholders may not realize any value from the
CVRs for several years, if ever. See &#x201C;Description of the
CVRs&#x201D; beginning on page 221 of the joint proxy
statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">42</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; page-break-after: always; width: 100%; height: 1px; background-color: #000000">
<!--page break line--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu is required to provide &#x201C;reasonably sufficient commercial
support&#x201D; to allow the business unit to achieve the CVR
milestones, but, under certain circumstances, Aytu may not be
required to take certain actions to achieve the CVR milestones,
which would have an adverse effect on the value, if any, of the
CVRs.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu has agreed to provide reasonably sufficient commercial support
to allow the achievement of the performance milestones. However,
Aytu is not required to provide more commercial support than the
amount of commercial support provided by Innovus during the year
ended December 31, 2018. As a result, factors and events may come
to pass that result in Aytu permissibly devoting less effort to the
achievement of any particular CVR milestone than Innovus would have
devoted had Innovus remained a stand-alone company.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
Aytu has agreed not to consolidate or merge with any other entity,
or convey, transfer or lease its property or assets substantially
as an entirety, unless such entity expressly agrees to assume the
CVR obligations, which means Aytu&#x2019;s value to certain
acquirers may be reduced which, in turn, may reduce the value of
Aytu&#x2019;s common stock .</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
Aytu has agreed not to consolidate or merge with any other entity,
or convey, transfer or lease its property or assets substantially
as an entirety, unless such entity expressly agrees to assume
Aytu&#x2019;s obligations under the CVR agreement. This obligation
may reduce the perceived value of Aytu to potential acquirers,
which may adversely affect the price of Aytu&#x2019;s common
stock.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: italic bold 13px Times New Roman; color: #000000">
The U.S. federal income tax treatment of the CVRs is
unclear.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
The parties are taking the position that the CVR agreement
represents an unsecured promise of additional contingent
consideration for the acquisition of Innovus common stock, payable
either in shares of Aytu common stock or in cash, at the option of
Aytu. On that basis, if future payments are made under the CVR
agreement entirely by the issuance of shares of Aytu common stock,
it is expected that the receipt of such Aytu common stock will be
tax free to the Innovus shareholders, or their successors, and
treated as though delivered as an integral part of a tax-free
reorganization.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
If Aytu elects to make payments under the CVR agreement in cash, it
is likely that such payments may compromise the tax- free treatment
of the merger and may result, if sufficient in amount, in the
entire merger being treated as a fully taxable transaction on a
retroactive basis.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
It is possible that the Internal Revenue Service, which is referred
to in the joint proxy statement/prospectus as the IRS, may assert
that the CVR agreement represents, in itself, additional merger
consideration for the acquisition of the Innovus common stock and
that consequently the merger transaction fails to qualify as a
tax-free reorganization under Section 368(a) of the Internal
Revenue Code.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman; color: #000000">
There is no clear legal authority directly addressing the U.S.
federal income tax treatment of the receipt of, and payments on,
the CVRs, and there can be no assurance that the IRS would not
assert, or that a court would not sustain, another position that
could result in materially worse U.S. federal income tax
consequences to holders of the Innovus common stock. See
&#x201C;Innovus Proposal I: Adoption of the Merger Agreement and
Aytu Proposal I: Approval of the Stock Issuance&#x2014;Material U.S.
Federal Income Tax Consequences&#x201D; beginning on page 169 of the
joint proxy statement/prospectus.</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">43</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; page-break-after: always; width: 100%; height: 1px; background-color: #000000">
<!--page break line--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: right; width: 100%"><FONT STYLE="font: 11px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="22">I</A>tem&#xA0;2. Unregistered Sales of Securities and Use
of Proceeds.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">None.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="23">I</A>tem&#xA0;3. Defaults Upon Senior
Securities.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 72px; margin-right: 0px; text-indent: -72px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">None.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="24">I</A>tem&#xA0; 4. Mine Safety Disclosures.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 72px; margin-right: 0px; text-indent: -72px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">Not
Applicable.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="25">I</A>tem&#xA0;5. Other Information.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; text-indent: 0px; margin-right: 0px"><FONT STYLE="font: bold 13px Times New Roman"><A NAME="26">I</A>tem&#xA0; 6. Exhibits.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 72px; margin-right: 0px; text-indent: -72px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left">
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; text-align: left; width: 100%; margin: 0px auto 0px 0px">
<TR>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 12%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Exhibit Number</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 87%">
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Description</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011717/aytu_ex101.htm">
2.1</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Asset
Purchase Agreement, dated October 10, 2019 (Incorporated by
reference to Exhibit 2.1 of the Registrant&#x2019;s Current Report
on Form 8-K filed on October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011716/aytu_ex31.htm">
<FONT STYLE="font: 13px Times New Roman">3.1</FONT></A></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Certificate of Designation of Preferences, Rights and Limitations
of Series F Convertible Preferred Stock (Incorporated by reference
to Exhibit 3.1 of the Registrant&#x2019;s Current Report on Form 8-K
filed on October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex31.htm">
3.2</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Certificate
of Designation of Preferences, Rights, and Limitations of Series G
Convertible Preferred Stock (Incorporated by reference to Exhibit
3.1 of the Registrant&#x2019;s Current Report on Form 8-K filed on
November 4, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011716/aytu_ex41.htm">
4.1</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Common Stock Purchase Warrant (Incorporated by reference to Exhibit
4.1 of the Registrant&#x2019;s Current Report on Form 8-K filed on
October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011716/aytu_ex101.htm">
10.1</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Placement
Agency Agreement, dated October 11, 2019 (Incorporated by reference
to Exhibit 10.1 of the Registrant&#x2019;s Current Report on Form
8-K filed on October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011716/aytu_ex102.htm">
10.2</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Securities Purchase Agreement (Incorporated by reference to Exhibit
10.2 of the Registrant&#x2019;s Current Report on Form 8-K filed on
October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419011716/aytu_ex103.htm">
10.3</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Registration Rights Agreement (Incorporated by reference to Exhibit
10.3 of the Registrant&#x2019;s Current Report on Form 8-K filed on
October 15, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex101.htm">
10.4</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">First
Amendment to Asset Purchase Agreement dated November 1, 2019
(Incorporated by reference to Exhibit 10.1 of the
Registrant&#x2019;s Current Report on Form 8-K filed on November 4,
2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex102.htm">
10.5</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Registration
Rights Agreement, dated November 1, 2019 (Incorporated by reference
to Exhibit 10.2 of the Registrant&#x2019;s Current Report on Form
8-K filed on November 4, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex103.htm">
10.6</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Cerecor Voting Agreement, dated November 1, 2019 (Incorporated by
reference to Exhibit 10.3 of the Registrant&#x2019;s Current Report
on Form 8-K filed on November 4, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex104.htm">
10.7</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Security Holder Voting Agreement, dated November 1, 2019
(Incorporated by reference to Exhibit 10.4 of the
Registrant&#x2019;s Current Report on Form 8-K filed on November 4,
2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex105.htm">
10.8</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Form of
Officer Voting Agreement, dated November 1, 2019 (Incorporated by
reference to Exhibit 10.5 of the Registrant&#x2019;s Current Report
on Form 8-K filed on November 4, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012301/aytu_ex107.htm">
10.9</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Transition
Services Agreement, dated November 1, 2019 (Incorporated by
reference to Exhibit 10.7 of the Registrant&#x2019;s Current Report
on Form 8-K filed on November 4, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419012492/aytu_ex106.htm">
10.10</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Consent
and Limited Waiver Agreement, dated November 1, 2019 (Incorporated
by reference to Exhibit 10.6 of the Registrant&#x2019;s Current
Report on Form 8-K/A filed on November 7, 2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495419013481/aytu_ex101.htm">
10.11</A><BR></FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Waiver
and Amendment to the July 29, 2019 Amended and Restated License and
Supply Agreement (Incorporated by reference to Exhibit 10.1 of the
Registrant&#x2019;s Current Report on Form 8-K filed on December 2,
2019)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: top; width: 12%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495420001622/aytu_ex311.htm" STYLE="-sec-extract: exhibit">31.1</A></FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Certificate
of Chief Executive Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: top; width: 12%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495420001622/aytu_ex312.htm" STYLE="-sec-extract: exhibit">31.2</A></FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Certificate
of Chief Financial Officer pursuant to Section 302 of the
Sarbanes-Oxley Act of 2002.</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: top; width: 12%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px"><FONT STYLE="font: 13px Times New Roman"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000165495420001622/aytu_ex321.htm" STYLE="-sec-extract: exhibit">32.1</A></FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">Certificate
of Chief Executive Officer and Chief Financial Officer pursuant to
Section 906 of the Sarbanes-Oxley Act of&#xA0;2002*.</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 12%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 87%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR STYLE="background-color: rgb(204, 238, 255)">
<TD STYLE="vertical-align: top; width: 12%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">101</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 1%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 87%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">XBRL
(eXtensible Business Reporting Language). The following materials
from Aytu BioScience, Inc.&#x2019;s Quarterly Report on Form 10-Q
for the quarter ended December 31, 2019 formatted in XBRL: (i) the
Consolidated Balance Sheet, (ii) the Consolidated Statement of
Operations, (iii) the Consolidated Statement of Stockholders&#x2019;
Equity (Deficit), (iv) the Consolidated Statement of Cash Flows,
and (v) the Consolidated Notes to the Financial
Statements.</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: left; margin-left: 36px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; width: 100%">
<TR>
<TD STYLE="vertical-align: top; width: 2%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">*</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 98%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">The
certification attached as Exhibit&#xA0;32.1 accompanying this
Quarterly Report on Form&#xA0;10-Q pursuant to 18 U.S.C.
Section&#xA0;1350, as adopted pursuant to Section&#xA0;906 of the
Sarbanes-Oxley Act of 2002, shall not be deemed &#x201C;filed&#x201D;
by the Registrant for purposes of Section&#xA0;18 of the Securities
Exchange Act of 1934, as amended.</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV STYLE="text-align: justify; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;<BR>
</FONT></DIV>
<DIV ID="pgbrk" STYLE="width: 100%; margin-left: 0px; text-indent: 0px; margin-right: 0px">
<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">44</FONT></DIV>
</DIV>
<DIV ID="pb" STYLE="text-align: center; page-break-after: always; margin-left: 0px; margin-right: 0px; margin-bottom: 6px; width: 100%; height: 1px; background-color: #000000">
<!--page break--></DIV>
<DIV ID="hdr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</DIV>
</DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT>
<FONT STYLE="font: 10 Times New Roman"><BR>
</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
<A NAME="sig">S</A>IGNATURES</FONT></DIV>
<DIV STYLE="text-align: center; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
&#xA0;</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 48px">
<FONT STYLE="font: 13px Times New Roman">Pursuant to the
requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.</FONT></DIV>
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 36px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV>
<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 13px Times New Roman; width: 100%">
<TR>
<TD STYLE="vertical-align: top; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD COLSPAN="2" STYLE="vertical-align: top; width: 40%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">AYTU
BIOSCIENCE, INC.</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 36%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">By:</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">/s/&#xA0;Joshua
R. Disbrow</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Joshua R. Disbrow</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Chief Executive Officer (principal executive officer)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Date: February 13, 2020</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: middle; width: 36%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">By:</FONT></DIV>
</TD>
<TD STYLE="border-bottom: rgb(0, 0, 0) 2px solid; vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">/s/&#xA0;David
A. Green</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
David A. Green</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Chief Financial Officer (principal financial and accounting
officer)</FONT></DIV>
</TD>
</TR><TR>
<TD STYLE="vertical-align: middle; width: 60%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: top; width: 4%">
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
</TD>
<TD STYLE="vertical-align: bottom; width: 36%">
<DIV STYLE="text-align: left; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: bold 13px Times New Roman">
Date: February 13, 2020</FONT></DIV>
</TD>
</TR></TABLE>
</DIV>
<DIV><FONT>&#xA0;</FONT></DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV><FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
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<DIV ID="ftr">
<DIV STYLE="text-align: left; width: 100%; margin-left: 0px; margin-right: 0px; text-indent: 0px">
<FONT STYLE="font: 13px Times New Roman">&#xA0;</FONT></DIV>
<DIV ID="pn" STYLE="text-align: center"><FONT STYLE="font: 13px Times New Roman">45</FONT></DIV>
</DIV>


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<P STYLE="margin: 0">&nbsp;</P>

<P STYLE="margin: 0"></P></DIV>

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<P STYLE="margin: 0"></P>

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<P STYLE="margin: 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>UNITED
STATES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SECURITIES
AND EXCHANGE COMMISSION</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Washington,
D.C. 20549</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>FORM
8-K</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>CURRENT
REPORT</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Date
of Report (Date of earliest event reported):&nbsp;<B>February 14, 2020</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>AYTU
BIOSCIENCE, INC.<BR>
</B>(Exact name of registrant as specified in its charter)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Delaware</B></FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>001-38247</B></FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 2%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 32%; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>47-0883144</B></FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(State or other jurisdiction<BR>
    of incorporation)</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(Commission File
    Number)</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">(IRS Employer <BR>
    Identification No.)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>373
Inverness Parkway, Suite 206</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Englewood,
CO 80112</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Address
of principal executive offices, including Zip Code)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">Registrant&rsquo;s
telephone number, including area code: <B>(720) 437-6580</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>&nbsp;</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>N/A</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">(Former
name or former address, if changed since last report)</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Check
the appropriate box below if the Form&nbsp;8-K filing is intended to simultaneously satisfy the filing obligation of the registrant
under any of the following provisions:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9746;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Written communications
    pursuant to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9744;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Soliciting material
    pursuant to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9744;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement
    communications pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 24px"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">&#9744;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: justify"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Pre-commencement
    communications pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">Securities
registered pursuant to Section 12(b) of the Act:</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; background-color: white; border-collapse: collapse">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: bottom">
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 35%; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Title
    of each class</B></FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 28%; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Trading
    Symbol(s)</B></FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 35%; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Name
    of each exchange on which registered</B></FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: #CCEEFF">
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Common
    Stock, par value $0.0001 per share</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">AYTU</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; padding-left: 5.4pt; text-align: center"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">The
    NASDAQ Stock Market LLC</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">Indicate
by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (&sect;230.405
of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (&sect;240.12b-2 of this chapter).&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: right; text-indent: -0.25in"><FONT STYLE="font-family: Times New Roman, Times, Serif">Emerging
growth company &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. &#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Item 1.01 Entry into a Material Definitive Agreement</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>&nbsp;</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">In connection with the completion of the merger
as set forth in Item 2.01 of this Current Report on Form 8-K, on February 14, 2020 we entered into warrant exchange agreements
with certain Innovus warrant holders that had Innovus warrants that contained a right to receive a cash payment (the &ldquo;<B>Cash
Warrants</B>&rdquo;) in connection with the merger. In exchange for the Cash Warrants, we offered the holders of the Cash Warrants
shares of the Series H convertible preferred stock (&ldquo;<B>Series H Preferred Stock</B>&rdquo;) of the Company (the &ldquo;<B>Warrant
Exchange</B>&rdquo;). The holders of the Cash Warrants agreed to exchange their Cash Warrants for the Series H Preferred Stock.
The total number of shares of Series H Preferred Stock we issued in connection with the Warrant Exchange was 1,997,736 shares of
Series H Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">The Series H Preferred Stock was be issued and
sold without registration under the Securities Act of 1933 (the &ldquo;<B>Securities Act</B>&rdquo;) in reliance on the exemptions
provided by Section 4(a)(2) of the Securities Act and/or Regulation D promulgated thereunder and in reliance on similar exemptions
under applicable state laws.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Terms of Series H Preferred Stock</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Conversion</I>. Each
share of Series H Preferred Stock, will be initially convertible under certain circumstances into shares of common stock at the
conversion price.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Fundamental Transaction</I>.
In the event we consummate a merger or consolidation with or into another person or other reorganization event in which our common
stock is converted or exchanged for securities, cash or other property, or we sell, lease, license, assign, transfer, convey or
otherwise dispose of all or substantially all of our assets or we or another person acquires 50% or more of our outstanding shares
of common stock, then following such event, the holders of the Series H Preferred Stock will be entitled to receive upon conversion
of such Series H Preferred Stock the same kind and amount of securities, cash or property which the holders would have received
had they converted their Series H Preferred Stock immediately prior to such fundamental transaction. Any successor to Aytu or surviving
entity shall assume the obligations under the Series H Preferred Stock.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Liquidation Preference</I>.
In the event of a liquidation, the holders of Series H Preferred Stock will be entitled to participate on an as-converted-to-common-stock
basis with holders of our common stock in any distribution of our assets to the holders of the common stock.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Voting Rights</I>. With
certain exceptions, as described in the certificate of designation, the Series H Preferred Stock will have no voting rights. However,
as long as any shares of Series H Preferred Stock remain outstanding, the certificate of designation provides that we shall not,
without the affirmative vote of holders of a majority of the then-outstanding shares of Series H Preferred Stock: (a) alter or
change adversely the powers, preferences or rights given to the Series H Preferred Stock or alter or amend the certificate of designation,
(b) amend our certificate of incorporation or other charter documents in any manner that adversely affects any rights of the holders,
(c) increase the number of authorized shares of Series H Preferred Stock or (d) enter into any agreement with respect to any of
the foregoing.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Dividends</I>. The certificate
of designation provides, among other things, that we shall not pay any dividends on shares of common stock (other than dividends
in the form of our common stock) unless and until such time as we pay dividends on each share of Series H Preferred Stock on an
as-converted basis. Other than as set forth in the previous sentence, the certificate of designation provides that no other dividends
shall be paid on shares of Series H Preferred Stock and that we shall pay no dividends (other than dividends in the form of our
common stock) on shares of common stock unless we simultaneously comply with the previous sentence.&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 9pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify; text-indent: 0.5in"><I>Exchange Listing.</I>
The Series H Preferred Stock is not listed on any securities exchange or other trading system.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B></B></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item
2.01 Completion of Acquisition of Disposition of Assets</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">On February 14, 2020, Aytu BioScience,
Inc. (<B>&ldquo;Company&rdquo;</B>) and Innovus Pharmaceuticals, Inc. (<B>&ldquo;Innovus&rdquo; or &ldquo;Innovus Pharma, Inc.&rdquo;</B>)
completed the Agreement and Plan of Merger dated September 12, 2019 (the <B>&ldquo;Merger&rdquo;</B>) after successful approval
of the Merger by the shareholders of the Company and Innovus at separate special meetings held on February 13, 2020. Upon closing
the Merger,(i) Aytu Acquisition Sub, Inc. (&ldquo;<B>Aytu Sub&rdquo;</B>), a wholly-owned subsidiary of the Company, merged with
and into Innovus and (ii) all outstanding Innovus common stock was exchanged for approximately 3.8 million shares of the Company&rsquo;s
common stock (Ticker: AYTU), and up to $16 million in value in Contingent Value Rights (<B>&ldquo;CVRs&rdquo;</B>). The outstanding
Innovus warrants with cash out rights were exchanged for approximately 2.0 shares of preferred stock of Aytu and retired. The remaining
Innovus warrants outstanding at the time of the Merger will continue to be outstanding, and upon exercise, retain the right to
the merger consideration offered to Innovus stockholders, including any remaining claims represented by CVRs at the time of exercise.
Innovus will continue as a subsidiary of the Company.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The Company determined that this acquisition
constitutes a business pursuant to Article 11 of Regulation S-X, and therefore is required pursuant to Rule 8-04 of Regulation
S-X to provide within 71 days after the Acquisition close, historical, audited financial statements for a period consisting of
the most recent fiscal year ended December 31, 2018 and the nine months ended September 30, 2019. In addition, pursuant to Article
11 of Regulation S-X, the Company is required to provide pro forma financial statements for the year-ended June 30, 2019 and three
months ended September 30, 2019. The exhibits to this Form 8-K satisfies these requirements.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0"><B>Item 3.02 Unregistered Sales of Equity Securities</B>.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-align: justify">The response to this item is included in Item
1.01 of this Current Report on Form 8-K , and is incorporated herein in its entirety.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt"></P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>Item
9.01 Financial Statements and Exhibits.</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>(a)
Financial statements of businesses acquired</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0; text-indent: 24.5pt">The (i) audited consolidated financial statements
for Innovus Pharmaceuticals, Inc. as of and for the year-ended and December 31, 2018 and December 31, 2017 and (ii) unaudited consolidated
financial statements as of and for the nine months ended September 30, 2019 are filed as Exhibit 99.1 and Exhibit 99.2, respectively,
to this Current Report on Form 8-K/A.</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>(d)
The following exhibit is being filed herewith:</I></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 1in; text-indent: -1in"><FONT STYLE="font-family: Times New Roman, Times, Serif"><I>&nbsp;</I></FONT></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 9%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Exhibit</B></FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 1%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif; width: 90%"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>Description</B></FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">23.1</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000121390020004010/f8k021320ex23-1_aytubio.htm" STYLE="-sec-extract: exhibit">Consent of Hall &amp; Company relating to Innovus&rsquo; financial statements</A>.</FONT></P></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.1*</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="http://www.sec.gov/Archives/edgar/data/1411879/000143774919006219/innv20181231_10k.htm" STYLE="-sec-extract: exhibit">Audited consolidated financial statements for Innovus Pharmaceutical Inc. as of and for the years-ended December 31, 2018 and 2017, respectively, as incorporated and filed within the Form 10-K on April 1, 2019.</A></FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.2*</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><A HREF="http://www.sec.gov/Archives/edgar/data/1411879/000143774919022728/innv20190930_10q.htm" STYLE="-sec-extract: exhibit">Unaudited consolidated financial statements for Innovus Pharmaceuticals, Inc. as of and for the nine-months ended September 30, 2019 as filed within the Form 10-Q on November 13, 2019</A>.</FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top; background-color: White">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">99.3</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-size: 10pt"><A HREF="http://www.sec.gov/Archives/edgar/data/1385818/000121390020004010/f8k021320ex99-3_aytubio.htm" STYLE="-sec-extract: exhibit">Unaudited pro forma condensed combined Balance Sheet as of June 30, 2019 and Statement of Operations for the year ended June 30, 2019 and three months ended September 30, 2019 for the combination of (i) Aytu BioScience, Inc., (ii) the Cerecor transaction and (iii) the merger with Innovus Pharmaceuticals, Inc.</A></FONT></FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0">* Incorporated by reference</P>



<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif"><B>SIGNATURES</B></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-indent: 24.5pt"><FONT STYLE="font-family: Times New Roman, Times, Serif">Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned hereunto duly authorized.</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

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    <TD COLSPAN="2" STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>AYTU
    BIOSCIENCE, INC. </B></FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 60%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 4%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif; width: 36%"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Date:</FONT> <FONT STYLE="font: 10pt Times New Roman, Times, Serif">February
    14, 2020</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">By:</FONT></TD>
    <TD STYLE="border-bottom: black 1.5pt solid; font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/
    Joshua R. Disbrow</FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Joshua R. Disbrow</FONT></TD></TR>
<TR STYLE="font-family: Times New Roman, Times, Serif; vertical-align: top">
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></TD>
    <TD STYLE="font-family: Times New Roman, Times, Serif"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><FONT STYLE="font-family: Times New Roman, Times, Serif">&nbsp;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt"></P>



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<P STYLE="margin: 0"></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"></P>

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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>UNITED STATES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>SECURITIES AND EXCHANGE COMMISSION</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Washington, D.C. 20549</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>FORM 8-K</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>CURRENT REPORT</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Date of Report (Date of earliest event reported):&nbsp;<B>February
19, 2020</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>AYTU BIOSCIENCE, INC.<BR>
</B>(Exact name of registrant as specified in its charter)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Delaware</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>001-38247</B></FONT></TD>
    <TD STYLE="padding-bottom: 1.5pt; width: 2%">&nbsp;</TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>47-0883144</B></FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">(State
or other jurisdiction</FONT></P>
                                                                              <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">of incorporation)</FONT></P></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">(Commission File Number)</FONT></TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">(IRS
Employer</FONT></P>
                                                                              <P STYLE="margin-top: 0; margin-bottom: 0"><FONT STYLE="font-size: 10pt">Identification No.)</FONT></P></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>373 Inverness Parkway, Suite 206</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>Englewood, CO 80112</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><BR>
(Address of principal executive offices, including Zip Code)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">Registrant&rsquo;s telephone number, including
area code: <B>(720) 437-6580</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt; text-align: center"><B>N/A<BR>
</B>(Former name or former address, if changed since last report)</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Check the appropriate box below if the Form&nbsp;8-K filing
is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">&#9744;</TD><TD><FONT STYLE="font-size: 10pt">Written communications pursuant
to Rule&nbsp;425 under the Securities Act (17 CFR 230.425)</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">&#9744;</TD><TD><FONT STYLE="font-size: 10pt">Soliciting material pursuant
to Rule&nbsp;14a-12 under the Exchange Act (17 CFR 240.14a-12)</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">&#9744;</TD><TD><FONT STYLE="font-size: 10pt">Pre-commencement communications
pursuant to Rule&nbsp;14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<TABLE CELLPADDING="0" CELLSPACING="0" STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0; margin-bottom: 0; width: 100%"><TR STYLE="vertical-align: top">
<TD STYLE="width: 0"></TD><TD STYLE="width: 0.25in; text-align: left">&#9744;</TD><TD><FONT STYLE="font-size: 10pt">Pre-commencement communications
pursuant to Rule&nbsp;13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))</FONT></TD>
</TR></TABLE>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">Securities registered pursuant to Section
12(b) of the Act:</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR>
    <TD STYLE="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Title of each class</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; vertical-align: bottom; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Trading Symbol(s)</B></FONT></TD>
    <TD STYLE="vertical-align: top; width: 2%; padding-bottom: 1.5pt; text-align: center">&nbsp;</TD>
    <TD STYLE="border-bottom: black 1.5pt solid; vertical-align: top; width: 32%; padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt"><B>Name of each exchange on which registered</B></FONT></TD></TR>
<TR STYLE="vertical-align: top; background-color: rgb(204,238,255)">
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">Common Stock, par value $0.0001 per share</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">AYTU</FONT></TD>
    <TD STYLE="text-align: center">&nbsp;</TD>
    <TD STYLE="padding-right: 5.4pt; padding-left: 5.4pt; text-align: center"><FONT STYLE="font-size: 10pt">The NASDAQ Stock Market LLC</FONT></TD></TR>
</TABLE>
<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0">Indicate by check mark whether the registrant is an emerging
growth company as defined in Rule 405 of the Securities Act of 1933 (&sect;230.405 of this chapter) or Rule 12b-2 of the Securities
Exchange Act of 1934 (&sect;240.12b-2 of this chapter).</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: right; text-indent: -0.25in"><FONT STYLE="font-size: 10pt">Emerging
growth company&nbsp;&nbsp;&#9744;</FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0 0pt 0.25in; text-align: right; text-indent: -0.25in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0"><FONT STYLE="font-size: 10pt">If an emerging growth company,
indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised
financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.&nbsp;&nbsp;&#9744;<BR STYLE="clear: both"></FONT></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<!-- Field: Rule-Page --><DIV STYLE="width: 100%"><DIV STYLE="border-top: Black 1pt solid; font-size: 1pt; border-bottom: Black 2pt solid">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

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    <DIV STYLE="border-bottom: Black 1.5pt solid; margin-top: 12pt; margin-bottom: 6pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
    <!-- Field: /Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"><B>Item 3.01 Notice of Delisting or Failure to Satisfy a Continued
Listing Rule or Standard; Transfer of Listing</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">On February 19, 2020,
Aytu BioScience, Inc. (the &ldquo;<B>Company</B>&rdquo;) received a letter from The Nasdaq Stock Market LLC (&ldquo;<B>Nasdaq</B>&rdquo;)
indicating that the Company has failed to comply with the minimum bid price requirement of Nasdaq Listing Rule 5550(a)(2). Nasdaq
Listing Rule 5550(a) (2) requires that companies listed on the Nasdaq Capital Market maintain a minimum closing bid price of at
least $1.00 per share.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">Under Nasdaq Listing
Rule 5810(c)(3)(A), the Company has a 180 calendar day grace period to regain compliance by meeting the continued listing standard.
The continued listing standard will be met if the Company&rsquo;s common stock has a minimum closing bid price of at least $1.00
per share for a minimum of 10 consecutive business days during the 180 calendar day grace period.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: justify; text-indent: 0.5in">The Company is monitoring
the bid price of its common stock and will consider options available to it to achieve compliance.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>


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    <DIV STYLE="page-break-before: always; margin-top: 6pt; margin-bottom: 12pt"><P STYLE="margin: 0pt">&nbsp;</P></DIV>
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<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center"><B>SIGNATURES</B></P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0; text-align: center">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: justify; margin: 0pt 0; text-indent: 0.75in">Pursuant to the requirements of the Securities
Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>

<TABLE CELLSPACING="0" CELLPADDING="0" STYLE="font: 10pt Times New Roman, Times, Serif; width: 100%; border-collapse: collapse">
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD COLSPAN="2" STYLE="padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif"><B>AYTU
    BIOSCIENCE, INC.</B> </FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0; width: 4%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 14%">&nbsp;</TD>
    <TD STYLE="width: 42%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 4%">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0; width: 36%">&nbsp;</TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Date:</FONT></TD>
    <TD COLSPAN="2" STYLE="padding: 0 0 1.5pt; text-indent: 0">February 21, 2020</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">By:</FONT></TD>
    <TD STYLE="border-bottom: Black 1.5pt solid; padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">/s/ Joshua R. Disbrow</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Joshua R. Disbrow</FONT></TD></TR>
<TR STYLE="vertical-align: top">
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD>&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0">&nbsp;</TD>
    <TD STYLE="padding: 0; text-indent: 0"><FONT STYLE="font: 10pt Times New Roman, Times, Serif">Chief Executive Officer</FONT></TD></TR>
</TABLE>


<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">&nbsp;</P>

<P STYLE="font: 10pt Times New Roman, Times, Serif; text-align: center; margin-top: 0pt; margin-bottom: 0pt">2</P>

<!-- Field: Rule-Page --><DIV STYLE="width: 100%"><DIV STYLE="border-top: Black 1.5pt solid; font-size: 1pt">&nbsp;</DIV></DIV><!-- Field: /Rule-Page -->

<P STYLE="font: 10pt Times New Roman, Times, Serif; margin: 0pt 0"></P>



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