Aytu BioScience Inc. (AYTU)

[DD2Gain]

Something to look out for...

Pay attention to what company leadership says about inventory, the source of inventory, and the exact reasons that the Biolidics deal disintegrated. There is no reason for the CEO to not provide specifics on how many Biolodics test kits need to be written off. There is also no reason for the company to not disclose the nature of circumstances leading to the failure of the distribution agreement if the circumstances were truly due to government policy. All of this should have already been exhaustively addressed, which is why I am being hard on the company.

Everything points to the company having taken a gamble on millions of dollars worth of inventory that it realized was useless two months ago, but had no way to correct its mistake. I very much expect to see a huge charge-off of $10 million or more and that will infuriate investors even more into escalating the current investigation against the company over the Biolidics fiasco.

Someone mentioned earlier that the Biolidics deal is a "non-event". Try telling that to these investors who now have even more compelling evidence of a coverup...

"The investigation concerns whether Aytu and certain of its officers and/or directors have violated federal securities laws.

On March 10, 2020, Aytu reported that it reached a license agreement for the exclusive distribution of a point-of-care rapid test for certain COVID-19 antibodies in the U.S. for three years, with three year auto-renewals thereafter. Then, on April 17, 2020, pre-market, NBC News issued a report entitled "Unapproved Chinese coronavirus antibody tests being used in at least 2 states." Citing health officials and U.S. Food and Drug Administration ("FDA") filings, the article reported that Aytu has been distributing unreliable COVID-19 tests from unapproved Chinese manufacturers, which were shipped to the U.S. after the FDA relaxed its guidelines for tests in mid-March. On this news, Aytu's stock price fell $0.12 per share, or 8%, to close at $1.38 per share on April 17, 2020."

https://www.prnewswire.com/news-releases/aytu-investigation-bronstein-gewirtz--grossman-llc-notifies-investors-of-investigation-of-aytu-biosciences-inc-301043170.html