SEC Form SC 13D/A filed by Aytu BioScience, Inc. (Amendment)

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Amendment No. 2 to Schedule 13D

The following constitutes Amendment No. 2 to the Schedule 13D filed by the undersigned (“Amendment No. 2”).  This Amendment No. 2 amends the Schedule 13D as specifically set forth herein.

All capitalized terms contained herein but not otherwise defined shall have the meanings ascribed to such terms in the Schedule 13D, as amended. Information given in response to each item shall be deemed incorporated by reference in all other items, as applicable.

Item 5 of the Schedule 13D is hereby amended and restated as follows:

(a) and (b) Items 7 through 11 and 13 of each of the cover pages of this Schedule 13D are incorporated herein by reference.  The Shares reported to be beneficially owned by the Reporting Persons are based on 27,551,912 Shares outstanding as of September 1, 2021, according to information received from the Issuer.

In addition, the Master Fund holds and the Reporting Persons beneficially own warrants to purchase an aggregate of 40,736 Shares that are subject to 4.99% beneficial ownership limitations applicable to the exercise of such warrants.  Of the 1,376,545 Shares beneficially owned by the Reporting Persons, 34,167 of such Shares are issuable upon exercise of such warrants beneficially owned by the Reporting Persons.

Further, the Master Fund holds 300,000 non-transferable contingent value rights ("CVRs") that were granted to the Master Fund as a former shareholder of Innovus Pharmaceuticals, Inc. ("Innovus") upon consummation of the merger between the Issuer and Innovus on February 14, 2020. The number of Shares receivable by the Master Fund pursuant to the CVRs is determined by the Issuer through the application of a formula based on the Issuer's achievement of certain revenue and profitability milestones.  Each CVR entitles its holder to receive its pro rata share, payable in cash or Shares, at the option of the Issuer, of certain payment amounts if the targets are met.  As the Master Fund does not have a right to acquire Shares through holding the CVRs until the satisfaction of material contingencies outside the control of the Master Fund and the Issuer has the option to make required payments in cash rather than Shares, the CVRs do not represent beneficial ownership of Shares for the Reporting Persons for Section 13(d) purposes.

Armistice Capital is the investment manager of the Master Fund, and pursuant to an Investment Management Agreement, Armistice Capital exercises voting and investment power over the securities of the Issuer held by the Master Fund and thus may be deemed to beneficially own the securities of the Issuer held by the Master Fund.  Mr. Boyd, as the managing member of Armistice Capital, may be deemed to beneficially own the securities of the Issuer held by the Master Fund.  The Master Fund specifically disclaims beneficial ownership of the securities of the Issuer directly held by it by virtue of its inability to vote or dispose of such securities as a result of its Investment Management Agreement with Armistice Capital.

(c) There have been no transactions in the Shares by the Reporting Persons within the past 60 days.

(d) The disclosure in Item 2 is incorporated herein by reference.

(e) As of September 1, 2021, the Reporting Persons no longer beneficially own more than 5% of the Shares.

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