Item 1.01 Entry into a Material Definitive Agreement.
Between August 28, 2018 and September 4, 2018, CytoDyn Inc., a Delaware corporation (the Company), issued in private placements to
accredited investors an aggregate of 16,758,770 shares of its common stock, par value $0.001 per share, together with warrants to purchase an aggregate of 8,379,385 shares of common stock at an exercise price of $0.75 per share. The securities were
issued at a combined purchase price of $0.50 per fixed combination of one share of common stock and one half of one warrant to purchase one share of common stock, for aggregate gross proceeds to the Company of approximately $8.4 million. The
warrants have a five-year term and are immediately exercisable. Pursuant to the subscription agreements, the Company has agreed to use commercially reasonable efforts to prepare and file with the United States Securities and Exchange Commission
within ninety (90) days following the final closing of the offering to which this Form
8-K
relates, but not later than December 31, 2018, a registration statement under the Securities Act of 1933, as
amended, covering the resale of all of the shares of common stock sold in the private placements. Copies of the forms of warrant and subscription agreement are filed as Exhibits 4.1 and 10.1, respectively, to this Form
8-K
and are incorporated herein by reference.
The representations, warranties and covenants contained in the
subscription agreements were made solely for the benefit of the parties to the subscription agreements. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the parties to the
subscription agreements and not as statements of fact, and (ii) may apply standards of materiality in a way that is different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the form of
the subscription agreement is included with this filing only to provide investors with information regarding the terms of transaction, and not to provide investors with any other factual information regarding the Company. Stockholders should not
rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject
matter of the representations and warranties may change after the date of the subscription agreements, which subsequent information may or may not be fully reflected in public disclosures.
As a fee to the placement agent, the Company has agreed to pay a cash fee equal to 12% of the gross proceeds received from qualified investors in the
offering, or $945,526, as well as a
one-time
non-accountable
expense fee of $25,000 in the aggregate for all closings in this offering. The Company also agreed to grant
the placement agent or its designees warrants to purchase up to 10% of the number of shares of common stock sold to qualified investors in the offering, or 1,575,877 shares for the private placement closings to which this Form
8-K
relates, on terms similar to the investor warrants described above. The placement agent warrants provide for cashless exercise.
The Company relied on the exemption provided by Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act of 1933, as amended, in connection
with the foregoing transactions.
After giving effect to the foregoing transactions, the number of shares of common stock outstanding as of
September 4, 2018 was 235,451,549. As of September 4, 2018, the total number of outstanding warrants was 133,692,440, with an average weighted exercise price of $0.78 per share.