Item 1.01
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Entry into a Material Definitive Agreement.
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On March 20, 2019, CytoDyn Inc. (the Company), issued in private placements to accredited investors an aggregate of
3,246 shares of its newly authorized Series C Convertible Preferred Stock, par value $0.001 per share, with an initial stated value of $1,000 per share (the Series C Preferred Stock), together with warrants to purchase an aggregate
of up to 3,895,200 shares of its common stock, par value $0.001 (Common Stock) per share, with an initial exercise price of $0.50 per share (the Series C Warrants) for aggregate gross proceeds to the Company of
approximately $3.2 million (the Series C Offering).
The shares of Series C Preferred Stock are convertible into shares of
Common Stock at an initial conversion price of $0.50 per share (the Conversion Price) and will carry dividends at a rate of 10% per annum (subject to adjustment as provided in the Series C Certificate of Designation (as defined below))
and have the preferences, rights and limitations set forth in the Series C Certificate of Designation. The Series C Warrants have a five-year term and are immediately exercisable. Pursuant to the subscription agreements entered into with each of the
investors (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 120 days following the closing of the Series C
Offering, but not later than August 31, 2019, a registration statement under the Securities Act of 1933, as amended, covering the resale of all of the Common Stock received by the investors upon the conversion of the Series C Preferred Stock
and the exercise of the Series C Warrants. In connection with the Series C Offering, the Company has issued and sold to certain lead investors additional warrants to purchase an aggregate of up to 1,000,000 shares of Common Stock, on identical terms
to the other Series C Warrants issued to investors.
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 forms of the
Subscription Agreements are 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.
The shares of Series C Preferred Stock and the Series C Warrants were offered and sold in reliance on an exemption from registration pursuant
to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D. Each investor has represented that it is an accredited investor, as defined in Regulation D, and has acquired the securities for investment purposes
only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.
The forms of the Series C Warrant and the Subscription Agreement are attached hereto as Exhibit 4.1 and Exhibit 10.1, respectively. The
foregoing summaries of the terms of these documents are subject to, and qualified in their entirety by, such documents, which are incorporated herein by reference.
As a fee to the placement agent in the Series C Offering, the Company has agreed to pay a cash fee equal to 5% of the gross proceeds received
from the sale of the Series C Preferred Stock and the Series C Warrants, or $162,300.