Item 1.01
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Entry into a Material Definitive Agreement.
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On October 21, 2019, CytoDyn Inc. (the Company), issued in private placements to accredited investors an aggregate of 1,000
shares of its 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 2,500,000 shares of
its common stock, par value $0.001 (Common Stock) per share, with an initial exercise price of $0.30 per share (the Series C Warrants) for aggregate gross proceeds to the Company of approximately $1.0 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 Certificate of Designation of the Rights, Preferences, Privileges and Restrictions
of the Series C Convertible Preferred Stock (the Series C Certificate of Designation)) and have the preferences, rights and limitations set forth in the Series C Certificate of Designation, as previously reported in the Current Report on
Form 8-K filed March 20, 2019, which is incorporated herein by reference. 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 January 31, 2020, 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.
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.
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 a prior placement agent, the Company has agreed to pay a cash fee of $90,000, which is equal to 9% of the gross proceeds received
from investors in the Series C Offering who were first introduced to the Company by the prior placement agent in a prior offering.