Item 1.01
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Entry into a Definitive Material Agreement
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Registered Direct Offering
As previously reported in its
Form 8-K filed on December 18, 2019, CytoDyn Inc. (the Company) has entered into a Commercialization and License Agreement (the License Agreement) and a Supply Agreement (the
Supply Agreement) with Vyera Pharmaceuticals, LLC, a Delaware limited liability company (Vyera), with respect to the commercialization of pharmaceutical preparations containing leronlimab (PRO 140) for treatment of HIV in
humans in the United States. As partial consideration for these agreements, Vyeras parent company, Phoenixus AG (Phoenixus), agreed to purchase $4.0 million of shares of the Companys common stock, par value $0.001 per
share (the Common Stock), and related warrants (the Warrants) in a registered direct offering upon the terms and conditions described herein (the Offering).
On December 23, 2019, the Company entered into definitive subscription agreements relating to the Offering (the Subscription Agreements). In
addition to the $4.0 million of shares of Common Stock and related Warrants sold to Phoenixus, the Offering also included $0.5 million of shares of Common Stock and related Warrants sold to an entity associated with David F. Welch, a member of
the Companys board of directors (the Board), on terms identical to those applicable to Phoenixus. In the aggregate, the Company sold 14,754,098 shares of Common Stock and Warrants to purchase up to an aggregate of 7,377,049 shares
of Common Stock. Each share of Common Stock was sold together with one-half of one Warrant to purchase one share of Common Stock for a combined purchase price of $0.305 per share.
Subject to certain ownership limitations, the Warrants will be exercisable commencing on the issuance date at an exercise price equal to $0.30 per share of
Common Stock, subject to adjustments as provided under the terms of the Warrants. The Warrants are exercisable for five years from the date of issuance. The closing of the Offering occurred on December 26, 2019.
Aggregate net proceeds to the Company in the Offering (after deducting estimated offering expenses, and excluding the proceeds, if any, from the exercise of
the Warrants) were approximately $4.5 million. The Company intends to use these proceeds for general corporate purposes.
The securities sold in the
Offering were offered and sold by the Company pursuant to an effective shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the
SEC) on February 23, 2018 and subsequently declared effective on March 7, 2018 (File No. 333-223195) (the Registration Statement), and the base prospectus dated
as of March 7, 2018 contained therein. The Company will file a prospectus supplement with the SEC in connection with the sale of the securities.
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 form of Warrant is filed as Exhibit 4.1 to this Current Report on Form 8-K. The form of Subscription
Agreement is filed as Exhibit 10.1 to this Current Report on Form 8-K. 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.