BACKGROUND TO THE SOLICITATION
The following is a chronology of material events leading up to this proxy solicitation:
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For the past seven years, Mr. Rosenbaum has had conversations with executive officers of the Company, including the Company’s Chief Executive Officer, Dr. Nader Pourhassan (“Dr. Pourhassan”), the Company’s Senior Vice President, Finance and its former Chief Financial Officer, Treasurer and Corporate Secretary, Michael D. Mulholland, and the Company’s Chairman of the Board and Chief Medical Officer, Dr. Scott A. Kelly, M.D. (“Dr. Kelly”) about various matters. In 2018, Mr. Rosenbaum met with Dr. Pourhassan, during which meeting Mr. Rosenbaum advised Dr. Pourhassan that he did not have the experience to run a public, pre-revenue biotech company and recommended that the Company hire a chief executive officer with pharmaceutical and public company experience.
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In July of 2020, Mr. Beaty contacted Dr. Pourhassan and Dr. Kelly to discuss repairing the relationship between the Company and IncellDx, which had provided patient sample analysis for the Company from October 2018 to May 2020. Mr. Beaty believed that a strong relationship with IncellDx was critical to the Company because of IncellDx’s expertise in the CCR5 receptor, HIV, Covid-19 and cancer.
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On April 8, 2021, the Investor Group sent a letter to the independent members of the Board outlining instances where we believe that the Company’s public statements did not fairly represent its financial conditions, results of operations and prospects. In this letter, the Investor Group highlighted a number of statements made by Company’s executives in press releases, on conference calls and in interviews that the Investor Group did not believe were reflected (adequately or at all) in the Company’s filings with the SEC. These statements related to, among other things:
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the receipt by the Company of grants from the National Institutes for Health to support Leronlimab;
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the timing of the Company’s anticipated commencement of revenues;
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collaboration with the Drexel University College of Medicine; and
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collaboration with Scripps Research Institute.
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On April 22, 2021, Mr. Rosenbaum and Mr. Wilmes delivered a letter to the independent members of the Board regarding the Company’s delay in addressing issues associated with the FDA’s response to the Company’s HIV Biologics License Applications filing.
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On May 24, 2021, the Investor Group and the other reporting persons listed therein filed a Schedule 13D (as amended from time to time, the ‘‘Schedule 13D’’) with the SEC disclosing a 5.7% ownership position in CYDY and reflecting a general intention to effect change at the Company.
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On June 8, 2021, the Investor Group and the other reporting persons therein filed Amendment No. 1 to its Schedule 13D with the SEC disclosing a 7.7% ownership position in CYDY.
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On June 30, 2021, the Investor Group privately delivered a letter (the “2021 Nomination Letter”) to the Company, in accordance with its organizational documents, nominating Thomas Errico, M.D., Bruce Patterson, M.D., Paul A. Rosenbaum, Peter Staats, M.D. and Melissa Yeager for election to the Board at the 2021 annual meeting of stockholders (the “2021 Annual Meeting”).
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On June 30, 2021, the Investor Group issued a press release announcing its nomination of the Nominees and its delivery of a letter to the Board outlining the Investor Group’s concerns regarding the operating and financial performance and governance and compensation issues at the Company and the need for a reconstituted Board to help put the Company on a better path forward.
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On June 30, 2021, the Board approved the appointment of Gordon A. Gardiner as a director of the Company, effective July 1, 2021.
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On July 2, 2021, the Investor Group and the other reporting persons therein, including the Investor Group, filed Amendment No. 2 to its Schedule 13D with the SEC disclosing a 7.3% ownership position in CYDY and disclosing the nomination of the Nominees.