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Item 3.02
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Unregistered Sales of Equity Securities.
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CytoDyn Inc., a Delaware corporation (the “Company”), is providing this disclosure under Item 3.02 because, as of September 23, 2021, its unregistered sales of equity securities, in the aggregate, since September 7, 2021, exceeded 1% of the shares of common stock outstanding as of May 31, 2021.
From September 21 through September 29, 2021, the Company issued in a private placement to accredited investors a total of 8,368,544 shares of its common stock, par value $0.001 per share (the “Common Stock”), together with warrants to purchase a total of 2,092,134 shares of Common Stock at exercise prices ranging from $1.10 to $1.80 per share. The securities were issued with a combined purchase price ranging from $1.10 to $1.80 per fixed combination of one share of Common Stock and one quarter of one warrant to purchase one share of Common Stock, for total gross proceeds to the Company of $9,902,700. The warrants have a five-year term and are immediately exercisable. Copies of the forms of warrant and subscription agreement were filed as Exhibits 4.1 and 10.1, respectively, to the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (the “SEC”) on September 7, 2021. The foregoing summary of the terms of the forms of warrant and subscription agreement is subject to, and qualified in its entirety by, such documents.
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 that are different from what may be viewed as material by stockholders of, or other investors in, the Company. Accordingly, the subscription agreements only provide information to investors regarding the terms of the private placement, and do not 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 regarding 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 each subscription agreement, which subsequent information may or may not be fully reflected in public disclosures.
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 (the “Securities Act”), for the sales of securities to accredited investors in the private placement.
On September 21, 2021, the Company entered into a privately negotiated warrant exchange agreement (an “Exercise Inducement Agreement”) with an accredited investor, pursuant to which the investor purchased shares of common stock at $3.00 per share in exchange for a warrant with an exercise price of $1.00 per share. The Company issued 500,000 shares of common stock, as well as 1,500,000 additional shares as an inducement to exercise their warrant, for a total of 2,000,000 million shares of common stock. Gross proceeds from the privately negotiated warrant exchange were $1,500,000.