Item 1.01. Entry into a Material Definitive Agreement.
On December 6, 2019, CytoDyn Inc., a Delaware corporation (the Company), issued in private placements to accredited investors an aggregate of
415 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 1,037,500
shares of its common stock, par value $0.001 per share (Common Stock), with an initial exercise price of $0.30 per share (the Series C Warrants) for aggregate gross proceeds to the Company of approximately $0.4 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 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 Series C 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
Series C Subscription Agreements were made solely for the benefit of the parties to the Series C Subscription Agreements. In addition, such representations, warranties and covenants (i) are intended as a way of allocating the risk between the
parties to the Series C 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 Series C 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 Series C 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 Series C Subscription Agreement were filed as Exhibit 4.1 and Exhibit 10.1, respectively, to the Current Report on Form 8-K filed on October 22, 2019. 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
As a fee to a prior placement agent, the Company has agreed to pay a cash fee of $37,500, 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.