shareholder lawsuit involving Mr. Caracciolo. Alpha Venture
Capital Partners LP, Caracciolo Family Trust, Gregory A. Gould, Law
Offices Of Kenneth E. Chyten Defined Benefit Pension Plan, Gavin
Myers, and Martin Peterson, derivatively on behalf of CytoDyn Inc.,
Plaintiffs, v. Nader Z. Pourhassan, Scott A. Kelly, Michael A.
Klump, Jordan G. Naydenov, David F. Welch, Craig S. Eastwood,
Michael D. Mulholland, Nitya G. Ray, and Brendan Rae, Defendants,
and CytoDyn Inc., Nominal Defendant, No. 2020-0307-PAF (Delaware
Court of Chancery April 24, 2020). Pursuant to the Settlement
Agreement, the Company agreed to implement a series of corporate
governance reforms, including adopting a compensation policy
related to director and executive officer compensation, and certain
defendants agreed to forfeit a substantial portion of the awards
granted in December 2019 in exchange for a release of the claims
brought against such defendants and dismissal of the derivative
action with prejudice.
On September 10, 2020, the same plaintiffs as in the foregoing
Delaware shareholder derivative lawsuit filed another derivative
action against Dr. Pourhassan, claiming Dr. Pourhassan had
improperly garnered short-swing profits in violation of Section
16(b) of the Securities Exchange Act of 1934 with respect to
certain personal stock transactions in the Company’s stock. Alpha
Venture Capital Partners LP, Caracciolo Family Trust, Gregory A.
Gould, Law Offices Of Kenneth E. Chyten 401(k) Profit Sharing Plan,
Gavin Myers, and Martin Peterson, derivatively on behalf of CytoDyn
Inc., Plaintiffs, v. Nader Z. Pourhassan, Defendant, and CytoDyn
Inc., Nominal Defendant, No. 3:20-cv-05909-JLR (Western District of
Washington September 10, 2020). On March 12, 2021, Judge
James L. Robart granted in full Dr. Pourhassan’s motion to
dismiss with prejudice. On April 9, 2021, the Plaintiffs filed
a Notice of Appeal to the Ninth Circuit Court of Appeals, appealing
the decision of Judge James L. Robart. In the appeal, both parties
have submitted opening briefs, and on September 20, 2021, the
plaintiff-appellants filed a request for an extension of time to
file their reply brief by no later than October 29, 2021.
Thus, there has not yet been a resolution of this case.
On November 2, 2020, Judge Richard Andrews granted in part
CytoDyn Inc. and CytoDyn Operations Inc.’s motion to dismiss,
dismissing Mr. Pestell’s claim under the Pennsylvania Wage Payment
and Collection Law, but allowing Mr. Pestell’s defamation and
breach of contract claims to proceed. Richard G. Pestell, M.D.,
Ph.D., Plaintiff, v. CytoDyn Inc., CytoDyn Operations Inc., Nader
Z. Pourhassan, Ph.D., and Scott A. Kelly, Defendants, M.D., No.
1:19-cv-01563 (District of Delaware August 22, 2019). Currently,
the parties are engaged in fact discovery, which is scheduled to
end October 27, 2021, and thus the case has not yet been
Based upon information provided to the Company by our stockholders,
Mr. Rosenbaum began reaching out to stockholders about a
potential proxy contest in March 2021 at the latest.
On April 8, 2021, Mr. Rosenbaum and Mr. Wilmes
delivered a letter to the independent members of the Board
outlining concerns regarding certain public disclosures made by the
Company. The Board, with the help of independent legal counsel, is
looking into the purported concerns raised in their letter.
On May 18, 2021, Mr. Rosenbaum formed CCTV Proxy Group,
LLC (“CCTV”), a Delaware limited liability company, for the
purposes of soliciting support and funding for a proxy contest.
On May 18, 2021, the Company promoted Antonio Migliarese to
Chief Financial Officer.
On May 24, 2021, the Proposing Persons, along with 21 other
individuals including Messrs. Pestell and Caracciolo, filed a
beneficial ownership report on Schedule 13D (the “Schedule 13D”)
disclosing a 5.7% ownership position in the Company. The Schedule
13D was later amended on June 8, 2021 to disclose a 7.7%
ownership position and to include Thomas Errico, M.D., and on
July 2, 2021 to disclose a 7.3% ownership position and to
include Dr. Patterson, Peter Staats, M.D. and Melissa
On July 1, 2021, the Company received the Nomination Notice
dated June 30, 2021 from the Proposing Persons, purporting to
nominate five directors—Thomas Errico, M.D., Bruce Patterson, M.D.,