Item 8.01 Other Events.
On or about September 22, 2021, a purported class action lawsuit, captioned Schielke, et al. v. CytoDyn Inc., et al., C.A. No. 2021-0818-MTZ (the “Action”), was filed against the Company and its then-directors in the Court of Chancery of the State of Delaware (the “Court”). Plaintiffs alleged that a clause in the Company’s Amended and Restated Certificate of Incorporation (the “Only With Cause Clause”), which provides that directors may be removed from office only with cause, is inconsistent with provisions of the Delaware General Corporate Law, which plaintiffs allege would permit removal with or without cause.
On August 24, 2017, at the Company’s annual meeting of stockholders, the Company’s stockholders had the opportunity to vote on a proposal to amend the Company’s certificate of incorporation by deleting the Only With Cause Clause. The stockholders did not approve the proposed amendment at that annual meeting. Thereafter, the Plaintiffs filed the Action, seeking a declaration that the Only With Cause Clause is invalid and to enjoin the defendants from enforcing it, as well as a reasonable allowance of attorneys’ fees and expenses.
On January 7, 2022, the Court entered an Order providing that the Only With Cause Clause is invalid, entering a final judgment, and retaining jurisdiction solely for the purpose of adjudicating plaintiffs’ counsel’s then-anticipated application for an award of attorneys’ fees and reimbursement of expenses. Further, on April 11, 2022, the Company filed a Form 10-Q with the U.S. Securities and Exchange Commission (the “SEC”) and filed therewith a Certificate of Correction of the Company’s Certificate of Incorporation, dated April 7, 2022 (the “Certificate of Correction”), which, in accordance with the Court’s January 7, 2022 Order, corrected the Charter by striking the Only With Cause Clause.
In December 2023, through arm’s-length negotiations, plaintiffs and the Company reached an agreement under which the Company agreed to pay $59,500 in attorneys’ fees and reimbursement of expenses to plaintiffs’ counsel, inclusive of a $500 service award to the plaintiffs. The Court has not expressed an opinion on the amount of fees and expenses. The foregoing disclosure was required to be made pursuant to the court order closing the case.