Item 3.02 Unregistered Sales of Equity Securities.
CytoDyn Inc., a Delaware corporation (the “Company”), is providing
this disclosure under Item 3.02 because, as of January 19,
2022, its unregistered sales of equity securities, in the
aggregate, exceeded 1% of the shares of its common stock, par value
$0.001 per share (the “Common Stock”), outstanding as of
January 10, 2022, the date of its last report under Item
3.02.
Exchange of Convertible Promissory Note
for Shares of Common Stock
On January 19, 2022, the Company and the holder of its secured
convertible promissory note issued April 2, 2021 (the “April 2
Note”), in partial satisfaction of the January maximum redemption
amount, entered into an exchange agreement pursuant to which the
April 2 Note was partitioned into a new note (the “January 19
Partitioned Note”) with a principal amount of $2.5 million.
The outstanding balance of the April 2 Note was reduced by the
January 19 Partitioned Note. The Company and the investor
exchanged the January 19 Partitioned Note for approximately
5.4 million shares of common stock.
The Company relied on the exemption from registration afforded by
Section 3(a)(9) of the Securities Act of 1933, as amended (the
“Securities Act”) for the exchange transactions described
above.
Private Placement of Common Stock and
Warrants
On January 13, 2022, the Company issued in a private placement
to three accredited investors a total of 1,300,000 shares of common
stock, together with warrants to purchase a total of 390,000 shares
of common stock at an exercise price of $1.00 per share. The
warrants have a five-year term and are immediately exercisable. The
securities were issued with a combined purchase price of $1.00 per
fixed combination of one share of common stock and three-tenths of
one warrant to purchase one share of common stock, for total gross
proceeds to the Company of $1,300,000. In connection with and as
additional consideration for the purchases by two related
investors, the Company agreed to issue an additional 281,820 shares
of common stock, effectively lowering the purchase price of
2,818,180 shares plus 704,544 warrants previously purchased by the
investors from $1.10 to $1.00 per unit, and to also reduce the
exercise price of the 704,544 warrants from $1.10 to $1.00 per
share. In connection with and as additional consideration for the
purchase by the third investor, the Company agreed: (i) to
issue an additional 163,636 shares of common stock, effectively
lowering the purchase price of 1,200,000 shares plus 300,000
warrants previously purchased by the investor from $1.25 to $1.10
per unit, and to also reduce the exercise price of the 300,000
warrants from $1.25 to $1.10 per share; and (ii) to issue an
additional 22,500 shares of common stock, effectively lowering the
purchase price of 225,000 shares plus 56,250 warrants from $1.10 to
$1.00 per unit, and to also reduce the exercise price of the 56,250
warrants from $1.10 to $1.00 per share.
The representations, warranties and covenants contained in the
subscription agreements governing the purchases 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 in a way that
is different from what may be viewed as material by stockholders
of, or other investors in, the Company. Stockholders should not
rely on the representations, warranties and covenants in the form
of subscription agreement as characterizations of the actual state
of facts or condition of the Company or any of its subsidiaries or
affiliates as of the date of execution of an agreement with an
investor or any previous or subsequent date.
The Company relied on the exemption provided by Rule 506 of
Regulation D and Section 4(a)(2) of the Securities Act in
connection with the foregoing transactions.