|
Item 3.02
|
Unregistered Sales of Equity Securities.
|
CytoDyn Inc. (the “Company”) is providing this disclosure because,
as of February 24, 2023, its unregistered sales of equity
securities that were not previously reported, in the aggregate,
exceeded 5% of the shares of its common stock outstanding as of
February 1, 2023.
Private Placement of Common Stock and Warrants through Placement
Agent
In January and February 2023, the Company continued a private
offering to accredited investors of units through a placement agent
(the “Placement Agent Offering”). Each unit will consist of one
share of common stock and one warrant to purchase one share of
common stock. The final purchase price per unit will be equal to
90% of (i) the intraday volume weighted average price of the common
stock as of the first closing, which occurred on January 12, 2023,
and (ii) the intraday volume weighted average price of the common
stock on the date of the final closing in the Placement Agent
Offering, whichever is lower; provided that the purchase price will
not be higher than $0.23 per unit. From February 1 to February 24,
2023, the Company had received binding subscription agreements to
purchase units at a total purchase price of approximately $3.6
million, or an estimated total of approximately 15.7 million units,
based on an assumed purchase price of $0.23 per unit.
The warrants to be issued in the
Placement Agent Offering will have a five-year term and an exercise
price of $0.50 per share. The warrants will be exercisable in full
when issued. Except as described above, the terms of the warrants
will be substantially similar to the form of warrant filed as
Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with
the SEC on September 7, 2021.
As previously disclosed on the
Company’s Form 8-K filed on February 1, 2023, the Company has
agreed to pay a cash fee equal to 12% of the gross proceeds
received from qualified investors in the Placement Agent Offering,
a one-time non-accountable expense fee of $25,000 in the aggregate
for all closings in the Placement Agent Offering, and has also
agreed to issue to the placement agent or its designees warrants
with a 10-year term to purchase 15% of the total number of shares
of common stock sold to qualified investors in the Placement Agent
Offering.
The Company has agreed to use
commercially reasonable efforts to prepare and file with the
Securities and Exchange Commission (the “SEC”), and cause the SEC
to declare effective, a registration statement under the Securities
Act of 1933, as amended
(the “Securities Act”) covering the resale of the shares and warrants
to purchase shares of common stock sold in the Offering.
The Company is relying on the
exemption provided by Rule 506 of Regulation D and Section 4(a)(2)
of the Securities Act in connection with the Placement Agent
Offering.
Direct Investment by Dr. Cyrus Arman, President of the Company
On February 13, 2023, the
Company accepted a $100,000 direct investment from Dr. Cyrus Arman,
the President of the Company. This investment was made directly
with the Company, with no placement agent serving as an
intermediary. The terms of the investment will be identical to
those of the Placement Agent Offering described above. Based on an
assumed purchase price of $0.23 per unit, Dr. Arman would receive
434,782 units upon closing of his investment.
The Company is relying on the exemption provided by Section 4(a)(2)
of the Securities Act in connection with the direct investment.
Warrant Issuance to Dr. David F. Welch, or One or More
Affiliates
As previously reported in the Company’s Current Report on Form 8-K
filed on February 17, 2022, the Company entered into a Surety Bond
Backstop Agreement with David Fairbank Welch, both individually and
in his capacity as trustee of a revocable trust, LRFA, LLC, a
Delaware limited liability company, and certain other related
parties (collectively, the “Indemnitors”), effective February 14,
2022. Under the agreement, the Indemnitors agreed to assist the
Company in obtaining a surety bond (the “Surety Bond”) for posting
in connection with the Company’s ongoing litigation with Amarex
Clinical Research, LLC, by, among other things, agreeing to
indemnify the issuer of the Surety Bond with respect to the
Company’s obligations under the Surety Bond.