Recent Corporate Developments
On November 9, 2023, at the Company’s annual meeting, our stockholders voted in favor of an amendment to the Company’s Certificate of Incorporation to increase the total number of shares of common stock authorized for issuance from 1,350,000,000 shares to 1,750,000,000 shares.
On January 10, 2024, the Company entered into an agreement with an executive services firm to engage Mitchell Cohen to provide financial and accounting services to the Company as an independent contractor. On January 19, 2024, the Company’s Board of Directors approved the appointment of Mr. Cohen as the Company’s Interim Chief Financial Officer effective February 1, 2024. Mr. Cohen also serves as the Company’s principal financial officer and principal accounting officer.
On January 26, 2024, the Company entered into an employment agreement with Jacob P. Lalezari, M.D., under which he is serving as the Company’s Chief Executive Officer, effective as of January 26, 2024. Dr. Lalezari previously served as the Company’s Interim CEO beginning November 17, 2023. Dr. Lalezari is responsible for leading the Company’s corporate and product development, with a focus on short-term clinical development and related fundraising.
On April 3, 2024, the Company and Samsung BioLogics Co., Ltd. (“Samsung”) executed an agreement (the “Letter Agreement”), wherein the parties agreed on an orderly process for winding down services and restructuring the amount payable by the Company to Samsung (the “Total Balance”). The Letter Agreement resolved the Company’s obligations under the Master Services Agreement and related ancillary agreements first entered into between Samsung and the Company in or around April 2019 (collectively, the “Agreement”). The Total Balance due as restructured under the Letter Agreement, is $43,821,231.32. Except for a single $250,000 payment due on or before December 31, 2024, the entirety of the Total Balance is conditional, and will only be due and payable, upon the Company achieving a qualifying “Revenue” event, as that term is defined in the Letter Agreement. Under the Letter Agreement, the Company agreed to pay 20% of its qualifying Revenue generated in each calendar year, if any, with such payments to be applied to reduce the Total Balance until it is repaid in full. Interest will not accrue on the Total Balance throughout the prospective repayment period. For additional information on the Samsung matter, refer to Note 8, Commitments and Contingencies – Commitments with Samsung in the consolidated financial statements for the year ended May 31, 2024, included in this prospectus.
On June 27, 2024, the Audit Committee of the Board of Directors of the Company engaged Marcum LLP (“Marcum”) and appointed the firm as the Company’s independent registered public accounting firm, effective immediately, to perform audit services for the Company’s fiscal year ended May 31, 2024, and review services for the quarters ending August 31, 2024, November 30, 2024, and February 28, 2025. The appointment of Marcum followed the Audit Committee’s dismissal of BF Borgers CPA PC (“BF Borgers”), the Company’s prior independent accounting firm, on May 3, 2024.
On July 2, 2024, the Company and Amarex entered into an agreement settling a lawsuit filed by the Company in October 2021 (the “Settlement Agreement”). The terms of the Settlement Agreement include: (i) the payment by Amarex of $12,000,000 to the Company, of which $10,000,000 was paid on execution of the Settlement Agreement and the balance will be paid on or before July 2, 2025; (ii) the release of the Company’s surety bond posted in the lawsuit and the return of the Company’s cash collateral in the amount of $6,500,000 provided as security to the surety; (iii) the crediting of all amounts claimed by Amarex as due and payable for its CRO services, totaling approximately $14,000,000, reducing the Company’s outstanding balance to zero, with no funds required to be paid by the Company; and (iv) a mutual release of claims, resolving all legal claims between the parties.
Background: Leronlimab as a CCR5 Antagonist
CytoDyn is focused on developing leronlimab, a CCR5 receptor antagonist, to be used as a platform drug for various indications. The CCR5 receptor is a protein located on the surface of various cells, including white blood cells and cancer cells. On white blood cells, it serves as a receptor for chemical attractants known as chemokines. Chemokines are key orchestrators of cell trafficking by directing immune cells to the sites of inflammation. At the site of an inflammatory reaction, chemokines are released. These chemokines bind to the CCR5 receptor and cause the migration of T-cells to these sites, promoting further inflammation. The CCR5 receptor is also the co-receptor needed for the most common strains of HIV to infect healthy T-cells.
The mechanism of action (“MOA”) of leronlimab has the potential to modulate the movement of T-cells to inflammatory sites, which could be beneficial by diminishing overactive inflammatory responses. Leronlimab is a unique humanized monoclonal antibody. Leronlimab binds to the second extracellular loop and N-terminus of the CCR5 receptor, and due to its selectivity and target-