CytoDyn Inc. (OTCMKTS:CYDY) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
On June26, 2018, CytoDyn Inc. (the “Company”) entered into a Securities Purchase Agreement (the “Agreement”) to which the Company issued a convertible promissory note (the “Note”) to an institutional accredited investor (the “Investor”) in the initial principal amount of $5.7million. The Investor gave consideration of $5.0million, reflecting original issue discount of $0.6million and expenses payable by the Company of $0.1million. The Company anticipates to use the proceeds for general working capital and to fund clinical trials.
The Note is the general unsecured obligation of the Company and ranks pari passu with all other creditors of the Company. Interest accrues on the outstanding balance of the Note at 10% per annum. Upon the occurrence of an event of default, interest accrues at the lesser of 22% per annum or the maximum rate permitted by applicable law. The Note contains customary default provisions, including provisions for potential acceleration.
The Investor may convert all or any part the outstanding balance of the Note into shares of common stock, par value $0.001 per share, of the Company (the “Common Stock”) at an initial conversion price of $0.55 per share, at any time after six months from the issue date upon five trading days’ notice, subject to certain adjustments and ownership limitations specified in the Note. The Note provides for liquidated damages upon failure to deliver Common Stock within specified timeframes.
The Investor may redeem any portion of the Note, at any time after six months from the issue date upon five trading days’ notice, subject to a maximum monthly redemption amount of $350,000. The Company may prepay the outstanding balance of the Note, in part or in full, at a 15% premium to par value, at any time upon five trading days’ notice.
The Company relied on the exemption from registration afforded by Section4(a)(2) of the Securities Act of 1933 in connection with the issuance and sale of the Note and underlying shares of Common Stock.
The foregoing description is qualified in its entirety by reference to the full text of the Note and the Securities Purchase Agreement, a copy of each of which is filed as Exhibit 4.1 and Exhibit 10.1 hereto, and each of which is incorporated herein by reference.
| Item 1.01. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information in Item 1.01 is incorporated herein by reference.
| Item 1.01. | Unregistered Sales of Equity Securities. |
The information in Item 1.01 is incorporated herein by reference.
| Item 1.01. | Financial Statements and Exhibits. |
(d)Exhibits
CytoDyn Inc. ExhibitEX-4.1 2 d636221dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 NEITHER THIS NOTE NOR THE SECURITIES ISSUABLE UPON THE CONVERSION HEREOF HAVE BEEN REGISTERED UNDER THE UNITED STATES SECURITIES ACT OF 1933,…To view the full exhibit click here
About CytoDyn Inc. (OTCMKTS:CYDY)
CytoDyn Inc. is a clinical-stage biotechnology company. The Company is focused on the clinical development and commercialization of humanized monoclonal antibodies to treat Human Immunodeficiency Virus (HIV) infection. The Company’s lead product candidate, PRO 140, belongs to a class of HIV therapies known as entry inhibitors that block HIV from entering into and infecting certain cells. The Company’s product pipeline also includes Cytolin and CytoFeline. Cytolin is a mouse monoclonal antibody developed to identify a specific type of immune cell called a cytotoxic T cell, or cytotoxic T lymphocyte (CTL). CytoFeline is an anti-lymphocyte function-associated antigen-1 (LFA-1) antibody for the treatment of Feline Immunodeficiency Virus (FIV) infection. PRO 140 blocks HIV from entering a cell by binding to a molecule called C-C chemokine receptor type 5 (CCR5). The Company has finished Phase II clinical trials for PRO 140 with demonstrated antiviral activity in man.
