CytoDyn Inc. (OTCMKTS:CYDY) Files An 8-K Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant
Item2.03. Creation of a Direct Financial Obligation or an
Obligation under an Off-Balance Sheet Arrangement
of a Registrant.
On May31, 2017, CytoDyn Inc. (the Company) issued $1.15million in
aggregate principal amount of unsecured convertible promissory
notes (the Notes) and related warrants (the Warrants) to purchase
common stock of the Company (the Common Stock) in a private
placement to various accredited investors, to subscription
agreements entered into with each (collectively, the Subscription
Agreements), in exchange for cash in an equal amount. The
proceeds are anticipated to be used for general working capital
and to fund clinical trials.
The Notes are the general unsecured obligations of the Company
and rank pari passu with all other creditors of the
Company. The principal amount of the Notes, including any accrued
but unpaid interest thereon, is convertible at the election of
the holders into shares of Common Stock at any time prior to
maturity at an initial conversion price of $0.75 per share. The
Notes bear simple interest at the annual rate of 7.0%. Principal
and accrued interest, to the extent not previously paid in cash
or converted, is due and payable on January31, 2018.
The Notes include events of default for nonpayment of principal
or interest when due, upon which the payment of principal and
interest may be accelerated. Prepayment by the Company is
permitted without penalty upon 10 days prior written notice to
investors.
Conversion rights under the Notes and the terms of the related
Warrants are described under Item3.02, which information is
incorporated herein by reference.
| Item3.02. | Unregistered Sales of Equity Securities. |
On May31, 2017, the Company sold $1.15million in aggregate
principal amount of Notes and related Warrants to various
accredited investors. The principal amount of the Notes plus
unpaid accrued interest is convertible at the election of the
holders into shares of Common Stock at any time prior to
maturity, at an initial conversion price of $0.75 per share, with
an aggregate of 1,533,333 shares of the Companys Common Stock
underlying the Notes issued on May31, 2017. Additional terms of
the Notes and the offering thereof are described under Item2.03
above, which information is incorporated herein by reference.
As part of the investment in the Notes, the Company also issued
Warrants exercisable for 25% of the shares into which the Notes
are convertible, with Warrants for an aggregate of 383,333 shares
of Common Stock issued on May31, 2017. The Warrants are
exercisable at a price of $1.35 per share. The Warrants are
currently exercisable in full and will expire five years from the
date of issuance.
The Subscription Agreements contain certain piggyback
registration rights relating to resales of shares of Common Stock
underlying the Notes and the Warrants.
Each of the investors has represented to the Company that it is
an accredited investor as that term is defined in Rule 501(a) of
Regulation D promulgated under the Securities Act of 1933, as
amended (the Securities Act). The Company relied on the exemption
from registration afforded by Section4(a)(2) of the Securities
Act in connection with the issuance of the Note and Warrants.
The foregoing description of the Notes and the Warrants and the
offering thereof is qualified in its entirety by reference to the
full text of the Notes, the Warrants and the Subscription
Agreements, the forms of each of which are attached as Exhibits
4.1, 4.2 and 10.1 and are incorporated herein by reference.
| Item9.01. | Financial Statements and Exhibits. |
(d)Exhibits
|
Exhibit No. |
Description |
|
| 4.1 | Form of Convertible Promissory Note | |
| 4.2 | Form of Warrant to Purchase Common Stock | |
| 10.1 | Form of Subscription Agreement |
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. CytoDyn Inc. (OTCMKTS:CYDY) Recent Trading Information
CytoDyn Inc. (OTCMKTS:CYDY) closed its last trading session up +0.009 at 0.580 with 145,791 shares trading hands.
