CytoDyn Inc. (OTCMKTS:CYDY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01 Entry Into a Material Definitive Agreement.
On March 13, 2020, CytoDyn Inc. (the Company), issued in private placements to accredited investors an aggregate of 882 shares of its authorized Series D Convertible Preferred Stock, par value $0.001 per share, with an initial stated value of $1,000 per share (the Series D Preferred Stock), together with warrants to purchase an aggregate of up to 275,625 shares of its common stock, par value $0.001 per share (Common Stock), with an initial exercise price of $1.00 per share (the Series D Warrants) for aggregate gross proceeds to the Company of approximately $0.9 million (the Series D Offering).
The shares of Series D Preferred Stock are convertible into shares of Common Stock at an initial conversion price of $0.80 per share (the Conversion Price) and will carry dividends at a rate of 10% per annum (subject to adjustment as provided in the Certificate of Designation of the Rights, Preferences, Privileges and Restrictions of the Series D Convertible Preferred Stock (the Series D Certificate of Designation)) and have the preferences, rights and limitations set forth in the Series D Certificate of Designation. The Series D Warrants have a five-year term and are immediately exercisable. to the subscription agreements entered into with each of the investors (the Subscription Agreements), the Company has agreed to use commercially reasonable efforts to prepare and file with the United States Securities and Exchange Commission by April 30, 2020, a registration statement under the Securities Act of 1933, as amended, covering the resale of all of the Common Stock issuable to the investors upon the conversion of the Series D Preferred Stock and the exercise of the Series D Warrants.
The representations, warranties and covenants contained in the Subscription Agreements 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. Accordingly, the forms of the Subscription Agreements are included with this filing only to provide investors with information regarding the terms of transaction, and not to provide investors with any other factual information regarding the Company. Stockholders should not rely on the representations, warranties and covenants or any descriptions thereof as characterizations of the actual state of facts or condition of the Company or any of its subsidiaries or affiliates. Moreover, information concerning the subject matter of the representations and warranties may change after the date of the Subscription Agreements, which subsequent information may or may not be fully reflected in public disclosures.
The shares of Series D Preferred Stock and the Series D Warrants were offered and sold in reliance on an exemption from registration to Section 4(a)(2) of the Securities Act of 1933, as amended, and Rule 506 of Regulation D. Each investor has represented that it is an accredited investor, as defined in Regulation D, and has acquired the securities for investment purposes only and not with a view to, or for sale in connection with, any distribution thereof. The securities were not issued through any general solicitation or advertisement.
The forms of the Series D Warrant and the Subscription Agreement were attached as Exhibit 4.1 and Exhibit 10.1, respectively, to the Companys Current Report on Form 8-K filed on February 3, 2020. The foregoing summaries of the terms of these documents are subject to, and qualified in their entirety by, such documents, which are incorporated herein by reference.
Item 3.02 Unregistered Sales of Equity Securities.
The disclosure in Item 1.01 with respect to the Series D Preferred Stock and the Series D Warrants is incorporated into this Item 3.02 by reference.