CytoDyn Inc. (OTCMKTS:CYDY) Files An 8-K Entry into a Material Definitive Agreement

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CytoDyn Inc. (OTCMKTS:CYDY) Files An 8-K Entry into a Material Definitive Agreement
Item 1.01. Entry into a Material Definitive Agreement.

On October11, 2017, CytoDyn Inc. (the “Company”) entered into Subscription Agreements (the “Subscription Agreements”) with certain investors (the “Investors”) for the sale by the Company of 1,880,765shares (the “Common Shares”) of the Company’s common stock, par value $0.001 per share (the “Common Stock”) in a registered direct offering (the “Offering”). The Investors in the Offering also received warrants to purchase 940,380shares of Common Stock (the “Warrants”). Each share of Common Stock was sold together with one half of a Warrant to purchase one share of Common Stock for a combined purchase price of $0.65.

The aggregate gross proceeds for the sale of the Common Shares and Warrants will be approximately $1.22million. Subject to certain ownership limitations, the Warrants will be exercisable commencing on the issuance date at an exercise price equal to $0.75 per share of Common Stock, subject to adjustments as provided under the terms of the Warrants. The Warrants are exercisable for five years from the date of issuance. The closing of the sales of these securities under the Subscription Agreements is expected to occur on or about October11, 2017. Paulson Investment Company, LLC (the “Placement Agent”), was engaged as a placement agent in connection with the Offering.

The net proceeds to the Company from the transactions, after deducting the Placement Agent’s fees and expenses (not including the Placement Agent Warrants, as defined below), the Company’s estimated offering expenses, and excluding the proceeds, if any, from the exercise of the Warrants, are expected to be approximately $1.11million. The Company intends to use the net proceeds from the transactions to fund clinical trials for its lead product candidate and for general corporate purposes.

The securities sold in the Offering were offered and sold by the Company to an effective shelf registration statement on FormS-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on August26, 2016 and subsequently declared effective on September9, 2016 (File No.333-213349) (the “Registration Statement”), and the base prospectus dated as of September9, 2016 contained therein. The Company will file a prospectus supplement with the SEC in connection with the sale of the securities.

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.

to the Placement Agent Agreement, dated as of August 8, 2017 (the “Placement Agent Agreement”), which was previously filed as Exhibit10.3 to the Form8-K filed on September 8, 2017, the Company has agreed to pay the Placement Agent a cash fee equal to 9% of the gross proceeds received by the Company from investors in the Offering, as well as a one-time non-accountable expense fee of $25,000 for aggregate expenses incurred collectively in the Offering and the September8, 2017 offering. The Company also agreed to grant to the Placement Agent or its designees warrants to purchase up to 8% of the aggregate number of shares sold to investors in the Offering at an exercise price equal to 110% of the price of the Common Stock sold in the Offering, or $0.715 per share (the “Placement Agent Warrants”). The Placement Agent Agreement has indemnity and other customary provisions for transactions of this nature.

The Placement Agent Warrants and the shares issuable upon exercise of the Placement Agent Warrants will be issued in reliance on the exemption from registration provided by Section4(a)(2)of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws.

The forms of the Warrants and the Subscription Agreement are filed as Exhibits4.1 and 10.1, respectively, to this Current Report on Form8-K. 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.

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The legal opinion and consent of Lowenstein Sandler LLP relating to the securities are filed as Exhibit5.1 to this Current Report on Form8-K.

Item 1.01. Unregistered Sales of Equity Securities.

See Item 1.01 with respect to the Placement Agent Warrants.

Item 1.01. Financial Statements and Exhibits.

(d)

Exhibit

No.

Description.

4.1 Form of Warrant Agreement
5.1 Opinion of Lowenstein Sandler LLP
10.1 Form of Subscription Agreement
23.1 Consent of Lowenstein Sandler LLP (included in the opinion of Lowenstein Sandler LLP as Exhibit5.1)

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EXHIBIT INDEX


CytoDyn Inc. Exhibit
EX-4.1 2 d443406dex41.htm EX-4.1 EX-4.1 Exhibit 4.1 COMMON STOCK PURCHASE WARRANT CYTODYN INC.   Warrant Shares: [            ]    Initial Exercise Date: [            ] THIS COMMON STOCK PURCHASE WARRANT (the “Warrant”) certifies that,…
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.

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