Item 1.01Entry into a Material Definitive Agreement.
On July 18, 2022, CytoDyn Inc. (the "Company") entered into an amendment (the
"Amendment") to the Surety Bond Backstop Agreement (the "Backstop Agreement")
previously entered into by the Company with David Fairbank Welch, both
individually and in his capacity as trustee of a revocable trust, LRFA, LLC, a
Delaware limited liability company, and certain other related parties
(collectively, the "Indemnitors"), effective February 14, 2022. As previously
reported in the Company's Current Report on Form 8-K filed on February 18, 2022,
the Indemnitors agreed to assist the Company in obtaining a surety bond (the
"Surety Bond") for posting in connection with the Company's ongoing litigation
with Amarex Clinical Research, LLC, by, among other things, agreeing to
indemnify the issuer of the Surety Bond with respect to the Company's
obligations under the Surety Bond. As consideration for the Indemnitors'
agreement to indemnify the Surety, the Backstop Agreement provided, among other
things, that the Company would issue to 4-Good Ventures LLC, an affiliate of the
Indemnitors ("4-Good"), (i) a warrant for the purchase of 15,000,000 shares of
common stock as a backstop fee (the "Initial Warrant") and (ii) a warrant for
the purchase of an additional 15,000,000 shares, to be exercisable only if the
Indemnitors were required to make a payment to the Surety (the "Make-Whole
Warrant" and, together with the Initial Warrant, the "4-Good Warrants").
Under the Amendment, (i) the obligation of the Indemnitors to indemnify the
Surety was extended from August 13, 2022 to November 15, 2022, (ii) the exercise
price of each of the 4-Good Warrants was reduced from $0.30 to $0.20 per share,
(iii) the Make-Whole Warrant was amended to be fully exercisable immediately,
(iv) the deadline for the Company to use its commercially reasonable efforts to
file a Registration Statement on Form S-3 with the Securities and Exchange
Commission to register for resale the shares underlying the 4-Good Warrants was
extended to December 31, 2022, (v) the Indemnitors and 4-Good agreed to waive
the requirement that the Company reserve for issuance the 15,000,000 shares
subject to the Make-Whole Warrant until such time as the Company's stockholders
approve an increase in the Company's authorized shares of common stock, and (vi)
upon the exercise in full of the 4-Good Warrants, the Company agreed to take
reasonable steps to cause the Indemnitors to be released from their indemnity
obligations to the Surety, if any, by an amount equal to the exercise proceeds.
Following the acceleration of the exercisability of the Make-Whole Warrant, Dr.
Welch is deemed to beneficially own in excess of 5 percent of the Company's
outstanding shares of common stock. The foregoing description of the terms of
the Amendment is qualified in its entirety by reference to the complete text of
the Amendment, a copy of which is filed as Exhibit 10.1 to this Current Report
on Form 8-K.
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
Exhibit
No. Description
10.1 Amendment dated July 18, 2022, to
104 Surety Bond Backstop Agreement dated
February 14, 2022, among the Company
and certain parties named therein
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