Item 1.01. Entry into a Material Definitive Agreement.
On January 28, 2021, CytoDyn Inc. (the "Company") entered into Warrant Exercise
Inducement Agreements (the "Exercise Agreements") with certain substantial
holders of outstanding warrants ("Exercise Warrants") to purchase an aggregate
of 3,560,550 shares of Common Stock (the "Warrant Shares"). The Exercise
Warrants had exercise prices ranging from $0.45 to $0.75 per share and were
issued in various financing transactions between November 2017 and December
2019, expiring five years from their respective dates of issuance.
Pursuant to the Exercise Agreements, as an inducement to exercise the Exercise
Warrants immediately for cash, the Company and the holders agreed to negotiated
exercise prices ranging from $0.90 to $1.50 per share, and the Company agreed to
issue to each Exercise Warrant holder upon exercise an additional four-tenths of
a share of Common Stock (collectively, the "Additional Shares") for each share
of Common Stock underlying the Exercise Warrants. In the aggregate, 3,560,550
shares of Common Stock, which includes the 2,543,250 Warrant Shares and
1,017,300 Additional Shares, will be issued in these transactions for aggregate
gross proceeds to the Company of approximately $2.9 million, less expenses and
the cash fee payable to Paulson Investment Company, LLC ("Paulson"), described
below. Final settlements closed on January 28, 2021.
In connection with the Exercise Agreements, the Company entered into a
Soliciting Agent Agreement with Paulson, pursuant to which Paulson assisted the
Company as its exclusive soliciting agent in connection with the exercise of the
Exercise Warrants. Company will pay to Paulson, as compensation for the services
provided, a cash commission equal to four and one-half percent (4.5%) of the
gross proceeds received by the Company from the Exercise Agreements.
A total of 1,813,250 of the shares of Common Stock issuable upon exercise of the
Warrants will be sold pursuant to the Company's Registration Statement on Form
S-3 (File No. 333-223195), declared effective on March 7, 2018, including the
prospectus supplement dated March 7, 2018 thereunder. The remaining 1,747,300
shares issuable upon exercise of the Warrants, as well as all of the Additional
Shares, will be sold to accredited investors in reliance upon the exemption
provided by Rule 506 of Regulation D and Section 4(a)(2) of the Securities Act
of 1933, as amended (the "Securities Act"). We have also previously filed
Registration Statements on Form S-3 (File Nos. 333-223563 and 333-228991) (the
"Resale Registration Statements") to register the resale of certain shares of
common stock underlying the Exercise Warrants under the Securities Act. Holders
who are named as selling stockholders in the Resale Registration Statements may
sell their Warrant Shares listed therein in accordance with the resale
provisions set forth in the "Plan of Distribution" section of the Resale
Registration Statement prospectus. The Additional Shares to be issued will be
"restricted securities" under the Securities Act upon issuance to the holder.
The form of Exercise Agreement is filed as Exhibit 10.1 to this Current Report
on Form 8-K. The foregoing summary of the terms of the Exercise Agreement is
subject to, and qualified in its entirety by, such document, which is
incorporated herein by reference.
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Item 3.02. Unregistered Sales of Equity Securities.
The information contained above in Item 1.01 is hereby incorporated by reference
into this Item 3.02 in its entirety.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
Exhibit
No. Description
10.1 Form of Warrant Exercise Inducement Agreement
104 Cover Page Interactive Data File, formatted in Inline Extensible
Business Reporting Language (iXBRL).
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