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Item 1.01.
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Entry into a Material Definitive Agreement.
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On November 20, 2019, CytoDyn Inc. (the “Company”) entered into Subscription Agreements (the “Subscription Agreements”) with certain
investors (the “Investors”) for the sale by the Company of 7,395,000 shares (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 5,546,250 shares of Common Stock (the “Warrants”). Each share of Common Stock was sold together with three quarters of one Warrant to purchase one
share of Common Stock for a combined purchase price of $0.30. The Company did not engage any placement agent in the Offering.
The aggregate gross
proceeds for the sale of the Common Shares and Warrants will be approximately $2.2 million. Subject to certain ownership limitations, the Warrants will be exercisable commencing on the issuance date at an exercise price equal to $0.45 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 November 20, 2019.
The net proceeds to the Company from the transactions, after deducting the Company’s estimated offering
expenses (including a cash “tail” fee to our placement agent in connection with a prior offering, as described below), and excluding the proceeds, if any, from the exercise of the Warrants, are expected to be approximately
$2.2 million. 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 pursuant to an effective shelf registration statement on Form S-3, which was initially filed with the Securities and Exchange Commission (the “SEC”) on February 23, 2018 and subsequently declared effective on March 7, 2018 (File No. 333-223195) (the “Registration Statement”), and the base prospectus dated as of March 7, 2018 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.
In connection with
the Offering, the Company will pay to a prior placement agent (the “Prior Placement Agent”), pursuant to a placement agent agreement entered into in connection with a prior offering, (i) a cash fee of approximately $3,500, or 9% of the
gross proceeds, as set forth in such placement agent agreement, received from an Investor in the Offering who was first introduced to the Company by the Prior Placement Agent in a prior offering and (ii) warrants to purchase an aggregate of 11,700
shares of Common Stock (the “Prior Placement Agent Warrants”), or 9% of the number of shares of common stock, set forth in such placement agent agreement, issued to an Investor in the Offering who was first introduced to the Company by the
Prior Placement Agent in a prior offering. The Prior Placement Agent Warrants will have an exercise price of $0.50 per share. The Prior Placement Agent Warrants and the shares issuable upon exercise of the Prior Placement Agent Warrants will be
issued in reliance on the exemption from registration provided by Section 4(a)(2) of the Securities Act as transactions not involving a public offering and in reliance on similar exemptions under applicable state laws.
The form of Warrant was filed as Exhibit 4.1 to the Current Report on Form 8-K filed on August 29, 2019. The form
of Subscription Agreement was filed as Exhibit 10.1 to the Current Report on Form 8-K filed on November 7, 2019. 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.
The legal opinion and consent of Lowenstein Sandler LLP relating to the
securities are filed as Exhibit 5.1 to this Current Report on Form 8-K.