CytoDyn Inc 10-Q for FY2022 Q2

CytoDyn Inc. (CYDY)

10-Q 2022-01-10 For: 2021-11-30

Added on April 12, 2026

About this 10-Q

CytoDyn Inc filed this 10-Q on January 10, 2022, covering the quarter ended November 30, 2021 (FY2022 Q2).

Headline figures

Quarter ended November 30, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $225K
Net loss: $36.6M; compared with a net loss of $35.43M a year earlier
Diluted EPS: -$0.06; compared with -$0.06 a year earlier


Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
None.		None.		None.


		PAGE
PART I	3
	ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS	3
	ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	32
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	46
	ITEM 4. CONTROLS AND PROCEDURES	47
PART II	49
	ITEM 1. LEGAL PROCEEDINGS	49
	ITEM 1A. RISK FACTORS	49
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	51
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES	51
	ITEM 4. MINE SAFETY DISCLOSURES	51
	ITEM 5. OTHER INFORMATION	51
	ITEM 6. EXHIBITS	52

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Delaware	83-1887078
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer or Identification No.)

1111 Main Street, Suite 660 Vancouver, Washington	98660
(Address of principal executive offices)	(Zip Code)


Large Accelerated Filer	☒	Accelerated Filer	☐

Non-accelerated Filer	☐	Smaller Reporting Company	☐

		Emerging Growth Company	☐


	November 30, 2021		May 31, 2021
			(Revised) ⁽¹⁾
Assets
Current assets:
Cash	$	8,875	$	33,943
Accounts receivable		225		—
Inventories, net		88,557		93,479
Prepaid expenses		2,979		616
Prepaid service fees		1,174		1,543
Total current assets		101,810		129,581
Operating leases right-of-use asset		617		712
Property and equipment, net		119		134
Intangibles, net		1,153		1,653
Total assets	$	103,699	$	132,080
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable	$	58,008	$	65,897
Accrued liabilities and compensation		6,654		19,073
Accrued interest on convertible notes		3,670		2,007
Accrued dividends on convertible preferred stock		3,481		2,647
Operating leases liabilities		149		175
Convertible notes payable, net		43,947		62,747
Total current liabilities		115,909		152,546
Long-term liabilities:
Operating leases liabilities		486		552
Total long-term liabilities		486		552
Total liabilities		116,395		153,098
Commitments and Contingencies (Note 10)
Stockholders’ (deficit) equity:
Preferred Stock, $0.001 par value; 5,000 shares authorized
Series D convertible preferred stock, $0.001 par value; 12 authorized; 9 issued and outstanding at November 30, 2021 and May 31, 2021		—		—
Series C convertible preferred stock, $0.001 par value; 8 authorized; 8 issued and outstanding at November 30, 2021 and May 31, 2021		—		—
Series B convertible preferred stock, $0.001 par value; 400 shares authorized, 19 and 79 shares issued and outstanding at November 30, 2021 and May 31, 2021, respectively		—		—
Common stock, $0.001 par value; 1,000,000 shares authorized, 685,861 and 626,123 issued and 685,418 and 625,680 outstanding at November 30, 2021 and May 31, 2021, respectively		686		626
Additional paid-in capital		589,971		512,796
Accumulated (deficit)		(603,353)		(534,440)
Treasury stock, $0.001 par value; 443 at November 30, 2021 and May 31, 2021		—		—
Total stockholders’ (deficit) equity		(12,696)		(21,018)
Total liabilities and stockholders' (deficit) equity	$	103,699	$	132,080


	Three months ended November 30,				Six months ended November 30,
	2021		2020		2021		2020
			(Revised) ⁽¹⁾				(Revised) ⁽¹⁾
Revenue:
Product revenue	$	225	$	—	$	266	$	—
Total revenue		225		—		266		—
Cost of goods sold:
Cost of goods sold		52		—		53		—
Total cost of goods sold		52		—		53		—
Gross margin		173		—		213		—
Operating expenses:
General and administrative		16,203		7,551		23,820		17,426
Research and development		9,040		16,446		22,824		31,738
Amortization and depreciation		252		506		528		1,011
Total operating expenses		25,495		24,503		47,172		50,175
Operating loss		(25,322)		(24,503)		(46,959)		(50,175)
Other income (expense):
Loss on extinguishment of convertible notes		(3,312)		(4,169)		(7,963)		(4,169)
Legal settlement		—		—		(1,941)		—
Interest expense:
Finance charges		(1,024)		(231)		(1,059)		(137)
Amortization of discount on convertible notes		(793)		(1,243)		(1,745)		(2,582)
Amortization of debt issuance costs		(23)		(15)		(51)		(19)
Inducement interest expense		(4,704)		(4,217)		(5,232)		(7,562)
Interest on convertible notes payable		(1,426)		(1,047)		(3,112)		(1,613)
Total interest expense		(7,970)		(6,753)		(11,199)		(11,913)
Loss before income taxes		(36,604)		(35,425)		(68,062)		(66,257)
Income tax benefit		—		—		—		—
Net loss	$	(36,604)	$	(35,425)	$	(68,062)	$	(66,257)
Basic and diluted loss per share	$	(0.06)	$	(0.06)	$	(0.11)	$	(0.12)
Basic and diluted weighted average common shares outstanding		662,600		577,945		647,517		566,677


	Preferred stock			Common stock			Treasury stock			Additional		Accumulated		Total stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		paid-in capital		deficit		(deficit) equity
										(Revised) ⁽¹⁾		(Revised) ⁽¹⁾		(Revised) ⁽¹⁾
Balance May 31, 2021	96	$	—	626,123	$	626	443	$	—	$	512,796	$	(534,440)	$	(21,018)
First Quarter Fiscal Year Ended May 31, 2022
Issuance of stock for convertible note repayment	—		—	11,816		12	—		—		18,483		—		18,495
Issuance of legal settlement warrants	—		—	—		—	—		—		1,744		—		1,744
Exercise of stock options	—		—	300		—	—		—		189		—		189
Stock issued for incentive compensation and tendered for income tax	—		—	1,014		1	—		—		(1)		—		—
Stock issued for private offering ($1.00 per share)	—		—	2,872		3	—		—		2,869		—		2,872
Private warrant exchange	—		—	1,327		1	—		—		774		—		775
Exercise of warrants	—		—	668		1	—		—		502		—		503
Inducement interest expense related to private warrant exchange	—		—	—		—	—		—		528		—		528
Dividends accrued on Series C and D preferred stock	—		—	—		—	—		—		—		(420)		(420)
Stock-based compensation	—		—	—		—	—		—		2,597		—		2,597
Net Loss August 31, 2021	—		—	—		—	—		—		—		(31,458)		(31,458)
Balance August 31, 2021	96		—	644,120		644	443		—		540,481		(566,318)		(25,193)
Second Quarter Fiscal Year Ended May 31, 2022
Issuance of stock for convertible note repayment	—		—	8,162		8	—		—		11,505		—		11,513
Exercise of stock options	—		—	210		—	—		—		200		—		200
Private warrant exchange	—		—	6,593		7	—		—		4,608		—		4,615
Stock issued for private offering ($1.00 - $1.80 per share)	—		—	25,178		25	—		—		27,282		—		27,307
Issuance costs related to stock issued for private offering	—		—	—		—	—		—		(1,418)		—		(1,418)
Conversion of Series B convertible preferred stock to common stock	(60)		—	600		1	—		—		—		—		1
Exercise of warrants	—		—	963		1	—		—		532		—		533
Inducement interest expense related to private warrant exchange	—		—	—		—	—		—		4,704		—		4,704
Dividend declared and paid in common stock on Series B preferred stock ($0.25 per share)	—		—	35		—	—		—		17		(17)		—
Dividends accrued on Series C and D preferred stock	—		—	—		—	—		—		—		(414)		(414)
Stock-based compensation	—		—	—		—	—		—		2,060		—		2,060
Net Loss November 30, 2021	—		—	—		—	—		—		—		(36,604)		(36,604)
Balance November 30, 2021	36	$	—	685,861	$	686	443	$	—	$	589,971	$	(603,353)	$	(12,696)


	As of and For the Year Ended May 31, 2019
(in thousands)	As Previously Reported		Adjustments		As Revised
Inducement interest expense	$	(196)	$	(4,532)	$	(4,728)
Total interest expense	$	(3,313)	$	(4,532)	$	(7,845)
Loss before income taxes	$	(59,014)	$	(4,532)	$	(63,546)
Income tax benefit	$	2,827	$	—	$	2,827
Net loss	$	(56,187)	$	(4,532)	$	(60,719)
Basic and diluted loss per share	$	(0.21)	$	(0.02)	$	(0.23)
Additional paid-in capital ⁽¹⁾	$	220,120	$	5,057	$	225,177
Accumulated (deficit) ⁽¹⁾	$	(229,363)	$	(5,057)	$	(234,420)
^{(1) Includes adjustment of}^$525^{for the fiscal year ended May 31, 2018.}


	As of and For the Year Ended May 31, 2020
(in thousands, except per share amount)	As Previously Reported		Adjustments		As Revised
Inducement interest expense	$	(7,904)	$	(15,533)	$	(23,437)
Total interest expense	$	(18,219)	$	(15,533)	$	(33,752)
Loss before income taxes	$	(124,403)	$	(15,533)	$	(139,936)
Net loss	$	(124,403)	$	(15,533)	$	(139,936)
Basic and diluted loss per share	$	(0.30)	$	(0.04)	$	(0.34)
Additional paid-in capital ⁽¹⁾	$	351,711	$	20,590	$	372,301
Accumulated (deficit) ⁽¹⁾	$	(354,711)	$	(20,590)	$	(375,301)
^{(1) Includes adjustments of}^$4,532^and^$525^{for the fiscal years ended May 31, 2019 and 2018, respectively.}


	Three months ended November 30, 2020						Six months ended November 30, 2020
(in thousands, except per share amount)	As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised
Inducement interest expense	$	(3,758)	$	(459)	$	(4,217)	$	(7,103)	$	(459)	$	(7,562)
Total interest expense	$	(6,294)	$	(459)	$	(6,753)	$	(11,454)	$	(459)	$	(11,913)
Loss before income taxes	$	(34,966)	$	(459)	$	(35,425)	$	(65,798)	$	(459)	$	(66,257)
Net loss	$	(34,966)	$	(459)	$	(35,425)	$	(65,798)	$	(459)	$	(66,257)
Basic and diluted loss per share	$	(0.06)	$	—	$	(0.06)	$	(0.12)	$	—	$	(0.12)


	Three months ended February 28, 2021						Nine months ended February 28, 2021
(in thousands, except per share amount)	As Previously Reported		Adjustments		As Revised		As Previously Reported		Adjustments		As Revised
Inducement interest expense	$	(4,139)	$	(1,221)	$	(5,360)	$	(11,242)	$	(1,680)	$	(12,922)
Total interest expense	$	(5,576)	$	(1,221)	$	(6,797)	$	(17,031)	$	(1,680)	$	(18,711)
Loss before income taxes	$	(43,985)	$	(1,221)	$	(45,206)	$	(109,783)	$	(1,680)	$	(111,463)
Net loss	$	(43,985)	$	(1,221)	$	(45,206)	$	(109,783)	$	(1,680)	$	(111,463)
Basic and diluted loss per share	$	(0.08)	$	—	$	(0.08)	$	(0.18)	$	—	$	(0.18)


	As of and For the Three months ended August 31, 2021
(in thousands, except per share amount)	As Previously Reported		Adjustments		As Revised
Inducement interest expense	$	(9)	$	(519)	$	(528)
Total interest expense	$	(2,710)	$	(519)	$	(3,229)
Loss before income taxes	$	(30,939)	$	(519)	$	(31,458)
Net loss	$	(30,939)	$	(519)	$	(31,458)
Basic and diluted loss per share	$	(0.05)	$	—	$	(0.05)
Additional paid-in capital	$	516,816	$	23,665	$	540,481
Accumulated (deficit)	$	(542,653)	$	(23,665)	$	(566,318)


	Three and six months ended November 30,
(in thousands)	2021	2020
Stock options, warrants & unvested restricted stock units	73,223	82,796
Convertible notes payable	12,000	12,000
Convertible preferred stock	34,089	31,490


Expiration period ending November 30,	Remaining shelf-life	Raw materials		Work-in-progress bulk drug product		Work-in-progress finished drug product in vials		Total inventories
2022	0 to 12 months	$	21,014	$	-	$	-	$	21,014
2023	13 to 24 months		1,078		-		-		1,078
2024	25 to 36 months		1,902		-		29,143		31,045
2025	37 to 48 months		192		-		24,315		24,507
2026	49 to 60 months		695		-		-		695
Thereafter	61 or more months		157		12,563		-		12,720
Total inventories			25,038		12,563		53,458		91,059
Inventories reserved			(2,502)		-		-		(2,502)
Total inventories, net		$	22,536	$	12,563	$	53,458	$	88,557


	As of
(in thousands)	November 30, 2021		May 31, 2021
Accrued compensation and related expense	$	796	$	4,005
Accrued legal settlement and fees		1,401		11,008
Accrued other liabilities		4,457		4,060
Total accrued liabilities	$	6,654	$	19,073


	As of November 30, 2021									As of May 31, 2021
(in thousands)	November 2020 Note		April 2, 2021 Note			April 23, 2021 Note		Total		November 2020 Note		April 2, 2021 Note		April 23, 2021 Note		Total
Convertible notes payable outstanding principal	$	-	$	19,500		$	28,500	$	48,000	$	13,500	$	28,500	$	28,500	$	70,500
Less: Unamortized debt discount and issuance costs		-		(1,613)			(2,440)		(4,053)		(1,204)		(3,232)		(3,317)		(7,753)
Convertible notes payable, net		-		17,887	-		26,060		43,947		12,296		25,268		25,183		62,747
Accrued interest on convertible notes		-		1,866			1,804		3,670		1,258		447		302		2,007
Outstanding convertible notes payable, net and accrued interest	$	-	$	19,753		$	27,864	$	47,617	$	13,554	$	25,715	$	25,485	$	64,754


				Weighted
				average
		Weighted		remaining	Aggregate
	Number of	average		contractual	intrinsic
(in thousands, except per share data)	shares	exercise price		life in years	value
Options and warrants outstanding May 31, 2021	61,573	$	0.95	4.40	$	68,756
Granted	20,151	$	1.97	—		—
Exercised	(5,654)	$	0.71	—		—
Forfeited or expired and cancelled	(6,443)	$	0.83	—		—
Options and warrants outstanding November 30, 2021	69,627	$	1.05	4.61	$	31,184
Outstanding exercisable November 30, 2021	59,807	$	0.87	3.51	$	30,747


(in thousands)	November 30, 2021		May 31, 2021
Leronlimab (PRO 140) patent	$	3,500	$	3,500
ProstaGene, LLC intangible asset acquisition, net of impairment		2,926		2,926
Website development costs		20		20
Gross carrying value		6,446		6,446
Accumulated amortization, net of impairment		(5,293)		(4,793)
Total amortizable intangible assets, net	$	1,153	$	1,653


Fiscal Year (in thousands)	Amount
2022 (6 months remaining)	$	21,271
2023		113,790
2024		106,140
2025		14,400
Total	$	255,601


	Three months ended November 30,				Change				Six months ended November 30,				Change
(in thousands)	2021		2020		$		%		2021		2020		$		%
			(Revised) ⁽¹⁾								(Revised) ⁽¹⁾
Total revenue	$	225	$	—	$	225	100	%	$	266	$	—	$	266	100	%
Total cost of goods sold		52		—		52	100	%		53		—		53	100	%
Gross margin		173		—		173	100	%		213		—		213	100	%
Operating expenses:
General and administrative		16,203		7,551		8,652	115	%		23,820		17,426		6,394	37	%
Research and development		9,040		16,446		(7,406)	(45)	%		22,824		31,738		(8,914)	(28)	%
Amortization and depreciation		252		506		(254)	(50)	%		528		1,011		(483)	(48)	%
Total operating expenses		25,495		24,503		992	4	%		47,172		50,175		(3,003)	(6)	%
Operating loss		(25,322)		(24,503)		(819)	(3)	%		(46,959)		(50,175)		3,216	6	%
Other income (expense):
Loss on extinguishment of convertible notes		(3,312)		(4,169)		857	21	%		(7,963)		(4,169)		(3,794)	(91)	%
Legal settlement		—		—		—	—	%		(1,941)		—		(1,941)	(100)	%
Interest expense:
Finance charges		(1,024)		(231)		(793)	(343)	%		(1,059)		(137)		(922)	(673)	%
Amortization of discount on convertible notes		(793)		(1,243)		450	36	%		(1,745)		(2,582)		837	32	%
Amortization of debt issuance costs		(23)		(15)		(8)	(53)	%		(51)		(19)		(32)	(168)	%
Inducement interest expense		(4,704)		(4,217)		(487)	(12)	%		(5,232)		(7,562)		2,330	31	%
Interest on convertible notes payable		(1,426)		(1,047)		(379)	(36)	%		(3,112)		(1,613)		(1,499)	(93)	%
Total interest expense		(7,970)		(6,753)		(1,217)	(18)	%		(11,199)		(11,913)		714	6	%
Loss before income taxes		(36,604)		(35,425)		(1,179)	(3)	%		(68,062)		(66,257)		(1,805)	(3)	%
Income tax benefit		—		—		—	—			—		—		—	—
Net loss	$	(36,604)	$	(35,425)	$	(1,179)	(3)	%	$	(68,062)	$	(66,257)	$	(1,805)	(3)	%


			Incorporated by Reference
Exhibit No	Description	Filed Herewith	Form	Exhibit No.	Filing Date
3.1	Amended and Restated Certificate of Incorporation, as amended November 24, 2021.	X

10.1	Form of Subscription Agreement.		8-K	10.1	11/23/2021

31.1	Rule 13a-14(a) Certification by CEO of Registrant.	X

31.2	Rule 13a-14(a) Certification by CFO of the Registrant.	X

32.1	Certification of CEO of the Registrant pursuant to 18 U.S.C. Section 1350.*	X

32.2	Certification of CFO of the Registrant pursuant to 18 U.S.C. Section 1350.*	X

101.INS	Inline XBRL Instance Document.	X

101.SCH	Inline XBRL Taxonomy Extension Schema Document.	X

101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document.	X

101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document.	X

101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document.	X

101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document.	X

104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).	X


	CYTODYN INC.
	(Registrant)

Dated: January 10, 2022		/s/ Nader Z. Pourhassan
		Nader Z. Pourhassan
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated: January 10, 2022		/s/ Antonio Migliarese
		Antonio Migliarese
		Chief Financial Officer
		(Principal Financial and Accounting Officer)