CytoDyn Inc 10-Q for FY2022 Q1

CytoDyn Inc. (CYDY)

10-Q 2021-10-12 For: 2021-08-31

Added on April 12, 2026

About this 10-Q

CytoDyn Inc filed this 10-Q on October 12, 2021, covering the quarter ended August 31, 2021 (FY2022 Q1).

Headline figures

Quarter ended August 31, 2021, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $41K
Net loss: $30.94M; compared with a net loss of $30.83M 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	27
	ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	38
	ITEM 4. CONTROLS AND PROCEDURES	38
PART II	40
	ITEM 1. LEGAL PROCEEDINGS	40
	ITEM 1A. RISK FACTORS	40
	ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS	41
	ITEM 3. DEFAULTS UPON SENIOR SECURITIES	41
	ITEM 4. MINE SAFETY DISCLOSURES	41
	ITEM 5. OTHER INFORMATION	41
	ITEM 6. EXHIBITS	43

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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	☐


	August 31, 2021		May 31, 2021
	(unaudited)		(audited)
Assets
Current assets:
Cash	$	6,533	$	33,943
Restricted cash		9		—
Accounts receivable		41		—
Inventories, net		91,558		93,479
Prepaid expenses		3,381		616
Prepaid service fees		1,264		1,543
Total current assets		102,786		129,581
Operating leases right-of-use asset		665		712
Property and equipment, net		129		134
Intangibles, net		1,390		1,653
Total assets	$	104,970	$	132,080
Liabilities and Stockholders’ (Deficit) Equity
Current liabilities:
Accounts payable	$	65,938	$	65,897
Accrued liabilities and compensation		6,891		19,073
Accrued interest on convertible notes		2,244		2,007
Accrued dividends on convertible preferred stock		3,067		2,647
Operating leases liabilities		162		175
Convertible notes payable, net		51,333		62,747
Warrant exercise proceeds held in escrow		9		—
Total current liabilities		129,644		152,546
Long-term liabilities:
Operating leases liabilities		519		552
Total long-term liabilities		519		552
Total liabilities		130,163		153,098
Commitments and Contingencies (Note 9)
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 August 31, 2021 and May 31, 2021, respectively		—		—
Series C convertible preferred stock, $0.001 par value; 8 authorized; 8 issued and outstanding at August 31, 2021 and May 31, 2021, respectively		—		—
Series B convertible preferred stock, $0.001 par value; 400 shares authorized, 79 shares issued and outstanding at August 31, 2021 and May 31, 2021, respectively		—		—
Common stock, $0.001 par value; 800,000 shares authorized, 644,120 and 626,123 issued and 643,677 and 625,680 outstanding at August 31, 2021 and May 31, 2021, respectively		644		626
Additional paid-in capital		516,816		489,650
Accumulated (deficit)		(542,653)		(511,294)
Treasury stock, $0.001 par value; 443 and 443 shares at August 31, 2021 and May 31, 2021, respectively		—		—
Total stockholders’ (deficit) equity		(25,193)		(21,018)
Total liabilities and stockholders' (deficit) equity	$	104,970	$	132,080


	Three months ended August 31,
	2021		2020
Revenues:
Product Revenue	$	41	$	—
Total Revenues		41		—
Cost of Goods Sold:
Cost of Goods Sold		1		—
Total Cost of Goods Sold		1		—
Gross Margin		40		—
Operating expenses:
General and administrative		7,617		9,875
Research and development		13,784		15,188
Amortization and depreciation		276		505
Total operating expenses		21,677		25,568
Operating loss		(21,637)		(25,568)
Other income (expense):
Loss on extinguishment of convertible notes		(4,651)		—
Legal settlement		(1,941)		—
Interest expense:
Finance charges		(35)		(10)
Amortization of discount on convertible notes		(952)		(1,339)
Amortization of debt issuance costs		(28)		(4)
Inducement interest expense		(9)		(3,345)
Interest on convertible notes payable		(1,686)		(566)
Total interest expense		(2,710)		(5,264)
Loss before income taxes		(30,939)		(30,832)
Income tax benefit		—		—
Net loss	$	(30,939)	$	(30,832)
Basic and diluted loss per share	$	(0.05)	$	(0.06)
Basic and diluted weighted average common shares outstanding		632,597		555,531


	Preferred stock			Common stock			Treasury stock			Additional		Accumulated		Total stockholders'
	Shares	Amount		Shares	Amount		Shares	Amount		paid-in capital		deficit		(deficit) equity
Balance May 31, 2021	96	$	—	626,123	$	626	443	$	—	$	489,650	$	(511,294)	$	(21,018)
First Quarter Fiscal Year Ended May 31, 2022
Issuance of stock for convertible note repayment	—		—	11,816		12	—		—		18,483		—		18,495
Exercise of stock options	—		—	300		—	—		—		189		—		189
Issuance of common stock upon vesting of stock-based compensation awards	—		—	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	—		—	—		—	—		—		9		—		9
Dividends accrued on preferred stock	—		—	—		—	—		—		—		(420)		(420)
Stock-based compensation	—		—	—		—	—		—		2,597		—		2,597
Issuance of legal settlement warrants (see Note 6)	—		—	—		—	—		—		1,744		—		1,744
Net loss for August 31, 2021	—		—	—		—	—		—		—		(30,939)		(30,939)
Balance August 31, 2021	96	$	—	644,120	$	644	443	$	—	$	516,816	$	(542,653)	$	(25,193)


	Three months ended August 31,
(in thousands)	2021	2020
Stock options, warrants & unvested restricted stock	60,141	86,704
Convertible notes payable	12,000	7,801
Convertible preferred stock	33,858	30,325


Expiration period ending August 31,	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	$	4,547	$	-	$	-	$	4,547
2023	12 or 24 months		17,457		-		-		17,457
2024	24 to 36 months		550		-		-		550
2025	36 to 48 months		1,626		-		45,236		46,862
2026	48 to 60 months		704		-		-		704
Thereafter	60 or more months		2,977		20,288		-		23,265
Total inventories			27,861		20,288		45,236		93,385
Inventories reserved			(1,827)		-		-		(1,827)
Total inventories, net		$	26,034	$	20,288	$	45,236	$	91,558


	As of
(in thousands)	August 31, 2021		May 31, 2021
Accrued compensation and related expense	$	956	$	4,005
Accrued legal settlement and fees		1,216		11,008
Accrued other liabilities		4,719		4,060
Total accrued liabilities	$	6,891	$	19,073


(in thousands)	November 2020 Note		April 2, 2021 Note		April 23, 2021 Note
Outstanding balance May 31, 2021	$	13,554	$	25,715	$	25,485
Consideration received		-		-		-
Amortization of issuance discount and costs		98		441		441
Interest expense accrued		192		750		745
Cash repayments		-		-		-
Conversions		-		-		-
Fair market value of shares exchanged for repayment		(18,495)		-		-
Debt extinguishment loss		4,651		-		-
Outstanding balance August 31, 2021	$	-	$	26,906	$	26,671


				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	5,268	$	1.15	—		—
Exercised	(1,632)	$	0.66	—		—
Forfeited or expired and cancelled	(5,766)	$	0.73	—		—
Options and warrants outstanding August 31, 2021	59,443	$	0.99	4.14	$	36,673
Outstanding exercisable August 31, 2021	52,537	$	0.84	3.52	$	35,931


Fiscal Year (in thousands)	Amount
2022 (9 months remaining)	$	604
2023		384
2024		85
2025		85
Thereafter		232
Total	$	1,390


	Three months ended August 31,				Change
(in thousands)	2021		2020		$		%
Product revenue	$	41	$	—	$	41	100	%
Total revenue		41		—		41	100	%
Cost of goods sold		1		—		1	100	%
Total cost of goods sold		1		—		1	100	%
Gross Margin		40		—		40	100	%
Operating expenses:
General and administrative		7,617		9,875		(2,258)	(23)	%
Research and development		13,784		15,188		(1,404)	(9)	%
Amortization and depreciation		276		505		(229)	(45)	%
Total operating expenses		21,677		25,568		(3,891)	(15)	%
Operating loss		(21,637)		(25,568)		3,931	15	%
Other income (expense):
Interest income		—		—		—	0	%
Loss on extinguishment of convertible notes		(4,651)		—		(4,651)	-100	%
Legal settlement		(1,941)		—		(1,941)	-100	%
Interest expense:
Finance charges		(35)		(10)		(25)	(250)	%
Amortization of discount on convertible notes		(952)		(1,339)		387	29	%
Amortization of debt issuance costs		(28)		(4)		(24)	(600)	%
Inducement interest expense		(9)		(3,345)		3,336	100	%
Interest on convertible notes payable		(1,686)		(566)		(1,120)	(198)	%
Total interest expense		(2,710)		(5,264)		2,554	49	%
Loss before income taxes		(30,939)		(30,832)		(107)	(0)	%
Income tax benefit		—		—		—	—
Net loss	$	(30,939)	$	(30,832)	$	(107)	(0)	%
Basic and diluted loss per share	$	(0.05)	$	(0.06)	$	0.01	10	%
Basic and diluted weighted average common shares outstanding		632,597		555,531		77,066	14	%


	Three Months Ended				Change
(in thousands)	2021		2020		$
Net cash (used in) provided by:
Net cash (used in) operating activities	$	(31,741)	$	(40,948)	$	9,207
Net cash (used in) investing activities	$	(8)	$	(59)	$	51
Net cash provided by financing activities	$	4,348	$	44,928	$	(40,580)


			Incorporated by Reference
Exhibit No	Description	Filed Herewith	Form	Exhibit No.	Filing Date
4.1	Form of Warrant.		8-K	4.1	9/7/2021

10.1	Form of Subscription Agreement.		8-K	10.1	9/7/2021

10.2	Form of Warrant Exercise Inducement Agreement.		8-K	10.2	9/7/2021

10.3*	Employment Agreement by and between CytoDyn Inc. and Antonio Migliarese, effective May 18, 2021.	X

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: October 12, 2021		/s/ Nader Z. Pourhassan
		Nader Z. Pourhassan
		President and Chief Executive Officer
		(Principal Executive Officer)

Dated: October 12, 2021		/s/ Antonio Migliarese
		Antonio Migliarese
		Chief Financial Officer
		(Principal Financial and Accounting Officer)


(in thousands)	August 31, 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		(5,056)		(4,793)
Total amortizable intangible assets, net	$	1,390	$	1,653