Cytodyn Inc (CYDY)

[finesand]

Warrant TO: 212.97M Shares for $56.79M or $0.2669/sh

TO: https://www.sec.gov/Archives/edgar/data/1175680
/000119312519146006/d748216dsctoi.htm

$56.79M Transaction valuation(1)

Estimated for purposes of calculating the amount of the filing fee only. An offer to amend and exercise warrants to purchase an aggregate of 141,983,145 shares of common stock (the “Exercise Offer”). The transaction value is calculated pursuant to Rule 0-11 using $0.40 per share of common stock, which represents the average of the high and low sales price of the common stock on May 7, 2019.

^^ Now that is the TO transaction _value_ for 141.98M shares.

The better readable document as attached to the TO:
https://www.sec.gov/Archives/edgar/data/1175680/000119312519146006/d748216dex99a1b.htm

141.98M Shares to be issued:

We are offering to amend, upon the terms and subject to the conditions set forth herein, outstanding warrants to purchase up to an aggregate of 141,983,145 shares of common stock (the “Exercise Offer”), including:

So far so 'good', the share valuation would seemingly be at 40c,
'only' 9.96M shares are offered at 30c.

But there comes the hammer:

In addition to reducing the exercise price of the Original Warrants, as a further inducement to holders to participate in the Exercise Offer, we will issue to participating holders shares of common stock equal to an additional 50% of the number of shares issuable upon exercise of the Amended Warrants (the “Additional Shares”). As a result, upon exercise of the Amended Warrants, participating holders will receive an aggregate of 150% of the number of shares of common stock originally issuable upon exercise of the Original Warrants.

This is also the explicit sales pitch of to exercise these Warrants in the letter to Warrant holders (in the very same TO).

So we end up at: 212.97M Shares to be issued for $56.79M or $0.2669 per share.

The currently available 36.35M issuable shares + 100M = 136.35M is misleading, since after exercise of these Warrants the AS reservation for the very same is gone.

They state non-diluted OS is at ~329M shares, also notice the share reservation for the Warrants now to be exercised at fire sales price:

As of May 13, 2019, the Company had: (i) 329,395,752 shares of common stock outstanding; (ii) 921,000 shares of Series B Preferred Stock outstanding, and 441,155 shares of common stock that would be issuable at our election in lieu of cash as accrued dividends, if declared thereunder; (iii) 6,492,000 shares of common stock issuable upon conversion of outstanding Series C Preferred stock, and 97,824 shares of common stock that are issuable at the holder’s election in lieu of cash as dividends; (iv) outstanding warrants to purchase 164,089,977 shares of common stock (including the Original Warrants); and (v) outstanding options to purchase 14,851,872 shares of common stock issued pursuant to the Company’s 2012 Equity Compensation Plan (the “Plan”). In addition, the Company has reserved (i) an additional 42,989,414 shares of common stock reserved for issuance upon the conversion or redemption of outstanding convertible notes and an additional 1,904,233 shares of common stock reserved for interest on such convertible notes, which may be paid in common stock rather than cash, (ii) an additional 24,144 shares of common stock for issuance pursuant to the Plan, (iii) an additional 2,620,000 shares of common stock earned by, but not yet issued to, the Company’s investment bank for advisory services in connection with the Company’s recent acquisition transaction with ProstaGene, LLC and other advisory services and (iv) an additional 379,880 shares of common stock earned by management but not yet issued.

^^^ Add 100M to the ~160M shares for Warrants and you will see that is almost the exact matching number of shares for this deal!


The additional 100M shares AS will be voted upon with the current proxy!

+++

Yes, this is better than BK, ohm20!
No, I cannot see a 'math game' here trding - it is all in plain sight.

Here the Warrant holder letter:
https://www.sec.gov/Archives/edgar/data/1175680/000119312519146006/d748216dex99a1a.htm

In addition to reducing the exercise price of the Original Warrants, as a further inducement to holders to participate in the Offer, we will issue to participating holders shares of common stock equal to an additional 50% of the number of shares issuable upon exercise of the Original Warrants. As a result, participating holders will receive an aggregate of 150% of the number of shares of common stock originally issuable upon exercise of the Original Warrants.

Yes, the _newly_ issued shares w/ this transaction will be locked up, but that doesn't say you cannot short and/or sell your existing shares (to gain or 'just' replace them w/ cheaper ones).