Cover Page
Cover Page | 12 Months Ended |
May 31, 2023 | |
Cover [Abstract] | |
Document Type | POS AM |
Entity Registrant Name | CytoDyn Inc. |
Entity Filer Category | Non-accelerated Filer |
Entity Small Business | true |
Entity Emerging Growth Company | false |
Entity Central Index Key | 0001175680 |
Amendment Flag | true |
Amendment Description | AMENDMENT NO. 1 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Current assets: | ||
Cash | $ 2,541 | $ 4,231 |
Restricted cash | 6,507 | |
Prepaid expenses | 1,167 | 5,198 |
Prepaid service fees | 590 | 1,086 |
Total current assets | 10,805 | 10,515 |
Inventories, net | 17,929 | |
Other non-current assets | 487 | 741 |
Total assets | 11,292 | 29,185 |
Current liabilities: | ||
Accounts payable | 62,725 | 67,974 |
Accrued liabilities and compensation | 6,669 | 8,995 |
Accrued interest on convertible notes | 10,598 | 5,974 |
Accrued dividends on convertible preferred stock | 5,308 | 3,977 |
Convertible notes payable, net | 34,417 | 36,241 |
Derivative liability | 79 | |
Total current liabilities | 119,796 | 123,161 |
Long-term liabilities: | ||
Notes payable, net | 714 | |
Operating leases | 283 | 422 |
Total liabilities | 120,793 | 123,583 |
Commitments and Contingencies (Note 10) | ||
Stockholders' deficit: | ||
Preferred stock | ||
Common stock, $0.001 par value; 1,350,000 shares authorized; 919,053 and 720,028 issued, and 918,610 and 719,585 outstanding at May 31, 2023 and May 31, 2022, respectively | 919 | 720 |
Treasury stock, $0.001 par value; 443 shares at May 31, 2023 and May 31, 2022 | ||
Additional paid-in capital | 731,270 | 671,013 |
Accumulated deficit | (841,690) | (766,131) |
Total stockholders' deficit | (109,501) | (94,398) |
Total liabilities and stockholders' deficit | 11,292 | 29,185 |
Series B Convertible Preferred Stock | ||
Stockholders' deficit: | ||
Preferred stock | ||
Series C Convertible Preferred Stock | ||
Current liabilities: | ||
Accrued dividends on convertible preferred stock | 2,500 | 2,014 |
Stockholders' deficit: | ||
Preferred stock | ||
Series D Convertible Preferred Stock | ||
Current liabilities: | ||
Accrued dividends on convertible preferred stock | 2,808 | 1,963 |
Stockholders' deficit: | ||
Preferred stock |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares shares in Thousands | May 31, 2023 | May 31, 2022 |
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 5,000 | 5,000 |
Common stock, par value | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 1,350,000 | 1,350,000 |
Common stock, shares issued | 919,053 | 720,028 |
Common stock, shares outstanding | 918,610 | 719,585 |
Treasury stock, shares | 443 | 443 |
Series B Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 400 | 400 |
Preferred stock, shares issued | 19 | 19 |
Preferred stock, shares outstanding | 19 | 19 |
Series C Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 8 | 8 |
Preferred stock, shares issued | 6 | 7 |
Preferred stock, shares outstanding | 6 | 7 |
Series D Convertible Preferred Stock | ||
Preferred stock, par value | $ 0.001 | $ 0.001 |
Preferred stock, shares authorized | 12 | 12 |
Preferred stock, shares issued | 9 | 9 |
Preferred stock, shares outstanding | 9 | 9 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) shares in Thousands, $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Consolidated Statements of Operations | ||
Revenue | $ 0 | $ 266 |
Cost of goods sold | 53 | |
Gross profit | 213 | |
Operating expenses: | ||
General and administrative | 17,136 | 44,303 |
Research and development | 2,632 | 27,043 |
Amortization and depreciation | 175 | 781 |
Inventory charge | 20,633 | 73,490 |
Total operating expenses | 40,576 | 145,617 |
Operating loss | (40,576) | (145,404) |
Interest and other expenses: | ||
Interest on convertible notes | (4,624) | (5,417) |
Amortization of discount on convertible notes | (2,126) | (2,958) |
Amortization of debt issuance costs | (9,747) | (87) |
Loss on induced conversion | (5,312) | (37,381) |
Finance charges | (8,689) | (9,029) |
Inducement interest expense | (6,691) | |
Legal settlement | (3,853) | |
Loss on derivatives | (8,750) | |
Total interest and other expenses | (39,248) | (65,416) |
Loss before income taxes | (79,824) | (210,820) |
Income tax benefit | 0 | 0 |
Net loss | $ (79,824) | $ (210,820) |
Weighted average common shares outstanding, Basic | 836,528 | 676,900 |
Weighted average common shares outstanding, Diluted | 836,528 | 676,900 |
Loss per share, Basic | $ (0.10) | $ (0.31) |
Loss per share, Diluted | $ (0.10) | $ (0.31) |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Deficit - USD ($) shares in Thousands, $ in Thousands | Preferred Stock | Common Stock Private Warrant Exchange | Common Stock Private Equity Offering | Common Stock | Treasury Stock | Additional Paid-in Capital Private Warrant Exchange | Additional Paid-in Capital Private Equity Offering | Additional Paid-in Capital | Accumulated Deficit | Private Warrant Exchange | Private Equity Offering | Total |
Beginning balance at May. 31, 2021 | $ 626 | $ 532,031 | $ (553,675) | $ (21,018) | ||||||||
Beginning balance (shares) at May. 31, 2021 | 96 | 626,123 | 443 | |||||||||
Issuance of stock for convertible note repayment | $ 37 | 68,344 | 68,381 | |||||||||
Issuance of stock for convertible note repayment (in shares) | 37,110 | |||||||||||
Loss on induced conversion | 37,381 | |||||||||||
Issuance of legal settlement, warrants | 2,863 | 2,863 | ||||||||||
Stock option exercises | $ 1 | 389 | 390 | |||||||||
Stock option exercises (in shares) | 510 | |||||||||||
Stock issued for compensation and tendered for income tax | $ 2 | 666 | 668 | |||||||||
Stock issued for compensation and tendered for income tax (in shares) | 2,582 | |||||||||||
Stock issued for private offerings | $ 38 | $ 46,473 | $ 46,511 | |||||||||
Stock issued for private offerings (in shares) | 38,035 | |||||||||||
Offering costs related to stock issuance | (5,316) | (5,316) | ||||||||||
Conversion of preferred stock to common stock | $ 3 | (3) | ||||||||||
Conversion of preferred stock to common stock (in shares) | (61) | 3,200 | ||||||||||
Warrant exercises | $ 8 | $ 2 | $ 5,382 | 1,034 | $ 5,390 | 1,036 | ||||||
Warrant exercises (in shares) | 7,920 | 1,642 | ||||||||||
Inducement interest expense related to private warrant exchange | $ 2 | 6,689 | 6,691 | |||||||||
Inducement interest expense related to private warrant exchange (in shares) | 2,293 | |||||||||||
Preferred stock dividends accrued and paid in common stock Preferred stock dividends accrued and paid in common stock upon conversion | $ 1 | 305 | (1,636) | (1,330) | ||||||||
Preferred stock dividends accrued and paid in common stock Preferred stock dividends accrued and paid in common stock upon conversion (in shares) | (613) | |||||||||||
Stock-based compensation | 5,571 | 5,571 | ||||||||||
Finance charges related to warrant issuance for surety bond backstop agreement | 6,585 | 6,585 | ||||||||||
Net loss | (210,820) | (210,820) | ||||||||||
Ending balance at May. 31, 2022 | $ 720 | 671,013 | (766,131) | (94,398) | ||||||||
Ending balance (shares) at May. 31, 2022 | 35 | 720,028 | 443 | |||||||||
Issuance of stock for convertible note repayment | $ 17 | 3,983 | 4,000 | |||||||||
Issuance of stock for convertible note repayment (in shares) | 17,260 | |||||||||||
Loss on induced conversion | 5,312 | 5,312 | ||||||||||
Warrants issued in note offering | 114 | 114 | ||||||||||
Stock issued for compensation | $ 3 | 982 | 985 | |||||||||
Stock issued for compensation (in shares) | 2,751 | |||||||||||
Exercise of warrants, net of offering costs (in shares) | 9,700 | |||||||||||
Make-whole shares related to private warrant exchange (in shares) | 23 | |||||||||||
Stock issued for private offerings | $ 157 | $ 37,067 | $ 37,224 | |||||||||
Stock issued for private offerings (in shares) | 157,390 | 500 | 4,600 | |||||||||
Offering costs related to stock issuance | (1,760) | (1,760) | ||||||||||
Conversion of preferred stock to common stock | $ 1 | (1) | ||||||||||
Conversion of preferred stock to common stock (in shares) | (1) | 1,136 | ||||||||||
Warrant exercises | $ 13 | $ 2 | $ 2,794 | 437 | $ 2,807 | 439 | ||||||
Warrant exercises (in shares) | 13,094 | 1,898 | ||||||||||
Deemed dividend paid in common stock due to down round provision, recorded in additional paid-in capital | $ 6 | (6) | ||||||||||
Deemed dividend paid in common stock due to down round provision recorded in additional paid-in capital (in shares) | 5,154 | |||||||||||
Preferred stock dividends accrued and paid in common stock Preferred stock dividends accrued and paid in common stock upon conversion | (1,331) | (1,331) | ||||||||||
Preferred stock dividends accrued and paid in common stock Preferred stock dividends accrued and paid in common stock upon conversion (in shares) | (319) | |||||||||||
Reclassification of warrants from liability to equity classified | 8,756 | 8,756 | ||||||||||
Stock-based compensation | 3,290 | 3,290 | ||||||||||
Reclassification of prior period preferred stock dividends | (4,265) | 4,265 | ||||||||||
Finance charges related to warrant issuance for surety bond backstop agreement | 4,885 | 4,885 | ||||||||||
Net loss | (79,824) | (79,824) | ||||||||||
Ending balance at May. 31, 2023 | $ 919 | $ 731,270 | $ (841,690) | $ (109,501) | ||||||||
Ending balance (shares) at May. 31, 2023 | 34 | 919,053 | 443 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Cash flows from operating activities: | ||
Net loss | $ (79,824) | $ (210,820) |
Adjustments to reconcile net loss to net cash used in operating activities: | ||
Amortization and depreciation | 175 | 781 |
Amortization of debt issuance costs | 9,747 | 87 |
Amortization of discount on convertible notes | 2,126 | 2,958 |
Warrants issued for legal settlement | 3,663 | |
Finance charges related to surety bond backstop agreement | 4,885 | 6,585 |
Loss on derivatives | 8,750 | |
Loss on induced conversion | 5,312 | 37,381 |
Inducement interest expense and non-cash finance charges | 6,691 | |
Change in fair value of derivative liabilities | 6 | |
Inventory charge | 20,633 | 73,490 |
Stock-based compensation | 4,275 | 6,239 |
Changes in operating assets and liabilities: | ||
Decrease (increase) in inventories | 2,060 | |
(Increase) decrease in prepaid expenses and other assets | 1,902 | (4,125) |
Decrease in accounts payable and accrued expenses | (3,097) | (2,713) |
Net cash used in operating activities | (25,110) | (77,723) |
Cash flows from financing activities: | ||
Proceeds from warrant transactions, net of offering costs | 2,807 | 5,390 |
Proceeds from sale of common stock and warrants, net of issuance costs | 25,786 | 41,195 |
Proceeds from warrant exercises | 439 | 1,036 |
Proceeds from convertible note and warrant issuances, net of issuance costs | 895 | |
Proceeds from stock option exercises | 390 | |
Net cash provided by financing activities | 29,927 | 48,011 |
Net change in cash and restricted cash | 4,817 | (29,712) |
Cash at beginning of fiscal year | 4,231 | 33,943 |
Cash and restricted cash at end of fiscal year | 9,048 | 4,231 |
Cash and restricted cash consisted of the following: | ||
Cash | 2,541 | 4,231 |
Restricted cash | 6,507 | |
Total cash and restricted cash | 9,048 | 4,231 |
Supplemental disclosure: | ||
Cash paid for interest | 19 | 63 |
Non-cash investing and financing transactions: | ||
Derivative liability associated with warrants | 8,750 | |
Issuance of common stock for principal and interest of convertible notes | 4,000 | 31,000 |
Accrued dividends on Series C and D convertible preferred stock | 1,490 | 1,636 |
Cashless exercise of warrants | 1 | |
Dividend paid in common stock on Series B and C convertible preferred stock conversions | 159 | 305 |
Warrants issued to placement agent, recorded in additional paid-in capital | 7,640 | 3,597 |
Warrants issued for surety bond backstop agreement | 4,885 | $ 6,585 |
Deemed dividend due to equity modifications, recorded in additional paid-in capital | $ 5,417 |
Organization
Organization | 12 Months Ended |
May 31, 2023 | |
Organization | |
Organization | Note 1. Organization CytoDyn Inc. (together with its wholly owned subsidiaries, the “Company”) was originally incorporated under the laws of Colorado on May 2, 2002, under the name RexRay Corporation and, effective August 27, 2015, reincorporated under the laws of Delaware. The Company is a clinical-stage biotechnology company focused on the clinical development of innovative treatments for multiple therapeutic indications based on its product candidate, leronlimab, a novel humanized monoclonal antibody targeting the CCR5 receptor. The Company has been investigating leronlimab as a viral entry inhibitor for treatment of HIV, believed to competitively bind to the N-terminus and second extracellular loop of the CCR5 receptor. For immunology, the CCR5 receptor is believed to be implicated in immune-mediated illnesses such as NASH. Leronlimab is being studied in NASH, NASH-HIV, solid tumors in oncology, and other HIV indications where CCR5 is believed to play an integral role . |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
May 31, 2023 | |
Summary of Significant Accounting Policies | |
Summary of Significant Accounting Policies | Note 2. Summary of Significant Accounting Policies Principles of Consolidation The consolidated financial statements include the accounts of CytoDyn Inc. and its wholly owned subsidiaries, CytoDyn Operations Inc. intercompany transactions and balances are eliminated in consolidation. Reclassifications Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the current period presentation. Such reclassifications did not have a material effect, if any, on the Company’s previously reported financial position, results of operations, stockholders’ (deficit) equity, or net cash provided by operating activities. During the fiscal year ended May 31, 2023, the Company reclassified amounts recorded as accumulated dividends for Series C and D preferred stockholders from accumulated deficit to additional paid-in capital. These reclassifications were made to reflect the proper presentation for accrued dividends when an entity has accumulated deficit. Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and satisfaction of liabilities in the ordinary course of business. As shown in the accompanying consolidated financial statements, the Company had losses for all periods presented. The Company incurred a net loss of $79.8 million and $210.8 million for the fiscal years ended May 31, 2023, and 2022, respectively, and had an accumulated deficit of $841.7 million as of May 31, 2023. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuance as a going concern is dependent upon its ability to obtain additional operating capital, complete the development of its product candidate, leronlimab, obtain approval to commercialize leronlimab from regulatory agencies, continue to outsource manufacturing of leronlimab, and ultimately achieve revenues and attain profitability. The Company plans to continue to engage in research and development activities related to leronlimab for multiple indications and expects to incur significant research and development expenses in the future, primarily related to its regulatory compliance, including seeking the lifting of the FDA’s clinical hold with regard to the Company’s HIV program, performing additional clinical trials in various indications, and seeking regulatory approval for its product candidate for commercialization. These research and development activities are subject to significant risks and uncertainties. The Company intends to finance its future development activities and its working capital needs primarily from the sale of equity and debt securities, combined with additional funding from other sources. However, there can be no assurance that the Company will be successful in these endeavors. Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are assessed each period and updated to reflect current information, such as the status of our analysis of the results of our clinical trials and/or discussions with the FDA, which could have an impact on the Company’s significant accounting estimates and assumptions. The Company’s estimates are based on historical experience and on various markets and other relevant, appropriate assumptions. Significant estimates include, but are not limited to, those relating to capitalization of pre-launch inventories, charges for excess and obsolete inventories, research and development expenses, commitments and contingencies, stock-based compensation, and the assumptions used to value warrants and warrant modifications. Actual results could differ from these estimates. Cash Cash is maintained at federally insured financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to cash balances. Balances in excess of federally insured limits were approximately $2.3 million of the cash balance and approximately $5.5 million of the restricted cash balance at May 31, 2023. Balances in excess of federally insured limits were approximately $4.0 million at May 31, 2022. As of May 31, 2023, the Company had recorded approximately $6.5 million of restricted cash. The restricted cash balance is related to cash held as collateral in connection with a Surety Bond, as defined in Note 7, Equity Awards and Warrants , that was posted as required in the litigation with Amarex and will remain as restricted cash until the litigation is resolved. For further information, See Note 7, Equity Awards and Warrants – Private Placement of Warrants under Surety Bond Backstop Agreement . Identified Intangible Assets The Company follows the provisions of ASC 350, Intangibles-Goodwill and Other , which establishes accounting standards for the impairment of long-lived assets such as intangible assets subject to amortization. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group is less than its carrying value, the asset is considered impaired. Impairment losses are measured as the amount by which the carrying amount of the asset group exceeds the fair value of the asset. Inventories Previously Expensed Inventories The Company recorded revenue in the fiscal year ended May 31, 2022, related to sales of vials for emergency purposes only, solely to treat critically ill COVID-19 patients in the Philippines under a Compassionate Special Permit. Cost of goods sold was minimal because the vials sold were expensed in prior periods as research and development expense because they were manufactured prior to the Company’s capitalization of pre-launch inventories as described below. All capitalized inventory amounts represent pre-launch inventories and do not include any inventories previously expensed as research and development expense. Capitalized Pre-launch Inventories Pre-launch inventories comprised raw materials required to commercially produce leronlimab and substantially completed commercially produced leronlimab in anticipation of commercial sales of the product upon potential regulatory approval as a combination therapy for HIV patients in the United States, and potential emergency use authorizations for COVID-19. The Company’s pre-launch inventories consisted of (1) raw materials purchased for commercial production, (2) work-in-progress materials which consist of bulk drug substance, which is the manufactured drug stored in bulk storage, and (3) drug product, which is the manufactured drug in unlabeled vials. The consumption of raw materials during production is classified as work-in-progress until saleable. Once it is determined to be in saleable condition, following regulatory approval, inventory is classified as finished goods. The Company capitalizes inventories procured or produced in preparation for product launches. Typically, capitalization of such inventory begins when the results of clinical trials have reached a status sufficient to support regulatory approval, uncertainties regarding ultimate regulatory approval have been significantly reduced, and the Company has determined it is probable that these capitalized costs will provide future economic benefit in excess of capitalized costs. The material factors considered by the Company in evaluating these uncertainties include the receipt and analysis of positive Phase 3 clinical trial results for the underlying product candidate, results from meetings with the relevant regulatory authorities prior to the filing of regulatory applications, and status of the Company’s regulatory applications. The Company closely monitors the status of the product within the regulatory review and approval process, including all relevant communications with regulatory authorities. If the Company becomes aware of any specific material risks or contingencies other than the normal regulatory review and approval process or if there are any specific issues identified relating to safety, efficacy, manufacturing, marketing, or labeling, it may make a determination that the related inventory may no longer qualify for capitalization. The Company determines whether raw materials purchased for commercial production are usable for production based on the manufacturer’s assigned expiration date. In evaluating whether raw materials included in the pre-launch inventories will be usable for production, the Company takes into account the shelf-life of raw materials at the time they are expected to be used in manufacturing. Any raw materials past expiration date at the time of the next manufacturing run are removed from inventory. As one stage of the manufacturing process, the Company produces work-in-progress materials which consist of bulk drug substance, which is the manufactured drug stored in bulk storage. The initial shelf-life of bulk drug substance is established based on periodically performed stability studies and is set at four four The Company utilizes resins, a reusable raw material, in its bulk drug manufacturing process. Shelf-life of a resin used in commercial manufacturing of biologics is determined by the number of cycles for which it has been validated to be used in a manufacturing process before it is considered unusable. Unpacked and unused resins have a manufacturer’s expiration date by which resins are expected to start being used in the manufacturing process without loss of their properties. Prior to a new manufacturing campaign, and between manufacturing campaigns, the resins are removed from storage, are treated and tested for suitability. Once resins are used in the manufacturing process, their shelf-life is measured by a validated predetermined number of manufacturing cycles they are usable for, conditional on appropriate storage solution under controlled environment between production campaigns, as well as by performing pre-production usability testing. Before a manufacturing campaign, each resin is tested for suitability. Regardless of the number of cycles, if a resin fails to meet prespecified suitability parameters it may not be used in manufacturing; likewise, even if the resin meets suitability criteria beyond the lifetime cycles, it may no longer be used. The cost of the resins used in a manufacturing campaign is allocated to the cost of the drug product in vials. The Company values its inventory at the lower of cost or net realizable value using the average cost method. Inventory is evaluated for recoverability by considering the likelihood that revenue will be obtained from the future sale of the related inventory considering the status of the product within the regulatory approval process. The Company evaluates its inventory levels on a quarterly basis and writes down inventory that became obsolete, has a cost in excess of its expected net realizable value, or is in quantities in excess of expected requirements. In assessing the lower of cost or net realizable value for pre-launch inventory, the Company relies on independent analyses provided by third parties knowledgeable about the range of likely commercial prices comparable to current comparable commercial product. Quarterly, the Company also evaluates whether certain raw materials held in its inventory are expected to reach the end of their estimated shelf-lives based on passage of time, the number of manufacturing cycles they are used in and results of pre-production testing prior to the expected production date, or when resins used in the manufacturing process fail suitability tests. If any of such events occur, the Company may make a determination to record a charge if it is expected that such inventories will become obsolete prior to the expected production date. Anticipated future sales, shelf lives, and expected approval date are considered when evaluating realizability of capitalized inventory. The shelf-life of a product is determined as part of the regulatory approval process; however, in assessing whether to capitalize pre-launch inventories, the Company considers the product stability data for all of the pre-approval inventory procured or produced to date to determine whether there is adequate shelf-life. When the remaining shelf-life of drug product inventory is less than 12 months, it is likely that it will not be accepted by potential customers. However, as inventories approach their shelf-life expiration, the Company may perform additional stability testing to determine if the inventory is still viable, which can result in an extension of its shelf-life and re-evaluation of the need for and the amount of the previously recorded reserves. Further, in addition to performing additional stability testing, certain raw materials inventory may be sold in its then current condition prior to reaching expiration. If the Company determines that it is not likely that shelf-life may be extended or the inventory cannot be sold prior to expiration, the Company may record a charge to bring inventory to its net realizable value. See Note 3, Inventories, net , for more information. Revenue Recognition The Company accounts for and recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers For the Company’s sole contract to date, the customer submitted purchase orders to purchase a specified quantity of leronlimab vials; therefore, the delivery of the ordered quantity per the purchase order was accounted for as one performance obligation. The Company does not offer discounts or rebates. The transaction price was determined based on the agreed upon rates per vial indicated in the purchase order or master supply agreement applied to the quantity of leronlimab vials that the customer requested in the purchase order. As the Company’s contract included only one performance obligation, the delivery of the product to the customer, all of the transaction price was allocated to the one performance obligation. Therefore, upon delivery of the product quantity equal to the quantity requested in the purchase order, there were deemed to be no remaining performance obligations. The Company’s shipping and handling activities are considered a fulfillment cost. The Company elected to exclude all sales and value added taxes from the measurement of the transaction price. The Company did not adjust the transaction price for financing since the time period between the transfer of goods and payment was less than one year. The Company recognizes revenue at a point in time when control of the products is transferred to the customer. Management applies judgment in evaluating when a customer obtains control of the promised goods, which generally occurs when the product is delivered to the customer. The Company’s customer contract includes a standard assurance warranty to guarantee that its products comply with agreed specifications. The Company grants a conditional right of return of product in the customer’s inventory upon an adverse regulatory ruling. The Company continually evaluates the probability of such occurrence. If necessary, the Company will defer revenue recognized based on its estimate of the amount of products that may be subject to the right of return. Disaggregation of Revenue The Company’s revenues have been derived solely from the sale of leronlimab vials. The Company believes the revenues are presented at the appropriate level of detail in the accompanying consolidated statements of operations. Contract Assets and Liabilities The Company’s performance obligations for its contract with a customer are satisfied at a point in time through the delivery of leronlimab vials to its customer. The Company did no t have revenues in the fiscal year ended May 31, 2023, and had $0.3 million in revenues in the fiscal year ended May 31, 2022. The Company did no t have any contract assets or liabilities as of May 31, 2023 or 2022. For all periods presented, the Company did no t recognize revenues from amounts that were previously included in a contract liability balance. In addition, for all periods presented, there was no revenue recognized in a reporting period from performance obligations satisfied in previous periods. Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s contract, each unit of product delivered to the customer represents a separate performance obligation; therefore, future deliveries of the product are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. Research and Development Research and development costs are expensed as incurred. Clinical trial costs incurred through third parties are expensed commensurate with the contracted work performed. Contingent milestone payments that are due to third parties under research and development collaboration arrangements or other contractual agreements are expensed when the milestone conditions are probable and the amount of payment is reasonably estimable. See Note 10, Commitments and Contingencies for additional discussion. Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts payable and accrued liabilities, and debt. As of May 31, 2023, the carrying value of the Company’s assets and liabilities approximate their fair value due to the short-term maturity of the instruments. Debt is reported at amortized cost in the consolidated balance sheets which approximate fair value. The remaining financial instruments are reported in the consolidated balance sheets at amounts that approximate current fair values. The fair value hierarchy specifies three levels of inputs that may be used to measure fair value as follows: ● Level 1. Quoted prices in active markets for identical assets or liabilities. ● Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions. ● Level 3. Unobservable inputs to the valuation methodology which are significant to the measurement of the fair value of assets or liabilities. These Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that cannot be corroborated with observable market data. In accordance with the prescribed accounting guidance, the Company measured the fair value of the liability classified warrants using the fair value hierarchy during the fiscal year ended May 31, 2023. The Company did no t have any assets or liabilities measured at fair value using the fair value hierarchy as of May 31, 2022. Leases Operating lease right-of-use (“ROU”) assets are included in other non-current assets and the current portion of operating lease liabilities are included in accrued liabilities and compensation on the consolidated balance sheets. The long-term operating lease liabilities are presented separately as operating leases on the consolidated balance sheets. Lease ROU assets, and liabilities, are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms do not include options to extend or terminate the lease as it is not reasonably certain that it would exercise these options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. Stock-Based Compensation U.S. GAAP requires companies to measure the cost of services received in exchange for the award of equity instruments based on their fair value at the date of grant. The related expense is recognized over the period during which services are expected to be performed in exchange for the award (requisite service period), when designated milestones have been achieved or when pre-defined performance conditions are met. The Company values its stock-based awards using the Black-Scholes option pricing model utilizing assumptions that include stock price volatility, expected term of the award, and risk-free interest rates. The Company estimates forfeitures at the time of grant and makes revisions in subsequent periods, if necessary, if actual forfeitures differ from those estimates. The Company estimated future unvested forfeitures at zero for all periods presented . Debt The Company historically issued promissory notes at a discount and incurred direct debt issuance costs. Debt discount and issuance costs are netted against the debt and amortized over the life of the promissory note in accordance with ASC 470-35, Debt Subsequent Measurement Offering Costs The Company periodically incurs direct incremental costs associated with the sale of equity securities; refer to Note 7 , Equity Awards and Warrants for additional information. The costs are recorded as a component of equity upon receipt of the proceeds. Income Taxes Deferred taxes are recorded using the asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards; deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Future tax benefits for net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes In accordance with Section 15 of the Internal Revenue Code, the Company utilized a federal statutory rate of 21% for our fiscal 2023 and 2022 tax years. The net tax expense for the fiscal years ended May 31, 2023 and May 31, 2022 was zero . As of May 31, 2023 and 2022, the Company has a full valuation allowance as management does not consider it more than likely than not that the benefits from the deferred tax assets will be realized. Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU No. 2020-06 as of June 1, 2022, using the modified retrospective method. The adoption of ASU No. 2020-06 had no impact on the Company’s balance sheets, statements of operations, cash flows or financial statement disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . ASU 2021-04 addresses the accounting for certain modifications or exchanges of freestanding equity-classified written call options (e.g., warrants). Entities should treat a modification of the terms or conditions, or an exchange of a freestanding equity-classified written call option that remains equity-classified after modification or exchange, as an exchange of the original instrument for a new instrument. Guidance should be applied prospectively after the date of initial application. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the new guidance prospectively as of June 1, 2022, and used the framework to record modifications to equity classified instruments during the fiscal year ended May 31, 2023. The modifications consisted of the following approximate amounts: induced warrant exercises recorded as $2.2 million of issuance cost, modification to the warrants issued in connection with the Surety Bond Backstop Agreement recorded as a $0.4 million finance charge, and triggers of down-round provisions and modifications recorded as deemed dividends with an aggregate $5.4 million charge to additional paid-in capital. The deemed dividends were included in the loss per share calculation, see Note 8, Loss per Common Share . Refer to Note 7, Equity Awards and Warrants for further information on each transaction. |
Inventories, net
Inventories, net | 12 Months Ended |
May 31, 2023 | |
Inventories, net | |
Inventories, net | Note 3. Inventories, net Inventories, net of write-offs, were as follows: (in thousands) May 31, 2023 May 31, 2022 Raw materials $ — $ 16,264 Work-in-progress — 1,665 Total inventories, net $ — $ 17,929 During the fourth quarter of fiscal 2022, the Company concluded that certain inventories no longer qualified for capitalization as pre-launch inventories due to expiration of shelf-life prior to expected commercial sales and the ability to obtain additional commercial product stability data until after shelf-life expiration. This was due to delays experienced from the originally anticipated BLA approval date from the FDA. The inventories written-off for GAAP accounting purposes continue to be physically maintained, can be used for clinical trials, and can be commercially sold if the shelf-lives can be extended as a result of the performance of on-going continued stability testing of drug product. In the event the shelf-lives of these written-off inventories are extended, and the inventories are sold commercially, the Company will not recognize any costs of goods sold on the previously expensed inventories. The Company also concluded that, due to delays of future production, certain raw materials would expire prior to production and as such no longer qualified for capitalization. Specifically, the Company evaluated its raw materials, which consist of specialized raw materials, resins, and other, against the anticipated production date and determined that while the next production date is indeterminable as of May 31, 2022, specialized raw materials have remaining shelf-life ranging from 2023 to 2026. Therefore, a write-off of $10.2 million for the entire remaining value of specialized and other raw materials was recorded as of May 31, 2022. The Company also concluded that approximately $29.1 million, comprised of five batches of drug product, out of total of nine manufactured, is likely to expire prior to the anticipated date the product may be approved for commercialization. Additionally, the Company anticipates that approximately $34.2 million of the drug product comprised of the remaining four manufactured batches, with shelf-lives lasting into 2026, may expire prior to receiving approval for commercialization. The Company wrote-off the entire remaining balance of the drug product, in the amount of $63.3 million, for a total of $73.5 million in inventory write-offs in the fiscal year ended May 31, 2022. During the first quarter of fiscal year 2023, the Company reviewed purchase commitments made by its manufacturing partner, Samsung BioLogics Co., Ltd. (“Samsung”), under the master agreement between the Company and Samsung, and its vendors for specialized raw materials for which the Company made a prepayment in the amount of approximately $2.7 million in the third quarter of fiscal year 2022, which was recorded as prepaid expenses in the consolidated financial statements as of May 31, 2022. As discussed in Note 10, Commitments and Contingencies – Commitments with Samsung BioLogics Co., Ltd. (“Samsung”), t he Company and its manufacturing partner remain in ongoing discussions about, among other things, deferring the unfulfilled commitments. The entire amount of approximately $2.7 million was charged-off during the quarter ended August 31, 2022. In October 2022, the Company voluntarily withdrew its rolling BLA submission after concluding that a significant risk existed that the BLA would not receive FDA approval due to the inadequate process and performance by its former CRO around the monitoring and oversight of the clinical data from its trials. Following this decision, the Company’s remaining inventories no longer qualified for capitalization as pre-launch inventories. During the three months ended November 30, 2022, the Company charged-off the remaining raw material resin and work-in-progress bulk product inventories of approximately $16.3 million and $1.7 million, respectively. |
Intangible Assets, net
Intangible Assets, net | 12 Months Ended |
May 31, 2023 | |
Intangible Assets, net | |
Intangible Assets, net | Note 4. Intangible Assets, net Intangible assets were as follows: (in thousands) May 31, 2023 May 31, 2022 Leronlimab (PRO 140) patent $ 3,500 $ 3,500 Website development costs 20 20 Gross carrying value 3,520 3,520 Accumulated amortization, net of impairment (3,520) (3,388) Total intangible assets, net $ — $ 132 Amortization expense related to the intangible assets for the fiscal years ended May 31, 2023 and 2022 was approximately $0.1 million and $0.7 million, respectively. In November 2018, the Company completed the acquisition of substantially all the assets of ProstaGene, LLC (“ProstaGene”) which included patents related to clinical research, a proprietary CCR5 algorithm technology for early cancer diagnosis, and a noncompetition agreement with ProstaGene’s founder and Chief Executive Officer, Richard G. Pestell. The Company accounted for the ProstaGene acquisition as an asset acquisition under ASC 805-10-55, Business Combinations . In March 2021, the Company concluded an arbitration hearing concerning a claim by ProstaGene for approximately 3.1 million shares of common stock that the Company had withheld for damages incurred by the Company in connection with the purchase of the proprietary algorithm as part of the ProstaGene acquisition. Based on the information revealed during the arbitration, the Company concluded that the algorithm’s value is fully impaired; the Company recorded an intangible asset impairment charge of approximately $10.0 million during the quarter ended February 28, 2021, resulting from the write-off of the allocated purchase price of $12.2 million and $2.2 million of associated accumulated amortization. In May 2022, in connection with an employment dispute with Dr. Pestell, the Company reached a settlement agreement with Dr. Pestell in which the Company agreed, among other things, to transfer all rights to intangible assets that were acquired as part of the ProstaGene transaction in 2018. The Company recorded a $0.8 million non-cash charge, representing the remaining carrying amount of the ProstaGene patent, as part of legal settlement expense in its consolidated statements of operations in connection with this transfer of assets for the fiscal year ended May 31, 2022. As of May 31, 2023, the Company fully amortized all intangible assets in the form of patents attributable to the leronlimab acquisition. |
Accounts Payable and Accrued Li
Accounts Payable and Accrued Liabilities | 12 Months Ended |
May 31, 2023 | |
Accounts Payable and Accrued Liabilities | |
Accounts Payable and Accrued Liabilities | Note 5. Accounts Payable and Accrued Liabilities As of May 31, 2023 and 2022, the accounts payable balance was approximately $62.7 million and $68.0 million, respectively. The Company had two vendors that together accounted for approximately 72% and 73% of the total balance of accounts payable as of each respective date. The components of accrued liabilities were as follows: (in thousands) May 31, 2023 May 31, 2022 Compensation and related expense $ 335 $ 1,522 Legal fees and settlement 168 2,006 Clinical expense 187 3,727 Accrued inventory charges and expenses 4,978 1,392 License fees 862 150 Lease payable 139 134 Other liabilities — 64 Total accrued liabilities $ 6,669 $ 8,995 As of May 31, 2023 and 2022, the accrued legal fees and settlement balance was primarily related to legal fees. |
Convertible Instruments and Acc
Convertible Instruments and Accrued Interest | 12 Months Ended |
May 31, 2023 | |
Convertible Instruments and Accrued Interest | |
Convertible Instruments and Accrued Interest | Note 6. Convertible Instruments and Accrued Interest Convertible Preferred Stock May 31, 2023 May 31, 2022 (in thousands except conversion rate) Series B Series C Series D Series B Series C Series D Shares of preferred stock outstanding 19 6 9 19 7 9 Common stock conversion rate 10:1 2,000:1 1,250:1 10:1 2,000:1 1,250:1 Total shares of common stock if converted 190 12,670 10,565 190 13,806 10,565 Undeclared dividends $ 15 $ — $ — $ 10 $ — $ — Accrued dividends $ — $ 2,500 $ 2,808 $ — $ 2,014 $ 1,963 Total shares of common stock if dividends converted 30 5,000 5,616 20 4,028 3,926 Under the Company’s Amended and Restated Certificate of Incorporation, as amended ( the “Certificate of Incorporation”), dividends on its outstanding shares of Series B Convertible Preferred Stock (the “Series B Preferred Stock”) may be paid in cash or shares of the Company’s common stock at the option of the Company. Dividends on outstanding shares of Series C Convertible Preferred Stock (the “Series C Preferred Stock”) and Series D Convertible Preferred Stock (the “Series D Preferred Stock”) are payable in cash or shares of common stock at the election of the holder. The preferred stockholders have the right to dividends only when and if declared by the Company’s Board of Directors . Shares of common stock presented in the table above represent the number of shares that would have been issued had the dividend been paid in shares of the Company’s common stock as of the end of each presented period; undeclared dividends of Series C Preferred Stock and Series D Preferred Stock are accrued as of May 31, 2023. Under Section 170 of the Delaware General Corporation Law, the Company is permitted to pay dividends only out of capital surplus or, if none, out of net profits for the fiscal year in which the dividend is declared or net profits from the preceding fiscal year. As of May 31, 2023, the Company had an accumulated deficit of approximately $841.7 million and had net loss in each fiscal year since inception and, therefore, is prohibited from paying any dividends, whether in cash, other property, or in shares of capital stock. Refer to the discussion below for additional information. Series B Convertible Preferred Stock Each share of the Series B Preferred Stock is convertible into ten shares of the Company’s common stock. Dividends are payable to the Series B Preferred stockholders when and as declared by the Board at the rate of $0.25 per share per annum. Such dividends are cumulative and accrue whether or not declared and whether or not there are any profits, surplus, or other funds or assets of the Company legally available therefor. At the option of the Company, dividends on the Series B Preferred Stock may be paid in cash or restricted shares of the Company’s common stock, valued at $0.50 per share. The preferred shareholders can only convert their shares to shares of common stock if the Company has sufficient authorized shares of common stock at the time of conversion. The Series B Preferred Stock has liquidation preferences over the common shares at $5.00 per share, plus any accrued and unpaid dividends. Except as provided by law, the Series B holders have no voting rights. The Company does not accrue dividends on Series B preferred stock until such dividends are declared. Series C Convertible Preferred Stock The Series C Certificate of Designation provides, among other things, that holders of Series C Preferred Stock shall be entitled to receive, when and as declared by the Board and out of any assets at the time legally available therefor, cumulative dividends at the rate of ten percent ( 10% ) per share per annum of the stated value of the Series C Preferred Stock, which is $1,000 per share (the “Series C Stated Value”). Any dividends paid by the Company will be paid to the holders of Series C Preferred Stock prior and in preference to any payment or distribution to holders of common stock. Dividends on the Series C Preferred Stock are cumulative, and will accrue and be compounded annually, whether or not declared and whether or not there are any profits, surplus, or other funds or assets of the Company legally available therefor. There are no sinking fund provisions applicable to the Series C Preferred Stock. The Series C Preferred Stock does not have redemption rights. Dividends, if declared by the Board, are payable to holders in arrears on December 31 of each year. Subject to the provisions of applicable Delaware law, the holder may elect to be paid in cash or in restricted shares of common stock, with the number of shares to be based on the conversion price then in effect. In the event of liquidation, dissolution, or winding up of the Company, the holders of Series C Preferred Stock will be entitled to receive, on a pari passu basis with the holders of the Series D Preferred Stock and in preference to any payment or distribution to any holders of the Series B Preferred Stock or common stock, an amount per share equal to the Series C Stated Value plus the amount of any accrued and unpaid dividends. If, at any time while the Series C Preferred Stock is outstanding, the Company effects a reorganization, merger or consolidation of the Company, sale of substantially all of its assets, or other specified transaction (each, as defined in the Series C Certificate of Designation, a “Fundamental Transaction”), a holder of the Series C Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in full of the Series C Preferred Stock immediately prior to the Fundamental Transaction. Each share of Series C Preferred Stock is convertible at any time at the holder’s option into that number of fully paid and nonassessable shares of common stock determined by dividing the Series C Stated Value by the conversion price of $0.50 (subject to adjustment as set forth in the Series C Certificate of Designation). No fractional shares will be issued upon the conversion of the Series C Preferred Stock. Except as otherwise provided in the Series C Certificate of Designation or as otherwise required by law, the Series C Preferred Stock has no voting rights. Series D Convertible Preferred Stock The Series D Certificate of Designation provides, among other things, that holders of Series D Preferred Stock shall be entitled to receive, when and as declared by the Company’s Board of Directors and out of any assets at the time legally available therefor, cumulative dividends at the rate of ten percent ( 10% ) per share per annum of the stated value of the Series D Preferred Stock, which is $1,000 per share (the “Series D Stated Value”). Any dividends paid by the Company will first be paid to the holders of Series D Preferred Stock prior and in preference to any payment or distribution to holders of common stock. Dividends on the Series D Preferred Stock are cumulative, and will accrue and be compounded annually, whether or not declared and whether or not there are any profits, surplus, or other funds or assets of the Company legally available therefor. There are no sinking fund provisions applicable to the Series D Preferred Stock. The Series D Preferred Stock does not have redemption rights. Dividends, if declared by the Board, are payable to holders in arrears on December 31 of each year. Subject to the provisions of applicable Delaware law, the holder may elect to be paid in cash or in restricted shares of common stock at the rate of $0.50 per share. In the event of liquidation, dissolution, or winding up of the Company, the holders of Series D Preferred Stock will be entitled to receive, on a pari passu basis with the holders of the Series C Preferred Stock, and in preference to any payment or distribution to any holders of the Series B Preferred Stock, $0.001 par value per share, or common stock, an amount per share equal to the Series D Stated Value plus the amount of any accrued and unpaid dividends. If, at any time while the Series D Preferred Stock is outstanding, the Company effects any reorganization, merger or consolidation of the Company, sale of substantially all of its assets, or other specified transaction (each, as defined in the Series D Certificate of Designation, a “Fundamental Transaction”), a holder of the Series D Preferred Stock will have the right to receive any shares of the acquiring corporation or other consideration it would have been entitled to receive if it had been a holder of the number of shares of common stock then issuable upon conversion in full of the Series D Preferred Stock immediately prior to the Fundamental Transaction. Each share of Series D Preferred Stock is convertible at any time at the holder’s option into that number of fully paid and nonassessable shares of common stock determined by dividing the Series D Stated Value by the conversion price of $0.80 (subject to adjustment as set forth in the Series D Certificate of Designation). No fractional shares will be issued upon the conversion of the Series D Preferred Stock. Except as otherwise provided in the Series D Certificate of Designation or as otherwise required by law, the Series D Preferred Stock has no voting rights. Convertible Notes and Accrued Interest The outstanding balance of convertible notes, including accrued interest, were as follows: May 31, 2023 May 31, 2022 (in thousands) April 2, 2021 Note April 23, 2021 Note Placement Agent Notes Total April 2, 2021 Note April 23, 2021 Note Total Convertible notes payable outstanding principal $ 6,081 $ 29,369 $ 1,000 $ 36,450 $ 9,819 $ 28,500 $ 38,319 Less: Unamortized debt discount and issuance costs (211) (822) (286) (1,319) (512) (1,566) (2,078) Convertible notes payable, net 5,870 28,547 714 35,131 9,307 26,934 36,241 Accrued interest on convertible notes 3,804 6,789 5 10,598 2,599 3,375 5,974 Outstanding convertible notes payable, net and accrued interest $ 9,674 $ 35,336 $ 719 $ 45,729 $ 11,906 $ 30,309 $ 42,215 Changes in the outstanding balance of convertible notes, including accrued interest, were as follows: (in thousands) April 2, 2021 Note April 23, 2021 Note Placement Agent Notes Total Outstanding balance at May 31, 2022 $ 11,906 $ 30,309 $ — $ 42,215 Consideration received 696 696 Amortization of issuance discount and costs 564 1,613 18 2,195 Interest expense 1,205 3,414 5 4,624 Fair market value of shares exchanged for repayment (5,312) — — (5,312) Difference between market value of 1,311 — — 1,311 Outstanding balance at May 31, 2023 $ 9,674 $ 35,336 $ 719 $ 45,729 Convertible Note – April 2, 2021 Note On April 2, 2021, the Company entered into a securities purchase agreement pursuant to which the Company issued a secured convertible promissory note with a two-year term in the initial principal amount of $28.5 million (the “April 2, 2021 Note”). The maturity date has been extended an additional two years to April 2025. See April 2, 2021 and April 23, 2021 Note Extensions below. The Company received consideration of $25.0 million, reflecting an original issue discount of $3.4 million and issuance costs of $0.1 million. Interest accrues at an annual rate of 10% on the outstanding balance, with the rate increasing to the lesser of 22% per annum or the maximum rate permitted by applicable law upon occurrence of an event of default. In addition, upon any event of default, the investor may accelerate the outstanding balance payable under the April 2, 2021 Note; upon such acceleration, the outstanding balance will increase automatically by 15% , 10%, or 5% , depending on the nature of the event of default. The events of default are listed in Section 4 of the April 2, 2021 Note filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 8, 2021, and listed as Exhibit 4.17 in Item 15 to this report. The April 2, 2021 Note is secured by all the assets of the Company, excluding the Company’s intellectual property. Pursuant to the terms of the securities purchase agreement and the April 2, 2021 Note, the Company must obtain the investor’s consent before assuming additional debt with aggregate net proceeds to the Company of less than $50.0 million. In the event of any such approval, the outstanding principal balance of the April 2, 2021 Note will increase automatically by 5% upon the issuance of such additional debt. The investor may convert all or any part of the outstanding balance of the April 2, 2021 Note into shares of common stock at an initial conversion price of $10.00 per share upon five trading days’ notice, subject to certain adjustments and volume and ownership limitations. In addition to standard anti-dilution adjustments, the conversion price of the April 2, 2021 Note is subject to full-ratchet anti-dilution protection, pursuant to which the conversion price will be automatically reduced to equal the effective price per share in any new offering by the Company of equity securities that have registration rights, are registered, or become registered under the Securities Act of 1933, as amended (the “Securities Act”). The April 2, 2021 Note provides for liquidated damages upon failure to deliver common stock within specified timeframes and requires the Company to maintain a share reservation of 6.0 million shares of common stock. The investor may redeem any portion of the note, at any time beginning six months after the issue date upon three trading days’ notice, subject to a maximum monthly redemption amount of $3.5 million. The April 2, 2021 Note requires the Company to satisfy its redemption obligations in cash within three trading days of the Company’s receipt of such notice. The Company may prepay the outstanding balance of the note, in part or in full, plus a 15% premium, at any time upon 15 trading days’ notice. In addition, beginning in May 2021 and for each of the following five months , the Company was obligated through November 2021, at the discretion of the noteholder, to reduce the outstanding balance of the April 2, 2021 Note by $7.5 million per month. Payments under the April 23, 2021 Note, described below, could be applied toward the payment of each monthly debt reduction amount. These payments are not subject to the 15% prepayment premium, which would otherwise be triggered if the Company were to make payments against such notes exceeding the allowed maximum monthly redemption amount. The conversion feature of the April 2, 2021 Note was analyzed under ASC 815, Derivatives and Hedging During the fiscal year ended May 31, 2023, in satisfaction of redemptions, the Company and the April 2, 2021 Noteholder entered into eight exchange agreements, pursuant to which the April 2, 2021 Note was partitioned into new notes (the “Partitioned Notes”) with an aggregate principal amount of $4.0 million, which was exchanged concurrently with the issuance of an aggregate amount of approximately 17.3 million shares of common stock. The outstanding balance of the April 2, 2021 Note was reduced by the Partitioned Notes to a principal amount of $6.1 million. The Company accounted for the Partitioned Notes and exchange settlement as an induced conversion, and, accordingly, in the fiscal years ended May 31, 2023 and 2022, the Company recorded a non-cash loss on convertible debt induced conversion of $5.3 million and $18.9 million, respectively. Convertible Note – April 23, 2021 Note On April 23, 2021, the Company entered into securities purchase agreements pursuant to which the Company issued a secured convertible promissory note with a two-year term to an institutional accredited investor affiliated with the holder of the April 2, 2021 Note in the initial principal amount of $28.5 million (the “April 23, 2021 Note”). The maturity date has been extended another two years to April 2025. See April 2, 2021 and April 23, 2021 Note Extensions below. The Company received consideration of $25.0 million, reflecting an original issue discount of $3.4 million and issuance costs of $0.1 million. The April 23, 2021 Note is secured by all the assets of the Company, excluding the Company’s intellectual property. Interest accrues at an annual rate of 10% on the outstanding balance of the April 23, 2021 Note, with the rate increasing to the lesser of 22% per annum or the maximum rate permitted by applicable law upon the occurrence of an event of default. In addition, upon any event of default, the investor may accelerate the outstanding balance payable under the April 23, 2021 Note; upon such acceleration, the outstanding balance will increase automatically by 15% , 10%, or 5% , depending on the nature of the event of default. The events of default are listed in Section 4 of the April 23, 2021 Note filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on April 29, 2021, and listed as Exhibit 4.18 in Item 15 to this report. The investor may convert all or any part of the outstanding balance into shares of common stock at an initial conversion price of $10.00 per share upon five trading days’ notice, subject to certain adjustments and volume and ownership limitations specified in the April 23, 2021 Note. In addition to standard anti-dilution adjustments, the conversion price of the April 23, 2021 Note is subject to full-ratchet anti-dilution protection, pursuant to which the conversion price will be automatically reduced to equal the effective price per share in any new offering by the Company of equity securities that have registration rights, are registered, or become registered under the Securities Act. The April 23, 2021 Note provides for liquidated damages upon failure to deliver common stock within specified timeframes and requires the Company to maintain a share reservation of 6.0 million shares of common stock. The investor may redeem any portion of the April 23, 2021 Note, at any time beginning six months after the issue date, upon three three Pursuant to the terms of the securities purchase agreement and the April 23, 2021 Note, the Company must obtain the investor’s consent before assuming additional debt with aggregate net proceeds to the Company of less than $75.0 million. In the event of any such approval, the outstanding principal balance of the April 23, 2021 Note will increase automatically by 5% upon the issuance of such additional debt. The conversion feature in the April 23, 2021 Note was analyzed under ASC 815, Derivatives and Hedging does not require bifurcation from the host instrument. The Company determined there was no beneficial conversion feature since the effective conversion rate was greater than the market value of the Company’s common stock upon issuance. Certain default put provisions were not considered to be clearly and closely related to the host instrument, but the Company concluded that the value of these default put provisions was de minimis. The Company evaluates the value of the default put provisions each reporting period to determine if the value becomes material to the financial statements. The holders of the April 2 and April 23 Notes have waived provisions in the notes that would have resulted in the imposition of a default interest rate, a downward adjustment in the conversion price, or any other default, breach, or imposition of a penalty. The related transactions consisted of the issuance of warrants to purchase 45 million shares of common stock with registration rights to the Indemnitors pursuant to the Backstop Agreement, and the grant of a security interest in the Company’s intellectual property to Indemnitors that were parties to the Backstop Agreement. The noteholders also waived similar registration rights in connection with the issuance of an additional note, and shares of common stock and warrants issued through a placement agent. April 2, 2021 Note and April 23, 2021 Note Extensions On April 10, 2023 the Company and the April 2, 2021 and April 23, 2021 noteholders entered into an amendment for each note that extended the maturity date an additional two years for each note. In exchange, the Company agreed to pay the noteholders an extension fee equal to two and one-half percent ( 2.5% ) of the outstanding balance of each note as of April 10, 2023. As a result, the balances of the April 2, 2021 Note and April 23, 2021 increased by $0.3 million and $0.9 million, respectively. The Company accounted for the note extensions as an increase to the discount on the convertible notes payable and will amortize the note extension fee over the term of the notes. Placement Agent Notes On April 28, 2023 and May 5, 2023, the Company entered into a securities purchase agreement pursuant to which the Company issued promissory notes bearing interest at a rate of 6% and with an 18-month term to accredited investors in the aggregate principal amount of $1.0 million through a placement agent (“Placement Agent Notes”). The Placement Agent Notes were secured by the net cash recovery, if any, by the Company in its dispute with Amarex and provided the investors with a right to convert the unpaid principal and accrued but unpaid interest into shares of common stock upon the occurrence of an event of default. The full balance matures in the fiscal year ending May 31, 2025. The Company also issued warrants to purchase 1.0 million shares of common stock with a three-year term and an exercise price of $0.50 as part of the sale. The net proceeds of $0.9 million reflect issuance costs of approximately $0.1 million. The Company also issued warrants to purchase 0.3 million shares of common stock to the placement agent with a ten-year term and an exercise price that will be based on the intraday volume weighted average price of the Company’s common stock on the date of the final closing of the offering, which the Company accounted for as additional issuances costs. See Note 13, Subsequent Events. The Company allocated the proceeds between the liability-classified Placement Agent Notes and the equity-classified warrants based on their relative fair values. |
Equity Awards and Warrants
Equity Awards and Warrants | 12 Months Ended |
May 31, 2023 | |
Equity Awards and Warrants | |
Equity Awards and Warrants | Note 7. Equity Awards and Warrants Approval of increase in authorized common stock On August 31, 2022, at a special stockholders’ meeting, the Company’s stockholders approved a proposal to increase the total number of authorized shares of common stock from 1.0 billion shares to 1.35 billion shares. Liability classified warrants From June 24, 2022 through August 31, 2022, the Company had insufficient authorized common stock to reserve for the shares underlying the Surety Backstop warrants and warrants issued to a placement agent in connection with the June 2022 offering (refer to Private Placement of Warrants under Surety Bond Backstop Agreement and Private Placement of Common Stock and Warrants through Placement Agent sections below). After approval by the Company’s stockholders of an increase to the Company’s authorized common stock, on August 31, 2022, sufficient shares were authorized to cover the shares underlying the warrants. Given that the Company did not have a sufficient number of authorized shares for the instruments at the time they were issued, the Company accounted for such warrants issued from June 24, 2022 through August 2022 as liability classified warrants consistent with ASC 815, Derivatives and Hedging. On December 1, 2022, the Company entered into the second amendment of the Surety Bond Backstop Agreement which included the issuance of a warrant covering up to 7.5 million shares of common stock with an exercise price of $0.10 per share, with the ultimate number of shares to be covered by the second warrant to be calculated based on a formula relating to how quickly the Company relieved the balance of cash collateral pledged by the Indemnitors (refer to Private Placement of Warrants under Surety Bond Backstop Agreement section below). On February 28, 2023, the warrant was determined to cover 7.5 million shares of common stock. As the settlement amount of shares of common stock underlying the warrant was variable, the Company accounted for such warrant as a liability classified warrant consistent with ASC 815, Derivatives and Hedging , until the number of shares underlying the warrant was determined, at which point the warrant became equity classified. During April and May 2023, the Company sold Placement Agent Notes through a placement agent. See Note 6, Convertible Instruments and Accrued Interest – Placement Agent Notes . The Company agreed to issue warrants to the placement agent as part of the issuance costs with an exercise price that was not determined until the final closing date. As the exercise price determination was contingent on a future financing closing, the Company accounted for the warrants as a liability classified warrant as of May 31, 2023. The value of the warrants at May 31, 2023 is recorded as a derivative liability on the balance sheet, and the change of the fair value of the warrants is recorded as a loss on derivatives. In accordance with the prescribed accounting guidance, the Company measured fair value of liability classified warrants using fair value hierarchy included in Note 2, Summary of Significant Accounting Policies – Fair Value of Financial Instruments . As of May 31, 2023, in accordance with ASC 815, Derivatives and Hedging, the Company reclassified warrants to equity when the warrants no longer qualified as liabilities. The Company recorded a loss on derivatives of approximately $8.8 million in the fiscal year ended May 31, 2023, due to change in fair market value of the liability classified warrants. The table below presents a reconciliation of the beginning and ending balances for liabilities measured at fair value as of May 31, 2022, and during the fiscal year ended May 31, 2023 : (in thousands) Liability Classified Warrants Balance at May 31, 2022 $ — Classified as liability 16,664 Reclassified as equity (25,335) Loss on derivative due to change in fair market value 8,750 Balance at May 31, 2023 $ 79 The Company used a Black-Scholes valuation model to estimate the value of the liability classified warrants using assumptions presented in the table below. The Black-Scholes valuation model was used because management believes it reflects all the assumptions that market participants would likely consider in negotiating the transfer of the warrant. The Company’s derivative liability is classified within Level 3. Black-Scholes inputs for warrants that have been reclassified as equity as of May 31, 2023: Initial Fair Market Value at Issuance Fair Market Value at Equity Classification Backstop Backstop Placement Backstop Backstop Backstop Placement Backstop Warrant #1 Warrant #2 Agent Warrants Warrant #3 Warrant #1 Warrant #2 Agent Warrants Warrant #3 Fair value of underlying stock $ 0.44 $ 0.42 $ 0.44 $ 0.35 $ 0.52 $ 0.52 $ 0.52 $ 0.32 Risk-free rate 3.17% 3.06% 3.13% 3.68% 3.34% 3.31% 3.16% 4.18% Expected term (in years) 4.65 5.00 10.00 5.00 4.46 4.88 9.82 4.76 Stock price volatility 110.20% 109.49% 95.99% 124.36% 117.29% 113.59% 95.87% 126.67% Expected dividend yield 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% Black-Scholes inputs for warrants that remain liability classified as of May 31, 2023: Initial Fair Market Value at Issuance Fair Market Value at May 31, 2023 Placement Agent Placement Agent Placement Agent Warrants Closing #1 Warrants Closing #2 Warrants Fair value of underlying stock $ 0.29 $ 0.27 $ 0.26 Risk-free rate 3.44% 3.44% 3.64% Expected term (in years) 10.00 10.00 10.00 Stock price volatility 98.22% 97.90% 97.90% Expected dividend yield 0.00% 0.00% 0.00% Equity Incentive Plan As of May 31, 2023, the Company had one active equity incentive plan, the CytoDyn Inc. Amended and Restated 2012 Equity Incentive Plan (the “2012 Plan” or “Incentive Plan”). The 2012 Plan contains an “evergreen provision” whereby the total number of shares available to be issued automatically increases annually on the first day of each fiscal year in an amount equal to 1.0% of the total outstanding shares on the last day of the prior fiscal year, unless the Board determines otherwise before the fiscal year end. As of May 31, 2023, the Board determined to waive the “evergreen provision”. As of May 31, 2023, the 2012 Plan covered a total of 56.3 million shares of common stock. Stock options Stock option activity is presented in the table below: Weighted average Weighted remaining Aggregate Number of average contractual intrinsic (in thousands, except per share data and years) shares exercise price life in years value Options outstanding at May 31, 2021 17,839 $ 1.58 7.93 $ 15,390 Granted 11,985 $ 1.38 Exercised (510) $ 0.79 301 Forfeited, expired, and cancelled (11,857) $ 1.51 Options outstanding at May 31, 2022 17,457 $ 1.53 7.79 $ — Granted 12,417 $ 0.41 Exercised — $ — Forfeited, expired, and cancelled (10,051) $ 1.16 Options outstanding at May 31, 2023 19,823 $ 0.99 7.87 $ — Options outstanding and exercisable at May 31, 2023 11,932 $ 1.21 7.02 $ — The fair value of the equity awards granted is estimated using the Black-Scholes option-pricing model based on the closing stock prices at the grant date and the assumptions specific to the underlying award. Expected volatility assumptions are based on the historical volatility of the Company’s common stock. The expected term assumption is based on the contractual and vesting term of the equity award. The risk-free interest rate is based on the U.S. Treasury yield curve with a maturity equal to the expected life assumed at the grant date. The following table summarizes the assumptions used in the determination of fair value: Fiscal years ended May 31, 2023 2022 Expected Volatility 99.2 - 112.7 % 94.3 - 122.0 % Weighted-Average Volatility 107.06 % 104.89 % Expected Dividends 0 % 0 % Expected Term (In years) 5.0 - 6.1 1.5 - 6.0 Risk-Free Rate 3.83 % 1.67 % In the fiscal years ended May 31, 2023, and 2022, stock-based compensation expense related to equity instruments totaled $4.3 million and $6.2 million, respectively; stock-based compensation expense is presented in general and administrative expense in the Company’s consolidated statements of operations. The grant date fair value of options vested during the same periods was approximately $4.9 million and $3.9 million, respectively. As of May 31, 2023, there was approximately $3.0 million of unrecognized compensation expense related to share-based payments for unvested options, which is expected to be recognized over a weighted-average period of approximately 1.10 years. During the fiscal year ended May 31, 2023, the Company granted stock options covering a total of approximately 1.8 million shares of common stock to non-executive employees, with exercise prices ranging between $0.35 and $0.67 per share. These stock option awards vest over four years , with a ten-year term and grant date fair values ranging between $0.29 and $0.54 per share. As of May 31, 2023 and May 31, 2022 there were approximately 12.0 million and 9.9 million vested stock options and approximately 7.8 million and 7.5 million unvested stock options outstanding, respectively. RSUs and PSUs The 2012 Plan provides for equity instruments, such as RSUs and PSUs, which grant the right to receive a specified number of shares over a specified period of time. RSUs and PSUs are service-based awards that vest according to the terms of the grant. PSUs have performance-based payout conditions. The following table summarizes the Company’s RSU and PSU activity: Weighted average Number of Weighted-average remaining contractual (shares in thousands) RSUs and PSUs (1) grant date fair value life in years Unvested RSUs and PSUs at May 31, 2021 5,470 $ 2.96 1.01 RSUs and PSUs granted — RSUs and PSUs forfeited (4,356) 2.94 RSUs and PSUs vested (814) 3.01 Unvested RSUs and PSUs at May 31, 2022 300 3.12 0.58 RSUs and PSUs granted 1,293 0.58 RSUs and PSUs forfeited (150) 3.12 RSUs and PSUs vested (150) 3.12 Unvested RSUs and PSUs at May 31, 2023 1,293 $ 0.58 0.81 (1) The number of PSUs disclosed in this table are at the target level of 100% . In July 2022, the Company awarded approximately 0.6 million RSUs and an equal number of PSUs to Cyrus Arman, then the Company’s President . The vesting of the PSUs was contingent on the achievement of specified performance-based conditions, with a potential payout percentage ranging from 0% to 100% . During the fiscal year ended May 31, 2023, the Company issued approximately 0.2 million shares of common stock to executives in connection with the time-based vesting of RSUs granted in June 2022. Based on the estimated level of achievement of the performance targets associated with the PSUs as of May 31, 2023, unrecognized compensation expense related to the unvested portion of the Company’s RSUs and PSUs totaled $0.4 million, which is expected to be recognized over a weighted-average period of 0.81 years. See Note 13, Subsequent Events. Issuance of shares to former and current executives and consultants During the fiscal year ended May 31, 2022, the employment of our CEO and General Counsel was terminated. Under the terms of their respective employment agreements, the Company was obligated to pay severance equal to 18 months of salary to our former CEO and 12 months of salary to our former General Counsel. As permitted by the employment agreements, in March 2022, the Board authorized the severance payments to our former CEO and the remaining severance payments to our former General Counsel to be made through the issuance of shares of common stock. The shares were issued outside of the 2012 Plan. During the fiscal year ended May 31, 2023, the Company issued to our former General Counsel a total of 79,391 shares of common stock to satisfy in full its obligation under the terms of the employment agreement. During the same period, consistent with the terms of our former CEO’s employment agreement, the Company also issued 380,704 shares of common stock as severance. The numbers of shares issued were based on the closing price of the common stock on the applicable date. As of December 2022, the Company ceased payment of severance to the Company’s former CEO. In order to preserve cash resources, in April 2022, the Board approved the issuance under the 2012 Plan, through November 2022, to then executive officers of shares of common stock with a value equal to 25 percent of salary in lieu of cash, net of payroll deductions and withholding taxes. During the fiscal years ended May 31, 2023 and 2022, a total of 522,382 and 317,441 shares of common stock were issued pursuant to this cash preservation program, respectively. The numbers of shares issued were based on the closing price of the common stock on each payroll date. In March 2022, the Board approved the issuance under the 2012 Plan of shares of common stock to consultants as payment for services provided. During the fiscal years ended May 31, 2023 and 2022, a total of 1,617,760 and 128,001 shares of common stock, respectively, were issued pursuant to the respective award agreements with the consultants. Issuance of warrants under Surety Bond Backstop Agreement On February 14, 2022, the Company entered into a Surety Bond Backstop Agreement (as amended, the “Backstop Agreement”) with an accredited investor, Dr. David Welch, in his individual capacity and as trustee of a revocable trust, as well as certain other related parties (collectively, the “Indemnitors”). Pursuant to the original terms of the Backstop Agreement, the Indemnitors agreed to assist the Company in obtaining a surety bond (the “Surety Bond”) for posting in connection with the Company’s ongoing litigation with Amarex by, among other things, agreeing to indemnify the issuer of the Surety Bond (the “Surety”) with respect to the Company’s obligations under the Surety Bond through August 13, 2022. As consideration for the Indemnitors’ agreement to indemnify the Surety, the Company agreed (i) to issue to 4-Good Ventures LLC, an affiliate of the Indemnitors (“4-Good”), a warrant for the purchase of 15.0 million shares of common stock as a backstop fee (the “Initial Warrant”), (ii) to issue to 4-Good a warrant for the purchase of an additional 15.0 million shares, to be exercisable only if the Indemnitors were required to make any payment to the Surety (the “Make-Whole Warrant” and, together with the Initial Warrant, the “4-Good Warrants”), and (iii) if the Indemnitors were required to make a payment to the Surety, (A) within 90 days of such payment, to reimburse the Indemnitors for any amount paid to the Surety and (B) to pay to the Indemnitors an indemnification fee in an amount equal to 1.5 times the amount paid by the Indemnitors to the Surety. The payment obligations of the Company to the Indemnitors bore interest at 10% per annum and were secured by substantially all of the patents held by the Company. The Company recognized a finance charge of approximately $6.6 million related to the warrant issuance for the fiscal year ended May 31, 2022. Pursuant to amendments to the Backstop Agreement executed in July and December of 2022, among other matters: (i) each of the 4-Good Warrants has a five-year term from the date of issuance and a reduced exercise price of $0.10 per share; (ii) the Make-Whole Warrant became fully exercisable in July 2022; (iii) the Indemnitors were issued, in December 2022, a fully exercisable warrant to purchase 7.5 million shares of common stock at an exercise price of $0.10 per share; (iv) the Indemnitors were issued a second warrant in December 2022 covering up to 7.5 million shares of common stock with an exercise price of $0.10 per share, with the ultimate number of shares to be covered by the second warrant to be calculated on or before February 14, 2023, based on a formula relating to how quickly the Company relieved the balance of cash collateral pledged by the Indemnitors; and (v) the obligation of the Indemnitors to indemnify the Surety was extended to January 31, 2023; provided that the Company would relieve the Indemnitors of a minimum of $1.5 million of cash collateral pledged by the Indemnitors in support of the Surety Bond by January 5, 2023, with the balance of the cash collateral to be relieved by January 31, 2023. The Indemnitor extended the amount and date to be relieved of the cash collateral to $5.1 million by February 28, 2023, and $1.4 million by March 10, 2023. As of February 28, 2023, the second warrant was determined to cover the full 7.5 million shares of common stock. See Liability Classified Warrants above for the accounting treatment of the July 2022 amendment to the Backstop Agreement and the final warrant for 7.5 million shares. The Company recorded a finance charge of approximately $4.9 million related to the warrant issuances for the fiscal year ended May 31, 2023. The Company recorded $6.5 million of restricted cash in connection with cash collateral for the Surety Bond as of May 31, 2023. Except as described above, the terms of the additional warrants issued in December 2022 are similar to the warrants issued under the original Backstop Agreement, filed as Exhibit 4.1 to the Company’s Current Report on Form 8-K filed on February 17, 2022. The shares covered by the warrants are entitled to registration rights. Following the issuance of the additional warrants, Dr. Welch was deemed to beneficially own in excess of five percent of the Company’s outstanding shares of common stock. Private placement of common stock and warrants through placement agent In April 2022, the Company initiated a private placement of common stock and warrants, completed in June 2022, to accredited investors through a placement agent. Between April and June 2022, the Company sold a total of approximately 85.4 million shares of common stock for a total of approximately $18.9 million of proceeds, net of issuance costs. Of these, approximately $7.7 million of proceeds, net of issuance costs, relating to approximately 34.6 million shares were remitted to the Company by May 31, 2022. Each unit sold included a fixed combination of one share of common stock and three-quarters of one warrant to purchase one share of common stock for a purchase price of $0.255 per unit. The Company issued approximately 64.0 million of immediately exercisable warrants to investors, with each such warrant having a five-year term and an exercise price of 120% of the final unit price, or $0.306 per share. The Company paid the placement agent a total cash fee of approximately $2.8 million, equal to 13% of the gross proceeds of the offering, as well as a one-time fee for expenses of $50,000 , and issued a total of approximately 19.4 million warrants with an exercise price of $0.255 per share and a ten-year term, representing 13% of the total number of shares, including shares subject to warrants sold in the offering, to the placement agent and its designees. The issuance of the warrants to the placement agent was subject to the approval by the Company’s stockholders of an increase in authorized shares of common stock, which was approved on August 31, 2022. In January 2023, the Company commenced a private placement of units consisting of common stock and warrants, completed March 3, 2023, to accredited investors through a placement agent. Each unit sold included a fixed combination of one share of common stock and one warrant to purchase one share of common stock. Each unit had a purchase price of $0.23 , which was equal to 90% of the closing price of the common stock on January 12, 2023. During January, February, and March 2023, the Company sold a total of approximately 71.1 million units for a total of approximately $14.4 million of proceeds, net of issuance costs. The Company classified the securities issued in the private placement through placement agent as equity. As part of the offering, the Company issued approximately 71.1 million warrants to investors, with each such warrant having a five-year term and an exercise price of $0.50 per share. The warrants were immediately exercisable. In connection with the above, the Company paid the placement agent a total cash fee of approximately $2.0 million, equal to 12% of the gross proceeds of the offering, as well as a one-time fee for expenses of $25.0 thousand, and issued a total of approximately 10.7 million warrants with an exercise price of $0.23 per share and a ten-year term, representing 15% of the total number of common stock sold in the offering, to the placement agent and its designees. In April 2023, The Company sold a total of approximately 0.5 million units for a total of approximately $0.1 million proceeds, net of offering costs, as part of a follow-on offering with the same terms as the units sold in January through March. As part of the offering, the Company issued approximately 0.5 million warrants to investors, with each such warrant having a five-year term and an exercise price of $0.50 per share. The warrants were immediately exercisable. In connection with the above, the Company paid the placement agent a total cash fee of approximately $13.8 thousand, equal to 12% of the gross proceeds of the offering, and issued a total of approximately 75.0 thousand warrants with an exercise price of $0.23 per share and a ten-year term, representing 15% of the total number of common stock sold in the offering, to the placement agent and its designees. Based on contractual payment terms, certain of the private placement transactions above are considered convertible debt instruments prior to final settlement, and the issuance costs associated with such issuances are capitalized and subsequently amortized through the statement of operations as interest expense. During the fiscal year ended May 31, 2023, the Company recognized $9.7 million in interest expense associated with issuance costs for these private placements. Private placement of shares of common stock and warrants On February 13, 2023, Cyrus Arman, who was then President of the Company, entered into a private transaction with the Company in which he purchased 0.4 million units consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $0.50 . The terms and conditions of the investment totaling $0.1 million made by Mr. Arman were identical to those offered to other investors in the concurrent offering being conducted through a placement agent as described above. The Company classified the securities issued in the private placement as equity. See Note 11, Related Party Transactions , for additional information. Down round provision issuance and modification to previous private offerings and private warrant exchanges During the fiscal year ended May 31, 2023, common stock and warrants previously issued between February and April 2022 to accredited investors directly by the Company in a private placement became subject to a down round provision under the original purchase agreements requiring the Company to reduce the purchase price of common stock from the original price of $0.40 to $0.255 per share, to increase the percentage of the warrant coverage from 50% to 75% based on the revised amount of total shares issued, and to reduce the exercise price of the warrants from the original price of $0.40 to $0.306 , the terms in the financing conducted by the Company during 2022 through the placement agent as described above. As a result, an approximate additional 4.6 million shares of common stock and 5.5 million warrants were issued. The incremental fair value of the warrants was measured using the Black-Scholes pricing model, resulting in an approximately $4.2 million charge to additional paid-in capital which was accounted for as a deemed dividend, and was included in the loss per share calculation for the year ended May 31, 2023 (refer to Note 8, Loss per Common Share ). During the fiscal year ended May 31, 2023, common stock previously issued in November 2022 to accredited investors directly by the Company in a private warrant exchange became subject to a down round provision under the original induced exercise agreements as a result of the transaction described below under Private Warrant Exchanges through Placement Agent , The required adjustments resulted in the issuance of approximately 0.5 million additional shares of common stock. The incremental fair value of the shares was measured using the share price on the date the down round provision was triggered, resulting in an approximately $0.1 million charge to additional paid-in capital which was accounted for as a deemed dividend, and was included in the loss per share calculation for the year ended May 31, 2023 (refer to Note 8, Loss per Common Share ). Warrants Warrant activity is presented in the table below: Weighted average Weighted remaining Aggregate Number of average contractual intrinsic (in thousands, except for share data and years) shares exercise price life in years value Warrants outstanding at May 31, 2021 42,934 $ 0.68 2.89 $ 52,671 Granted 38,220 $ 0.52 Exercised (5,167) $ 0.70 5,514 Forfeited, expired, and cancelled (2,740) $ 0.73 Warrants outstanding at May 31, 2022 73,248 $ 0.59 3.18 $ 352 Granted 201,771 $ 0.33 Exercised (6,207) $ 0.63 758 Forfeited, expired, and cancelled (8,902) $ 0.75 Warrants outstanding at May 31, 2023 259,910 $ 0.37 4.57 $ 7,276 Warrants outstanding and exercisable at May 31, 2023 259,910 $ 0.37 4.57 $ 7,276 Private warrant exchanges During the fiscal year ended May 31, 2023, the Company entered into various separate privately negotiated warrant exchange agreements directly with certain accredited investors, pursuant to which the investors exercised warrants with an original exercise price of $1.00 per share in exchange for the issuance of approximately 9.7 million shares of common stock upon exercise of the warrants, including approximately 8.4 million shares issued as an inducement for the exercises. Gross and net aggregate proceeds from the private warrant exchanges were approximately $2.1 million. In connection with these transactions, the Company recognized approximately $2.1 million as issuance costs and $0.5 million as a deemed dividend, which was included in the loss per share calculation for the year ended May 31, 2023 (refer to Note 8, Loss per Common Share ). Private warrant exchanges through placement agent During the fiscal year ended May 31, 2023, the Company entered into various separate privately negotiated warrant exchange agreements with certain accredited investors through a placement agent, pursuant to which the investors exercised warrants with an original exercise price of $0.50 – $0.75 per share in exchange for the issuance of approximately 3.4 million shares of common stock upon exercise of the warrants, including approximately 0.6 million shares issued as an inducement for the exercises. Gross and net aggregate proceeds from the private warrant exchanges were approximately $0.7 million. In connection with these transactions, the Company recognized approximately $0.1 million as issuance costs. Warrant expiration extension During the fiscal year ended May 31, 2023, the Company extended the expiration dates of approximately 3.8 million warrants to January 31, 2023. The previous expiration dates for the warrants ranged from September 2022 to December 2022. The modification to these equity instruments resulted in an approximate $0.6 million deemed dividend recorded in equity and was included in the loss per share calculation for the year ended May 31, 2023 (refer to Note 8, Loss per Common Share ). Warrant exercises During the fiscal year ended May 31, 2023, the Company issued approximately 1.8 million shares of common stock in connection with the exercise of an equal number of warrants. The stated exercise prices ranged from $0.10 to $0.75 per share, which resulted in aggregate gross proceeds of approximately $0.4 million. Additionally, during the fiscal year ended May 31, 2023, the Company issued approximately 0.1 million shares of common stock in connection with the cashless exercise of approximately 0.3 million warrants with stated exercise prices ranging from $0.26 to $0.50 per share. |
Loss per Common Share
Loss per Common Share | 12 Months Ended |
May 31, 2023 | |
Loss per Common Share | |
Loss per Common Share | Note 8. Loss per Common Share Basic loss per share is computed by dividing the net loss adjusted for preferred stock dividends by the weighted average number of common shares outstanding during the period. Diluted loss per share would include the weighted average common shares outstanding and potentially dilutive common stock equivalents. Because of the net losses for all periods presented, the basic and diluted weighted average shares outstanding are the same, since including the additional shares would have an anti-dilutive effect on the loss per share. The reconciliation of the numerators and denominators of the basic and diluted net loss per share computations are as follows: Fiscal years ended May 31, (in thousands, except per share amounts) 2023 2022 Net loss $ (79,824) $ (210,820) Less: Deemed dividends (5,417) — Less: Accrued preferred stock dividends (1,495) (1,628) Net loss applicable to common stockholders $ (86,736) $ (212,448) Basic and diluted: Weighted average common shares outstanding 836,528 676,900 Loss per share $ (0.10) $ (0.31) Refer to Note 13, Subsequent Events for additional information regarding the shares issued subsequent to May 31, 2023. The table below shows the numbers of shares of common stock issuable upon the exercise, vesting, or conversion of outstanding options, warrants, unvested restricted stock including those subject to performance conditions, convertible preferred stock (including undeclared dividends), and convertible notes that were not included in the computation of basic and diluted weighted average number of shares of common stock outstanding for the periods presented: Fiscal years ended May 31, (in thousands) 2023 2022 Stock options, warrants, and unvested restricted stock units 281,023 106,002 Convertible notes 12,000 12,000 Convertible preferred stock 34,071 32,535 |
Income Taxes
Income Taxes | 12 Months Ended |
May 31, 2023 | |
Income Taxes | |
Income Taxes | Note 9. Income Taxes Deferred taxes are recorded for all existing temporary differences in the Company’s assets and liabilities for income tax and financial reporting purposes. As noted below, there was no net deferred tax benefit or expense for the periods ended May 31, 2023 and 2022. Reconciliation of the federal statutory income tax rate of 21% to the effective income tax rate is as follows: Fiscal years ended May 31, 2023 2022 Income tax provision at statutory rate: 21.0 % 21.0 % Derivative loss (2.3) — Non-deductible debt issuance costs (2.6) — Non-deductible interest on convertible notes (1.2) (0.5) Inducement interest expense — (0.7) Other 0.8 1.1 Credit carry-forward released — (0.2) Non-deductible loss on induced conversion (1.4) (3.7) Non-deductible debt discount amortization (0.6) (0.3) IRC section 162(m) limitation — (0.1) Non-deductible expense on induced conversion of debt — (0.3) Valuation allowance (13.7) (16.3) Effective income tax rate 0.0 % 0.0 % Net deferred tax assets and liabilities, non-current, are composed of the following: As of May 31, (in thousands) 2023 2022 Net operating loss $ 96,338 $ 106,965 Credits 2,063 2,063 ASC 718 expense on non-qualified stock options 6,400 6,057 Charitable contribution carry forward — 14 Accrued vacation and payroll 21 68 Right-of-use asset (84) (112) Lease liability 89 117 Inventory charges 6,173 2,138 Inventory write-off 13,739 — Issued warrants 2,317 — Section 174 R&D costs 858 — Accrued legal settlements 13 — Accrued legal fees 3 — Accrued expenses 36 89 Amortization 609 238 Fixed assets 4 1 Valuation allowance (128,579) (117,638) Deferred tax asset, non-current $ — $ — Non-current asset 128,579 117,638 Valuation allowance (128,579) (117,638) Deferred tax asset (liability) non-current $ — $ — The income tax benefit for the period presented is offset by a valuation allowance established against deferred tax assets arising from operating losses and other temporary differences, the realization of which is not considered more likely than not. In future periods, tax benefits and related tax deferred assets will be recognized when management considers realization of such amounts to be more likely than not. As of May 31, 2023 and 2022, the Company had available net operating loss carry forwards of approximately $458.8 million and $509.4 million, respectively, which began expiring in 2023. The Company’s income tax returns remain subject to examination by all tax jurisdictions for tax years ended May 31, 2020 through 2022. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
May 31, 2023 | |
Commitments and Contingencies. | |
Commitments and Contingencies | Note 10. Commitments and Contingencies Commitments with Samsung BioLogics Co., Ltd. (“Samsung”) In April 2019, the Company entered into an agreement with Samsung, pursuant to which Samsung will perform technology transfer, process validation, manufacturing, pre-approval inspection, and supply services for the commercial supply of leronlimab bulk drug substance effective through calendar year 2027. In 2020, the Company entered into an additional agreement, pursuant to which Samsung will perform technology transfer, process validation, vial filling, and storage services for clinical, pre-approval inspection, and commercial supply of leronlimab drug product. Samsung is obligated to procure necessary raw materials for the Company and manufacture a specified minimum number of batches, and the Company is required to provide a rolling three-year forecast of future estimated manufacturing requirements to Samsung that are binding. On January 6, 2022, Samsung provided written notice to the Company alleging that the Company had materially breached the parties’ Master Services and Project Specific Agreements for failure to pay $13.5 million due on December 31, 2021. An additional $22.8 million became due under the agreements on January 31, 2022. Under the agreements, Samsung may be entitled to terminate its services if the parties cannot agree on the past-due balance. Management continues to be in ongoing discussions with Samsung regarding potential approaches to resolve these issues, including proposals by both parties of a revised schedule of payments over an extended period, proposals by the Company of satisfaction of a portion of the Company’s payment obligations in equity securities, through future financing, and/or potential licensing opportunities of the Company, proposals to postpone the manufacturing of unfulfilled commitments until a future regulatory approval, and proposals offsetting the unfulfilled commitments with other future potential R&D drug development needs related to the longer-acting therapeutic the Company is currently studying. Samsung paused manufacturing all unfulfilled commitments not needed by the Company starting in January of 2022. Accordingly, the Company has not recorded any accruals associated with the unfulfilled commitments as of May 31, 2023. In the event negotiations are unsuccessful, the Company may have to accrue a liability related to the unfulfilled commitments. As of May 31, 2023, the Company had past due balances of approximately $33.7 million due to Samsung, which were included in accounts payable . As of May 31, 2023, the future commitments pursuant to these agreements are estimated as follows (in thousands): Fiscal Year Amount 2024 $ 156,388 2025 $ 76,400 2026 and thereafter — Total $ 232,788 Distribution and Licensing In December 2019, the Company entered into a Commercialization and License Agreement, and Supply Agreement (together the “License Agreements”) with Vyera Pharmaceuticals, LLC (“Vyera”) under which the Company granted Vyera an exclusive royalty-bearing license to commercialize pharmaceutical preparations containing leronlimab for treatment of HIV in the United States. The License Agreements gave Vyera the right to assign its rights and obligations under the License Agreements to an affiliate of Vyera. In October 2020, Vyera assigned the License Agreements to SevenScore Pharmaceuticals, which in turn, in December 2021, assigned them to Regnum Corp. Vyera, SevenScore and Regnum are each controlled by their parent Phoenixus AG. The License Agreements, as assigned, provide that, pursuant to the terms and subject to the conditions set forth therein, Regnum will, at its cost, use commercially reasonable efforts to commercialize leronlimab for treatment of HIV in the United States. The Company retained the right to license leronlimab for uses in the United States for purposes other than the treatment of HIV and for any purposes outside the United States. The License Agreements obligate Regnum to pay the Company up to $85.3 million upon the achievement of certain sales and regulatory milestones. Certain milestones are subject to reduction if not achieved within an agreed-upon timeframe. Regnum may also pay the Company additional potential milestone payments upon the regulatory approval of leronlimab for certain subsequent indications in the field. Whether a particular subsequent indication qualifies for an additional milestone payment will be determined in good faith by the parties at the time such an event occurs. In addition, during the Royalty Term, as defined in the License Agreements, but, in any event, a period of not less than 10 years following the first commercial sale under the License Agreements, Regnum is obligated to pay the Company a royalty equal to 50% of Regnum’s net sales from product sales. The royalty is subject to reduction during the Royalty Term after patent expiry and expiry of regulatory exclusivity. Following expiration of the Royalty Term, Regnum has non-exclusive rights to commercialize the product. Regnum has the right to terminate the License Agreements (i) upon written notice to the Company on or after December 19, 2021 and prior to the Company’s receipt of approval from the FDA of the BLA for the manufacture and sale of leronlimab for HIV, (ii) if Regnum fails to achieve certain aggregate Net Sales (as defined in the License Agreements) of leronlimab during the period beginning on the date of first commercial sale and ending on the date that is two years from the date of the first commercial sale, and (iii) with 180 days’ prior written notice, at Regnum’s convenience following the second anniversary of the first commercial sale of leronlimab. PRO 140 Acquisition and Licensing Arrangements We originally acquired leronlimab, as well as certain other related assets, including the existing inventory of PRO 140 bulk drug substance, intellectual property, and FDA regulatory filings, pursuant to an Asset Purchase Agreement, dated as of July 25, 2012, and effective October 16, 2012 (the “Progenics Purchase Agreement”), between CytoDyn and Progenics. Pursuant to the Progenics Purchase Agreement, we are required to pay Progenics a milestone payment and royalties as follows: (i) $5,000,000 at the time of the first U.S. new drug application approval by the FDA or other non-U.S. approval for the sale of leronlimab; and (ii) royalty payments of up to 5% on net sales during the period beginning on the date of the first commercial sale of leronlimab until the later of (a) the expiration of the last to expire patent included in the acquired assets, and (b) 10 years, in each case determined on a country-by-country basis. To the extent that such remaining milestone payment and royalties are not timely made, under the terms of the Progenics Purchase Agreement, Progenics has certain repurchase rights relating to the assets sold to us thereunder. Payments to Progenics are in addition to payments due under a Development and License Agreement, dated April 30, 1999 (the “PDL License”), between Protein Design Labs (now AbbVie Inc.) and Progenics, which was assigned to us in the Progenics Purchase Agreement, pursuant to which we have an exclusive worldwide license to develop, make, have made, import, use, sell, offer to sell, or have sold products that incorporate the humanized form of the leronlimab antibody developed under the agreement. Pursuant to the PDL License, we are required to pay AbbVie Inc. milestone payments and royalties as follows: (i) $500,000 upon filing a Biologic License Application with the FDA or non-U.S. equivalent regulatory body; (ii) $500,000 upon FDA approval or approval by another non-U.S. equivalent regulatory body; and (iii) royalties of up to 3.5% of net sales for the longer of 10 years and the date of expiration of the last to expire licensed patent. Additionally, the PDL License provides for an annual maintenance fee of $150,000 until royalties paid exceed that amount. To the extent that such remaining milestone payments and royalties are not timely made, under the terms of the PDL License, AbbVie Inc. has certain termination rights relating to our license of leronlimab thereunder. Effective July 29, 2015, we entered into a License Agreement (the “Lonza Agreement”) with Lonza Sales AG (“Lonza”) covering Lonza’s “system know-how” technology with respect to our use of proprietary cell lines to manufacture new leronlimab material. The Lonza Agreement provides for an annual license fee and future royalty payments, both of which varies based on whether Lonza, or we or our strategic partner manufactures leronlimab. We currently use two independent parties as contract manufacturers for leronlimab, but are currently in the process of reviewing this arrangement. Should the arrangement continue as-is, an annual license fee of £0.6 million (approximately $0.7 million given current exchange rate) would continue to apply, as well as a royalty, up to 2% of the net selling price upon commercialization of leronlimab, excluding value added taxes and similar amounts. Operating Leases We lease our principal office location in Vancouver, Washington (the “Vancouver Lease”). The Vancouver Lease expires on April 30, 2026. Consistent with the guidance in ASC 842, Leases, we have recorded this lease in our consolidated balance sheet as an operating lease. For the purpose of determining the right of use asset and associated lease liability, we determined that the renewal of the Vancouver lease was not reasonably probable. The lease does not include any restrictions or covenants requiring special treatment under ASC 842, Leases. Operating lease costs for the fiscal years ended May 31, 2023 and 2022 were approximately $0.2 million and $0.2 million, respectively. Operating lease right-of-use assets are included in other non-current assets and the current portion of operating lease liabilities are included in accrued liabilities and compensation on the consolidated balance sheets. The long-term operating lease liabilities are presented separately as operating leases on the consolidated balance sheets. The following table summarizes the operating lease balances . (in thousands) May 31, 2023 May 31, 2022 Assets Right-of-use asset $ 400 $ 536 Liabilities Current operating lease liability $ 139 $ 134 Non-current operating lease liability 283 422 Total operating lease liability $ 422 $ 556 The minimum (base rental) lease payments reconciled to the carrying value of the operating lease liabilities as of May 31, 2023 are expected to be as follows (in thousands): Fiscal Year Amount 2024 $ 182 2025 185 2026 169 Total operating lease payments 536 Less: imputed interest (114) Present value of operating lease liabilities $ 422 Supplemental information related to the operating leases was as follows: May 31, 2023 Weighted average remaining lease term 2.9 years Weighted average discount rate 10.0 % Legal Proceedings The Company is a party to various legal proceedings. The Company recognizes accruals for such proceedings to the extent a loss is determined to be both probable and reasonably estimable. The best estimate of a loss within a possible range is accrued; however, if no estimate in the range is more probable than another, then the minimum amount in the range is accrued. If it is determined that a material loss is not probable but reasonably possible and the loss or range of loss can be estimated, the possible loss is disclosed. It is not possible to determine the outcome of proceedings that have not been concluded, including the defense and other litigation-related costs and expenses that may be incurred by the Company, as the outcomes of legal proceedings are inherently uncertain, and the outcomes could differ significantly from recognized accruals. Therefore, it is possible that the ultimate outcome of any proceeding, if in excess of a recognized accrual, or if an accrual had not been made, could be material to the Company’s consolidated financial statements. Securities Class Action Lawsuit s On March 17, 2021, a stockholder filed a putative class-action lawsuit (the “March 17, 2021 lawsuit”) in the U.S. District Court for the Western District of Washington against the Company and certain former officers. The complaint generally alleges the defendants made false and misleading statements regarding the viability of leronlimab as a potential treatment for COVID-19. On April 9, 2021, a second stockholder filed a similar putative class action lawsuit in the same court, which the plaintiff voluntarily dismissed without prejudice on July 23, 2021. On August 9, 2021, the court appointed lead plaintiffs for the March 17, 2021 lawsuit. On December 21, 2021, lead plaintiffs filed an amended complaint, which is brought on behalf of an alleged class of those who purchased the Company’s common stock between March 27, 2020 and May 17, 2021. The amended complaint generally alleges that the defendants violated Sections 10(b) and/or 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by making purportedly false or misleading statements concerning, among other things, the safety and efficacy of leronlimab as a potential treatment for COVID-19, the Company’s CD10 and CD12 clinical trials, and its HIV BLA. The amended complaint also alleges that the individual defendants violated Section 20A of the Exchange Act by selling shares of the Company’s common stock purportedly while in possession of material nonpublic information. The amended complaint seeks, among other relief, a ruling that the case may proceed as a class action and unspecified damages and attorneys’ fees and costs. On February 25, 2022, the defendants filed a motion to dismiss the amended complaint. On June 24, 2022, lead plaintiffs filed a second amended complaint. The second amended complaint is brought on behalf of an alleged class of those who purchased the Company’s common stock between March 27, 2020 and March 30, 2022, makes similar allegations, names the same defendants, and asserts the same claims as the prior complaint, adds a claim for alleged violation of Section 10(b) of the Exchange Act and Rule 10b-5(a) and (c) promulgated thereunder, and seeks the same relief as the prior complaint. All defendants have filed motions to dismiss the second amended complaint in whole or in part. The Company and the individual defendants deny all allegations of wrongdoing in the complaint and intend to vigorously defend the matter. Since this case is in an early stage where the number of plaintiffs is not known, and the claims do not specify an amount of damages, the Company is unable to predict the ultimate outcome of the lawsuit and cannot reasonably estimate the potential loss or range of loss the Company may incur. 2021 Shareholder Derivative Lawsuits On June 4, 2021, a stockholder filed a purported derivative lawsuit against certain of the Company’s former officers and directors, and the Company as a nominal defendant, in the U.S. District Court for the Western District of Washington. Two additional shareholder derivative lawsuits were filed against the same defendants in the same court on June 25, 2021 and August 18, 2021, respectively. The court has consolidated these three lawsuits for all purposes (“Consolidated Derivative Suit”). On January 20, 2022, the plaintiffs filed a consolidated complaint. The consolidated complaint generally alleges that the director defendants breached their fiduciary duties by allowing the Company to make false and misleading statements regarding, among other things, the safety and efficacy of leronlimab as a potential treatment for COVID-19, the Company’s CD10 and CD12 clinical trials, and its HIV BLA, and by failing to maintain an adequate system of oversight and controls. The consolidated complaint also asserts claims against one or more individual defendants for waste of corporate assets, unjust enrichment, contribution for alleged violations of the federal securities laws, and for breach of fiduciary duty arising from alleged insider trading. The consolidated complaint seeks declaratory and equitable relief, an unspecified amount of damages, and attorneys’ fees and costs. The Company and the individual defendants deny all allegations of wrongdoing in the complaints and intend to vigorously defend the litigation. In light of the fact that the Consolidated Derivative Suit is in an early stage and the claims do not specify an amount of damages, the Company cannot predict the ultimate outcome of the Consolidated Derivative Suit and cannot reasonably estimate the potential loss or range of loss the Company may incur. Securities and Exchange Commission and Department of Justice Investigations The Company has received subpoenas from the United States Securities and Exchange Commission (“SEC”) and the United States Department of Justice (“DOJ”) requesting documents and information concerning, among other matters, leronlimab, the Company’s public statements regarding the use of leronlimab as a potential treatment for COVID-19, HIV, and triple-negative breast cancer, related communications with the FDA, investors, and others, litigation involving former employees, the Company’s retention of investor relations consultants, and trading in the Company’s securities. Certain former Company executives and directors have received subpoenas concerning similar issues and have been interviewed by the DOJ and SEC, including the Company’s former CEO, Nader Z. Pourhassan. On January 24, 2022, Mr. Pourhassan was terminated and removed from the Board of Directors and has had no role at the Company since. On December 20, 2022, the DOJ announced the unsealing of a criminal indictment charging both Mr. Pourhassan, and Kazem Kazempour, CEO of Amarex, a subsidiary of NSF International, Inc., and which had formerly served as the Company’s CRO. Mr. Pourhassan was charged with one count of conspiracy, four counts of securities fraud, three counts of wire fraud, and three counts of insider trading. Mr. Kazempour was charged with one count of conspiracy, three counts of securities fraud, two counts of wire fraud, and one count of making a false statement. That same day, the SEC announced charges against both Mr. Pourhassan and Mr. Kazempour for alleged violations of federal securities laws. The Company is committed to cooperating fully with the DOJ and SEC investigations, which are ongoing, and which the Company’s counsel frequently engages with them on. Further, the Company has made voluminous productions of information and made witnesses available for voluntary interviews. The Company will continue to comply with the requests of the SEC and DOJ. The Company cannot predict the ultimate outcome of the DOJ and SEC investigations or the case against Mr. Pourhassan, nor can it predict whether any other governmental authorities will initiate separate investigations or litigation. The investigations and any related legal and administrative proceedings could include a wide variety of outcomes, including the institution of administrative, civil injunctive, or criminal proceedings involving the Company and/or former executives and/or former directors in addition to Mr. Pourhassan, the imposition of fines and other penalties, remedies and/or sanctions, modifications to business practices and compliance programs, and/or referral to other governmental agencies for other appropriate actions. It is not possible to accurately predict at this time when matters relating to the investigations will be completed, the final outcome of the investigations, what additional actions, if any, may be taken by the DOJ or SEC or by other governmental agencies, or the effect that such actions may have on our business, prospects, operating results and financial condition, which could be material. The DOJ and SEC investigations, including any matters identified in the investigations and indictments, could also result in (1) third-party claims against the Company, which may include the assertion of claims for monetary damages, including but not limited to interest, fees, and expenses, (2) damage to the Company’s business or reputation, (3) loss of, or adverse effect on, cash flow, assets, results of operations, business, prospects, profits, or business value, including the possibility of certain of the Company’s existing contracts being cancelled, (4) adverse consequences on the Company’s ability to obtain or continue financing for current or future projects, and/or (5) claims by directors, officers, employees, affiliates, advisors, attorneys, agents, debt holders or other interest holders, or constituents of the Company or its subsidiaries, any of which could have a material adverse effect on the Company’s business, prospects, operating results, and financial condition. Further, to the extent that these investigations and any resulting third-party claims yield adverse results over time, such results could jeopardize the Company’s operations, exhaust its cash reserves, and could cause stockholders to lose their entire investment . Amarex Dispute On October 4, 2021, the Company filed a complaint for declaratory and injunctive relief and a motion for a preliminary injunction against NSF International, Inc. and its subsidiary Amarex, the Company’s former CRO. Over the past eight years, Amarex provided clinical trial management services to the Company and managed numerous clinical studies of the Company’s drug product candidate, leronlimab. On December 16, 2021, the U.S. District Court for the District of Maryland issued a preliminary injunction requiring Amarex to provide the Company with access to all of its materials in the possession of Amarex. The court also granted CytoDyn the right to conduct an audit of Amarex’s work for CytoDyn. That case has been administratively closed. The Company simultaneously filed a demand for arbitration with the American Arbitration Association. In response, Amarex filed a counterclaim alleging that CytoDyn has failed to pay certain invoices due under the contract between the parties. On July 10, 2023, the Company filed a Statement of Particulars and requested a final hearing date be set in the proceeding against Amarex. The Statement of Particulars alleges that Amarex failed to perform services to an acceptable professional standard and failed to perform certain services required by the parties’ agreements. Further, the Statement of Particulars alleges that Amarex billed the Company for services it did not perform. The Company contends that, due to Amarex’s failures, it has suffered avoidable delays in obtaining regulatory approval of leronlimab and has paid for services not performed, among other damages. As the formal arbitration process is still at an early stage, the Company cannot predict the ultimate outcome of the lawsuit and cannot reasonably estimate the potential loss or range of loss that the Company may incur. Following a formal scheduling request by the Company, the final arbitration hearing was recently ordered to commence on August 19, 2024, and the parties will now proceed into the discovery phase of the litigation. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
May 31, 2023 | |
Related Party Transactions | |
Related Party Transactions | Note 11. Related Party Transactions The Board’s Audit Committee and the Board of Directors review and approve all related party transactions. The terms and amounts described below are not necessarily indicative of the terms and amounts that could have been incurred had comparable transactions been entered into with independent parties. On February 13, 2023, Cyrus Arman, then the Company’s President, entered into a private placement with the Company in which he purchased approximately 0.4 million units consisting of one share of common stock and one warrant to purchase one share of common stock at an exercise price of $0.50 . The terms and conditions of the investment totaling $0.1 million made by Mr. Arman were identical to those offered to other investors in a concurrent offering being conducted through a placement agent. In 2021, the Company engaged the Center for Advanced Research & Education, LLC (“CARE”), owned by Dr. Christopher Recknor’s spouse, Julie Recknor, Ph.D., (and owned by Dr. Christopher Recknor, then the Company’s Chief Operating Officer, until March 11, 2021). CARE was one of several clinical locations for the Company’s NASH COVID-19 long-hauler clinical trials, and mild-to-moderate and severe-to-critical COVID-19 clinical trials. Dr. Julie Recknor serves as the Site Director of CARE and manages its day-to-day operations. The Company entered into a Clinical Trial Agreement (“CTA”) with CARE for each of the foregoing clinical trials. Each CTA was negotiated in the ordinary course of business by Amarex, then Company’s clinical research organization, prior to Dr. Christopher Recknor’s appointment as COO, and the operational and financial terms of the CTAs with CARE are comparable to the terms available to unrelated clinical locations. Dr. Christopher Recknor was not involved in the Company’s decision to choose CARE as a clinical location for its ongoing trials, and he is not involved in patient treatment at the CARE site. In July 2021, the Company entered into an amendment to the previously approved CTA with CARE, wherein such amendment provided for the additional recording of patient information thus giving rise to the additional contract value of less than $0.1 million. The Company made payments of approximately $0.2 million and $1.7 million to CARE during the fiscal years ended May 31, 2023 and May 31, 2022. In September 2021, Jordan G. Naydenov, a then member of the Board, entered into a private warrant exchange in which he exercised warrants to purchase approximately 0.6 million shares of common stock, as well as approximately 0.6 million additional shares that were offered as an inducement to exercise his warrants, for a total of approximately 1.3 million shares of common stock. The terms and conditions of the investment totaling $0.7 million made by Mr. Naydenov were identical to those offered to other investors. |
Employee Benefit Plan
Employee Benefit Plan | 12 Months Ended |
May 31, 2023 | |
Employee Benefit Plan | |
Employee Benefit Plan | Note 12. Employee Benefit Plan The Company has an employee savings plan (the “401(k) Plan”), organized under Section 401(k) of the Internal Revenue Code (the “Code”), covering all employees. The Company makes a qualified non-elective contribution of 3% , which vests immediately. In addition, participants in the 401(k) Plan may contribute a percentage of their compensation, but not greater than the maximum allowed under the Code. During each of the years ended May 31, 2023 and 2022, the Company incurred an expense of approximately $0.1 million for qualified non-elective contributions. |
Subsequent Events
Subsequent Events | 12 Months Ended |
May 31, 2023 | |
Subsequent Events | |
Subsequent Events | Note 13. Subsequent Events Issuance and Amendment of Placement Agent Notes In June 2023, the Company entered into securities purchase agreements pursuant to which the Company issued Placement Agent Notes with an 18-month term to accredited investors in the aggregate principal amount of approximately $1.3 million through a placement agent. The Company also issued warrants to purchase approximately 1.3 million shares of common stock with a three-year term and an exercise price of $0.50 as part of the debt issuance. The Company also issued warrants to purchase approximately 0.4 million shares of common stock to the placement agent with a ten-year term. The exercise price for the warrants issued to the placement agent was determined to be $0.26 per share, based on the intraday volume weighted average price of the Company’s stock on June 23, 2023. The net proceeds of approximately $1.2 million reflect issuance costs of approximately $0.1 million. Amendment to Placement Agent Notes During June 2023, an amendment was entered into with the investors of the Placement Agent Notes, which stated that the principal amount and interest on the secured promissory notes would be converted to equity on the first close of the subsequent private placement of common stock and warrants through a placement agent. The units purchased have the same terms of the offering except for the exercise price of the warrants which would be set at $0.306 per share as opposed to $0.50 per share. Private placement of common stock and warrants through placement agent In July 2023, the Company commenced a private placement of units consisting of common stock and warrants to accredited investors through a placement agent. Each unit sold included a fixed combination of one share of common stock and one warrant to purchase one share of common stock. Each unit has a purchase price of $0.20 , which was equal to 90% of the closing price of the common stock on July 31, 2023. During July and August 2023, the Company sold a total of approximately 14.7 million units for a total of approximately $2.6 million of proceeds, net of issuance costs and converted approximately $2.3 million principal and interest of the Placement Agent Notes to approximately 11.5 million units. The Company classified the securities issued in the private placement through placement agent as equity. As part of the offering, the Company will issue approximately 14.7 million warrants to investors, with each such warrant having a five-year term and an exercise price of $0.50 per share. The Company will also issue 11.5 million warrants to holders of the Placement Agent Notes having a five-year term and an exercise price of $0.306 per share. The warrants were immediately exercisable. In connection with the above, the Company paid the placement agent a total cash fee of approximately $0.4 million, equal to 12% of the gross proceeds of the offering, as well as a one-time fee for expenses of $5.0 thousand, and will issue a total of approximately 2.2 million warrants with an exercise price of $0.20 per share and a ten-year term, representing 15% of the total number of common stock sold in the offering, to the placement agent and its designees. Induced Note conversions During July and August 2023, in satisfaction of redemptions, the Company and the April 2, 2021 Noteholder entered into exchange agreements, pursuant to which a portion of the April 2, 2021 Note was partitioned into new notes with an aggregate principal amount of $1.5 million, which were exchanged concurrently with the issuance of approximately 8.7 million shares of common stock. Form 12b-25 On August 30, 2023, the Company filed Form 12b-25 due to the Company’s inability to file timely, without unreasonable effort and expense, its Annual Report on Form 10-K for the fiscal year ended May 31, 2023, because additional time was required before issuing the Company’s financial statements for the fiscal year ended May 31, 2023, to evaluate the implications of an Order released by the Public Company Accounting Oversight Board (the “PCAOB”) on August 29, 2023, shortly before the Company’s filing deadline. The Company was subsequently able to determine that there was no substantive effect on the Company’s financial statements, including its fiscal year end 2023 financials. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
May 31, 2023 | |
Summary of Significant Accounting Policies | |
Principles of Consolidation | Principles of Consolidation The consolidated financial statements include the accounts of CytoDyn Inc. and its wholly owned subsidiaries, CytoDyn Operations Inc. intercompany transactions and balances are eliminated in consolidation. |
Reclassifications | Reclassifications Certain prior year amounts shown in the accompanying consolidated financial statements have been reclassified to conform to the current period presentation. Such reclassifications did not have a material effect, if any, on the Company’s previously reported financial position, results of operations, stockholders’ (deficit) equity, or net cash provided by operating activities. During the fiscal year ended May 31, 2023, the Company reclassified amounts recorded as accumulated dividends for Series C and D preferred stockholders from accumulated deficit to additional paid-in capital. These reclassifications were made to reflect the proper presentation for accrued dividends when an entity has accumulated deficit. |
Going Concern | Going Concern The accompanying consolidated financial statements have been prepared on a going concern basis, which contemplates realization of assets and satisfaction of liabilities in the ordinary course of business. As shown in the accompanying consolidated financial statements, the Company had losses for all periods presented. The Company incurred a net loss of $79.8 million and $210.8 million for the fiscal years ended May 31, 2023, and 2022, respectively, and had an accumulated deficit of $841.7 million as of May 31, 2023. These factors, among others, raise substantial doubt about the Company’s ability to continue as a going concern. The Company’s continuance as a going concern is dependent upon its ability to obtain additional operating capital, complete the development of its product candidate, leronlimab, obtain approval to commercialize leronlimab from regulatory agencies, continue to outsource manufacturing of leronlimab, and ultimately achieve revenues and attain profitability. The Company plans to continue to engage in research and development activities related to leronlimab for multiple indications and expects to incur significant research and development expenses in the future, primarily related to its regulatory compliance, including seeking the lifting of the FDA’s clinical hold with regard to the Company’s HIV program, performing additional clinical trials in various indications, and seeking regulatory approval for its product candidate for commercialization. These research and development activities are subject to significant risks and uncertainties. The Company intends to finance its future development activities and its working capital needs primarily from the sale of equity and debt securities, combined with additional funding from other sources. However, there can be no assurance that the Company will be successful in these endeavors. |
Use of Estimates | Use of Estimates The preparation of the consolidated financial statements in accordance with accounting principles generally accepted in the United States (“U.S. GAAP” or “GAAP”) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, and the disclosure of contingent assets and liabilities at the date of consolidated financial statements, and the reported amounts of revenue and expenses during the reporting period. Estimates are assessed each period and updated to reflect current information, such as the status of our analysis of the results of our clinical trials and/or discussions with the FDA, which could have an impact on the Company’s significant accounting estimates and assumptions. The Company’s estimates are based on historical experience and on various markets and other relevant, appropriate assumptions. Significant estimates include, but are not limited to, those relating to capitalization of pre-launch inventories, charges for excess and obsolete inventories, research and development expenses, commitments and contingencies, stock-based compensation, and the assumptions used to value warrants and warrant modifications. Actual results could differ from these estimates. |
Cash | Cash Cash is maintained at federally insured financial institutions and, at times, balances may exceed federally insured limits. The Company has never experienced any losses related to cash balances. Balances in excess of federally insured limits were approximately $2.3 million of the cash balance and approximately $5.5 million of the restricted cash balance at May 31, 2023. Balances in excess of federally insured limits were approximately $4.0 million at May 31, 2022. As of May 31, 2023, the Company had recorded approximately $6.5 million of restricted cash. The restricted cash balance is related to cash held as collateral in connection with a Surety Bond, as defined in Note 7, Equity Awards and Warrants , that was posted as required in the litigation with Amarex and will remain as restricted cash until the litigation is resolved. For further information, See Note 7, Equity Awards and Warrants – Private Placement of Warrants under Surety Bond Backstop Agreement . |
Identified Intangible Assets | Identified Intangible Assets The Company follows the provisions of ASC 350, Intangibles-Goodwill and Other , which establishes accounting standards for the impairment of long-lived assets such as intangible assets subject to amortization. The Company reviews long-lived assets to be held and used for impairment whenever events or changes in circumstances indicate that the carrying amount of the assets may not be recoverable. If the sum of the undiscounted expected future cash flows over the remaining useful life of a long-lived asset group is less than its carrying value, the asset is considered impaired. Impairment losses are measured as the amount by which the carrying amount of the asset group exceeds the fair value of the asset. |
Inventories | Inventories Previously Expensed Inventories The Company recorded revenue in the fiscal year ended May 31, 2022, related to sales of vials for emergency purposes only, solely to treat critically ill COVID-19 patients in the Philippines under a Compassionate Special Permit. Cost of goods sold was minimal because the vials sold were expensed in prior periods as research and development expense because they were manufactured prior to the Company’s capitalization of pre-launch inventories as described below. All capitalized inventory amounts represent pre-launch inventories and do not include any inventories previously expensed as research and development expense. Capitalized Pre-launch Inventories Pre-launch inventories comprised raw materials required to commercially produce leronlimab and substantially completed commercially produced leronlimab in anticipation of commercial sales of the product upon potential regulatory approval as a combination therapy for HIV patients in the United States, and potential emergency use authorizations for COVID-19. The Company’s pre-launch inventories consisted of (1) raw materials purchased for commercial production, (2) work-in-progress materials which consist of bulk drug substance, which is the manufactured drug stored in bulk storage, and (3) drug product, which is the manufactured drug in unlabeled vials. The consumption of raw materials during production is classified as work-in-progress until saleable. Once it is determined to be in saleable condition, following regulatory approval, inventory is classified as finished goods. The Company capitalizes inventories procured or produced in preparation for product launches. Typically, capitalization of such inventory begins when the results of clinical trials have reached a status sufficient to support regulatory approval, uncertainties regarding ultimate regulatory approval have been significantly reduced, and the Company has determined it is probable that these capitalized costs will provide future economic benefit in excess of capitalized costs. The material factors considered by the Company in evaluating these uncertainties include the receipt and analysis of positive Phase 3 clinical trial results for the underlying product candidate, results from meetings with the relevant regulatory authorities prior to the filing of regulatory applications, and status of the Company’s regulatory applications. The Company closely monitors the status of the product within the regulatory review and approval process, including all relevant communications with regulatory authorities. If the Company becomes aware of any specific material risks or contingencies other than the normal regulatory review and approval process or if there are any specific issues identified relating to safety, efficacy, manufacturing, marketing, or labeling, it may make a determination that the related inventory may no longer qualify for capitalization. The Company determines whether raw materials purchased for commercial production are usable for production based on the manufacturer’s assigned expiration date. In evaluating whether raw materials included in the pre-launch inventories will be usable for production, the Company takes into account the shelf-life of raw materials at the time they are expected to be used in manufacturing. Any raw materials past expiration date at the time of the next manufacturing run are removed from inventory. As one stage of the manufacturing process, the Company produces work-in-progress materials which consist of bulk drug substance, which is the manufactured drug stored in bulk storage. The initial shelf-life of bulk drug substance is established based on periodically performed stability studies and is set at four four The Company utilizes resins, a reusable raw material, in its bulk drug manufacturing process. Shelf-life of a resin used in commercial manufacturing of biologics is determined by the number of cycles for which it has been validated to be used in a manufacturing process before it is considered unusable. Unpacked and unused resins have a manufacturer’s expiration date by which resins are expected to start being used in the manufacturing process without loss of their properties. Prior to a new manufacturing campaign, and between manufacturing campaigns, the resins are removed from storage, are treated and tested for suitability. Once resins are used in the manufacturing process, their shelf-life is measured by a validated predetermined number of manufacturing cycles they are usable for, conditional on appropriate storage solution under controlled environment between production campaigns, as well as by performing pre-production usability testing. Before a manufacturing campaign, each resin is tested for suitability. Regardless of the number of cycles, if a resin fails to meet prespecified suitability parameters it may not be used in manufacturing; likewise, even if the resin meets suitability criteria beyond the lifetime cycles, it may no longer be used. The cost of the resins used in a manufacturing campaign is allocated to the cost of the drug product in vials. The Company values its inventory at the lower of cost or net realizable value using the average cost method. Inventory is evaluated for recoverability by considering the likelihood that revenue will be obtained from the future sale of the related inventory considering the status of the product within the regulatory approval process. The Company evaluates its inventory levels on a quarterly basis and writes down inventory that became obsolete, has a cost in excess of its expected net realizable value, or is in quantities in excess of expected requirements. In assessing the lower of cost or net realizable value for pre-launch inventory, the Company relies on independent analyses provided by third parties knowledgeable about the range of likely commercial prices comparable to current comparable commercial product. Quarterly, the Company also evaluates whether certain raw materials held in its inventory are expected to reach the end of their estimated shelf-lives based on passage of time, the number of manufacturing cycles they are used in and results of pre-production testing prior to the expected production date, or when resins used in the manufacturing process fail suitability tests. If any of such events occur, the Company may make a determination to record a charge if it is expected that such inventories will become obsolete prior to the expected production date. Anticipated future sales, shelf lives, and expected approval date are considered when evaluating realizability of capitalized inventory. The shelf-life of a product is determined as part of the regulatory approval process; however, in assessing whether to capitalize pre-launch inventories, the Company considers the product stability data for all of the pre-approval inventory procured or produced to date to determine whether there is adequate shelf-life. When the remaining shelf-life of drug product inventory is less than 12 months, it is likely that it will not be accepted by potential customers. However, as inventories approach their shelf-life expiration, the Company may perform additional stability testing to determine if the inventory is still viable, which can result in an extension of its shelf-life and re-evaluation of the need for and the amount of the previously recorded reserves. Further, in addition to performing additional stability testing, certain raw materials inventory may be sold in its then current condition prior to reaching expiration. If the Company determines that it is not likely that shelf-life may be extended or the inventory cannot be sold prior to expiration, the Company may record a charge to bring inventory to its net realizable value. See Note 3, Inventories, net , for more information. |
Revenue Recognition | Revenue Recognition The Company accounts for and recognizes revenue in accordance with ASC 606, Revenue from Contracts with Customers For the Company’s sole contract to date, the customer submitted purchase orders to purchase a specified quantity of leronlimab vials; therefore, the delivery of the ordered quantity per the purchase order was accounted for as one performance obligation. The Company does not offer discounts or rebates. The transaction price was determined based on the agreed upon rates per vial indicated in the purchase order or master supply agreement applied to the quantity of leronlimab vials that the customer requested in the purchase order. As the Company’s contract included only one performance obligation, the delivery of the product to the customer, all of the transaction price was allocated to the one performance obligation. Therefore, upon delivery of the product quantity equal to the quantity requested in the purchase order, there were deemed to be no remaining performance obligations. The Company’s shipping and handling activities are considered a fulfillment cost. The Company elected to exclude all sales and value added taxes from the measurement of the transaction price. The Company did not adjust the transaction price for financing since the time period between the transfer of goods and payment was less than one year. The Company recognizes revenue at a point in time when control of the products is transferred to the customer. Management applies judgment in evaluating when a customer obtains control of the promised goods, which generally occurs when the product is delivered to the customer. The Company’s customer contract includes a standard assurance warranty to guarantee that its products comply with agreed specifications. The Company grants a conditional right of return of product in the customer’s inventory upon an adverse regulatory ruling. The Company continually evaluates the probability of such occurrence. If necessary, the Company will defer revenue recognized based on its estimate of the amount of products that may be subject to the right of return. Disaggregation of Revenue The Company’s revenues have been derived solely from the sale of leronlimab vials. The Company believes the revenues are presented at the appropriate level of detail in the accompanying consolidated statements of operations. Contract Assets and Liabilities The Company’s performance obligations for its contract with a customer are satisfied at a point in time through the delivery of leronlimab vials to its customer. The Company did no t have revenues in the fiscal year ended May 31, 2023, and had $0.3 million in revenues in the fiscal year ended May 31, 2022. The Company did no t have any contract assets or liabilities as of May 31, 2023 or 2022. For all periods presented, the Company did no t recognize revenues from amounts that were previously included in a contract liability balance. In addition, for all periods presented, there was no revenue recognized in a reporting period from performance obligations satisfied in previous periods. Performance Obligations The Company does not disclose the value of unsatisfied performance obligations for (i) contracts with an original expected length of one year or less and (ii) contracts for which the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under the Company’s contract, each unit of product delivered to the customer represents a separate performance obligation; therefore, future deliveries of the product are wholly unsatisfied, and disclosure of the transaction price allocated to remaining performance obligations is not required. |
Research and Development | Research and Development Research and development costs are expensed as incurred. Clinical trial costs incurred through third parties are expensed commensurate with the contracted work performed. Contingent milestone payments that are due to third parties under research and development collaboration arrangements or other contractual agreements are expensed when the milestone conditions are probable and the amount of payment is reasonably estimable. See Note 10, Commitments and Contingencies for additional discussion. |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company’s financial instruments consist primarily of cash, accounts payable and accrued liabilities, and debt. As of May 31, 2023, the carrying value of the Company’s assets and liabilities approximate their fair value due to the short-term maturity of the instruments. Debt is reported at amortized cost in the consolidated balance sheets which approximate fair value. The remaining financial instruments are reported in the consolidated balance sheets at amounts that approximate current fair values. The fair value hierarchy specifies three levels of inputs that may be used to measure fair value as follows: ● Level 1. Quoted prices in active markets for identical assets or liabilities. ● Level 2. Observable inputs other than Level 1 prices, such as quoted prices for similar assets or liabilities, quoted prices in markets with insufficient volume or infrequent transactions (less active markets), or model-derived valuations in which all significant inputs are observable or can be derived principally from or corroborated with observable market data for substantially the full term of the assets or liabilities. Level 2 inputs also include non-binding market consensus prices that can be corroborated with observable market data, as well as quoted prices that were adjusted for security-specific restrictions. ● Level 3. Unobservable inputs to the valuation methodology which are significant to the measurement of the fair value of assets or liabilities. These Level 3 inputs also include non-binding market consensus prices or non-binding broker quotes that cannot be corroborated with observable market data. In accordance with the prescribed accounting guidance, the Company measured the fair value of the liability classified warrants using the fair value hierarchy during the fiscal year ended May 31, 2023. The Company did no t have any assets or liabilities measured at fair value using the fair value hierarchy as of May 31, 2022. |
Leases | Leases Operating lease right-of-use (“ROU”) assets are included in other non-current assets and the current portion of operating lease liabilities are included in accrued liabilities and compensation on the consolidated balance sheets. The long-term operating lease liabilities are presented separately as operating leases on the consolidated balance sheets. Lease ROU assets, and liabilities, are recognized based on the present value of the future minimum lease payments over the lease term at commencement date. As the Company’s leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of future payments. The operating lease ROU asset also includes any lease payments made and excludes lease incentives and initial direct costs incurred. The Company’s lease terms do not include options to extend or terminate the lease as it is not reasonably certain that it would exercise these options. Lease expense for minimum lease payments is recognized on a straight-line basis over the lease term. |
Stock-Based Compensation | Stock-Based Compensation U.S. GAAP requires companies to measure the cost of services received in exchange for the award of equity instruments based on their fair value at the date of grant. The related expense is recognized over the period during which services are expected to be performed in exchange for the award (requisite service period), when designated milestones have been achieved or when pre-defined performance conditions are met. The Company values its stock-based awards using the Black-Scholes option pricing model utilizing assumptions that include stock price volatility, expected term of the award, and risk-free interest rates. The Company estimates forfeitures at the time of grant and makes revisions in subsequent periods, if necessary, if actual forfeitures differ from those estimates. The Company estimated future unvested forfeitures at zero for all periods presented . |
Debt | Debt The Company historically issued promissory notes at a discount and incurred direct debt issuance costs. Debt discount and issuance costs are netted against the debt and amortized over the life of the promissory note in accordance with ASC 470-35, Debt Subsequent Measurement |
Offering Costs | Offering Costs The Company periodically incurs direct incremental costs associated with the sale of equity securities; refer to Note 7 , Equity Awards and Warrants for additional information. The costs are recorded as a component of equity upon receipt of the proceeds. |
Income Taxes | Income Taxes Deferred taxes are recorded using the asset and liability method, whereby deferred tax assets are recognized for deductible temporary differences and operating loss and tax credit carry forwards; deferred tax liabilities are recognized for taxable temporary differences. Temporary differences are the differences between the reported amounts of assets and liabilities and their tax basis. Future tax benefits for net operating loss carryforwards are recognized to the extent that realization of these benefits is considered more likely than not. Deferred tax assets are reduced by a valuation allowance when it is more likely than not that some portion or all the deferred tax assets will not be realized. The Company follows the provisions of ASC 740-10, Uncertainty in Income Taxes In accordance with Section 15 of the Internal Revenue Code, the Company utilized a federal statutory rate of 21% for our fiscal 2023 and 2022 tax years. The net tax expense for the fiscal years ended May 31, 2023 and May 31, 2022 was zero . As of May 31, 2023 and 2022, the Company has a full valuation allowance as management does not consider it more than likely than not that the benefits from the deferred tax assets will be realized. |
Recently Accounting Pronouncements | Recent Accounting Pronouncements In August 2020, the FASB issued ASU No. 2020-06, Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) , which simplifies the accounting for convertible instruments. The guidance removes certain accounting models that separate the embedded conversion features from the host contract for convertible instruments. Either a modified retrospective method of transition or a fully retrospective method of transition is permissible for the adoption of this standard. ASU No. 2020-06 is effective for fiscal years beginning after December 15, 2021, including interim periods within those fiscal years. The Company adopted ASU No. 2020-06 as of June 1, 2022, using the modified retrospective method. The adoption of ASU No. 2020-06 had no impact on the Company’s balance sheets, statements of operations, cash flows or financial statement disclosures. In May 2021, the FASB issued ASU No. 2021-04, Earnings Per Share (Topic 260), Debt—Modifications and Extinguishments (Subtopic 470-50), Compensation - Stock Compensation (Topic 718), and Derivatives and Hedging—Contracts in Entity’s Own Equity (Subtopic 815-40): Issuer’s Accounting for Certain Modifications or Exchanges of Freestanding Equity-Classified Written Call Options . ASU 2021-04 addresses the accounting for certain modifications or exchanges of freestanding equity-classified written call options (e.g., warrants). Entities should treat a modification of the terms or conditions, or an exchange of a freestanding equity-classified written call option that remains equity-classified after modification or exchange, as an exchange of the original instrument for a new instrument. Guidance should be applied prospectively after the date of initial application. ASU 2021-04 is effective for fiscal years beginning after December 15, 2021, and interim periods within those fiscal years, with early adoption permitted. The Company adopted the new guidance prospectively as of June 1, 2022, and used the framework to record modifications to equity classified instruments during the fiscal year ended May 31, 2023. The modifications consisted of the following approximate amounts: induced warrant exercises recorded as $2.2 million of issuance cost, modification to the warrants issued in connection with the Surety Bond Backstop Agreement recorded as a $0.4 million finance charge, and triggers of down-round provisions and modifications recorded as deemed dividends with an aggregate $5.4 million charge to additional paid-in capital. The deemed dividends were included in the loss per share calculation, see Note 8, Loss per Common Share . Refer to Note 7, Equity Awards and Warrants for further information on each transaction. |
Inventories, net (Tables)
Inventories, net (Tables) | 12 Months Ended |
May 31, 2023 | |
Inventories, net | |
Summary of Inventories, net of reserves | (in thousands) May 31, 2023 May 31, 2022 Raw materials $ — $ 16,264 Work-in-progress — 1,665 Total inventories, net $ — $ 17,929 |
Intangible assets, net (Tables)
Intangible assets, net (Tables) | 12 Months Ended |
May 31, 2023 | |
Intangible Assets, net | |
Schedule of intangible assets | (in thousands) May 31, 2023 May 31, 2022 Leronlimab (PRO 140) patent $ 3,500 $ 3,500 Website development costs 20 20 Gross carrying value 3,520 3,520 Accumulated amortization, net of impairment (3,520) (3,388) Total intangible assets, net $ — $ 132 |
Accounts Payable and Accrued _2
Accounts Payable and Accrued Liabilities (Tables) | 12 Months Ended |
May 31, 2023 | |
Accounts Payable and Accrued Liabilities | |
Schedule of components of accrued liabilities | (in thousands) May 31, 2023 May 31, 2022 Compensation and related expense $ 335 $ 1,522 Legal fees and settlement 168 2,006 Clinical expense 187 3,727 Accrued inventory charges and expenses 4,978 1,392 License fees 862 150 Lease payable 139 134 Other liabilities — 64 Total accrued liabilities $ 6,669 $ 8,995 |
Convertible Instruments and A_2
Convertible Instruments and Accrued Interest (Tables) | 12 Months Ended |
May 31, 2023 | |
Convertible Instruments and Accrued Interest | |
Schedule of information on dividends of convertible preferred stock | May 31, 2023 May 31, 2022 (in thousands except conversion rate) Series B Series C Series D Series B Series C Series D Shares of preferred stock outstanding 19 6 9 19 7 9 Common stock conversion rate 10:1 2,000:1 1,250:1 10:1 2,000:1 1,250:1 Total shares of common stock if converted 190 12,670 10,565 190 13,806 10,565 Undeclared dividends $ 15 $ — $ — $ 10 $ — $ — Accrued dividends $ — $ 2,500 $ 2,808 $ — $ 2,014 $ 1,963 Total shares of common stock if dividends converted 30 5,000 5,616 20 4,028 3,926 |
Schedule of outstanding balances of convertible notes | May 31, 2023 May 31, 2022 (in thousands) April 2, 2021 Note April 23, 2021 Note Placement Agent Notes Total April 2, 2021 Note April 23, 2021 Note Total Convertible notes payable outstanding principal $ 6,081 $ 29,369 $ 1,000 $ 36,450 $ 9,819 $ 28,500 $ 38,319 Less: Unamortized debt discount and issuance costs (211) (822) (286) (1,319) (512) (1,566) (2,078) Convertible notes payable, net 5,870 28,547 714 35,131 9,307 26,934 36,241 Accrued interest on convertible notes 3,804 6,789 5 10,598 2,599 3,375 5,974 Outstanding convertible notes payable, net and accrued interest $ 9,674 $ 35,336 $ 719 $ 45,729 $ 11,906 $ 30,309 $ 42,215 |
Schedule of reconciliation of changes to outstanding balance of convertible notes | (in thousands) April 2, 2021 Note April 23, 2021 Note Placement Agent Notes Total Outstanding balance at May 31, 2022 $ 11,906 $ 30,309 $ — $ 42,215 Consideration received 696 696 Amortization of issuance discount and costs 564 1,613 18 2,195 Interest expense 1,205 3,414 5 4,624 Fair market value of shares exchanged for repayment (5,312) — — (5,312) Difference between market value of 1,311 — — 1,311 Outstanding balance at May 31, 2023 $ 9,674 $ 35,336 $ 719 $ 45,729 |
Equity Awards and Warrants (Tab
Equity Awards and Warrants (Tables) | 12 Months Ended |
May 31, 2023 | |
Equity Awards and Warrants | |
Schedule of warrant liability and equity | (in thousands) Liability Classified Warrants Balance at May 31, 2022 $ — Classified as liability 16,664 Reclassified as equity (25,335) Loss on derivative due to change in fair market value 8,750 Balance at May 31, 2023 $ 79 |
Schedule of warrants that have been reclassified as equity | Initial Fair Market Value at Issuance Fair Market Value at Equity Classification Backstop Backstop Placement Backstop Backstop Backstop Placement Backstop Warrant #1 Warrant #2 Agent Warrants Warrant #3 Warrant #1 Warrant #2 Agent Warrants Warrant #3 Fair value of underlying stock $ 0.44 $ 0.42 $ 0.44 $ 0.35 $ 0.52 $ 0.52 $ 0.52 $ 0.32 Risk-free rate 3.17% 3.06% 3.13% 3.68% 3.34% 3.31% 3.16% 4.18% Expected term (in years) 4.65 5.00 10.00 5.00 4.46 4.88 9.82 4.76 Stock price volatility 110.20% 109.49% 95.99% 124.36% 117.29% 113.59% 95.87% 126.67% Expected dividend yield 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% |
Schedule of warrants that remain liability classified | Initial Fair Market Value at Issuance Fair Market Value at May 31, 2023 Placement Agent Placement Agent Placement Agent Warrants Closing #1 Warrants Closing #2 Warrants Fair value of underlying stock $ 0.29 $ 0.27 $ 0.26 Risk-free rate 3.44% 3.44% 3.64% Expected term (in years) 10.00 10.00 10.00 Stock price volatility 98.22% 97.90% 97.90% Expected dividend yield 0.00% 0.00% 0.00% |
Schedule of stock option activity | Weighted average Weighted remaining Aggregate Number of average contractual intrinsic (in thousands, except per share data and years) shares exercise price life in years value Options outstanding at May 31, 2021 17,839 $ 1.58 7.93 $ 15,390 Granted 11,985 $ 1.38 Exercised (510) $ 0.79 301 Forfeited, expired, and cancelled (11,857) $ 1.51 Options outstanding at May 31, 2022 17,457 $ 1.53 7.79 $ — Granted 12,417 $ 0.41 Exercised — $ — Forfeited, expired, and cancelled (10,051) $ 1.16 Options outstanding at May 31, 2023 19,823 $ 0.99 7.87 $ — Options outstanding and exercisable at May 31, 2023 11,932 $ 1.21 7.02 $ — |
Schedule of assumptions used in determination of fair value | Fiscal years ended May 31, 2023 2022 Expected Volatility 99.2 - 112.7 % 94.3 - 122.0 % Weighted-Average Volatility 107.06 % 104.89 % Expected Dividends 0 % 0 % Expected Term (In years) 5.0 - 6.1 1.5 - 6.0 Risk-Free Rate 3.83 % 1.67 % |
Schedule of Company RSU and PSU activity | Weighted average Number of Weighted-average remaining contractual (shares in thousands) RSUs and PSUs (1) grant date fair value life in years Unvested RSUs and PSUs at May 31, 2021 5,470 $ 2.96 1.01 RSUs and PSUs granted — RSUs and PSUs forfeited (4,356) 2.94 RSUs and PSUs vested (814) 3.01 Unvested RSUs and PSUs at May 31, 2022 300 3.12 0.58 RSUs and PSUs granted 1,293 0.58 RSUs and PSUs forfeited (150) 3.12 RSUs and PSUs vested (150) 3.12 Unvested RSUs and PSUs at May 31, 2023 1,293 $ 0.58 0.81 (1) The number of PSUs disclosed in this table are at the target level of 100% . |
Schedule of Warrant activity | Weighted average Weighted remaining Aggregate Number of average contractual intrinsic (in thousands, except for share data and years) shares exercise price life in years value Warrants outstanding at May 31, 2021 42,934 $ 0.68 2.89 $ 52,671 Granted 38,220 $ 0.52 Exercised (5,167) $ 0.70 5,514 Forfeited, expired, and cancelled (2,740) $ 0.73 Warrants outstanding at May 31, 2022 73,248 $ 0.59 3.18 $ 352 Granted 201,771 $ 0.33 Exercised (6,207) $ 0.63 758 Forfeited, expired, and cancelled (8,902) $ 0.75 Warrants outstanding at May 31, 2023 259,910 $ 0.37 4.57 $ 7,276 Warrants outstanding and exercisable at May 31, 2023 259,910 $ 0.37 4.57 $ 7,276 |
Loss per Common Share (Tables)
Loss per Common Share (Tables) | 12 Months Ended |
May 31, 2023 | |
Loss per Common Share | |
Schedule of reconciliation of the numerators and denominators of basic and diluted net loss per share | Fiscal years ended May 31, (in thousands, except per share amounts) 2023 2022 Net loss $ (79,824) $ (210,820) Less: Deemed dividends (5,417) — Less: Accrued preferred stock dividends (1,495) (1,628) Net loss applicable to common stockholders $ (86,736) $ (212,448) Basic and diluted: Weighted average common shares outstanding 836,528 676,900 Loss per share $ (0.10) $ (0.31) |
Schedule of securities excluded from computation of earnings per share | Fiscal years ended May 31, (in thousands) 2023 2022 Stock options, warrants, and unvested restricted stock units 281,023 106,002 Convertible notes 12,000 12,000 Convertible preferred stock 34,071 32,535 |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
May 31, 2023 | |
Income Taxes | |
Schedule of reconciliation of federal statutory Income tax | Fiscal years ended May 31, 2023 2022 Income tax provision at statutory rate: 21.0 % 21.0 % Derivative loss (2.3) — Non-deductible debt issuance costs (2.6) — Non-deductible interest on convertible notes (1.2) (0.5) Inducement interest expense — (0.7) Other 0.8 1.1 Credit carry-forward released — (0.2) Non-deductible loss on induced conversion (1.4) (3.7) Non-deductible debt discount amortization (0.6) (0.3) IRC section 162(m) limitation — (0.1) Non-deductible expense on induced conversion of debt — (0.3) Valuation allowance (13.7) (16.3) Effective income tax rate 0.0 % 0.0 % |
Schedule of net deferred tax assets and liabilities | As of May 31, (in thousands) 2023 2022 Net operating loss $ 96,338 $ 106,965 Credits 2,063 2,063 ASC 718 expense on non-qualified stock options 6,400 6,057 Charitable contribution carry forward — 14 Accrued vacation and payroll 21 68 Right-of-use asset (84) (112) Lease liability 89 117 Inventory charges 6,173 2,138 Inventory write-off 13,739 — Issued warrants 2,317 — Section 174 R&D costs 858 — Accrued legal settlements 13 — Accrued legal fees 3 — Accrued expenses 36 89 Amortization 609 238 Fixed assets 4 1 Valuation allowance (128,579) (117,638) Deferred tax asset, non-current $ — $ — Non-current asset 128,579 117,638 Valuation allowance (128,579) (117,638) Deferred tax asset (liability) non-current $ — $ — |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 12 Months Ended |
May 31, 2023 | |
Commitments and Contingencies. | |
Schedule of future commitments | As of May 31, 2023, the future commitments pursuant to these agreements are estimated as follows (in thousands): Fiscal Year Amount 2024 $ 156,388 2025 $ 76,400 2026 and thereafter — Total $ 232,788 |
Schedule of operating lease balances | (in thousands) May 31, 2023 May 31, 2022 Assets Right-of-use asset $ 400 $ 536 Liabilities Current operating lease liability $ 139 $ 134 Non-current operating lease liability 283 422 Total operating lease liability $ 422 $ 556 |
Schedule of the minimum (base rental) lease payments | The minimum (base rental) lease payments reconciled to the carrying value of the operating lease liabilities as of May 31, 2023 are expected to be as follows (in thousands): Fiscal Year Amount 2024 $ 182 2025 185 2026 169 Total operating lease payments 536 Less: imputed interest (114) Present value of operating lease liabilities $ 422 |
Schedule of supplemental information relating to operating leases | May 31, 2023 Weighted average remaining lease term 2.9 years Weighted average discount rate 10.0 % |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 12 Months Ended | |||
May 31, 2023 | May 31, 2022 | Mar. 10, 2023 | Feb. 28, 2023 | |
Summary Of Significant Accounting Policies [Line Items] | ||||
Net loss | $ (79,824) | $ (210,820) | ||
Accumulated deficit | (841,690) | (766,131) | ||
Balance in excess of federally insured limits | 2,300 | 4,000 | ||
Restricted cash, uninsured amount | 5,500 | |||
Restricted cash | 6,507 | |||
Charge to APIC due to warrant modification | 2,200 | |||
Amortization of Debt Issuance Costs | 9,747 | $ 87 | ||
Warrant expirations deemed dividend | $ 5,400 | |||
Bulk Drug Substance | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Shelf life | 4 years | |||
Extended shelf life | 4 years | |||
Private Equity Offering | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Debt issuance costs | $ 9,700 | |||
Surety Bond Backstop Agreement | ||||
Summary Of Significant Accounting Policies [Line Items] | ||||
Amortization of Debt Issuance Costs | $ 400 | |||
Amount of cash collateral to be relieved of amount currently pledged | $ 1,400 | $ 5,100 |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Revenue (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Summary of Significant Accounting Policies | ||
Revenue | $ 0 | $ 266 |
Contract assets | 0 | 0 |
Contract liabilities | 0 | 0 |
Revenue recognized previously included in contract liabilities | 0 | 0 |
Revenue from performance obligations satisfied in previous periods | $ 0 | $ 0 |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Fair value of financial instruments (Details) $ in Thousands | May 31, 2022 USD ($) |
Level 1 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Assets fair value | $ 0 |
Liabilities fair value | 0 |
Level 2 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Assets fair value | 0 |
Liabilities fair value | 0 |
Level 3 | |
Fair Value, Liabilities Measured on Recurring Basis, Unobservable Input Reconciliation [Line Items] | |
Assets fair value | 0 |
Liabilities fair value | $ 0 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Income taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Summary of Significant Accounting Policies | ||
Income tax expense | $ 0 | $ 0 |
Federal statutory income tax rate, percent | 21% | 21% |
Inventories, net (Details)
Inventories, net (Details) $ in Thousands | May 31, 2022 USD ($) |
Inventories, net | |
Raw materials | $ 16,264 |
Work-in-progress | 1,665 |
Total inventories, net | $ 17,929 |
Inventories, net - Shelf-life (
Inventories, net - Shelf-life (Details) $ in Thousands | 1 Months Ended | 3 Months Ended | 12 Months Ended | ||
Nov. 30, 2022 USD ($) | Aug. 31, 2022 USD ($) | May 31, 2023 USD ($) | May 31, 2022 USD ($) | Feb. 28, 2022 USD ($) | |
Inventory Realizable Value | |||||
Inventory charged-off | $ 2,700 | $ 20,633 | $ 73,490 | ||
Number of batches not saleable | 5 | ||||
Raw materials | 16,264 | ||||
Total number of batches manufactured | 9 | ||||
Other Assets | Samsung BioLogics Co., Ltd. ("Samsung") | |||||
Inventory Realizable Value | |||||
Specialized raw materials | $ 2,700 | ||||
Resins | |||||
Inventory Realizable Value | |||||
Inventory charged-off | $ 16,300 | ||||
Other | |||||
Inventory Realizable Value | |||||
Inventory charged-off | $ 63,300 | ||||
Number of batches not saleable | 4 | ||||
Specialized and other raw materials | |||||
Inventory Realizable Value | |||||
Inventory charged-off | $ 10,200 | ||||
Five Batches Of Drug Product | |||||
Inventory Realizable Value | |||||
Raw materials | $ 29,100 | ||||
Four Batches Of Drug Product | |||||
Inventory Realizable Value | |||||
Raw materials | $ 34,200 | ||||
Bulk Drug Substance | |||||
Inventory Realizable Value | |||||
Inventory charged-off | $ 1,700 |
Intangible Assets, Net - Compon
Intangible Assets, Net - Components (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Asset Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 3,520 | $ 3,520 |
Accumulated amortization, net of impairment | (3,520) | (3,388) |
Total intangible assets, net | 132 | |
Website development costs | ||
Asset Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | 20 | 20 |
Leronlimab (PRO 140) patent | ||
Asset Acquisition [Line Items] | ||
Finite-Lived Intangible Assets, Gross | $ 3,500 | $ 3,500 |
Intangible Assets, Net - Amorti
Intangible Assets, Net - Amortization Expense Intangible Assets (Details) - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Intangible Assets, net | ||
Amortization expense | $ 0.1 | $ 0.7 |
Intangible Assets, Net - Prosta
Intangible Assets, Net - ProstaGene (Details) - USD ($) shares in Millions, $ in Millions | 1 Months Ended | 3 Months Ended | |
May 19, 2022 | Mar. 31, 2021 | Feb. 28, 2021 | |
Intangible Assets, net | |||
Shares subject to arbitration | 3.1 | ||
Intangible asset impairment charge | $ 10 | ||
Impairment charge, gross | 12.2 | ||
Impairment charge, reversal of accumulated amortization | $ 2.2 | ||
Non cash charge | $ 0.8 |
Accounts Payable and Accrued _3
Accounts Payable and Accrued Liabilities (Details) $ in Thousands | 12 Months Ended | |
May 31, 2023 USD ($) item | May 31, 2022 USD ($) item | |
Accounts Payable and Accrued Liabilities | ||
Accounts payable | $ 62,725 | $ 67,974 |
Number of vendors | item | 2 | 2 |
Compensation and related expense | $ 335 | $ 1,522 |
Legal fees and settlement | 168 | 2,006 |
Clinical expense | 187 | 3,727 |
Accrued inventory charges and expenses | 4,978 | 1,392 |
License fees | 862 | 150 |
Lease payable | 139 | 134 |
Other liabilities | 64 | |
Total accrued liabilities | $ 6,669 | $ 8,995 |
Accounts Payable | Credit Availability Concentration Risk | Vendor One | ||
Accounts Payable and Accrued Liabilities | ||
Concentration Risk, Percentage | 72% | |
Accounts Payable | Credit Availability Concentration Risk | Vendor Two | ||
Accounts Payable and Accrued Liabilities | ||
Concentration Risk, Percentage | 73% |
Convertible Instruments and A_3
Convertible Instruments and Accrued Interest - Preferred stock (Details) $ / shares in Units, $ in Thousands | 12 Months Ended | |
May 31, 2023 USD ($) $ / shares shares | May 31, 2022 USD ($) $ / shares shares | |
Class of Stock [Line Items] | ||
Accumulated deficit | $ | $ (841,690) | $ (766,131) |
Accrued dividends | $ | $ 5,308 | $ 3,977 |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Series B Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Shares of preferred stock | shares | 19,000 | 19,000 |
Common stock conversion rate | 10 | 10 |
Total shares of common stock if converted | shares | 190,000 | 190,000 |
Undeclared dividend | $ | $ 15 | $ 10 |
Total shares of common stock if dividends converted | shares | 30,000 | 20,000 |
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 5 | |
Preferred stock dividend, value per share | $ / shares | 0.25 | |
Preferred stock conversion price, per share | $ / shares | 0.50 | |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Undeclared dividend, shares | shares | 10,000 | |
Series C Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Shares of preferred stock | shares | 6,000 | 7,000 |
Common stock conversion rate | 2,000 | 2,000 |
Total shares of common stock if converted | shares | 12,670,000 | 13,806,000 |
Accrued dividends | $ | $ 2,500 | $ 2,014 |
Total shares of common stock if dividends converted | shares | 5,000,000 | 4,028,000 |
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 1,000 | |
Preferred stock dividend rate, as a percent | 10% | |
Preferred stock conversion price, per share | $ / shares | $ 0.50 | |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Fractional shares | shares | 0 | |
Series D Convertible Preferred Stock | ||
Class of Stock [Line Items] | ||
Shares of preferred stock | shares | 9,000 | 9,000 |
Common stock conversion rate | 1,250 | 1,250 |
Total shares of common stock if converted | shares | 10,565,000 | 10,565,000 |
Accrued dividends | $ | $ 2,808 | $ 1,963 |
Total shares of common stock if dividends converted | shares | 5,616,000 | 3,926,000 |
Preferred Stock, Liquidation Preference Per Share | $ / shares | $ 1,000 | |
Preferred stock dividend rate, as a percent | 10% | |
Preferred stock dividend, value per share | $ / shares | $ 0.50 | |
Preferred stock conversion price, per share | $ / shares | 0.80 | |
Preferred stock, par value | $ / shares | $ 0.001 | $ 0.001 |
Fractional shares | shares | 0 |
Convertible Instruments and A_4
Convertible Instruments and Accrued Interest - Convertible notes and accrued interest (Details) - $ / shares | Apr. 23, 2021 | Apr. 02, 2021 |
Long-term Convertible Note - April 2, 2021 Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Conversion price per share | $ 10 | |
Long-term Convertible Note - April 23, 2021 Note | ||
Debt Instrument [Line Items] | ||
Interest rate | 10% | |
Conversion price per share | $ 10 |
Convertible Instruments and A_5
Convertible Instruments and Accrued Interest - Outstanding Balance (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Debt Instrument [Line Items] | ||
Convertible notes payable outstanding principal | $ 36,450 | $ 38,319 |
Less: Unamortized debt discount and issuance costs | (1,319) | (2,078) |
Convertible notes payable, net | 35,131 | 36,241 |
Accrued interest on convertible notes | 10,598 | 5,974 |
Outstanding convertible notes payable, net and accrued interest | 45,729 | 42,215 |
Long-term Convertible Note - April 2, 2021 Note | ||
Debt Instrument [Line Items] | ||
Convertible notes payable outstanding principal | 6,081 | 9,819 |
Less: Unamortized debt discount and issuance costs | (211) | (512) |
Convertible notes payable, net | 5,870 | 9,307 |
Accrued interest on convertible notes | 3,804 | 2,599 |
Outstanding convertible notes payable, net and accrued interest | 9,674 | 11,906 |
Long-term Convertible Note - April 23, 2021 Note | ||
Debt Instrument [Line Items] | ||
Convertible notes payable outstanding principal | 29,369 | 28,500 |
Less: Unamortized debt discount and issuance costs | (822) | (1,566) |
Convertible notes payable, net | 28,547 | 26,934 |
Accrued interest on convertible notes | 6,789 | 3,375 |
Outstanding convertible notes payable, net and accrued interest | 35,336 | $ 30,309 |
Placement Agent Notes | ||
Debt Instrument [Line Items] | ||
Convertible notes payable outstanding principal | 1,000 | |
Less: Unamortized debt discount and issuance costs | (286) | |
Convertible notes payable, net | 714 | |
Accrued interest on convertible notes | 5 | |
Outstanding convertible notes payable, net and accrued interest | $ 719 |
Convertible Instruments and A_6
Convertible Instruments and Accrued Interest - Components (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Apr. 23, 2021 | Apr. 02, 2021 | May 31, 2023 | |
Debt Instrument [Line Items] | |||
Outstanding balance, beginning | $ 42,215 | ||
Consideration received | 696 | ||
Amortization of issuance discount and costs | 2,195 | ||
Interest expense | 4,624 | ||
Fair market value of shares exchanged for repayment | (5,312) | ||
Difference between market value of common shares and reduction of principle | (1,311) | ||
Outstanding balance, ending | 45,729 | ||
Long-term Convertible Note - April 2, 2021 Note | |||
Debt Instrument [Line Items] | |||
Outstanding balance, beginning | 11,906 | ||
Consideration received | $ 25,000 | ||
Amortization of issuance discount and costs | 564 | ||
Interest expense | 1,205 | ||
Fair market value of shares exchanged for repayment | (5,312) | ||
Difference between market value of common shares and reduction of principle | (1,311) | ||
Outstanding balance, ending | 9,674 | ||
Long-term Convertible Note - April 23, 2021 Note | |||
Debt Instrument [Line Items] | |||
Outstanding balance, beginning | 30,309 | ||
Consideration received | $ 25,000 | ||
Amortization of issuance discount and costs | 1,613 | ||
Interest expense | 3,414 | ||
Outstanding balance, ending | 35,336 | ||
Placement Agent Notes | |||
Debt Instrument [Line Items] | |||
Consideration received | 696 | ||
Amortization of issuance discount and costs | 18 | ||
Interest expense | 5 | ||
Outstanding balance, ending | $ 719 |
Convertible Instruments and A_7
Convertible Instruments and Accrued Interest - Convertible Note - April 2, 2021 Note (Detail) $ in Thousands, shares in Millions | 12 Months Ended | |||
Apr. 02, 2021 USD ($) shares | May 31, 2023 USD ($) agreement shares | May 31, 2022 USD ($) | Feb. 04, 2023 USD ($) | |
Debt Instrument [Line Items] | ||||
Consideration received | $ 696 | |||
Unamortized discount | $ 3,400 | |||
Convertible Note - April 2, 2021 Note | ||||
Debt Instrument [Line Items] | ||||
Shares reserved | shares | 6 | |||
Debt instrument term | 2 years | |||
Conversion of preferred stock to common stock (in shares) | shares | 17.3 | |||
Loss on induced conversion | $ 5,300 | $ 18,900 | ||
Debt instrument, extended term | 2 years | |||
Convertible note, aggregate principal | $ 28,500 | $ 6,100 | ||
Number of exchange agreements | agreement | 8 | |||
Consideration received | 25,000 | |||
Debt issuance costs | 100 | |||
Conversion of principal and interest of convertible notes to common stock | $ 3,500 | |||
Convertible notes, interest rate | 10% | |||
Percentage increase in amount payable on default | 15% | |||
Percentage increase in amount payable, second scenario | 10% | |||
Percentage increase in amount payable, third default scenario | 5% | |||
Number of days of notice to be given for conversion of notes into common stock | 5 days | |||
Debt instrument lock in period | 6 months | |||
Number of days of notice to be given for redemption | 3 days | |||
Specified monthly redemption amount | $ 7,500 | |||
Debt instrument prepayment percentage premium | 15% | |||
Number of days of notice to be given for prepayment | 15 days | |||
Period in which company was obligated to reduce the outstanding balance of debt | 5 months | |||
Debt proceeds requiring investor consent | $ 50,000 | |||
Additional debt, increase in interest rate | 5% | |||
Beneficial conversion feature | $ 0 | |||
Convertible Note - April 2, 2021 Note | Maximum | ||||
Debt Instrument [Line Items] | ||||
Convertible notes, interest rate | 22% | |||
Partitioned Notes | ||||
Debt Instrument [Line Items] | ||||
Convertible note, aggregate principal | $ 4,000 |
Convertible Instruments and A_8
Convertible Instruments and Accrued Interest - Convertible Note - April 23, 2021 Note (Detail) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | ||||
Apr. 23, 2021 | May 31, 2023 | Mar. 31, 2023 | May 31, 2022 | Apr. 02, 2021 | |
Debt Instrument [Line Items] | |||||
Consideration received | $ 696 | ||||
Unamortized discount | $ 3,400 | ||||
Amortization of issuance discount and costs | 2,195 | ||||
Net carrying value of note | $ 45,729 | $ 42,215 | |||
Warrants to purchase common shares, shares | 71.1 | ||||
Indemnitors | |||||
Debt Instrument [Line Items] | |||||
Warrants to purchase common shares, shares | 45 | ||||
Private Equity Offering | |||||
Debt Instrument [Line Items] | |||||
Debt issuance costs | $ 9,700 | ||||
Warrants to purchase common shares, shares | 5.5 | ||||
Convertible Note - April 23, 2021 Note | |||||
Debt Instrument [Line Items] | |||||
Debt instrument term | 2 years | ||||
Convertible note, aggregate principal | $ 28,500 | ||||
Debt instrument, extended term | 2 years | ||||
Consideration received | $ 25,000 | ||||
Unamortized discount | 3,400 | ||||
Debt issuance costs | 100 | ||||
Conversion of principal and interest of convertible notes to common stock | $ 7,000 | ||||
Convertible notes, interest rate | 10% | ||||
Percentage increase in amount payable on default | 15% | ||||
Percentage increase in amount payable, second scenario | 10% | ||||
Percentage increase in amount payable, third default scenario | 5% | ||||
Conversion price per share | $ 10 | ||||
Number of days of notice to be given for conversion of notes into common stock | 5 days | ||||
Shares reserved | 6 | ||||
Debt instrument lock in period | 6 months | ||||
Number of days of notice to be given for redemption | 3 days | ||||
Threshold trading days to satisfy redemption obligation | 3 days | ||||
Debt instrument prepayment percentage premium | 15% | ||||
Number of days of notice to be given for prepayment | 15 days | ||||
Debt proceeds requiring investor consent | $ 75,000 | ||||
Additional debt, increase in interest rate | 5% | ||||
Beneficial conversion feature | $ 0 | ||||
Amortization of issuance discount and costs | $ 1,613 | ||||
Net carrying value of note | $ 35,336 | $ 30,309 | |||
Maximum | Convertible Note - April 23, 2021 Note | |||||
Debt Instrument [Line Items] | |||||
Convertible notes, interest rate | 22% |
Convertible Instruments and A_9
Convertible Instruments and Accrued Interest - Convertible Note - April 2, 2021 Note and April 23, 2021 Note Extensions (Details) - April 2, 2021 Note and April 23, 2021 Note Extensions - USD ($) $ in Millions | Apr. 10, 2023 | Apr. 23, 2021 | Apr. 02, 2021 |
Debt Instrument [Line Items] | |||
Debt instrument, extended term | 2 years | ||
Extension fees percentage | 2.50% | ||
Debt instrument increase in debt | $ 0.9 | $ 0.3 |
Convertible Instruments and _10
Convertible Instruments and Accrued Interest - Convertible Note - Placement Agent Notes (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | ||||
May 05, 2023 | Apr. 28, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | Jan. 31, 2023 | |
Debt Instrument [Line Items] | |||||
Warrants to purchase common shares, shares | 71.1 | ||||
Term of warrants | 5 years | 10 years | |||
Class of warrants, exercise price | $ 0.50 | ||||
Stock offering costs | $ 2 | $ 2.8 | |||
Placement Agent Notes | |||||
Debt Instrument [Line Items] | |||||
Convertible notes, interest rate | 6% | 6% | |||
Debt instrument term | 18 months | 18 months | |||
Convertible note, aggregate principal | $ 1 | $ 1 | |||
Class of warrants, exercise price | $ 0.50 | $ 0.50 | |||
Proceeds from issuance of warrants | $ 0.9 | $ 0.9 | |||
Stock offering costs | $ 0.1 | $ 0.1 | |||
Placement Agent Notes | Placement Agent Warrants Issue One | |||||
Debt Instrument [Line Items] | |||||
Warrants to purchase common shares, shares | 1 | 1 | |||
Term of warrants | 3 years | 3 years | |||
Placement Agent Notes | Placement Agent Warrants Issue Two | |||||
Debt Instrument [Line Items] | |||||
Warrants to purchase common shares, shares | 0.3 | 0.3 | |||
Term of warrants | 10 years | 10 years |
Equity Awards and Warrants - Co
Equity Awards and Warrants - Common Stock (Details) - shares shares in Thousands | May 31, 2023 | Aug. 31, 2022 | Aug. 30, 2022 | May 31, 2022 |
Equity Awards and Warrants | ||||
Common stock, shares authorized | 1,350,000 | 1,350,000 | 1,000,000 | 1,350,000 |
Equity Awards and Warrants - Li
Equity Awards and Warrants - Liability Classified Warrants (Details) - USD ($) $ / shares in Units, $ in Thousands, shares in Millions | 12 Months Ended | |||||||
May 31, 2023 | May 30, 2023 | Mar. 31, 2023 | Feb. 28, 2023 | Jan. 31, 2023 | Dec. 01, 2022 | Jun. 30, 2022 | Feb. 14, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 71.1 | |||||||
Exercise price of share | $ 0.50 | |||||||
Liability Classified Warrants | ||||||||
Classified as liability | $ (16,664) | |||||||
Reclassified as equity | (25,335) | |||||||
Loss on derivative due to change in fair market value | 8,750 | |||||||
Derivative liability (ending balance) | $ 79 | |||||||
Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | $ 0.75 | |||||||
Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | $ 0.10 | |||||||
Private Equity Offering | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 5.5 | |||||||
Exercise price of share | $ 0.306 | $ 0.40 | ||||||
Private Equity Offering | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | 0.255 | |||||||
Private Equity Offering | Minimum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | 0.40 | |||||||
Accredited Investors | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 71.1 | |||||||
Private Warrant Exchange | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | $ 1 | |||||||
Allotment to placement agent | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 10.7 | 19.4 | ||||||
Exercise price of share | $ 0.23 | $ 0.255 | ||||||
Second Private Placement | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 64 | |||||||
Exercise price of share | $ 0.306 | |||||||
Initial Warrant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 15 | |||||||
Second Warrant Member | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Exercise price of share | $ 0.10 | |||||||
Second Warrant Member | Maximum | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 7.5 | 7.5 | ||||||
Make-Whole Warrant | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Warrants to purchase common shares, shares | 15 |
Equity Awards and Warrants - As
Equity Awards and Warrants - Assumptions used in Estimating Fair Value (Details) - Level 3 Inputs | May 31, 2023 $ / shares Y | May 05, 2023 $ / shares Y | Apr. 28, 2023 Y $ / shares | Jun. 24, 2022 Y $ / shares |
Grant Date Fair Value | Equity Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.52 | 0.44 | ||
Grant Date Fair Value | Liability Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.26 | |||
Grant Date Fair Value | Placement Agent Warrants One | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.29 | |||
Grant Date Fair Value | Placement Agent Warrants Two | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.27 | |||
Grant Date Fair Value | Back Stop Warrant #1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.52 | 0.44 | ||
Grant Date Fair Value | Back Stop Warrant #2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.52 | 0.42 | ||
Grant Date Fair Value | Back Stop Warrant #3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | $ / shares | 0.32 | 0.35 | ||
Risk free rate | Equity Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0316 | 0.0313 | ||
Risk free rate | Liability Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0364 | |||
Risk free rate | Placement Agent Warrants One | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0344 | |||
Risk free rate | Placement Agent Warrants Two | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0344 | |||
Risk free rate | Back Stop Warrant #1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0334 | 0.0317 | ||
Risk free rate | Back Stop Warrant #2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0331 | 0.0306 | ||
Risk free rate | Back Stop Warrant #3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.0418 | 0.0368 | ||
Expected term (in years) | Equity Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 9.82 | 10 | ||
Expected term (in years) | Liability Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 10 | |||
Expected term (in years) | Placement Agent Warrants One | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 10 | |||
Expected term (in years) | Placement Agent Warrants Two | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 10 | |||
Expected term (in years) | Back Stop Warrant #1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 4.46 | 4.65 | ||
Expected term (in years) | Back Stop Warrant #2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 4.88 | 5 | ||
Expected term (in years) | Back Stop Warrant #3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | Y | 4.76 | 5 | ||
Stock price volatility | Equity Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.9587 | 0.9599 | ||
Stock price volatility | Liability Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.9790 | |||
Stock price volatility | Placement Agent Warrants One | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.9822 | |||
Stock price volatility | Placement Agent Warrants Two | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0.9790 | |||
Stock price volatility | Back Stop Warrant #1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 1.1729 | 1.1020 | ||
Stock price volatility | Back Stop Warrant #2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 1.1359 | 1.0949 | ||
Stock price volatility | Back Stop Warrant #3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 1.2667 | 1.2436 | ||
Expected dividend yield | Equity Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 | ||
Expected dividend yield | Liability Classified Placement Agent Warrants | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | |||
Expected dividend yield | Placement Agent Warrants One | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | |||
Expected dividend yield | Placement Agent Warrants Two | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | |||
Expected dividend yield | Back Stop Warrant #1 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 | ||
Expected dividend yield | Back Stop Warrant #2 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 | ||
Expected dividend yield | Back Stop Warrant #3 | ||||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||||
Derivative Liability, Measurement Input | 0 | 0 |
Equity Awards and Warrants - Eq
Equity Awards and Warrants - Equity Incentive Plan (Details) shares in Millions | 12 Months Ended |
May 31, 2023 plan shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Number of active plans | plan | 1 |
2012 Equity Incentive Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Shares available for future stock-based grants | shares | 56.3 |
Equity Awards and Warrants - St
Equity Awards and Warrants - Stock options (Details) - Stock Options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Number of shares | |||
Outstanding, beginning of period | 17,457 | 17,839 | |
Granted | 12,417 | 11,985 | |
Exercised | (510) | ||
Forfeited, expired, and cancelled | (10,051) | (11,857) | |
Outstanding, end of period | 19,823 | 17,457 | 17,839 |
Options exercisable (in shares) | 11,932 | ||
Weighted average exercise price | |||
Outstanding at the beginning of the year (in dollars per share) | $ 1.53 | $ 1.58 | |
Granted | 0.41 | 1.38 | |
Exercised | 0.79 | ||
Forfeited, expired, and cancelled | 1.16 | 1.51 | |
Outstanding at the end of the year (in dollars per share) | 0.99 | $ 1.53 | $ 1.58 |
Options outstanding and exercisable | $ 1.21 | ||
Additional Information | |||
Weighted average remaining contractual life in years | 7 years 10 months 13 days | 7 years 9 months 14 days | 7 years 11 months 4 days |
Weighted average remaining contractual life in years exercisable | 7 years 7 days | ||
Aggregate intrinsic value | $ 301 | $ 15,390 |
Equity Awards and Warrants - Sc
Equity Awards and Warrants - Schedule of Assumptions (Details) | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Volatility, Minimum | 99.20% | 94.30% |
Expected Volatility, Maximum | 112.70% | 122% |
Weighted-Average Volatility | 107.06% | 104.89% |
Expected Dividends | 0% | 0% |
Risk-Free Rate | 3.83% | 1.67% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Term (In years) | 5 years | 1 year 6 months |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected Term (In years) | 6 years 1 month 6 days | 6 years |
Equity Awards and Warrants - Ex
Equity Awards and Warrants - Expense and unrecognized (Details) - USD ($) $ in Thousands, shares in Millions | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 4,275 | $ 6,239 | |
Common stock warrants to purchase shares | 71.1 | ||
Stock Options And Warrants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Vested during the period, grant date fair value | 4,900 | 3,900 | |
Unrecognized compensation expense | $ 3,000 | ||
Weighted average period over which unrecognized compensation expense is expected to be recognized | 1 year 1 month 6 days | ||
Equity Instruments | General and Administrative Expenses | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Compensation expense | $ 4,300 | $ 6,200 |
Equity Awards and Warrants - Op
Equity Awards and Warrants - Options, RSUs, PSUs (Details) shares in Thousands | 12 Months Ended | ||||
Jun. 01, 2022 | May 31, 2023 plan shares | May 31, 2022 $ / shares shares | Aug. 31, 2022 shares | Aug. 30, 2022 shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Common stock, shares authorized | 1,350,000 | 1,350,000 | 1,350,000 | 1,000,000 | |
Number of active plans | plan | 1 | ||||
Management, Employees And Consultants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option granted, Shares | 1,800 | ||||
Stock Options | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Stock option exercises (in shares) | 510 | ||||
Stock options exercised, exercise price | $ / shares | $ 0.79 | ||||
Stock Options | Management, Employees And Consultants | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Award vesting period | 4 years | ||||
Options term | 10 years | ||||
Restricted Stock Units (RSUs) [Member] | Executives | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of common stock upon vesting of stock based compensation awards, shares | 200 | ||||
2012 Equity Incentive Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Annual increase in shares authorized, as a percent of outstanding shares | 1% | ||||
Shares available for future stock-based grants | 56,300 |
Equity Awards and Warrants - Re
Equity Awards and Warrants - Restricted Stock Units ("RSUs") and Performance Stock Units ("PSU"s) (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 1 Months Ended | 12 Months Ended | |||
Jul. 31, 2021 | May 31, 2023 | May 31, 2022 | May 31, 2021 | Jul. 31, 2022 | |
RSU and PSU | |||||
Number of shares | |||||
Beginning shares | 300 | 5,470 | |||
Granted (in shares) | 1,293 | ||||
Forfeited (in shares) | (150) | (4,356) | |||
Vested (in shares) | (150) | (814) | |||
Ending shares | 1,293 | 300 | 5,470 | ||
Weighted average grant date fair value | |||||
Beginning | $ 3.12 | $ 2.96 | |||
Grant | 0.58 | ||||
Forfeited | 3.12 | 2.94 | |||
Vested | 3.12 | 3.01 | |||
Ending | $ 0.58 | $ 3.12 | $ 2.96 | ||
Weighted average remaining contractual life in years | 9 months 21 days | 6 months 29 days | 1 year 3 days | ||
Performance target level percentage for non-vested equity-based payment instruments | 100% | ||||
Performance Shares [Member] | |||||
Weighted average grant date fair value | |||||
Unrecognized compensation expense | $ 0.4 | $ 0.6 | |||
Expected to be recognized over weighted-average period | 9 months 21 days | ||||
Performance Shares [Member] | Maximum | |||||
Weighted average grant date fair value | |||||
Performance target level percentage for non-vested equity-based payment instruments | 100% | ||||
Performance Shares [Member] | Minimum | |||||
Weighted average grant date fair value | |||||
Performance target level percentage for non-vested equity-based payment instruments | 0% | ||||
RSU | |||||
Weighted average grant date fair value | |||||
Unrecognized compensation expense | $ 0.6 |
Equity Awards and Warrants - Pr
Equity Awards and Warrants - Private Placement of Shares of Common Stock and Warrants (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||||||
May 31, 2023 | May 30, 2023 | Feb. 13, 2023 | Jan. 12, 2023 | Feb. 14, 2022 | Jul. 31, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Apr. 30, 2022 | Aug. 31, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | May 31, 2023 | May 31, 2022 | Mar. 10, 2023 | Feb. 28, 2023 | Jan. 05, 2023 | Dec. 31, 2022 | Aug. 31, 2022 | Aug. 30, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||||||
Exercise of warrants for cash | $ 400,000 | |||||||||||||||||||
Exercise of warrants for cash, shares | 1,800,000 | |||||||||||||||||||
Cashless exercise of warrants, shares | 100,000 | |||||||||||||||||||
Cashless exercise of warrants, warrants | 300,000 | |||||||||||||||||||
Shares issued during the period new issues shares | 400,000 | |||||||||||||||||||
Finance charges related to warrant issuance for surety bond backstop agreement | $ 4,885,000 | $ 6,585,000 | ||||||||||||||||||
Common stock warrants to purchase shares | 71,100,000 | |||||||||||||||||||
Term of warrants | 10 years | 5 years | ||||||||||||||||||
Placement agent fees and expenses | $ 2,000,000 | $ 2,800,000 | ||||||||||||||||||
Number of warrants expiration extended | 3,800,000 | |||||||||||||||||||
Proceeds from warrant exercises | $ 439,000 | $ 1,036,000 | ||||||||||||||||||
Deemed dividends | $ 600,000 | |||||||||||||||||||
Common Stock, Shares Authorized | 1,350,000,000 | 1,350,000,000 | 1,350,000,000 | 1,350,000,000 | 1,000,000,000 | |||||||||||||||
CytoDyn Inc. | David F Welch | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Ownership percentage | 5% | 5% | ||||||||||||||||||
Back Stop Warrant #1 | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.10 | |||||||||||||||||||
Common stock warrants to purchase shares | 7,500,000 | |||||||||||||||||||
Back Stop Warrant #2 | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.10 | |||||||||||||||||||
Common stock warrants to purchase shares | 7,500,000 | 7,500,000 | 7,500,000 | 7,500,000 | ||||||||||||||||
Accredited Investors Warrants [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||||||
Common stock warrants to purchase shares | 500,000 | |||||||||||||||||||
Term of warrants | 5 years | |||||||||||||||||||
Placement agent fees and expenses | $ 13,800 | |||||||||||||||||||
Warrants to Private Placement Agents | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Term of warrants | 10 years | |||||||||||||||||||
Former CEO | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Compensation policy period | 18 months | |||||||||||||||||||
Shares issued during the period new issues shares | 380,704 | |||||||||||||||||||
Former General Counsel | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Compensation policy period | 12 months | |||||||||||||||||||
Shares issued during the period new issues shares | 79,391 | |||||||||||||||||||
Private Equity Offering | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.306 | $ 0.40 | $ 0.306 | |||||||||||||||||
Shares issued during the period new issues shares | 4,600,000 | |||||||||||||||||||
Common stock warrants to purchase shares | 5,500,000 | 5,500,000 | ||||||||||||||||||
Warrant covering common stock shares purchased, percentage | 75% | 50% | ||||||||||||||||||
Stock issued for private offerings | $ 37,224,000 | $ 46,511,000 | ||||||||||||||||||
Incremental fair value of warrants | 4,200,000 | |||||||||||||||||||
Debt issuance costs | $ 9,700,000 | |||||||||||||||||||
Accredited Investors | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Shares issued during the period new issues shares | 500,000 | 85,400,000 | 34,600,000 | |||||||||||||||||
Common stock warrants to purchase shares | 71,100,000 | |||||||||||||||||||
Stock issued for private offerings | $ 100,000 | $ 14,400,000 | $ 18,900,000 | |||||||||||||||||
Proceeds, net of issuance costs | $ 7,700,000 | |||||||||||||||||||
Private Warrant Exchange | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 1 | $ 1 | ||||||||||||||||||
Shares issued during the period new issues shares | 500,000 | |||||||||||||||||||
Placement agent fees and expenses | $ 2,100,000 | |||||||||||||||||||
Incremental fair value of warrants | $ 100,000 | |||||||||||||||||||
Exercise of warrants, net of offering costs (in shares) | 9,700,000 | |||||||||||||||||||
Shares issued on warrant inducement | 8,400,000 | |||||||||||||||||||
Proceeds from warrant exercises | $ 2,100,000 | |||||||||||||||||||
Deemed dividends | 500,000 | |||||||||||||||||||
Private Warrant Exchange | Cyrus Arman | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||||||
Shares issued during the period new issues shares | 400,000 | |||||||||||||||||||
Common stock warrants to purchase shares | 1 | |||||||||||||||||||
Number of shares per warrant | 1 | |||||||||||||||||||
Proceeds from Issuance of Common Stock | $ 100,000 | |||||||||||||||||||
Number of shares per unit | 1 | |||||||||||||||||||
Allotment to placement agent | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.23 | $ 0.255 | ||||||||||||||||||
Common stock warrants to purchase shares | 10,700,000 | 19,400,000 | ||||||||||||||||||
Term of warrants | 10 years | |||||||||||||||||||
Warrant covering common stock shares purchased, percentage | 15% | 12% | 13% | |||||||||||||||||
Placement agent fees and expenses | $ 25,000 | $ 50,000 | ||||||||||||||||||
Allotment to placement agent | Accredited Investors Warrants [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Warrant covering common stock shares purchased, percentage | 12% | |||||||||||||||||||
Allotment to placement agent | Warrants to Private Placement Agents | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.23 | |||||||||||||||||||
Common stock warrants to purchase shares | 75,000 | |||||||||||||||||||
Warrant covering common stock shares purchased, percentage | 15% | |||||||||||||||||||
Second Private Placement | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.306 | |||||||||||||||||||
Exercise price of stock warrant combo, per share | $ 0.23 | $ 0.255 | ||||||||||||||||||
Common stock warrants to purchase shares | 64,000,000 | |||||||||||||||||||
Term of warrants | 5 years | |||||||||||||||||||
Number of common shares in a fixed combination issue of shares | 1 | 1 | ||||||||||||||||||
Number of warrants in a fixed combination issue of securities | 1 | 1 | ||||||||||||||||||
Warrant exercise price percentage of final unit price | 120% | |||||||||||||||||||
Closing share price (as percentage) | 90% | |||||||||||||||||||
Surety Bond Backstop Agreement | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Finance charges related to warrant issuance for surety bond backstop agreement | 4,900,000 | |||||||||||||||||||
Interest rate | 10% | |||||||||||||||||||
Period of Indemnification, Payment by Indemnitors | 90 days | |||||||||||||||||||
Indemnification Fee Payment Ratio | 1.50% | |||||||||||||||||||
Amount of cash collateral to be relieved of amount currently pledged | $ 1,400,000 | $ 5,100,000 | ||||||||||||||||||
Restricted Cash | $ 6,500,000 | $ 6,500,000 | ||||||||||||||||||
Surety Bond Backstop Agreement | Four Good Warrants | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.10 | $ 0.10 | ||||||||||||||||||
Term of warrants | 5 years | 5 years | ||||||||||||||||||
Initial Warrant | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Common stock warrants to purchase shares | 15,000,000 | |||||||||||||||||||
Make-Whole Warrant | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Common stock warrants to purchase shares | 15,000,000 | |||||||||||||||||||
Four Good Warrants | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Finance charges related to warrant issuance for surety bond backstop agreement | $ 6,600,000 | |||||||||||||||||||
Warrant Exchange Agreements [Member] | Accredited Investors Warrants [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Warrant exercises (in shares) | 3,400,000 | |||||||||||||||||||
Shares issued on warrant inducement | 600,000 | |||||||||||||||||||
Proceeds from warrant exercises | $ 700,000 | |||||||||||||||||||
Restricted Cash | $ 100,000 | $ 100,000 | ||||||||||||||||||
Maximum | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.75 | $ 0.75 | ||||||||||||||||||
Cashless exercise of warrants, exercise price | 0.50 | 0.50 | ||||||||||||||||||
Maximum | Private Equity Offering | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | 0.255 | 0.255 | ||||||||||||||||||
Maximum | Warrant Exchange Agreements [Member] | Accredited Investors Warrants [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | 0.75 | 0.75 | ||||||||||||||||||
Minimum | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | 0.10 | 0.10 | ||||||||||||||||||
Cashless exercise of warrants, exercise price | 0.26 | 0.26 | ||||||||||||||||||
Minimum | Private Equity Offering | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | 0.40 | 0.40 | ||||||||||||||||||
Minimum | Surety Bond Backstop Agreement | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Amount of cash collateral to be relieved of amount currently pledged | $ 1,500,000 | |||||||||||||||||||
Minimum | Warrant Exchange Agreements [Member] | Accredited Investors Warrants [Member] | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.50 | $ 0.50 | ||||||||||||||||||
2012 Equity Incentive Plan | Executives | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Percent of salary in lieu of cash, net of payroll deductions and withholding taxes | 25% | |||||||||||||||||||
Shares issued | 522,382 | 317,441 | ||||||||||||||||||
2012 Equity Incentive Plan | Consultants | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Stocks issued for severance payment | 1,617,760 | 128,001 | ||||||||||||||||||
Subsequent Event | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Placement agent fees and expenses | $ 400,000 | |||||||||||||||||||
Subsequent Event | Accredited Investors | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Shares issued during the period new issues shares | 14,700,000 | |||||||||||||||||||
Stock issued for private offerings | $ 2,600,000 | |||||||||||||||||||
Subsequent Event | Allotment to placement agent | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of share | $ 0.20 | |||||||||||||||||||
Common stock warrants to purchase shares | 2,200,000 | |||||||||||||||||||
Term of warrants | 10 years | |||||||||||||||||||
Warrant covering common stock shares purchased, percentage | 15% | 12% | ||||||||||||||||||
Placement agent fees and expenses | $ 5,000 | |||||||||||||||||||
Subsequent Event | Second Private Placement | ||||||||||||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||||||||||||
Exercise price of stock warrant combo, per share | $ 0.20 | |||||||||||||||||||
Closing share price (as percentage) | 90% |
Equity Awards and Warrants - _2
Equity Awards and Warrants - Stock Options and Other Equity Awards (Details) - $ / shares shares in Thousands | 12 Months Ended | ||
Feb. 13, 2023 | May 31, 2023 | May 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options outstanding, vested | 12,000 | 9,900 | |
Options outstanding, nonvested | 7,800 | 7,500 | |
Shares issued during the period new issues shares | 400 | ||
Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Warrant exercises (in shares) | 1,898 | 1,642 | |
Management, Employees And Consultants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option granted, Shares | 1,800 | ||
Management, Employees And Consultants [Member] | Maximum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option granted, exercise price | $ 0.67 | ||
Stock options grant date fair value | 0.54 | ||
Management, Employees And Consultants [Member] | Minimum | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option granted, exercise price | 0.35 | ||
Stock options grant date fair value | 0.29 | ||
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Stock option granted, exercise price | $ 0.41 | $ 1.38 | |
Stock options exercised, exercise price | $ 0.79 | ||
Stock Options | Management, Employees And Consultants [Member] | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Options term | 10 years | ||
Award vesting period | 4 years | ||
Restricted Stock Units (RSUs) [Member] | Executives | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuance of common stock upon vesting of stock based compensation awards, shares | 200 |
Equity Awards and Warrants - Wa
Equity Awards and Warrants - Warrants Activity (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
May 31, 2023 | May 31, 2022 | May 31, 2021 | |
Equity Awards and Warrants | |||
Warrants outstanding beginning of period | 73,248 | 42,934 | |
Granted | 201,771 | 38,220 | |
Exercised | (6,207) | (5,167) | |
Forfeited, expired, and cancelled | (8,902) | (2,740) | |
Warrants outstanding at end of period | 259,910 | 73,248 | 42,934 |
Warrants outstanding and exercisable | 259,910 | ||
Outstanding at the beginning of the year (in dollars per share) | $ 0.59 | $ 0.68 | |
Granted | 0.33 | 0.52 | |
Exercised | 0.63 | 0.70 | |
Forfeited, expired, and cancelled | 0.75 | 0.73 | |
Outstanding at the end of the year (in dollars per share) | 0.37 | $ 0.59 | $ 0.68 |
Warrants outstanding and exercisable | $ 0.37 | ||
Weighted average remaining contractual life in years | 4 years 6 months 25 days | 3 years 2 months 4 days | 2 years 10 months 20 days |
Weighted average remaining contractual life in years exercisable | 4 years 6 months 25 days | ||
Aggregate intrinsic value outstanding of beginning | $ 352 | $ 52,671 | |
Aggregate intrinsic value exercised | 758 | 5,514 | |
Aggregate intrinsic value outstanding of end period | 7,276 | $ 352 | $ 52,671 |
Aggregate intrinsic value exercisable | $ 7,276 |
Loss per Common Share - Summary
Loss per Common Share - Summary of Reconciliation of Net Loss Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Loss per Common Share | ||
Net loss | $ (79,824) | $ (210,820) |
Less: Deemed dividends | (5,417) | |
Less: Accrued preferred stock dividends | (1,495) | (1,628) |
Net loss applicable to common stockholders | $ (86,736) | $ (212,448) |
Weighted average common shares outstanding, Basic | 836,528 | 676,900 |
Weighted average common shares outstanding, Diluted | 836,528 | 676,900 |
Loss per share, Basic | $ (0.10) | $ (0.31) |
Loss per share, Diluted | $ (0.10) | $ (0.31) |
Loss per Common Share - Summa_2
Loss per Common Share - Summary of Weighted Average Number of Shares of Common Stock Outstanding (Details) - shares shares in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Stock options, warrants, and unvested restricted stock units | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of loss per common share | 281,023 | 106,002 |
Convertible notes | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of loss per common share | 12,000 | 12,000 |
Convertible preferred stock | ||
Antidilutive Securities Excluded from Computation of Earnings Per Share | ||
Antidilutive securities excluded from computation of loss per common share | 34,071 | 32,535 |
Income Taxes (Details)
Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Income Taxes | ||
Deferred income tax benefit | $ 0 | $ 0 |
Effective Income Tax Rate Reconciliation Percent | ||
Income tax provision at statutory rate: | 21% | 21% |
Income Taxes - Reconciliation o
Income Taxes - Reconciliation of Tax Rates (Details) | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Effective Income Tax Rate Reconciliation Percent | ||
Income tax provision at statutory rate: | 21% | 21% |
Derivative loss | (2.30%) | 0% |
Non-deductible debt issuance costs | (2.60%) | 0% |
Non-deductible interest on convertible notes | (1.20%) | (0.50%) |
Inducement interest expense | 0% | (0.70%) |
Other | 0.80% | 1.10% |
Credit carry-forward released | 0% | (0.20%) |
Non-deductible loss on induced conversion | (1.40%) | (3.70%) |
Non-deductible debt discount amortization | (0.60%) | (0.30%) |
IRC section 162(m) limitation | 0% | (0.10%) |
Non-deductible expense on induced conversion of debt | 0% | (0.30%) |
Valuation allowance | (13.70%) | (16.30%) |
Effective income tax rate | 0% | 0% |
Income Taxes - Net Deferred Tax
Income Taxes - Net Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Components of Deferred Tax Assets and Liabilities | ||
Net operating loss | $ 96,338 | $ 106,965 |
Credits | 2,063 | 2,063 |
ASC 718 expense on non-qualified stock options | 6,400 | 6,057 |
Charitable contribution carry forward | 0 | 14 |
Accrued vacation and payroll | 21 | 68 |
Right of use asset | (84) | (112) |
Lease liability | 89 | 117 |
Inventory charges | 6,173 | 2,138 |
Inventory write-off | 13,739 | 0 |
Issued warrants | 2,317 | 0 |
Section 174 R&D costs | 858 | 0 |
Accrued legal settlements | 13 | 0 |
Accrued legal fees | 3 | 0 |
Accrued expenses | 36 | 89 |
Amortization | 609 | 238 |
Fixed assets | 4 | 1 |
Valuation allowance | (128,579) | (117,638) |
Deferred tax asset, non-current | 0 | 0 |
Non-current asset | 128,579 | 117,638 |
Valuation allowance | (128,579) | (117,638) |
Deferred tax asset (liability) non-current | 0 | 0 |
Net operating loss | $ 458,800 | $ 509,400 |
Commitments and Contingencies_2
Commitments and Contingencies (Details) £ in Millions | 1 Months Ended | 12 Months Ended | |||||||
Dec. 20, 2022 item | Aug. 18, 2021 lawsuit | Jun. 25, 2021 lawsuit | Jun. 04, 2021 lawsuit | Dec. 31, 2019 USD ($) D | May 31, 2023 USD ($) item | May 31, 2023 GBP (£) | Jan. 31, 2022 USD ($) | Jan. 06, 2022 USD ($) | |
Shareholder Derivative Lawsuits | |||||||||
Commitments and Contingencies | |||||||||
Number of additional shareholder derivative lawsuits | lawsuit | 2 | 2 | |||||||
Consolidated number of lawsuits | lawsuit | 3 | ||||||||
Securities and Exchange Commission and Department of Justice Investigations | Mr. Pourhassan | |||||||||
Commitments and Contingencies | |||||||||
Number of conspiracy charges | item | 1 | ||||||||
Number of security fraud charges | item | 4 | ||||||||
Number of wire fraud charges | item | 3 | ||||||||
Number of insider trading charges | item | 3 | ||||||||
Securities and Exchange Commission and Department of Justice Investigations | Kazem Kazempour | |||||||||
Commitments and Contingencies | |||||||||
Number of conspiracy charges | item | 1 | ||||||||
Number of security fraud charges | item | 3 | ||||||||
Number of wire fraud charges | item | 2 | ||||||||
Number of insider trading charges | item | 1 | ||||||||
Samsung BioLogics Co., Ltd. ("Samsung") | |||||||||
Commitments and Contingencies | |||||||||
Forecast period | 3 years | ||||||||
Amount of material breach of' Master Services and Project Specific Agreements | $ | $ 13,500,000 | ||||||||
Additional Contractual Obligation | $ | $ 22,800,000 | ||||||||
Past due balance | $ | $ 232,788,000 | ||||||||
License Agreements With Vyera Pharmaceuticals, LLC | |||||||||
Commitments and Contingencies | |||||||||
Amount payable upon achievement of sales and regulatory milestone | $ | $ 85,300,000 | ||||||||
Percentage of royalty payable by the counter party | 50% | ||||||||
Term of arrangement | 10 years | ||||||||
Term of arrangement, after first commercial sale | 2 years | ||||||||
Number of days of prior written notice | D | 180 | ||||||||
Progenics Purchase Agreement | |||||||||
Commitments and Contingencies | |||||||||
Amount of milestone payments payable | $ | $ 5,000,000 | ||||||||
Percentage of royalty payable | 3.50% | ||||||||
Amount payable upon filing BLA with FDA | $ | $ 500,000 | ||||||||
Amount payable upon FDA approval | $ | 500,000 | ||||||||
Annual maintenance fees | $ | $ 150,000 | ||||||||
Progenics Purchase Agreement | Royalty Payable in Initial 10 Years | |||||||||
Commitments and Contingencies | |||||||||
Percentage of royalty payable | 5% | ||||||||
Lonza Agreement | |||||||||
Commitments and Contingencies | |||||||||
Number of contract manufacturers | item | 2 | ||||||||
Annual license fee | $ 700,000 | £ 0.6 | |||||||
Royalty on net sales (as a percent) | 2% | 2% | |||||||
Accounts Payable | Samsung BioLogics Co., Ltd. ("Samsung") | |||||||||
Commitments and Contingencies | |||||||||
Past due balance | $ | $ 33,700,000 |
Commitments and Contingencies -
Commitments and Contingencies - Summary of Future Commitments (Details) - Samsung BioLogics Co., Ltd. ("Samsung") $ in Thousands | May 31, 2023 USD ($) |
Fiscal Year | |
2024 | $ 156,388 |
2025 | 76,400 |
Total | $ 232,788 |
Commitments and Contingencies_3
Commitments and Contingencies - Summary of Operating Lease Balances (Details) - USD ($) $ in Thousands | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Commitments and Contingencies. | ||
Operating lease costs | $ 200 | $ 200 |
Right-of-use asset | $ 400 | $ 536 |
Operating Lease, Right-of-Use Asset, Statement of Financial Position [Extensible Enumeration] | Other Assets, Noncurrent | Other Assets, Noncurrent |
Current operating lease liability | $ 139 | $ 134 |
Operating Lease, Liability, Current, Statement of Financial Position [Extensible Enumeration] | Accrued Compensation And Non-financing Liabilities | Accrued Compensation And Non-financing Liabilities |
Non-current operating lease liability | $ 283 | $ 422 |
Total operating lease liability | $ 422 | $ 556 |
Commitments and Contingencies_4
Commitments and Contingencies - Summary of Minimum (Base Rental) Lease Payments (Details) - USD ($) $ in Thousands | May 31, 2023 | May 31, 2022 |
Fiscal Year | ||
2024 | $ 182 | |
2025 | 185 | |
2026 | 169 | |
Total operating lease payments | 536 | |
Less: imputed interest | (114) | |
Present value of operating lease liabilities | $ 422 | $ 556 |
Commitments and Contingencies_5
Commitments and Contingencies - Supplemental Information Related to Operating Leases (Details) | May 31, 2023 |
Commitments and Contingencies. | |
Weighted average remaining lease term | 2 years 10 months 24 days |
Weighted average discount rate | 10% |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 12 Months Ended | ||||
Feb. 13, 2023 | Sep. 30, 2021 | Jul. 31, 2021 | May 31, 2023 | May 31, 2022 | Mar. 31, 2023 | |
Related Party Transaction [Line Items] | ||||||
Number of shares to be sold | 400,000 | |||||
Warrants to purchase common shares, shares | 71,100,000 | |||||
Exercise price of share | $ 0.50 | |||||
Private Warrant Exchange | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares to be sold | 500,000 | |||||
Exercise price of share | $ 1 | |||||
Jordan G. Naydenov | Private Warrant Exchange | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants to purchase common shares, shares | 1,300,000 | |||||
Proceeds from issuance of common shares | $ 0.7 | |||||
Jordan G. Naydenov | Private Warrant Exchange, Inducement Shares [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants to purchase common shares, shares | 600,000 | |||||
Jordan G. Naydenov | Private Warrant Exchange, Non-Inducement Shares [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Warrants to purchase common shares, shares | 600,000 | |||||
Cyrus Arman | Private Warrant Exchange | ||||||
Related Party Transaction [Line Items] | ||||||
Number of shares to be sold | 400,000 | |||||
Number of shares per unit | 1 | |||||
Warrants to purchase common shares, shares | 1 | |||||
Number of shares per warrant | 1 | |||||
Exercise price of share | $ 0.50 | |||||
Proceeds from issuance of common shares | $ 0.1 | |||||
Immediate Family Member of Management or Principal Owner [Member] | ||||||
Related Party Transaction [Line Items] | ||||||
Related party transactions, amount | $ 0.1 | $ 0.2 | $ 1.7 |
Employee Benefit Plan (Details)
Employee Benefit Plan (Details) - Employee Savings Plan - USD ($) $ in Millions | 12 Months Ended | |
May 31, 2023 | May 31, 2022 | |
Defined Contribution Plan Disclosure [Line Items] | ||
Qualified non-elective contribution, employer contribution, as a percent | 3% | |
Qualified non-elective contribution expense | $ 0.1 | $ 0.1 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | 1 Months Ended | 2 Months Ended | 3 Months Ended | 12 Months Ended | ||||||||||||
Jun. 23, 2023 | May 05, 2023 | Apr. 28, 2023 | Feb. 13, 2023 | Jan. 12, 2023 | Apr. 02, 2021 | Jul. 31, 2023 | Apr. 30, 2023 | Jan. 31, 2023 | Aug. 31, 2023 | Mar. 31, 2023 | Jun. 30, 2022 | May 31, 2023 | May 31, 2022 | Jun. 30, 2023 | Feb. 04, 2023 | |
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 71,100,000 | |||||||||||||||
Term of warrants | 10 years | 5 years | ||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||
Placement agent fees and expenses | $ 2,000,000 | $ 2,800,000 | ||||||||||||||
Stock issued for private offerings (in shares) | 400,000 | |||||||||||||||
Convertible note, redeemed amount | $ 4,000,000 | $ 31,000,000 | ||||||||||||||
Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt Instrument Term | 18 months | 18 months | ||||||||||||||
Convertible note, aggregate principal | $ 1,000,000 | $ 1,000,000 | ||||||||||||||
Exercise price of share | $ 0.50 | $ 0.50 | ||||||||||||||
Proceeds from issuance of warrants | $ 900,000 | $ 900,000 | ||||||||||||||
Placement agent fees and expenses | $ 100,000 | $ 100,000 | ||||||||||||||
Partitioned Notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Convertible note, aggregate principal | $ 4,000,000 | |||||||||||||||
Long-term Convertible Note - April 2, 2021 Note | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt Instrument Term | 2 years | |||||||||||||||
Convertible note, aggregate principal | $ 28,500,000 | $ 6,100,000 | ||||||||||||||
Conversion of preferred stock to common stock (in shares) | 17,300,000 | |||||||||||||||
Placement Agent Warrants Issue One | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 1,000,000 | 1,000,000 | ||||||||||||||
Term of warrants | 3 years | 3 years | ||||||||||||||
Placement Agent Warrants Issue Two | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 300,000 | 300,000 | ||||||||||||||
Term of warrants | 10 years | 10 years | ||||||||||||||
Accredited Investors | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 71,100,000 | |||||||||||||||
Stock issued for private offerings (in shares) | 500,000 | 85,400,000 | 34,600,000 | |||||||||||||
Stock issued for private offerings | $ 100,000 | $ 14,400,000 | $ 18,900,000 | |||||||||||||
Allotment to placement agent | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 10,700,000 | 19,400,000 | ||||||||||||||
Term of warrants | 10 years | |||||||||||||||
Exercise price of share | $ 0.23 | $ 0.255 | ||||||||||||||
Placement agent fees and expenses | $ 25,000 | $ 50,000 | ||||||||||||||
Warrant covering common stock shares purchased, percentage | 15% | 12% | 13% | |||||||||||||
Second Private Placement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 64,000,000 | |||||||||||||||
Term of warrants | 5 years | |||||||||||||||
Exercise price of share | $ 0.306 | |||||||||||||||
Number of common shares in a fixed combination issue of shares | 1 | 1 | ||||||||||||||
Number of warrants in a fixed combination issue of securities | 1 | 1 | ||||||||||||||
Exercise price of stock warrant combo, per share | $ 0.23 | $ 0.255 | ||||||||||||||
Closing share price (as percentage) | 90% | |||||||||||||||
Subsequent Event | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Placement agent fees and expenses | $ 400,000 | |||||||||||||||
Subsequent Event | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Debt Instrument Term | 18 months | |||||||||||||||
Convertible note, aggregate principal | $ 1,300,000 | |||||||||||||||
Proceeds from issuance of warrants | 1,200,000 | |||||||||||||||
Placement agent fees and expenses | $ 100,000 | |||||||||||||||
Subsequent Event | Amended placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Exercise price of share | $ 0.306 | |||||||||||||||
Subsequent Event | Partitioned Notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Convertible note, aggregate principal | $ 1,500,000 | |||||||||||||||
Subsequent Event | Long-term Convertible Note - April 2, 2021 Note | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Conversion of preferred stock to common stock (in shares) | 8,700,000 | |||||||||||||||
Subsequent Event | Placement Agent Warrants Issue One | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||
Subsequent Event | Placement Agent Warrants Issue One | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 1,300,000 | |||||||||||||||
Term of warrants | 3 years | |||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||
Subsequent Event | Placement Agent Warrants Issue Two | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 400,000 | |||||||||||||||
Term of warrants | 10 years | |||||||||||||||
Exercise price of share | $ 0.26 | |||||||||||||||
Subsequent Event | Private placement warrants | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 14,700,000 | |||||||||||||||
Term of warrants | 5 years | |||||||||||||||
Exercise price of share | $ 0.50 | |||||||||||||||
Subsequent Event | Accredited Investors | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Stock issued for private offerings (in shares) | 14,700,000 | |||||||||||||||
Stock issued for private offerings | $ 2,600,000 | |||||||||||||||
Subsequent Event | Accredited Investors | Placement agent notes | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Convertible note, redeemed amount | $ 2,300,000 | |||||||||||||||
Warrants issued in debt conversion | 11,500,000 | |||||||||||||||
Subsequent Event | Accredited Investors | Private placement warrants | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Term of warrants | 5 years | |||||||||||||||
Exercise price of share | $ 0.306 | |||||||||||||||
Warrants issued in debt conversion | 11,500,000 | |||||||||||||||
Subsequent Event | Allotment to placement agent | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Warrants to purchase common shares, shares | 2,200,000 | |||||||||||||||
Term of warrants | 10 years | |||||||||||||||
Exercise price of share | $ 0.20 | |||||||||||||||
Placement agent fees and expenses | $ 5,000 | |||||||||||||||
Warrant covering common stock shares purchased, percentage | 15% | 12% | ||||||||||||||
Subsequent Event | Second Private Placement | ||||||||||||||||
Subsequent Event [Line Items] | ||||||||||||||||
Exercise price of stock warrant combo, per share | $ 0.20 | |||||||||||||||
Closing share price (as percentage) | 90% |