UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of Earliest Event Reported) November 4, 2005
CytoDyn, Inc.
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(Exact name of registrant as specified in its charter)
Colorado 000-49908 75-3056237
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(State or other jurisdiction (Commission File Number) (IRS Employer
of incorporation) Identification No.)
200 W. DeVargas St., Suite 1, Santa Fe, NM 87501
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(Address of Principal Executive Offices) (Zip Code)
(505) 988-5520
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(Registrant's telephone number, including area code)
(Former Name or Former Address, if Changed Since Last Report)
Item 8.01 Other Events
Background
On November 25, 2003, the Company entered into a Financial Representative
Agreement (the"Agreement") with J.P. Turner & Company, LLC the ("Agent"), a
broker/dealer belonging to the National Association of Securities Dealers
("NASD"). The purpose of the Agreement was to provide the Company with the
services of the Agent in connection with a private offering of the Company's
common stock.
The Company had developed the first targeted immune therapy that has shown
promise in preliminary clinical trials as a treatment for HIV/AIDS. Although
targeted immune therapies have now become a mainstay for treating cancer and
autoimmune diseases, the use of these therapies to treat
immunologically-mediated infectious diseases would still be in the nature of a
breakthrough. (An immunologically- mediated infectious disease is a disease that
is triggered by an "infectious agent" but arises because of an inappropriate
immune response. Lyme disease is a familiar example.)
Brokers and customers of the Agent had been following the Company's product for
years and had already conducted due diligence. This involved the burden of
identifying and talking to independent medical specialists who had actual
knowledge of the subject, which requires familiarity with advanced research in a
highly focused area.
As an example of how this poses a problem for capitalization, when the Company's
President made his discovery back in 1994, it was widely believed by biotech
analysts that there could never be such a thing as a targeted immune therapy for
any disease. Today, there are so many on the market that the FDA has reassigned
these monoclonal antibodies from the biologic division to the drug division.
Because of the distinct advantage held by the Agent in being able to help the
Company and its 60 pre-existing shareholders, the Company agreed to provide the
Agent with consideration that included, without limitation, "Investment Banking
Warrants" for the purchase of 300,000 shares of the Company's common stock.
There was also a covenant for the benefit of all of the Company's shareholders
that the Company intended to register its shares for sale in the public market
place. Otherwise, the Company would find it difficult to impossible to obtain
the additional capital needed for further clinical trials due to the problems
surrounding a breakthrough, as explained above.
Change in Covenants of the Agreement
The Company subsequently learned that NASD had advised the Agent that the
Agreement violated the rules imposed by NASD on its members with respect to
compensation and participation. After five months of clarifications and
negotiations, the Agent was advised by NASD that the problem could be resolved
if the Agent sent a letter to NASD agreeing that any of the shares of the
Company listed in the Company's registration will be traded through another
broker/dealer Whether such shares are held by the Agent itself or by its
customers
The Agent has advised the Company that the Agent has complied in full with the
demands of NASD by filing the requested letter on or about November 4, 2005.
SIGNATURE
Pursuant to the requirements of Securities Exchange Act of 1934, the Registrant
has duly caused this report to be signed on its behalf by the undersigned
hereunto duly authorized.
CytoDyn, Inc.
Date: November 8, 2005 /s/ Allen D. Allen
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Allen D. Allen
President