Early this morning, the 11th of November, everyone’s favorite reverse-merger pink sheet Coronacrapper, Cytodyn (CYDY), issued a press release (here) eerily reminiscent of one from the end of July (here) and the end of March (here).
Here is the one from this morning:
Sounds AMAZING, right? Especially with the shares trading right around $2.00. But this is Cytodyn, so naturally nothing is as it seems. Instead this press release, like the July and March press releases before it, appears to be quite misleading as to the true amount raised, the effective interest rate, the true dilutive nature of the financing, and the true effective conversion price. We won’t know for sure, of course, until the company issues an 8k with the actual details.
Talk about deja vu. For the March deal we didn’t get any real details until the 8k was filed on the 6th of April (here). For the July deal we only had to wait 2 days, as the 8k was filed on the 31st of July (available here).
Both of those 8ks revealed important information that the press release conveniently omitted. The “institutional investor” in both turned out to be Iliad Research and Trading, LP. This is one of many John M. Fife entities (Iliad, St. George, Chicago Venture Partners, among others). Who is he? A one-time variable annuity trader (see here) who moved into toxic financing of shady penny stocks.
And while the headline screams a top-line number of $28.5mm, the actual amount of money raised by the company was only $25mm.
The next red flag is that although the press release claimed it was a $28.5mm note convertible at $10, bearing interest at 10%, but these are misleading. As the company only received $25mm, a discount of 12.25%. This means that Fife invested $25mm but will receive at maturity the face value ($28.5mm) in addition to annual 10% interest on the face value. The effective interest rate is actually 11.4%.
And the $10 conversion price?
The note is convertible into 2.85mm shares at $10.50 per share. But as Iliad only paid $25mm for the note, the effective conversion price is actually $25/2.85 = $8.77 per share.
Finally, for all the claims about this being a non-dilutive financing, the 8ks from April and July are clear that in addition to “standard anti-dilution” the note also features a “full-ratchet.” A full-ratchet means that if the company raises money in the future at a lower price than given to Iliad, the conversion price is reset to the new, lower, amount. We suppose one could argue that Cytodyn isn’t lying, that the deal is certainly non-dilutive, but only to Iliad!
Not being big on coincidences here at BuyersStrike! HQ, we took a look at the unusual volume in Cytodyn shares on the 9th and 10th of November, 6.3mm and 11.1mm shares versus around 2mm shares a day on average the previous week:
Which may not be that unusual by itself, but what about the odd increase in shares outstanding as seen on Otcmarkets.com?
583.5mm shares as of November 9th, compared with 579.4mm as reported as of November 6th. Where did those 4.1mm shares come from? And to whom did they go?
As for what we don’t know, and likely will not know about this November deal, until the 8k is finally filed, here are our BuyersStrike! HQ predictions for the truth about this new CYDY deal:
The investor will be Iliad, or another Fife entity.
The “non-dilutive” deal will, in fact, be highly dilutive, just like the March and July deals.
And, those 4.1mm mystery shares that were issued sometime between November 6th and November 9th? Our prediction: Inducement to someone, most likely Iliad, and most likely the big seller on the 9th and 10th.
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you truly are a moron. keep lying all you want, buyers strike is the worst press out there, you’re the laughing stock of twitter daily,nobody respects you and when cytodyn gets approved you’re gonna get short squeezed like never before. can’t wait!!!!!!
[Hi Jason, exactly what do you believe is untrue? Why do you think “Cytodyn” will get approved? And for what? For a NASDAQ listing? Or do you mean Cytodyn’s drug? What do you think that will be approved for? Covid? HIV? Cancer? And exactly when do you think it will be approved? – Editor]
It’s gonna get approved for covid first, then HIV next and then for cancer, why? Because there is hundreds of stories of lives being saved out there, trials have never been halted, nothing has been rejected, their halted all the time and they’re allowed to continue, also you’re connected to companies who stand to lose a lot of money by Leronlimab being approved, it’s disgusting that you would rather short this stock and call it loserlimab instead of supporting it and letting it save thousands more lives and make yourself some honest money supporting a good company. Instead you lie and make things up, you call nadar a felon for doing practically nothing 20 years ago. You’re writing hit piece every few days now and have now lost all respect from anyone and can’t even scare weak hands anymore. It’s getting pathetic now and a huge waste of peoples time. Grow up man, the worlds already a mess and these guys wanna help, I’m sure you made enough already like move onto something else that is actually a scam.
[Jason aka Byrd, Expanded Access Program requests – rejected. BLA filing – rejected. BTD applications (there have been at least 2 so far) – rejected. Proven lives saved – 0 (stories don’t count). EUA for M/M – rejected. It will likely never be approved for Covid, and chances for an EUA for Covid are virtually zero due to the requirements set down in Section 564 of the FD&C Act. – Editor]
Your horrible lack of journalistic skills are laughable. Maybe you should write comedy instead. You tried it but your lies are weak. Cytodyn will prevail and I can’t wait.
[We agree, Cytodyn will prevail in fleecing retail morons. Now, can you point to a single error of fact? Of course not. – Editor]
Thank you for the research. I am reading al of your CytoDyn articles and you have opened my eyes. Shareholders should be scared shitless. There is still time to get out (not much). this stock is a religion and I have awoken to the dogma.
it’s comical that most of the comments on the articles amount to ad hominem attacks rather than factual refutation. Hmmm….paid pumpers?
Thank you for the kind words. You are correct about this being a religion, that is why the number one book I recommend is not about investing, per se, rather it is a study of cults and how they behave AFTER their prophecies fail. Cytodyn is a perfect example. You are doubtless correct about the angry commenters. Not one has been able to point to a single error of fact, they have only ad hominem attacks. The company has hired tons of paid pumpers. Some more odious than others.