CYTODYN INC. Management’s Discussion and Analysis of Financial Condition and Results of Operations (Form 10-Q)

Refer to information previously reported in Part I, Item 1 of Form 10-K 2021.

Certain information included in this Quarterly Report on Form 10-Q contains, or
incorporates by reference, forward-looking statements within the meaning of
Section 21E of the Exchange Act. The words "anticipate," "believe," "hope,"
"expect," "intend," "predict," "plan," "seek," "estimate," "project,"
"continue," "could," "may," and similar terms and expressions, or the use of
future tense, are intended to identify forward-looking statements. These
statements include, among others, statements about leronlimab, its ability to
have positive health outcomes, the Company's ability to resolve the clinical
holds recently imposed by the FDA, and information regarding future operations,
future capital expenditures and future net cash flows. Such statements reflect
current views with respect to future events and financial performance and
involve risks and uncertainties, including, without limitation, (i) the
regulatory determinations of leronlimab's safety and effectiveness by the U.S.
Food and Drug Administration and various drug regulatory agencies in other
countries; (ii) the Company's ability to raise additional capital to fund its
operations; (iii) the Company's ability to meet its debt and other payment
obligations; (iv) the Company's ability to enter into or maintain partnership or
licensing arrangements with third-parties; (v) the Company's ability to recruit
a permanent CEO and retain other key employees; (vi) the timely and sufficient
development, through internal resources or third-party consultants, of analyses
of the data generated from the Company's clinical trials required by the FDA or
other regulatory agencies in connection with the Company's BLA resubmission or
other applications for approval of the Company's drug product, (vii) the
Company's ability to achieve approval of a marketable product; (viii) the
design, implementation and conduct of the Company's clinical trials; (ix) the
results of the Company's clinical trials, including the possibility of
unfavorable clinical trial results; (x) the market for, and marketability of,
any product that is approved; (xi) the existence or development of vaccines,
drugs, or other treatments that are viewed by medical professionals or patients
as superior to the Company's products; (xii) regulatory initiatives, compliance
with governmental regulations and the regulatory approval process; (xiii) legal
proceedings, investigations or inquiries affecting the Company or its products;
(xiv) general economic and business conditions; (xv) changes in foreign,
political, and social conditions; (xvi) stockholder actions or proposals with
regard to the Company, its management, or its Board of Directors; and (xvii)
various other matters, many of which are beyond the Company's control. Should
one or more of these risks or uncertainties occur, or should underlying
assumptions prove to be incorrect, actual results may vary materially and
adversely from those anticipated, believed, estimated, or otherwise indicated.
Consequently, the forward-looking statements made in this filing are qualified
by these cautionary statements and there can be no assurance of the actual
results or developments. For a discussion of the risks and uncertainties that
could materially and adversely affect the Company's financial condition and
results of operations, see "Risk Factors" set forth in our Annual Report on
Form 10-K for the year ended May 31, 2021, as amended by Amendment No. 1 filed
with the SEC on September 28, 2021 (the "2021 Form 10-K"), as well as those
risks and uncertainties identified in Part II, Item 1A of this Form 10-Q.

The following discussion and analysis of our financial condition and results of
operations should be read in conjunction with the 2021 Form 10-K and the other
sections of this Form 10-Q, including our consolidated financial statements and
related notes set forth in Part I, Item 1. This discussion and analysis contain
forward-looking statements, including information about possible or assumed
results of our financial condition, operations, plans, objectives and
performance that involve risks, uncertainties and assumptions. The actual
results may differ materially from those anticipated and set forth in such
forward-looking statements.

Insight

The Company is a late-stage biotechnology company focused on the clinical
development and potential commercialization of its product candidate, leronlimab
(PRO 140), which is being studied for the treatment of HIV infection, and other
therapeutic indications including oncology and nonalcoholic steatohepatitis
("NASH"). Our current business strategy is to seek the removal of the partial
and full clinical holds recently imposed by the US FDA, continue the
resubmission process for our Biologics License Application ("BLA") for
leronlimab as a combination therapy for highly treatment-experienced HIV
patients , and to seek to further develop leronlimab for other HIV-related
indications. We also seek to advance our clinical development of leronlimab for
various forms of cancer, including metastatic triple-negative breast cancer
("mTNBC") and other solid tumors as well as plan to continue to evaluate NAFLD
and NASH, and concurrently explore other potential immunologic indications
for
leronlimab.

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The target of leronlimab is the immunologic receptor CCR5. The CCR5 receptor is
a protein located on the surface of white blood cells that serves as a receptor
for chemical attractants called chemokines. The CCR5 receptor may also be
present on cells that undergo malignant transformation and may also be present
in the tumor microenvironment. Chemokines are the key orchestrators of leukocyte
trafficking by attracting immune cells to the sites of inflammation. At the site
of an inflammatory reaction, chemokines are released. These chemokines are
specific for CCR5 and cause the migration of cells to these sites, promoting
further inflammation. The Company believes the mechanism of action of leronlimab
has the potential to decrease the movement of cells to inflammatory sites, which
could be instrumental in diminishing or eliminating inflammatory responses. Some
disease processes that could possibly benefit from CCR5 blockade include
transplantation rejection, autoimmunity, and chronic inflammation.

As further discussed in Part I, Note 2, Summary of Significant Accounting
Policies, Inventories, Note 3, Inventories, net, and Note 10, Commitments and
Contingencies, the Company capitalized procured or produced pre-launch
inventories in preparation for product launches sufficient to support estimated
initial market demand. The Company considers anticipated future sales,
shelf-lives, and expected approval date when evaluating realizability of
pre-launch inventories. The shelf-life of a product is determined as part of the
regulatory approval process; however, in assessing whether to capitalize
pre-launch inventory, the Company considers the stability data of all
inventories. 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. Further, in addition
to performing additional stability testing, certain raw materials inventory may
be sold in its then current condition prior to reaching expiration. The Company
also considers potential delays associated with regulatory approval in
determining whether pre-approval inventory remains salable. Although we believe
our product will receive market acceptance, the introduction of a competing
product could negatively impact the demand for our product and affect the
realizability of our inventories. In addition, if physicians are unwilling or
unable to prescribe leronlimab to their patients, or the target patient
population was reluctant to try leronlimab as a new therapy, the salability of
our pre-launch inventory would be adversely affected.

Third Quarter Overview

COVID-19 Clinical Developments

In March 2022, the United States FDA notified the Company it had placed a full
clinical hold on its COVID-19 program. The Company was not conducting any
COVID-19 trials in the United States at the time the hold was placed, and
elected to withdraw the respective IND. The Company will need to resolve the
clinical hold and submit another IND to initiate any future COVID-19 trials in
the United States. Further, the Company had elected to pause its Brazil COVID-19
trials pending results from its previously scheduled data safety monitoring
board ("DSMB") meeting in early April 2022.

In April 2022, the DSMB for the Brazilian COVID-19 clinical trials met and
recommended that the Brazilian COVID-19 trials, previously paused by the
Company, may continue based on the review of the interim patient safety data
from the clinical trials. The Company is in the process of providing this
information to ANVISA for their subsequent review of the information prior to
commencing the enrollment of new patients in the Brazilian trials.

For business updates related to prior periods, see Part I, Item 2 of Form 10-Q for the period ended November 30, 2021.

BLA HIV and clinical developments

The remaining BLA section to be completed and submitted remains in progress as
of the date of this filing. The Company is in a dispute with its former contract
research organization ("CRO"), and the Company obtained an order requiring the
CRO to release the Company's clinical data related to the BLA, which the CRO had
been withholding. Further, the order granted the Company the right to perform an
audit of the CRO's services. Additionally, the FDA recently placed the HIV
program on a partial clinical hold, which may affect the ability to resubmit the
BLA. As of March 2022, the FDA had commenced their review of the CMC section.
The Company is in the process of evaluating the data, results of the audit, and
implications of the partial clinical hold. The Company will update the status of
its anticipated resubmission of the clinical section of the BLA once it
completes its evaluation.

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In March 2022, the United States FDA notified the Company it had place a partial
clinical hold on its HIV programs. The Company was not enrolling any new
patients in the trials placed on hold. The partial clinical hold on the HIV
program impacts patients currently enrolled in HIV extension trials. The
impacted patients will be transitioned to other available therapeutics. No
clinical studies can be initiated or resumed until the partial clinical hold is
resolved. The Company intends to work with the FDA to resolve the partial
clinical hold as soon as possible.

For business updates related to prior periods, see Part I, Item 2 of Form 10-Q for the period ended November 30, 2021.

Clinical developments in oncology

During 2021, the Company stopped and reported results from metastatic
Triple-Negative Breast Cancer ("mTNBC") patients who had failed at least two
lines of previous therapy in the Compassionate Use program, our Phase 1b/2
clinical trial, and our Basket trial. The data were insufficient to support
resubmission of a Breakthrough Therapy designation request without additional
data. The Company is identifying the next steps in clinical development and
potential business opportunities to continue the development of this indication,
including potentially facilitating research in leronlimab's role in oncology at
various academic institutions.

For business updates related to prior periods, see Part I, Item 2 of Form 10-Q for the period ended November 30, 2021.

NASH Clinical Developments

The Company is in the process of completing its final analysis of the data from
its Phase 2 NASH trial and plans to release the updated and final results in the
near future. There is currently no approved drug for NASH, and liver disease is
one of the leading causes of non-AIDS-related death in HIV patients. The Company
is identifying the next steps in clinical development and is exploring potential
business opportunities to continue the investigation of leronlimab in the NASH
indication.

For business updates related to prior periods, see Part I, Item 2 of Form 10-Q for the period ended November 30, 2021.

Corporate developments

On January 24, 2022, the Board of Directors terminated the employment of Nader
Z. Pourhassan, Ph.D., as President and CEO of the Company and he is no longer a
member of the Board of Directors. A committee of three Board members has been
appointed to initiate the search for a new permanent CEO, with a focus on
identifying a candidate possessing the requisite pharmaceutical industry
experience to enhance the Company's efforts to achieve regulatory approval and
commercialization of leronlimab. Antonio Migliarese, the Company's Chief
Financial Officer, was also appointed interim President.

During February 2022, the Board approved the continued appointments to the
Scientific Advisory Board ("SAB") of Dr. Hope Rugo (oncology), Dr. Mazen
Noureddin (hepatology), Dr. Jonah Sacha (HIV), Dr. Norman Gaylis (rheumatology),
and Dr. Eric Mininberg (oncology), as well as new SAB members Dr. Otto Yang
(infectious diseases/immunology), Dr. Kabir Mody (oncology), and Dr. Paul Edison
(neuroscience/neuroinflammation).

On March 27, 2022, the Board of Directors appointed Karen J. Brunke, Ph.D., as a
director of the Company. Dr. Brunke has over 30 years of scientific,
operational, clinical, senior executive, and corporate development managerial
experience with large and small biotechnology companies.

For business updates related to prior periods, see Part I, Item 2 of Form 10-Q for the period ended November 30, 2021.

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Results of Operations

The Company's operating results may fluctuate significantly depending on the
outcomes of clinical trials, patient enrollment and/or completion rates in
various trials, entering into new or potential amendments to existing clinical
trial protocols, and their related effect on research and development expenses,
regulatory and compliance activities, activities related to resubmission and
preparation of our HIV BLA, general and administrative expenses, professional
fees, and legal proceedings and the related outcomes. Additionally, our
operating results are significantly affected by manufacturing activities,
specifically by the timing of product manufacturing activities, as well as
estimates related to shelf lives of pre-launch inventories, and reclassification
of inventory from pre-launch to clinical use.

We also require a significant amount of additional capital and our ability to
continue to fund operations will continue to depend on our ability to raise such
capital. The type of agreements we utilize to raise capital may create various
forms of expense such as non-cash interest expense, inducement expense, or
expense related to amortization of issuance costs. Further, we negotiate
settlement of debt payment obligations in exchange for equity securities of the
Company, which may create a non-cash charge upon extinguishment of debt.

Refer to Risk Factors previously reported under Part 1, Item 1A of the 2021 Form
10-K, to Going Concern section below and to Part II, Item 1A of this report.

                                Three months ended February 28,                   Change                 Nine months ended February 28,                 Change
(in thousands)                   2022                   2021                $              %                2022                2021               $              %
                                                     (Revised) (1)                                                           (Revised) (1)
Total revenue               $             -     $                  -    $        -            - %     $            266     $             -    $        266        100 %
Total cost of goods sold                  -                        -             -            - %                   53                   -              53        100 %
Gross margin                              -                        -             -            - %                  213                   -             213        100 %
Operating expenses:
General and
administrative                       10,140                    7,902         2,238           28 %               33,960              25,328           8,632         34 %
Research and development              9,128                   12,323       (3,195)         (26) %               31,952              44,061        (12,109)       (27) %
Amortization and
depreciation                            129                      511         (382)         (75) %                  657               1,522           (865)       (57) %
Intangible asset
impairment charge                         -                   10,049      (10,049)          (1) %                    -              10,049        (10,049)      (100) %
Total operating expenses             19,397                   30,785      (11,388)         (37) %               66,569              80,960        (14,391)       (18) %
Operating loss                     (19,397)                 (30,785)        11,388           37 %             (66,356)            (80,960)          14,604         18 %
Other income (expense):
Interest and other
expense:
Interest on convertible
notes                               (1,187)                  (1,257)            70            6 %              (4,299)             (2,870)         (1,429)       (50) %
Amortization of discount
on convertible notes                  (637)                    (157)         (480)        (306) %              (2,382)             (2,739)             357         13 %
Amortization of debt
issuance costs                         (19)                     (21)             2           10 %                 (70)                (40)            (30)       (75) %
Loss on extinguishment
of convertible notes                (3,109)                  (7,625)         4,516           59 %             (11,072)            (11,794)             722          6 %
Finance charges                     (7,025)                      (1)       (7,024)    (702,400) %              (8,084)               (138)         (7,946)    (5,758) %
Inducement interest
expense                               (954)                  (5,360)         4,406           82 %              (6,186)            (12,922)           6,736         52 %
Legal settlement                          -                        -             -            - %              (1,941)                   -         (1,941)      (100) %
Interest and other
expense                            (12,931)                 (14,421)         1,490           10 %             (34,034)            (30,503)         (3,531)       (12) %
Loss before income taxes           (32,328)                 (45,206)        12,878           28 %            (100,390)           (111,463)          11,073         10 %
Income tax benefit                        -                        -             -            -                      -                   -               -          -
Net loss                    $      (32,328)     $           (45,206)    $   12,878           28 %     $      (100,390)     $     (111,463)    $     11,073         10 %
Basic and diluted loss
per share                   $        (0.05)     $             (0.08)    $     0.03           36 %     $         (0.15)     $        (0.19)    $       0.04         20 %
Basic and diluted
weighted average common
shares outstanding                  695,614                  577,854       117,760           20 %              663,373             595,226          68,147         11 %

(1) See Note 2, Correction of immaterial misstatements in the prior period financial statements of Form 10-Q for the period ended November 30, 2021.

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Product revenue

For the nine months ended February 28, 2022, we recognized revenue of
approximately $0.3 million; none in the three months ended February 28, 2022 and
the three and nine months of the comparable periods of fiscal 2021. Revenue was
related to the fulfillment of orders under a Compassionate Special Permit
("CSP") in the Philippines for the treatment of COVID-19 patients. As discussed
in the previous filings, sales were made under the April 2021 exclusive supply
and distribution agreement granting Chiral the right to distribute and sell up
to 200,000 vials of leronlimab through April 15, 2022.

For additional information about the revenue recognition policy, refer to Item
1, Note 2, Summary of Significant Accounting Policies, Revenue Recognition, of
this Form 10-Q.

Cost of Goods Sold (“COGS”) and Gross Margin

For the nine months ended February 28, 2022, we recognized cost of goods sold of
approximately $53.0 thousand; none in the three months ended February 28, 2022.
We did not have revenue or associated costs in the comparable periods of 2021.
At the time of the sales, FDA approval had not yet been received for leronlimab
and the product sold was previously expensed as research and development expense
due to its being manufactured prior to the commencement of the manufacturing of
commercial grade pre-launch inventories. Therefore, COGS consists only of the
costs of packaging and shipping of the vials, including related customs and
duties. When product manufactured prior to the manufacturing of pre-launch
inventories is fully depleted and commercial grade pre-launch inventories for
which manufacturing costs have been capitalized are sold, it is expected that
COGS will significantly increase and gross margin will significantly decrease.

For more information on inventory policies, see Note 2, Summary of Significant Accounting Policies, Inventory, to the 2021 Form 10-K and this Form 10-Q.

General and administrative (“G&A”) expenses

General and administrative expenses consisted of the following items:

                               Three months ended February 28,               Change              Nine months ended February 28,              Change
(in thousands)                 2022                  2021                 $           %           2022                 2021                $          %
                                                (Revised) (1)                                                     (Revised) (1)
Salaries, benefits, and
other compensation         $       3,227     $               2,436    $     791       32 %    $      5,463     $              7,417    $ (1,954)    (26) %
Stock-based compensation           (438)                     1,937      (2,375)    (123)             4,219                    9,053      (4,834)    (53)
Legal fees                         5,161                     2,520        2,641      105            16,718                    5,100       11,618     228
Other                              2,190                     1,009        1,181      117             7,560                    3,758        3,802     101
Total general and
administrative             $      10,140     $               7,902    $   2,238       28 %    $     33,960     $             25,328    $   8,632      34 %


G&A expenses increased approximately $2.2 million, or 28%, for the three months
ended February 28, 2022 compared to the same period in the prior year. The
increase was primarily driven by increased other compensation, legal fees, and
other. The increase in other compensation was related to the accrual of expenses
related to severance due to the Company's former CEO, which was partially
settled in stock in March 2022. Refer to the further discussion regarding the
separation of the former CEO provided in Item 1, Note 7, Equity Awards and
Warrants, Former CEO Severance in Common Stock, of this Form 10-Q. The increase
in legal fees was primarily related to legal fees associated with the SEC and
DOJ investigations, the Pestell employment dispute, and the Amarex dispute. The
decrease in stock-based compensation was primarily related to the forfeiture of
unvested equity grants of the former CEO upon separation. Additionally, the
increase in other G&A expense was primarily due to increased insurance premiums
and outsourced consulting and recruiting services.

G&A expenses increased approximately $8.6 million, or 34%, for the nine months
ended February 28, 2022 compared to the same period in the prior year. The
increase was primarily driven by increased legal fees and other G&A expense,
which were partially offset by decreased employee-related costs. The increase in
legal fees was primarily

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related to the proxy contest and related lawsuits, SEC and DOJ investigations,
the Pestell employment dispute, and the Amarex dispute. The increase in other
was primarily due to increased insurance premiums, costs associated with the
2021 annual meeting of stockholders, and outsourced consulting and recruiting
services. The reduction in salaries, benefits and other compensation was
attributable to a reduction in bonuses and the reclassification of previously
accrued incentive compensation to stock-based compensation due to the
compensation being issued in stock, offset by an increase in severance costs
related to the termination of employees and salaries and benefits. The decrease
in stock-based compensation was primarily related to the forfeiture of unvested
equity grants of the former CEO upon separation, partially offset by the
issuance of common stock for bonus compensation instead of cash.

Research and development (“R&D”) expenses

R&D expenses break down as follows:

                             Three months ended February 28,                Change              Nine months ended February 28,               Change
(in thousands)               2022                   2021                 $           %           2022                 2021                $           %
                                              (Revised) (1)                                                      (Revised) (1)
Clinical                 $       2,612     $               10,194    $ (7,582)     (74) %    $     17,273     $             26,650    $  (9,377)    (35) %
Non-clinical                       203                         52          151      290               878                    1,090         (212)    (19)
CMC                              6,067                      1,804        4,263      236            13,086                   15,618       (2,532)    (16)
License and patent fees            246                        273         (27)     (10)               715                      703            12       2
Total research and
development              $       9,128     $               12,323    $ (3,195)     (26) %    $     31,952     $             44,061    $ (12,109)    (27) %

For the nine months ended February 28, 2022R&D expenditures were primarily for: (1) COVID-19 clinical trials, (2) HIV extension studies that continue to provide leronlimab to patients who have already successfully completed a trial, (3) the NASH clinical trial, (4) the new HIV BLA submission, (5) clinical trials for oncology and other immunological indications, and (6) CMC activities related to clinical and commercialization inventories, including expenses associated with inventory charges.

For the three months ended February 28, 2022, R&D expenses decreased
approximately $3.2 million, or 26%, compared to the same period in the prior
year. The decrease was primarily due to decreased clinical expenses, offset by
CMC related activities and a slight increases in non-clinical expenses. The
reduction in clinical expenses was primarily attributable to decreased expenses
associated with the various clinical trials related to COVID-19, HIV extension
studies, NASH, oncology, costs related to resubmission of our HIV BLA, and the
packaging and shipping of leronlimab. The driver of the increase in the CMC
expense was related to the increase of the inventory reserve for the estimated
obsolescence of raw materials, and the expensing of vialed drug product used for
clinical purposes and inventory rendered defective for commercial purposes due
to manufacturing errors committed by the contract manufacturer during the
manufacturing process. The increase in non-clinical expenses was attributable to
increased activity associated with pre-clinical studies.

For the nine months ended February 28, 2022, R&D expenses decreased
approximately $12.1 million, or 27%, compared to the same period from 2021. The
decrease was primarily due to lower clinical, CMC, and non-clinical expenses.
The decrease in clinical expenses was primarily attributable to reduced expenses
associated with the various clinical trials related to COVID-19, HIV extension
studies, and oncology, and the packaging and shipping of leronlimab. The
reduction in CMC expense was due to decreased manufacturing activity tied to the
commercialization of leronlimab, partially offset by the increase of inventory
reserves for estimated obsolescence of raw materials, and the expensing of
vialed drug product used for clinical purposes and inventory rendered defective
for commercial purposes due to manufacturing errors committed by the contract
manufacturer during the manufacturing process. The reduction in non-clinical
expenses was attributable to decreased activity associated with pre-clinical
studies.

Depreciation, amortization and impairment charges for intangible assets

In the three and nine months ended February 28, 2022 and 2021, amortization and
depreciation expense was approximately $0.1 million and $0.5 million, and
approximately $0.7 million and $1.5 million, respectively. The decrease of
approximately $0.4 million, or 75%, and approximately $0.8 million, or 57% is
primarily attributable to the

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non-cash impairment charge related to the ProstaGene asset recorded in the third quarter of fiscal 2021, in addition to certain intangible assets that became fully amortized.

Interest and other expenses

Interest and other charges consisted of the following items:

                            Three months ended February 28,                Change                Nine months ended February 28,               Change
(in thousands)              2022                  2021                 $            %            2022                  2021                $           %
                                               (Revised) (1)                                                        (Revised) (1)
Interest on convertible
notes payable           $       1,187     $               1,257    $    (70)        (6) %    $       4,299     $              2,870    $   1,429       50 %
Amortization of
discount on convertible
notes                             637                       157          480        306              2,382                    2,739        (357)     (13)
Amortization of debt
issuance costs                     19                        21          (2)       (10)                 70                       40           30       75
Loss on extinguishment
of convertible notes            3,109                     7,625      (4,516)       (59)             11,072                   11,794        (722)      (6)
Finance charges                 7,025                         1        7,024    702,400              8,084                      138        7,946    5,758
Inducement interest
expense                           954                     5,360      (4,406)       (82)              6,186                   12,922      (6,736)     (52)
Legal settlement                    -                         -            -          -              1,941                        -        1,941      100
Total interest and
other expense           $      12,931     $              14,421    $ (1,490)       (10) %    $      34,034     $             30,503    $   3,531       12 %

(1) See Note 2, Correction of immaterial misstatements in the prior period financial statements of Form 10-Q for the period ended November 30, 2021.

In the three and nine months ended February 28, 2022 and 2021, we recognized a
non-cash loss on the extinguishment of convertible notes of approximately $3.1
million and $7.6 million, and approximately $11.1 million and $11.8 million,
respectively. The losses resulted from separate and independently negotiated
note payment settlements in which certain debt was agreed to be settled in
exchange for shares issued at a price less than the closing price at the date of
the respective transactions. The original underlying convertible notes were
entered into on November 10, 2020 and April 2, 2021. The November 10, 2020 note
was fully retired during the three months ended November 30, 2022. Refer to Item
I, Note 6, Convertible Instruments and Accrued Interest, for further
information.

The increase in finance charges in the three and nine months ended February 28,
2022 as compared to the same periods in the prior year, was primarily
attributable to a non-cash expense related to the issuance of 15.0 million
warrants pursuant to the Backstop Agreement in addition to interest charges
assessed on amounts due to vendors. Refer to Part I, Note 7, Equity Awards and
Warrants, Private Placement of Warrants under Surety Bond Backstop Agreement for
additional information.

For the three months ended February 28, 2022 as compared to the same period in
the prior year, interest on convertible notes did not change significantly. In
the nine months ended February 28, 2022 as compared to the same period in the
prior year, the increase is attributable to the larger amount of debt carried by
the Company at the beginning of the fiscal year.

For the nine months ended February 28, 2022, we incurred approximately $1.9
million as legal settlement expense; none in the three months ended February 28,
2022 and three and nine months of the comparable periods of fiscal 2021. The
legal settlement expense consisted of a $0.2 million cash payment and
approximately $1.7 million of non-cash expense related to the issuance of
warrants in connection with a negotiated settlement of a dispute with a
placement agent.

Cash and capital resources

Species

The Company's cash and restricted cash position of approximately $2.4 million as
of February 28, 2022 decreased by approximately $31.6 million, when compared to
the balance of $33.9 million at May 31, 2021. This decrease was

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primarily the result of approximately $71.7 million in cash used in our
operating activities offset by approximately $40.1 million in cash provided by
financing activities. Refer to Item 1, Note 2, Summary of Significant Accounting
Policies, Going Concern, and Going Concern discussion below to obtain an
understanding of the Company's ability to continue to fund its operations and
satisfy its payment obligations and commitments.

                                      Nine months ended February 28,         Change
(in thousands)                          2022                2021               $
                                                         (Revised) (1)
Net cash (used in) provided by:
Net cash used in operating
activities                          $    (71,679)     $       (84,767)    $     13,088
Net cash used in investing
activities                          $        (30)     $          (100)    $         70
Net cash provided by financing
activities                          $      40,129     $         84,866    $

(44,737)

Cash flows used in operating activities

During the nine months ended February 28, 2022, we used $71.7 million for
operating activities, an improvement of $13.1 million as compared to the same
period in the prior year. The decrease in the net amount of cash used in
operating activities was due primarily to the change in our net loss, working
capital fluctuations, and changes in our non-cash expenses, all of which are
highly variable.

Cash used in investing activities

Net cash used in investing activities was negligible during the nine months ended
February 28, 2022compared to the same period of the previous year.

Cash provided by financing activities

During the nine months ended February 28, 2022, net cash provided by financing
activities was $40.1 million, a decrease of $44.7 million as compared to the
same period in the prior year. The decrease was primarily attributable to a
decrease in proceeds received from convertible notes of $50.0 million, and from
stock option and warrant exercises.

Inventories

The Company's pre-launch inventories consist of raw materials purchased for
commercial production and work-in-progress inventory related to the
substantially completed commercial production of pre-launch inventories of
leronlimab in light of the Company's expectation regarding approval of the
product as a combination therapy for HIV patients in the United States.
Work-in-progress consists of bulk drug substance, which is the manufactured drug
stored in bulk storage, and drug product, which is the manufactured drug in
unlabeled vials. See Item 1, Note 2, Summary of Significant Accounting Policies
- Inventories, and Note 3, Inventories, net, for further discussion of the
capitalization of pre-launch inventories.

The Company's inventory position as of February 28, 2022 was approximately $82.7
million, net of an approximate $5.8 million reserve, a decrease of approximately
$10.8 million when compared to a balance of approximately $93.5 million as of
May 31, 2021, net of an approximate $0.7 million reserve. During the nine months
ended February 28, 2022, the decrease in inventory was primarily related to $5.1
million reserved for current and future estimated obsolescence of raw materials,
approximately $3.6 million related to the write-off of expired raw materials not
previously reserved for and vialed drug product used for clinical purposes, $3.3
million of inventories returned or credits received from vendors, offset by
inventory purchases of approximately $2.0 million. As of February 28, 2022 the
raw materials balance was approximately $19.5 million, net of an approximate
$5.8 million reserve, and the total work-in-progress was approximately $63.2
million. Work-in-progress consists of bulk drug substance, which is the
manufactured drug stored in bulk storage, and drug product, which is the
manufactured drug in unlabeled vials. Bulk drug substance and drug product
comprised approximately $1.7 million and $61.5 million, respectively, of
work-in-progress inventory.

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Convertible debt

A summary of our convertible debt arrangements is included in Note 6, Convertible Instruments and Accrued Interest, to the Notes to the Consolidated Financial Statements included in Part I, Item 1 of this Form 10-Q.

April 2, 2021 To note

On April 2, 2021, we issued a convertible note with a principal amount of $28.5
million resulting in net cash proceeds of $25.0 million, after $3.4 million of
debt discount and $0.1 million of offering costs. The note accrues interest
daily at a rate of 10% per annum, contains a stated conversion price of $10.00
per share, and matures in April 2023. The April 2, 2021 Note required monthly
debt reduction payments of $7.5 million for the six months beginning in May
2021, which could also be satisfied by payments on other notes held by the
noteholder or its affiliates. Beginning six months after the issuance date, the
noteholder may request monthly redemptions of up to $3.5 million. The
outstanding balance of the April 2, 2021 Note, including accrued interest, was
$11.4 million as of February 28, 2022.

April 23, 2021 To note

On April 23, 2021, we issued a convertible note with a principal amount of $28.5
million resulting in net cash proceeds of $25.0 million, after $3.4 million of
debt discount and $0.1 million of offering costs. The note accrues interest
daily at a rate of 10% per annum, contains a stated conversion price of $10.00
per share, and matures in April 2023. Beginning six months after the issuance
date, the noteholder may request monthly redemptions of up to $7.0 million. The
outstanding balance of the April 23, 2021 Note, including accrued interest, was
$29.1 million as of February 28, 2022.

Ordinary actions

We have 1,000.0 million authorized shares of common stock. As of February 28,
2022, we had approximately 713.3 million shares of common stock outstanding,
approximately 79.3 million shares of common stock issuable upon the exercise of
warrants, approximately 32.2 million shares of common stock issuable upon
conversion of convertible preferred stock and undeclared dividends,
approximately 19.0 million shares of common stock issuable upon the exercise of
outstanding stock options or the vesting of outstanding restricted stock units,
approximately 10.2 million shares of common stock reserved for issuance pursuant
to future stock-based awards under our equity incentive plan, and approximately
12.0 million shares of common stock reserved and issuable upon conversion of
outstanding convertible notes. As a result, as of February 28, 2022, we had
approximately 134.0 million unreserved authorized shares of common stock
available for issuance.

Our ability to continue to fund our operations depends on our ability to raise
such capital. The funding necessary for our operations may not be available on
acceptable terms or at all. If we may need to scale back operations and/or slow
CMC-related activities, delay, reduce the scope of, or eliminate one or more of
our clinical trials or postpone our regulatory submissions and commercialization
initiatives or our ability to adequately fund legal proceedings, which would
adversely affect our business, financial condition, and stock price. If we
deplete our cash reserves, we may have to discontinue our operations and
liquidate our assets, in extreme cases, we could be forced to file for
bankruptcy protection, discontinue operations or liquidate assets.

Off-balance sheet arrangements

From February 28, 2022we had no off-balance sheet arrangements that have, or are reasonably likely to have, a material effect on our current or future financial condition, results of operations, liquidity, capital expenditures or capital resources .

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Contractual Obligations

Refer to Note 5, Accounts Payable and Accrued Liabilities, Note 6, Convertible
Instruments and Accrued Interest, and Note 10, Commitments and Contingencies
included in Part I, Item 1 of this Form 10-Q, and in Item 7 of the 2021 Form
10-K.

Legal Proceedings

The Company is a party to various legal proceedings. As of February 28, 2022, we
were not party to any material pending legal proceedings, other than those
described in Note 10, Commitments and Contingencies, to the Consolidated
Financial Statements included in Part I, Item 1 of this Form 10-Q. 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 these proceedings, 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 has not been made, could be material to the
Company's consolidated financial statements. As of February 28, 2022, the
Company had not recorded any accruals related to the outcome of the matters
described in Note 10, Commitments and Contingencies, Legal Proceedings.

Regulatory issues

FDA Refusal Letter to File HIV BLA Application

In July 2020, the Company received a Refusal to File letter from the FDA
regarding its BLA submission for leronlimab as a combination therapy with HAART
for highly treatment-experienced HIV patients. The FDA informed the Company the
BLA did not contain certain information and data needed to complete a
substantive review and therefore, the FDA would not file the BLA. The
deficiencies cited by FDA included administrative deficiencies, omissions,
corrections to data presentation and related analyses, and clarifications
regarding the manufacturing processes. The Company is working with consultants
to cure the BLA deficiencies noted and will resubmit the BLA as soon as
practical. In November 2021, the Company resubmitted the non-clinical and CMC
sections of the BLA and is currently reevaluating when it expects to complete
the clinical section. As of March 2022, the FDA had commenced its review of the
CMC section. The Company is in dispute with its former contract research
organization ("CRO"), as described in Note 10, Commitments and Contingencies -
Legal Proceedings. Recently, in the context of the litigation, the Company
obtained an order requiring the CRO to release the Company's clinical data
related to the BLA, which the CRO had been withholding. Further, the order
granted the Company the right to perform an audit of the CRO's services.
Additionally, the FDA recently placed the HIV program on a partial clinical
hold, which may affect the ability to resubmit the BLA. The Company is in the
process of evaluating the data, results of the audit, and implications of the
partial clinical hold. The Company will provide an updated timeline anticipated
resubmission date once it completes its evaluation, the impact those results may
have on the BLA and the estimated resubmission timeline.

FDA Warning Letter Regarding Improper COVID-19 Branding of Investigational Drug

In January 2022, the Company received a Warning Letter from the United States
FDA alleging that its former CEO and President, Dr. Nader Pourhassan, had made
references in a video interview to COVID-19 and leronlimab in a promotional
context to the effect that leronlimab, an investigational new drug, is safe and
effective for the purpose for which it is being investigated or otherwise
promoted the drug. The FDA warned the Company that leronlimab has not been
approved or authorized by the FDA, its safety and effectiveness has not yet been
established, and that the related clinical trial data was mischaracterized in
the video. The FDA further alleged the video misbrands leronlimab under section
502(f)(1) of the FD&C Act and in violation of section 301(a) of the FD&C Act, as
the claims in the video make representations in a promotional context regarding
the safety and efficacy of an investigational new drug that has not

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been approved or cleared by the FDA. The Company is working closely with the FDA to resolve this issue and take appropriate corrective action.

FDA Partial Clinical Hold re HIV and Full Clinical Hold re COVID-19 Letters

In March 2022, the United States FDA placed a partial clinical hold on the
Company's HIV program and a full clinical hold on its COVID-19 program in the
United States. The Company was not enrolling any new patients in the trials
placed on hold in the United States. The partial clinical hold on the HIV
program impacts patients currently enrolled in extension trials. These patients
will be transitioned to other available therapeutics and no clinical studies can
be initiated or resumed until the partial clinical hold is resolved. CytoDyn is
working closely with the FDA to resolve the partial clinical hold as soon as
possible. Under the full clinical hold on the COVID-19 program, no new clinical
studies may be initiated until the clinical hold is resolved. The Company is not
currently conducting any COVID-19 trials in the United States, as it is
evaluating the most optimal programs on which to focus its resources and
attention. The Company is working closely with the FDA to resolve the partial
clinical hold as soon as possible.

Continuity of exploitation

As presented in the accompanying consolidated financial statements, the Company
had losses for all periods presented. The Company incurred a net loss of $100.4
million for the nine months ended February 28, 2022 and has an accumulated
deficit of $636.1 million as of February 28, 2022. The Company has had limited
to no activities that produced revenue in the periods presented and has
sustained operating losses since inception.

We currently require and will continue to require a significant amount of
additional capital to fund operations and pay our liabilities and commitments,
and our ability to continue as a going concern is dependent on our ability to
raise such additional capital, commercialize our product and achieve
profitability. If the Company is not able to raise such additional capital on a
timely basis or on favorable terms, it may need to scale back operations and/or
slow CMC-related activities, delay or reduce the scope of, or eliminate one or
more of our clinical trials or postpone our regulatory submissions and
commercialization initiatives, or ability to adequately fund legal proceedings,
which could materially delay commercialization initiatives and its ability to
achieve profitability. The Company's failure to raise additional capital could
also affect its relationships with key vendors, including Samsung, disrupting
its ability to timely execute its business plan. In extreme cases, the Company
could be forced to file for bankruptcy protection, discontinue operations or
liquidate assets.

Since inception, the Company has financed its activities principally from the
public and private sale of equity securities and proceeds from convertible notes
payable and related party notes payable. The Company intends to finance its
future operating activities and its working capital needs largely from the sale
of equity and debt securities, combined with additional potential funding from
other traditional and non-traditional financing sources. As of the date of this
filing, the Company has approximately 134.0 million shares of common stock
unreserved, authorized and available for issuance under its certificate of
incorporation, as amended.

The sale of equity and convertible debt securities to raise additional capital
may result in dilution to stockholders and those securities may have rights
senior to those of common shares. If the Company raises funds through the
issuance of additional preferred stock, convertible debt securities or other
debt or equity financing, the related transaction documents could contain
covenants restricting its operations. On April 2 and April 23, 2021, the Company
entered into long-term convertible notes that are secured by all of our assets
(excluding our intellectual property), and include certain restrictive
provisions, including limitations on incurring additional indebtedness and
future dilutive issuances of securities, any of which could impair our ability
to raise additional capital on acceptable terms and conditions. On February 14,
2022, in exchange for warrants the Company entered into a Backstop Arrangement
with an accredited investor whereby the Company pledged its patents and the
investor agreed to indemnify the issuer of the Surety Bond in the Amarex dispute
with respect to the Company's obligations under the Surety Bond. Any other
third-party funding arrangements could require the Company to relinquish
valuable rights. The Company expects to require additional capital beyond
currently anticipated needs. Additional capital, if available, may not be
available on reasonable or non-dilutive terms. Refer to Item 1A in the 2021 Form
10-K and Item 1A in Part II of this Form 10-Q for additional information.

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Contents

New accounting statements

There have been no material changes in recently issued or adopted accounting
standards from those disclosed in the 2021 Form 10-K. Also refer to Item 1,
Note 2, Summary of Significant Accounting Policies, Revenue Recognition, and
Note 3, Inventories, net of this Form 10-Q for additional discussion.

Significant Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations
are based upon our unaudited consolidated financial statements, which have been
prepared in accordance with accounting principles generally accepted in the
United States of America. The preparation of these financial statements requires
us to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues and expenses and related disclosure of contingent assets
and liabilities.

We believe that the estimates, assumptions and judgments involved in the
accounting policies described in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" section of our most recent Annual
Report on Form 10-K have the greatest potential impact on our financial
statements, so we consider these to be our critical accounting policies. Actual
results could differ from the estimates we use in applying our critical
accounting policies. We are not currently aware of any reasonably likely events
or circumstances that would result in materially different amounts being
reported.

The Company capitalizes inventories procured or produced in preparation for
product launches sufficient to support estimated initial market demand subject
to regulatory approval for commercial sale. The Company believes that material
uncertainties related to the ultimate regulatory approval of leronlimab for
commercial sale have been significantly reduced based on positive data from its
Phase 2b/3 clinical trial for leronlimab as a combination therapy with highly
active antiretroviral therapy ("HAART") for highly treatment-experienced HIV
patients, as well as information gathered from meetings with the U.S. Food and
Drug Administration ("FDA") related to its Biologic License Application ("BLA")
for this indication. In July 2020, the Company received a Refusal to File letter
from the FDA regarding its BLA submission for leronlimab as a combination
therapy with HAART for highly treatment-experienced HIV patients. The FDA
informed the Company the BLA did not contain certain information and data needed
to complete a substantive review and therefore, the FDA would not file the BLA.
The deficiencies cited by FDA included administrative deficiencies, omissions,
corrections to data presentation and related analyses, and clarifications
regarding the manufacturing processes. The Company is working with consultants
to cure the BLA deficiencies noted and will resubmit the BLA as soon as
practical. In November 2021, the Company resubmitted the non-clinical and
chemistry, manufacturing, and controls ("CMC") sections of the BLA and is
currently reevaluating when it expects to complete the clinical section. As of
March 2022, the FDA had commenced its review of the CMC section. The Company is
in dispute with its former contract research organization ("CRO"), as described
in Note 10, Commitments and Contingencies, Legal Proceedings. Recently, in the
context of the litigation, the Company obtained an order requiring the CRO to
release the Company's clinical data related to the BLA, which the CRO had been
withholding. Further, the order granted the Company the right to perform an
audit of the CRO's services. Additionally, the FDA recently placed the HIV
program on a partial clinical hold, which may affect the ability to resubmit the
BLA. The Company is in the process of evaluating the data, results of the audit,
and implications of the partial clinical hold. The Company will update the
status of its anticipated resubmission of the clinical section of the BLA once
it completes its evaluation. The Company anticipates that when the FDA completes
its review of the BLA following completion of the resubmission, leronlimab will
be approved, and market acceptance of leronlimab as a treatment for HIV will be
forthcoming, enabling the Company to sell the amount of pre-launch inventory
on-hand prior to its expiration. Refer to Note 2, Summary of Significant
Accounting Policies, Inventories, Note 3, Inventories, net, and Note 10,
Commitments and Contingencies, and Part II, Item 2. Regulatory Matters, and Item
1A. Risk factors for additional discussions.

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