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CYDY News CytoDyn Turns Pink with Continued Quarterly Reporting to Ensure Liquidity

SANTA FE, N.M.--(BUSINESS WIRE)--Because of a medical emergency and other unforeseen circumstances, CytoDyn, Inc. (Pink Sheets:CYDY) was late filing a 10-QSB for the first time. The policy of NASD is to require an issuer with a first late filing that has since become current to wait for the processing of a new Form 211 before that issuer is again quoted on the Bulletin Board. Previously, the Company waited five months for the Form 211 to be processed by NASD and might have had to wait even longer if the Company had not been prepared to litigate. As a consequence, CYDY will move from the Bulletin Board to the Pink Sheets on December 11, 2006 with a right of appeal. Although the actual policy of NASD appears to deviate from the stated policy (Rule 6530), CytoDyn, Inc., in consultation with its Audit Committee, affiliates, and others, has decided not to appeal for the following reasons:

1. Liquidity will not be materially affected or might even improve. The Pink Sheets provide bids and asks, along with real time Level II quotes, which will be available at no additional cost at www.pinksheets.com.
2. The Company intends to continue making quarterly reports to the SEC, and expects to qualify for one of the high-quality categories, such as “SEC Reporting,” when these categories become available on the Pink Sheets in May of 2007.
3. Eventually moving to an exchange, such as AMEX, from a high-quality Pink Sheet category should be no more difficult than in moving from the Bulletin Board, so long as the requirements of the exchange are met.
4. Recently, Pink Sheets has transformed itself to utilize the power of the Internet and the advances in web based technology to increase the quality, timeliness and value of its information and services. This has increased the transparency of information available in the OTC markets, making them more efficient for market makers, issuers, brokers and investors, according to the Pink Sheets.
5. Other biotechnology companies maintain robust trading and volume on the Pink Sheets, some with share prices consistently above $5.00.
6. The Company believes that development of its first-in-class products for treating and for preventing global threats from infectious diseases should not be delayed because of apparent confusion over NASD policy, or because of the inability of the Company to prevent “acts of God” or other circumstances over which it has no control.

This press release contains forward-looking statements that are not historical facts. The Company's management makes forward-looking statements concerning the Company's expected future operations, performance and other developments. These forward-looking statements are necessarily estimates based upon current information and involve a number of risks and uncertainties. There can be no assurance that such risks and uncertainties, or other factors, will not affect the accuracy of such forward-looking statements. It is impossible to identify all factors that could cause actual results to differ materially from those estimated by the Company. They include, but are not limited to, government regulation, managing and maintaining growth, victimization by white-collar offenders, and the effects of adverse publicity, litigation, competition, and other factors that may be identified from time to time in the Company's announcements.

Visit our web site at www.cytodyn.com.