Avid Bioservices Inc (CDMO)

[Protector]

jbainseky, it is in the DEF-14A.

source: PPHM SEC Filing DEF-14A

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR EACH DIRECTOR NOMINEE NAMED IN PROPOSAL NO. 1.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR PROPOSAL NO. 2 TO RATIFY THE SELECTION OF ERNST & YOUNG LLP AS THE COMPANY’S INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM FOR THE FISCAL YEAR ENDING APRIL 30, 2016.

THE BOARD OF DIRECTORS ????? RECOMMENDS THAT YOU VOTE FOR THE PROPOSAL TO APPROVE THE AMENDMENT TO OUR CERTIFICATE OF INCORPORATION, AS AMENDED, TO INCREASE THE NUMBER OF SHARES OF COMMON STOCK AUTHORIZED FOR ISSUANCE THEREUNDER FROM 325 MILLION TO 500 MILLION SHARES .

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE APPROVAL OF THE AMENDMENT TO THE 2011 STOCK INCENTIVE PLAN.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT STOCKHOLDERS VOTE FOR THE PROPOSAL TO APPROVE, ON AN ADVISORY BASIS, THE COMPENSATION OF OUR NAMED EXECUTIVE OFFICERS AS DISCLOSED IN THIS PROXY STATEMENT.

I find this TO generic. The main cost of SUNRISE should be spend and it feels like they want to play the FEAR card.

Reason for the Proposal

We have expended substantial funds on the research and development of our product candidates, and funding the operations of our wholly-owned biomanufacturing subsidiary, Avid Bioservices, Inc. As a result, we have historically experienced negative cash flows from operations since our inception and we expect negative cash flows from operations to continue in the foreseeable future as we continue to (i) advance the clinical development of our lead immunotherapy candidate, bavituximab, which includes, among other things, completing our ongoing Phase III SUNRISE trial and expanding our bavituximab clinical pipeline by initiating additional later-stage trials to explore expanded indications and combinations, (ii) prepare for the potential commercialization of bavituximab, and (iii) support the growth of our contract manufacturing business.

Historically, we have funded most of our operations in the equity markets through the sale of our common stock and through the issuance of our preferred stock, which can be converted into shares of our common stock. We believe it is likely that the sale of shares of common stock (or sale of preferred shares convertible into shares of our common stock) will continue to be the principal means by which we will raise additional capital to fund our operations over the foreseeable future until such time we are able to (i) generate sufficient earnings from the sale of our product candidates, if approved, (ii) secure sufficient funding from a potential licensing or partnership arrangement, or (iii) generate sufficient revenue from our contract manufacturing business. Based on the current market price of our common stock, we believe that the current number of unreserved shares of our common stock is insufficient to fund our operations for the foreseeable future. Therefore, the Board of Directors believes that it is in the best interest of the Company and our stockholders to have a sufficient number of authorized but unissued shares of common stock available for issuance in the future to fund our planned operations.

If the stockholders do not approve this proposal, we may not be able to arrange the financing necessary to continue our existing operations or may be required to immediately hold a special stockholders meeting to seek approval to increase the authorized number of shares of our common stock, which could cost the Company in excess of $125,000 in printing, distribution, and mailing fees.

And this kind of emphasizes that FEAR card.

Possible Effects of the Amendment

If this proposal is approved, the increase in authorized common stock will not have any immediate effect on the rights of existing stockholders. However, the Board of Directors will have the authority to issue the additional authorized common stock without requiring future stockholder approval of such issuances, except as may be required by applicable law. To the extent that additional authorized shares are issued in the future, they would decrease the existing stockholders' percentage equity ownership and voting power and, depending on the price at which they are issued, may have a dilutive effect on our earnings per share and book value per share. The Company has no current plan, commitment, arrangement, understanding or agreement regarding the issuance of the additional shares of common stock that will result from the Company’s adoption of the proposed amendment.