Avid Bioservices Inc (CDMO)

[eb0783]

I appreciate your experience and insight as well as that you readily share it with us. Please keep giving your opinion and thoughts. All of these items that you mention are real and deserve consideration. In general they would all apply to this situation but many of them have been covered to some extent already. I wish you had been there for the Avid tour so you could hear and see what is happening there. You would have gotten a great deal from it. I spent a number years doing project engineering and project management work myself so I think I can see where some items can be checked off.

if one started today in terms of site location, planning and fda approval and cert you would be going full speed ahead and would be lucky to be even close to being ready...

and any landlord would not touch pphm in the present financial condition... (even with $100 mil in bank it would not be considered a "credit" tenant... and landlords want "credit tenants" because it makes their properties easier to finance or sell…….. site selection could take months and months.... they have to shore up the financial picture to even be considered... particularly for special use facilities that require high tenant finish dollars and high parking ratios...

and it will not be easy... sk talks about how easy a site fits into warehouse space? very tall order due to parking issues with warehouse space particularly with shift changes (basically double parking when shifts change out)... if they want to maintain clean image they need to go into newer buildings... and most owners are reluctant to venture out from typical bread and butter warehouse use... tech/flex space has a better chance where parking ratios are better because this type of use sucks up parking so it hurts the rest of a project...one would have to have stellar credit (bond rated which pphm doesn't have) or significant guarantees which suck up credit lines.....

Peregrine has been a neighbor to the tenants and landlords around them for a few decades. They are well enough known to them, have relationships with them, and have expanded a number of times in that locale over the years. I don’t think the landlords around them have any issues about their credit worthiness. They have surveyed the available sites, have leased some already for various purposes, and they know the advantages/disadvantages of each of them for the purposes they will use them for. The design for the new facility is a smaller but cookie cutter version on Avid II. John Haney also mentioned that the parking used by PPHM at Myford is considerably less than an office tenant would need and he spoke as if that was a plus for them at that location. The only hold-up (time wise) I see right now is whether they can get the lease signed in the most desirable site or if they will relent and use one that may take a little more infrastructure buildout. It is their timeline and they will decide how much negotiation time is too much. (it could be done as we type this) I might also add, imo, that if the demand for a product/service is great enough, there are a myriad of ways to get it financed, including various levels of customer input/$$. I experienced that in another industry.