Avid Bioservices Inc (CDMO)

[BKT]

Cheynew,

I had noticed that a while back when researching to if I could find other companies Garnick may have been consulting for. I didn't find any others, but let me give you my take on what I think.

SO PPHM and Garnick talk and agree that Garnick should work for PPHM in some capacity, they agree on some type of compensation, so at that point Garnick has two options.

1) Be paid as an employee or 2) Be paid as a subcontractor/consultant.

I am an accountant and get a lot of phone calls from clients regarding what would be better. I think Garnick chose to get paid as a consultant, sets up a corp. (formed in Nevada in Sept 2008) and therefore can deduct most of his expenses, car, telephone, internet, meals, health, etc. Puts his wife on the books as an employee, so he can write off her expenses as well, since she is an employee of the corp too, well you get the picture.

The alternative is to get paid as an employee, but most of the expenses incurred may be able to be deducted, but are limited to 2% of AGI, but really can't be deducted anyways since the dreaded AMT normally kicks in.

Obviously, PPHM could set up a reimbursement policy to cover him for everything, but he may lose other valuable tax deductions.

Just my thoughts, but I am pretty sure he is locked tight into PPHM alone.

The wife thing was the clincher for me, lol.