Avid Bioservices Inc (CDMO)

[Protector]

PPHM's change of bylaws is a good thing for the retail share holder that is a real investor and has no scammy plans or dark agenda's.

Let me explain more in detail why I think about this that way:

At this point in the existence of PPHM, the company is at a turning point. By means of the sum of all the results of it's clinical trials those that have a global view, such as many people that follow this board because everything is posted here, and those that have extended information under non-disclosure due to collaborations/partnership negotiations or employment, know that Bavituximab works. It is all a matter of confirmation by one clinical trial or granted procedure (eg: BTD) to allow the product to the market.

That means that at this point it is strategically a good moment to break in into PPHM. The reasons to do this can be multiple. I know most think immediately about a BP, and they certainly would have their reasons to drop a pawn into PPHM's BoD, but they are not alone. There are many financial entities that would love to have information directly out of the BoD certainly knowing that PPHM with what it holds is in for a mine-field of events and announcements ones we have that first confirmation. Just knowing about such announcement 24h up-front and trading on it is illegal BUT is also a GOLD mine!

While such info leaking out of the BoD would be illegal, many entities trading on such info know how to uncouple it from the leak so that it doesn't become trading on insider information.

Furthermore PPHM is sufficiently small for smaller private initiatives to buy large parts of it on the open market, share-by-share, while avoiding reporting.

Also imagine that K. Dart could have his pawn in the BoD. That would cost ALL of us money because the PPS would move for reasons that we cannot at that point know and we will always be second when acting upon the information. When PPHM reaches higher prices this will translate in dollars and no longer in dollar cents per share differences.

But the poison pill is an effective means to keep deep pockets from breaking into PPHM now that the bulk of risk is gone and most of the clinical trial work for the first PIII approval of Bavituximab is in the end phase. And the poison pill is NOT ONLY a means to defend against hostile acquisition but against ALL possible hostile action.

PPHM's poison pill can be circumvented in 3 ways. One of these ways, via bankers and financing entities, has already been closed. Loan terms forbid share issuing with the bankers permission and hence makes the BoD dependant on the banker who may have other, more short term, profit interests (as we saw in 2012 they are not your friend). Also seats in the BoD by bankers or BP's, as part of negotiated contracts or partnerships, can break the balance of BoD majority voting.

With the changing of the bylaws PPHM clearly recognized the second way, namely, a shareholders attempt to break into the BoD (not part of negotiated terms of a loan or partnership). Some will say : "What shareholders would want to break into the BoD, this is ridiculous!"

Yes, if you think in retail or isolated day/swing trader terms it surely is. But if you think at BP or Fund/II/etc terms then there are for sure good strategic reasons to do so. As it is unlikely that such candidates would be welcomed by PPHM or its other share holders, the only possibility remains changing bylaws and then pushing candidates on the Annual Meeting agenda.

The BoD is the guardians of the poison pill, they decide if and when they trigger it, that is if they believe the stipulations in the bylaws to do so are met. But the bylaws only say when they are ALLOWED to, not that they HAVE to if such situation occurs. If 3 parties would together, with PPHM's consent, show up with more then 5% of the shares then PPHM can let them if the BoD wants to. So bringing extra BoD members on board or making changes that reduce the BoD's power (for instance changing that they are not just re-elected with 1 vote but need a certain %, or make sure they cannot reject to put candidates BoD members on the list or refuse them even if they have one vote,etc) could disturb the BoD's voting majority or its possibility to prevent this balance of being disturbed.

The changes in the bylaws make this more difficult, if not impossible.

Advanced notice will be required to propose one or more shareholders to the vote or pass any shareholders proposal at the annual meeting or:

...before any meeting of the Company’s stockholders;.

That includes special meetings called for by a minimum quorum of stock holders as specified in the bylaws. This gives PPHM the time to investigate and possibly device counter measures in case of hostile action, etc.

This is good for us, the retail shareholder because just like the PPHM BoD, the employees, the scientists and consultants (Brekken, Garnick,...) that hold PPHM shares, we also want the highest price and not a breadcrumb-grade prince because the 'break-in party' has an undisclosed - will be most often seemingly unrelated and unknown - conflict of interest and breaks the BoD majority vote through newly planted members.

The danger is that, say, 6 candidates are proposed and each have, say, more then one million votes. How do you defend, even before a Deleware court, that your bylaws say that you only need ONE vote to be re-elected and that 4 existing members could, after the vote, exercise there right to refuse 6 new members with 1milj votes behind their names? Now, with this change, if such 6 members would show up then PPHM can just add 3 new trustees of its own and with 7 against 6 keep the majority vote. No risk of going to court because whatever they applied for the 4 new members they applied equally so for their own 3 and hence all or none get in.

The same goes for any attempt to change the bylaws in such a way that PPHM's current BoD would lose the ability to refuse candidates or to changes the minimal votes requirement as such that for instance only CEO King would pass (he has much more YES votes compared to none-votes then the other three).

With this door closed there is only one way to circumvent the poison pill that is left. Against that way there is no, known, defence, but very few people know about that way, let alone that they would know how to properly execute or have the means to execute it.

In order to not bring anyone on ideas I am not going to post about that way, for the same reason I choose not to post the full detailed clinical trial list, because I think it could harm PPHM and therefore my and your investments in the company.