Avid Bioservices Inc (CDMO)

[Protector]

Ronin's PPHM BoD Candidate Nominations.

Based of the many posts on the subject and my own doubt whether the filings of Ronin were in time I have done some extended D&D. Thanks to all posters that have provided links and info on the subject.


FACTS & DOCUMENTS

#1) PPHM ASM 2016 Proxy dated August__2016 and SEC filed on EDGAR the 16th of AUG 2016.

#2) PPHM ASM 2016 held on October 13th 2016.

#3)
PPHM Nominating committee charter - adopted on 29th April 2004 (FY 2003 ending April 30th 2004)

#4) PPHM ASM 2004 (FY 2003), 10-K Jul 2004 - See Part I for Nomination Committee Charter

#5) Ronin's letter to PPHM shareholders of July 1"th 2017

#6) PPHM's reply also on JUL 13th 2017

#7) Ronin's letter to PPHM employees of 20 Jul 2017

#8) PPHM's CEO King letter to employees on 21th JUL 2017

#9) Ronin's SCHEDULE 13D/A for 3.3 Mil PPHM shares

#10) Ronin's SCHEDULE 13D/A for 115K PPHMP shares



DISCLOSURE
I am PPHM Long and principally opposed to Ronin's, IMO, hostile actions towards PPHM for the reasons that I have explained here and have later completed as more things became obvious. Hence I write the current post in a state of mind were I hope RONIN will in no way be part of any PPHM future, NOT EVEN by lack of alternatives, because I perceive Ronin as a BIGGER danger to my PPHM investment then the current BoD.

This being said I will support replacements of some of the current BoD members, except President and CEO King, by OTHER BoD members that are not directly or indirectly related to Ronin. I understand the frustration about remuneration and have my own recent frustration based on the fact that Ronin's accusations where made officially in a SEC listed document and the attacked members did in NO WAY defend themselves. AIMO.

REASONING
According #1 the proxy date of last proxy is 1th AUG 2016 following the date notation of the proxy of August[__]2016.

Hence the anniversary date of lasts year proxy is 1th AUG 2017.

According that proxy:

For a stockholder to make any nomination for election to the Board of Directors at the 2017 Annual Meeting of Stockholders, the stockholder must provide notice to the Company, which notice must be delivered to, or mailed and received at, the Company’s principal executive offices not earlier than the close of business on June 15, 2017 and not later than the close of business on August 15, 2017.

According #6 PPHM confirms on JULY 13th that Ronin filed a shareholders proposition for the nomination of 3 BoD members. That filing is TIMING WISE Valid because it is in the required window.

According #3 PPHM has adopted a "CHARTER OF THE NOMINATING COMMITTEE
OF THE BOARD OF DIRECTORS" on 29th April 2004.

According #4 that charter has been submitted to the shareholders at the ASM of 2004 (FY 2003). It is pointed to in EACH 10-K since then.


According this charter from #3:

10. Timing for Submissions Regarding Nominees for Election at Annual Meetings. A stockholder (or group of stockholders) wishing to submit a nominating recommendation for an annual meeting of stockholders must ensure that it is received by the Company, as provided above, not later than 120 calendar days prior to the first anniversary of the date of the proxy statement for the prior annual meeting of stockholders.

In the event that the date of the annual meeting of stockholders for the current year is more than 30 days following the first anniversary
date of the annual meeting of stockholders for the prior year, the submission of a recommendation will be considered timely if it is submitted a reasonable time in advance of the mailing of the Company's proxy statement for the annual meeting of stockholders for the current
year.

According the documents at hand there is NO TRACE of Ronin filing any request for nominations to the PPHM Nomination Committee, as required, before 3th April 2017 (Ronin was still building his position according the 13-D filings). This is 120 Days BEFORE the anniversary of last years ASM proxy. Hence Ronin's filing would not have been conform the regulation applicable to PPHM BoD candidates propositions since the ASM of 2004 (FY 2003).

According #2 last years ASM was held on 13th OCT 2016. Adding 30 DAY brings us at 13th NOV 2017.

If the ASM of this year, 2017 (FY 2016) would be pushed BEHIND 13th November 2017 (which in my opinion is very unlikely since PPHM did call Ronin activists, according #8, and will certainly NOT open a door that is probably already closed by the above), then Ronin could still have a chance.

In the mean time Ronin, by filing, had to agree to HOLD his position in PPHM equity according filings in #9 and #10, approx. 3.4Mil common PPHM shares equivalent, or 23.8Mil pre-split equivalent, which makes him the 2nd biggest PPHM shareholders after Kenneth Dart's Eastern Capital.

NOMINATION COMMITTEE
The current Nomination Committee Members are ES, DP, CJ. They advice (they do NOT take the decision in their capacity of Nomination Committee) the BoD, according #3, on nominations and BoD size.

Ronin proposes 3 candidates and we have no trace of any request to remove the current 3 members mentioned above (should have been in #6 if it were the case).

If it is NOT a replacement then the Committee may at first just say there is no need for extra members if all current members are proposed for renewal.

Secondly, supposing Ronin's filing to the committee was timely, they will vet the candidates and I am sure there are possibilities that would allow them to say that the current BoD is not only extending the Avid business and that there is also PS-targeting. They will probably find that the current team that also BUILD Avid into a 2+6 Award winning business with 5 consecutive record years in revenue and a top record in last quarter as to earnings per share of best qualified.

But the same 3 Nomination Committee members are ALSO the BoD members. And there is a conflict in interest because, according #5 and #7, Ronin is clearly hostile to those 3 BoD members. So they would advice themselves and then vote and that, IMO, is a conflict of interest because WHY would they vote Ronin in that wants them out? So if they abstain CEO King must vote on his own in the BoD and since he called Ronin activists it is very unlikely that he would vote them IN, unless this is all a set-up where Ronin is ASKED to play hostile. If that would be the case and it EVER uncovers then King would not survive that politically IMO.

CONCLUSION
Based on the above PPHM requires TWO filings to nominate BoD members. One shareholder proposition to place candidates on the voting items of the ASM and one to the BoD Nomination Committee, to according to the terms of the charter, allows for the vetting of such candidates and advising the BoD.

Ronin was certainly in time for the first one, but unless never disclosed by BOTH parties, isn't for the second one. And in that case, IMO, the Nomination Committee, given their conflict of interest when in the BoD, will do everything to kill Ronin's filing based on procedure errors and NEVER go to any vetting.

It will be interesting times because the ONLY BoD change possibility, given the procedural requirement for shareholder proposed candidates, will have to come from FREE WILL of the current BoD members to have themselves replaced. By lack of defending themselves against the accusations of Ronin in his letters they now form a liability to PPHM and that is NEVER in the best interest of us shareholders. Every party negotiating with PPHM will ONLY have heard Ronin's version and possibly partial presentation of the facts and they do NOT come across well in that format. Furthermore such pending accusations may keep future investors in PPHM shares at a distance which is also not good for the PPHM PPS.

So if the BoD really has the best interest of PPHM shareholders in mind and in absence of a defence they should step down and replace themselves with strong candidates from the Scientific and Biotech/Pharma Industry, possibly a lawyer but then one of reputation and Keep CEO King as the President & CEO.

It is NOT the shareholders fault that the resume/CV of said BoD members looks so bad. Ronin has made this official and the persons in question have apparently accepted Ronin's version and related conclusions as TRUE because they didn't defend themselves officially. Hence that is how I am going to see it from now on because this is no longer an anonymous message board set of accusations, this is in a SEC listed document.

AIMO