Avid Bioservices Inc (CDMO)

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Tax reasons or good news?

The December 2012 Grants represent a non-routine broad based grant of stock options, which the Committee deemed necessary for
the purposes of promoting employee retention and in the best interest of the Company and its stockholders given the Company’s (i) recent
agreement with the U.S. Food and Drug Administration on the design of a single registration trial for Cotara in patients with recurrent
glioblastoma multiforme and the need to focus significant time and effort on moving this trial forward, including efforts to seek a partner, (ii)
need to complete the Company’s detailed internal review of its Phase II second-line non-small cell lung cancer trial with bavituximab, (iii) need
for its biomanufacturing subsidiary, Avid Bioservices, to meet its existing customer obligations, plus continue to expand its client base, and (iv)
need to meet other corporate goals and objectives, all of which are necessary to continue to maintain and enhance stockholder value.