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Untrue as evidenced of how the initial offer of $0.81 was improved to $0.84. The board believed the $0.84 was below cash on hand plus royalty stream and gave no value for products.

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Party F never made a real offer – its indications were highly conditional and dependent on diligence, which it refused to conduct

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On the advice of Dechert, the company’s external counsel, the BOD deemed it prudent to investigate enacting a shareholder rights plan to protect all of the company’s shareholders from a potential corporate raider Party F.

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The break-up fee agreed to was 3.25% of the deal, which is well within the norm for break-up fees and the break-up fee was only due if the company received and accepted a higher offer.

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If the deal didn’t close for any other reason, such as the shareholders not approving the merger or a significant adverse event at Vaxart, there was no break-up fee payable.

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Following a termination of employment after a transaction, the CEO and CFO will only receive the severance payments long-ago called for in their employment agreements. The contracts, which the compensation committee of the board approved based on the advice of an independent compensation consultant and were consistent with industry norms for comparable companies with whom Aviragen competes for talent.

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Stifel receives the same fee if the board accepted the buyout offer as they would receive for the merger.

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The combined company has significant amount of cash (approximately $30 million) that will last until the second quarter of 2019, during which the company will achieve a number of value-creating milestones. In addition nearly all of Vaxart’s debt converts into shares and the combined company will be left with very little debt ($5 million), which doesn’t need to be repaid for years.

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The “material weakness was related to lack of sufficient personnel”, ignores that the combined company will have the benefit of Aviragen’s resources and procedures. It is not a reflection of the quality or accuracy of the accounting. As noted in the proxy, it will be remedied immediately upon closing of the merger.

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Stifel are experts in the industry that routinely prepared fairness opinions. They chose companies that are comparable to Vaxart and are ones that Vaxart competes against in the vaccine development arena.

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Stifel selected the companies and the transactions utilized in its analyses based on the size of the company or target company, the current phases of the life cycle of the company or target company and other factors.  With respect to Vaxart, each of the selected publicly companies to which it was compared was a biotechnology company whose lead value generating asset was a clinical stage vaccine in the United States, and each of the target companies in the transactions to which it was compared was a biotechnology company with a lead value generating asset that was a non-marketed vaccine (and was not a biodefense focused company). Stifel understood that the companies and transactions utilized in its analyses were not identical to Aviragen or Vaxart or to the merger and differed in material ways; accordingly, Stifel’s analyses were not purely mathematical but involved complex considerations and judgements concerning the differences in the companies and the transactions.

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Stifel conducted several analyses, consisting primarily of a selected publicly traded companies analysis, a selected precedent transactions analysis, a discounted cash flow analysis, and (in the case of Vaxart) a selected IPO analysis, each as described in Aviragen’s proxy statement, and considered the results of all of its analyses as a whole.  Stifel noted that no methodology should be viewed individually, and did not attribute any particular weight to any analysis or other factor.   

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The list could be viewed as a conservative one given that some of the companies have had recent major clinical trial failures that affected their value.

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An excellent recent comp for Vaxart is Okairos, another delivery/gene-based vaccine company with a viral vector.  Okairos was at a similar stage of development as Vaxart when they were acquired by GSK for $325M.

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The discount rate in the DCF does not address the market potential of the products, which is the absolute driving factor in a DCF calculation.

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Aviragen’s liquidation value did take into consideration a number of different aspects including royalties, third-party obligations, D&O insurance tails, etc.

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Actually the length of time required by the FDA to follow subjects for safety following administration of a novel adjuvant is only 12 months.

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Although, the total number of subjects in a typical phase 3 adjuvanted prophylactic vaccine study may be larger than that in a novel therapeutic study, vaccines only require one pivotal phase 3 study for licensure, unlike therapeutics, which typically require two pivotal trials.

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Actually three adjuvanted vaccines have been approved by the FDA in the last two years

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Shingrix, HEPLISAV B, and Fluad

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No safety concerns to date (>300 patients dosed)

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Positive feedback from the FDA to date

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No change in formulation is required and tablets with more virus (higher potency) have successfully been made and tested clinically

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Our current GMP facility is adequate to manufacture clinical trial supplies for the trials that are scheduled to start in 2018. Importantly, our process has yields that are at least 10-fold higher than those achieved by Lonza, an enormous advantage both in cost as well as in CAPEX requirements. Additionally, Vaxart has a proprietary process and manufacturing in-house gives us better control of this important intellectual property asset.

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Vaxart has no need to match Lonza’s facilities since Lonza is a service provider for hundreds of customers. Although the vaccines used in clinical trials to date (flu, norovirus, RSV vaccine) were manufactured at Lonza, the process was supervised by Vaxart’s personnel using Vaxart’s equipment.

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Many of the synergies are explained in the document, and in fact most are quite obvious. The new company doesn’t need two CEO’s, nor two CFO’s, nor two drug development management teams. All of the programs of both companies can be handled by one management team, which as the proxy notes in detail will be the Vaxart team. In fact, Aviragen has already laid off all of its senior management team (excluding the two executives needed to undertake its regulatory responsibilities of being a public company and one to conduct the ongoing clinical trial) in advance of the merger in order to preserve cash for the benefit of our shareholders. In addition, there will be no need for two headquarters, two legal firms, two accounting firms, etc. The reduced staffing and other synergies will save more than $6 million dollars annually for the combined company.

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Aviragen is not running the new company. Vaxart is. And vaccines are not a new business for them.

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See above. The major items contributing to synergy are all laid out in the proxy.

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It is clearly stated that because Vaxart will control 60% of the combined stock, they are the acquiring company. The beneficial ownership table is presented for the combined company.

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Extremely short-term movements in the stock price are not indicative of shareholder sentiment, particularly with a highly volatile, retail-heavy, microcap stock whose value is largely subjective.

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It is easy to manipulate the narrative by selecting time periods that favor any one given argument.

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The same argument can be made about the price surrounding the merger announcement. Company shares had been trading in the $.50s and low $.60s for most of the summer and fall and in fact was trading in the $.40s earlier in the year. In October it rose steadily in anticipating of news. It then sold off as short term traders took profits.

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CEO Wouter Latour has been a leader at some of the world’s largest pharmaceutical companies, including Global Head of BD, M&A at SmithKline Beecham Vaccines, and Head of a major Business Unit at Novartis, as well as CEO of smaller biotech companies.

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The Board of Vaxart has the benefit of a highly experienced executives in the pharmaceutical industry, including Richard Markham, CEO of Aventis Pharmaceuticals and Jan Leschly, CEO of GlaxoSmithKline.