DEFA14A: Vaxart Addresses Reverse Stock Split Proposal to Maintain Nasdaq Listing

Vaxart is seeking stockholder approval for a reverse stock split to regain compliance with Nasdaq's minimum bid price requirement and avoid delisting.

Summary

• Vaxart is proposing a reverse stock split to regain compliance with Nasdaq's minimum $1.00 bid price requirement.
• The company's share price was $0.42 as of May 9, 2025.
• The proposed reverse stock split ratio is not less than 1-for-5 and not more than 1-for-50.
• The board of directors will select a ratio only high enough to resolve the Nasdaq deficiency.
• If the stock price appreciates above $1.00, the board may decide not to effect the reverse stock split.
• The company believes a share repurchase program is not a prudent use of capital at this time because they are not currently profitable.
• The company has obtained non-dilutive funding from BARDA and the Gates Foundation.
• ISS and Glass Lewis recommend Vaxart stockholders support the reverse stock split proposal.
• Management equity is adjusted accordingly and has also suffered losses related to the company's share price decline.
• Vaxart will continue to explore both business development partnerships and non-dilutive funding options.

Sentiment

Score: 6

Explanation: The sentiment is neutral to slightly positive. While the company faces the risk of delisting, they are taking proactive steps to address the issue. The recommendations from ISS and Glass Lewis are also a positive sign.

Positives

• Maintaining the Nasdaq listing is expected to increase market visibility and broaden investor appeal.
• The reverse stock split could potentially enhance long-term value by increasing trading volume and facilitating future financing opportunities.
• The company has already secured non-dilutive funding through BARDA and the Gates Foundation.
• Leading independent proxy advisory firms recommend stockholders support the proposal.

Negatives

• The company's share price is below the Nasdaq minimum bid price requirement of $1.00, leading to the risk of delisting.
• The company is not currently profitable, making a share repurchase program an imprudent use of capital.
• The reverse stock split is not a preferred option, but is considered necessary to maintain the Nasdaq listing.

Risks

• Failure to regain compliance with Nasdaq's minimum bid price requirement could result in delisting.
• Delisting from Nasdaq could adversely affect the value of the company's securities and trading volume.
• Organic price appreciation depends on unpredictable factors such as clinical trial results, regulatory progress, and market sentiment.
• The company needs more time and/or data to advance business development partnerships and non-dilutive funding discussions.

Future Outlook

The company aims to regain compliance with Nasdaq's minimum bid price requirement through a reverse stock split and continue to advance its clinical-stage programs and preclinical pipeline.

Management Comments

• The board of directors intends to select a ratio for the reverse stock split only high enough as it deems necessary to resolve the Nasdaq deficiency.
• Vaxart prefers the requirement to be satisfied through appreciation of Vaxart's stock price.
• Maintaining our listing on Nasdaq listing is essential in supporting the Company's overall strategy of progressing its clinical stage programs for COVID-19 and norovirus while continuing to advance its promising preclinical pipeline.

Industry Context

Many biotechnology companies face challenges in maintaining Nasdaq listing compliance, especially during periods of market volatility or when clinical trial results are pending. Reverse stock splits are a common mechanism used to address low share prices and maintain listing status.

Comparison to Industry Standards

• Many companies in the biotechnology industry, particularly those in the clinical stage, have used reverse stock splits to maintain their Nasdaq listing.
• For example, companies like Agenus and Ocugen have previously implemented reverse stock splits to meet Nasdaq's minimum bid price requirement.
• The proposed reverse stock split ratio of 1-for-5 to 1-for-50 is within the typical range seen in similar situations.

Stakeholder Impact

• Shareholders will be impacted by the reverse stock split, potentially owning fewer shares at a higher price per share.
• Maintaining the Nasdaq listing is intended to benefit shareholders by increasing market visibility and broadening investor appeal.
• Employees may be indirectly affected by the company's ability to maintain its listing and secure future financing.

Next Steps

• Stockholders will vote on the reverse stock split proposal at the Annual Meeting on May 21, 2025.
• The board of directors will determine the final reverse stock split ratio if the proposal is approved.
• The company will continue to pursue business development partnerships and non-dilutive funding options.

Key Dates

Keywords

reverse stock split, Nasdaq, delisting, compliance, share price, Vaxart, stockholders, proxy, financing, BARDA, clinical trials