8-K: Vaxart Urges Stockholders to Approve Reverse Split for NASDAQ Listing

Vaxart's management strongly advocates for a reverse stock split to regain NASDAQ compliance, citing benefits for capital access, investor visibility, and corporate governance.

Summary

• Vaxart held a virtual stockholder fireside chat on August 20, 2025, to discuss the proposed reverse stock split and address stockholder questions.
• The primary goal of the reverse stock split is to regain compliance with NASDAQ's $1 minimum bid price requirement, which management views as critical for long-term business viability.
• A NASDAQ listing is expected to provide increased visibility, better liquidity, broader access to capital markets, and stricter corporate governance standards.
• Trading volume on the OTC market has decreased, with 2025 volumes below 1 million shares per day, compared to 1.5 million in 2024.
• Independent proxy advisory firms, ISS and Glass Lewis, have recommended that stockholders support the reverse stock split proposal.
• The company presented a plan for NASDAQ compliance, solely based on the reverse stock split, to the NASDAQ Hearings Panel on August 14, 2025, and expects a decision within two to four weeks.
• The target post-split stock price range is $5 to $10, consistent with other companies that have undergone reverse stock splits.
• Insider shares, equity incentive plan shares, and employee stock purchase program shares will be proportionately reduced; preferred shares are not included in the split and are held in reserve for potential strategic transactions, with NASDAQ rules preventing their use to overcome common share voting.
• Management denies any intent to squeeze out retail shareholders, emphasizing alignment of interests and regulatory protections.
• The company has implemented significant cost reductions, including a 10% reduction in FTEs in Q1 and another 21% in Q2.
• Cash runway extends into Q1 2026, necessitating capital raises or partnerships to continue operations.
• Partnership discussions are ongoing following positive norovirus Phase I data, but diligence takes time and is subject to confidentiality.
• The second stop work order for the COVID program is different from the the first, as approximately 5,000 participants have already been enrolled in the KP.2 cohort, which should provide useful information.
• Vaxart aims to differentiate its oral pill vaccine platform from mRNA vaccines, focusing on efficacy and safety profiles, with Phase IIb COVID trial data expected to provide head-to-head comparison.
• The avian flu program is being explored for government partnerships for funding due to the lack of a commercial market and potential for novel platforms after mRNA cancellations.

Sentiment

Score: 6

Explanation: The company is proactively addressing its NASDAQ compliance issue and has positive Phase I norovirus data. Management emphasizes alignment with shareholders and is pursuing multiple funding avenues. However, the need for a reverse stock split, limited cash runway, and ongoing delays/uncertainties in clinical programs and partnerships present significant challenges.

Positives

• Positive Phase I norovirus results have been achieved.
• Approximately 5,000 participants have been enrolled in the COVID KP.2 cohort, providing useful data despite the stop work order.
• Management and Board members have purchased shares, indicating alignment with stockholders' interests.
• The company has made significant cost reductions, including a 10% FTE reduction in Q1 and a 21% FTE reduction in Q2.
• Manufacturing readiness and capabilities are strong, demonstrated by the quick pivot from XBB to KP.2 for the COVID vaccine.
• Independent proxy advisory firms, ISS and Glass Lewis, recommend supporting the reverse stock split.
• A NASDAQ listing is expected to offer increased visibility, liquidity, better access to capital, and stricter corporate governance.
• The company is actively exploring non-dilutive funding options such as government grants, venture debt, and industry partnerships.

Negatives

• Stock trading volume on the OTC market is down, with 2025 volumes below 1 million shares per day compared to 1.5 million in 2024.
• Low liquidity on OTC makes trading more expensive and can cause investor nervousness.
• A reverse stock split could result in stock volatility.
• The company's cash runway extends only into Q1 2026, creating a funding gap.
• NASDAQ delisting could negatively impact business viability and access to capital.
• Blue Sky laws on OTC make certain fundraising vehicles, such as rights offerings and ATMs, difficult to implement.
• The BARDA agreement has experienced two stop work orders, impacting the COVID program timeline.
• Partnership discussions take time and are under confidentiality, limiting the ability to provide interim updates.
• There is currently no commercial market for an avian flu vaccine, requiring reliance on government partnerships for funding.

Risks

• Failure to regain NASDAQ compliance could negatively impact business viability, access to capital, and investor confidence.
• Potential for stock volatility following a reverse stock split.
• Uncertainty inherent in the clinical development and regulatory process for vaccine candidates.
• Potential for further dilution if equity financing is required on less favorable terms while trading on OTC.
• Dependence on external funding (partnerships, grants, equity) to extend cash runway beyond Q1 2026.
• Stop work orders on the BARDA agreement could delay or impact COVID program funding and timelines.
• Competition from existing approved products in the COVID market.
• Challenges in advancing pipeline programs, such as avian flu, without dedicated funding or a commercial market.

Future Outlook

Vaxart anticipates a decision from the NASDAQ Hearings Panel within two to four weeks regarding its compliance plan. The company expects a sentinel cohort readout for its COVID clinical trial in Q1 2026 and top-line results for the Phase II COVID trial in late 2026. The Norovirus Phase II study is expected to commence in the coming months. The company is actively pursuing partnerships and government grants to fund its pipeline and extend its cash runway beyond Q1 2026.

Management Comments

• "Our goal is we want to get to the point... that we want to commercialize or find a partner to commercialize this vaccine and -our vaccine platform." Steve Lo
• "Listing on NASDAQ gives us a better chance to move our programs forward with support from institutional investors or partnerships, and we are actively pursuing both." Steve Lo
• "Simply put, remaining on OTC could negatively impact our business." Steve Lo
• "NASDAQ isn't just better for the company; it's also better for stockholders." Steve Lo
• "We understand that a reverse stock split could result in stock volatility. However, we have several important upcoming milestones, including potential partnerships and data readouts." Steve Lo
• "The only plan we presented was going back to our stockholders and asking for approval of the proxy to effect the reverse split." Ed Berg
• "Our goal for us is that, for all NASDAQ companies, is to trade above $1." Steve Lo
• "We really cannot sort of cost cut your way to success. We really need the resources to drive the programs forward." Jeroen Grasman
• "We have publicly disclosed that our remaining cash runway is into the first quarter of 2026. So we have every reason to make sure that we act as quickly, efficiently as we can to get to these inflection points." Jeroen Grasman
• "The dream of mine is that we could develop a vaccine that could come to your house rather than having to go wait in line." Sean Tucker

Industry Context

The biotech industry frequently sees reverse stock splits, particularly for companies in early-stage development, as a means to maintain exchange listings and attract institutional investment. Vaxart's focus on oral pill vaccines positions it uniquely against the backdrop of growing public skepticism toward mRNA vaccines, aiming to offer a differentiated and potentially safer/more effective alternative. The shift from pandemic to endemic COVID also changes the regulatory and commercial landscape for vaccine development, reducing the urgency for emergency use authorizations. The cancellation of some mRNA approaches for avian flu might open funding opportunities for novel platforms like Vaxart's.

Comparison to Industry Standards

• Novavax and Dynavax are cited as examples of biotech companies that underwent reverse stock splits early in their clinical development and later became billion-dollar companies with sales.
• Vaxart aims to differentiate its oral vaccine platform from mRNA vaccines, which are a current industry standard, by focusing on efficacy and safety profiles.
• The target post-split stock price range of $5 to $10 is stated as "the norm of other companies who have a reverse stock split."

Management Changes

Corporate Governance

Legal Proceedings

• Allegations against former Board member Bob Yedid for insider trading (not involving Vaxart).

Stakeholder Impact

• Shareholders: Potential for stock volatility from reverse split, but also increased visibility, liquidity, and access to capital if NASDAQ listing is regained. Protections from NASDAQ's corporate governance rules. Potential for less dilutive capital raises.
• Employees: Recent FTE reductions (10% in Q1, 21% in Q2) due to cost-cutting measures.
• Partners: Ongoing diligence and negotiations for potential partnerships.
• Regulatory Bodies: NASDAQ Hearings Panel decision pending. SEC filings and compliance.

Next Steps

• Stockholders to vote on the reverse stock split proposal by September 4, 2025.
• Special Meeting of Stockholders on September 5, 2025, for the final vote on the reverse stock split.
• Await decision from NASDAQ Hearings Panel regarding compliance (expected in two to four weeks).
• Continue diligence and negotiations for potential partnerships.
• Sentinel cohort readout for COVID clinical trial in Q1 2026.
• Top-line results for Phase II COVID trial in late 2026.
• Initiate Norovirus Phase II study.
• Explore funding avenues for other pipeline programs, such as avian flu.
• Submit avian flu study results for peer-reviewed publication (aim for this year).

Key Dates

Recommendation

Vaxart is at a critical juncture, with the outcome of the reverse stock split vote and NASDAQ compliance being paramount. While the company has promising science (norovirus Phase I data) and is actively pursuing partnerships and non-dilutive funding, its limited cash runway into Q1 2026 and ongoing clinical trial uncertainties present significant risks. A successful reverse split and NASDAQ relisting could provide stability and access to capital, but the immediate impact on stock price is uncertain. Investors should hold to see the outcome of the vote and NASDAQ's decision, as well as further progress on partnerships and clinical milestones.

Keywords

Vaxart, VXRT, reverse stock split, NASDAQ compliance, oral vaccine, norovirus, COVID vaccine, avian flu, BARDA, clinical trials, biotech, pharmaceutical, capital raise, corporate governance, stock market, investor relations