IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

IN RE VAXART, INC.

STOCKHOLDER LITIGATION

)

)

CONSOLIDATED

C.A. No. 2020-0767-PAF

MEMORANDUM OPINION

Date Submitted: August 24, 2021

Date Decided: November 30, 2021

Corrected: December 1, 2021

Stephen E. Jenkins, F. Troupe Mickler, IV, ASHBY & GEDDES, P.A., Wilmington, 

Delaware; Gregory V. Varallo, BERNSTEIN LITOWITZ BERGER & 

GROSSMANN LLP, Wilmington, Delaware; Jeroen van Kwawegen, Daniel E. 

Meyer, Margaret Sanborn-Lowing, BERNSTEIN LITOWITZ BERGER & 

GROSSMANN LLP, New York, New York; Gustavo F. Bruckner, Samuel J. 

Adams, Daryoush Behbood, POMERANTZ LLP, New York, New York; Sascha N. 

Rand, Rollo C. Baker, IV, Silpa Maruri, Jesse Bernstein, Charles H. Sangree, 

QUINN EMANUEL URQUHART & SULLIVAN, LLP, New York, New York; 

Stanley D. Bernstein, Matthew Guarnero, BERNSTEIN LIEBHARD LLP, New 

York, New York; William J. Fields, Christopher J. Kupka, Samir Shukurov, FIELDS 

KUPKA & SHUKUROV LLP, New York, New York; Attorneys for Plaintiffs.

Brock E. Czeschin, Andrew L. Milam, RICHARDS LAYTON & FINGER, P.A., 

Wilmington, Delaware; Riccardo DeBari, Renee Zaytsev, Mendy Piekarski, 

THOMPSON HINE, New York, New York; Attorneys for Andrei, Wouter W. 

Latour, Todd Davis, Michael J. Finney, Robert A. Yedid, Anne M. VanLent, and 

Nominal Defendant Vaxart, Inc.

Matthew F. Davis, Abraham C. Schneider, POTTER ANDERSON & CORROON 

LLP, Wilmington, Delaware; Douglas A. Rappaport, Kaitlin D. Shapiro, Elizabeth 

C. Rosen, Madeleine R. Freeman, AKIN GUMP STRAUSS HAUER & FELD LLP, 

New York, New York; Attorneys for Defendants Steven Boyd, Keith Maher, 

Armistice Capital, LLC. 

FIORAVANTI, Vice Chancellor 
2

Vaxart, Inc. (“Vaxart” or the “Company”) is a small biotechnology company 

that embarked on developing a vaccine for COVID-19 in the early stages of the 

pandemic. In early June 2020, the Company’s board of directors agreed to amend 

two warrant agreements between the Company and its one-time majority 

stockholder. The warrant amendments permitted the stockholder to beneficially own 

a greater number of Vaxart shares upon exercise of the warrants. In effect, it enabled 

the stockholder to exercise and dispose of the warrant shares faster than under the 

terms of the original warrants. A few days later, Vaxart stockholders voted on an 

amendment to the Company’s incentive compensation plan to increase the number 

of shares eligible for grant. A few weeks after those two events, the Company 

announced that it had been selected to participate in a non-human primate study 

sponsored by Operation Warp Speed, the federal government’s program to 

accelerate the development and distribution of a COVID-19 vaccine. The 

Company’s stock price jumped upon the announcement.

The plaintiffs in this action are Vaxart stockholders who have asserted a 

variety of claims arising from the three events described above. Plaintiffs allege that 

the Company’s board and former majority stockholder had knowledge of Vaxart’s 

selection to participate in the non-human primate study before the board approved 

the warrant agreement amendments and before the stockholder vote on the 

amendment to the equity incentive plan. Plaintiffs allege the board withheld the 
3

disclosure of that information until after those two events so as to benefit themselves 

in the form of spring-loaded option grants, and to benefit the former majority 

stockholder, which exercised the warrants and sold most all of the underlying shares 

within two days of the public announcement of Vaxart’s participation in the nonhuman primate study. Plaintiffs have asserted claims for breach of fiduciary duty, 

unjust enrichment, and aiding and abetting. All defendants have moved to dismiss 

the complaint in its entirety. In this opinion, I grant the motion as to certain claims, 

and I request additional briefing on two discrete issues. 

I. BACKGROUND

Unless otherwise specified, the facts recited in this Memorandum Opinion are 

drawn from the Verified Complaint (the “Complaint” or “Compl.”) and documents 

integral thereto.1

1 Dkt. 1. Exhibits attached to the Complaint will be cited as “Ex.” Exhibits entered into 

the record by the Armistice Defendants (defined below) will be cited as “Armistice Defs.’ 

Ex.” Exhibits entered into the record by the Vaxart Defendants (defined below) will be 

cited as “Vaxart Defs.’ Ex.” Plaintiffs have objected that Defendants have introduced into 

the record “extraneous documents” produced to Plaintiffs in response to books and records 

demands under 8 Del. C. § 220. Pls.’ Ans. Br. at 34. Plaintiffs’ characterization of Vaxart’s 

participation in Operation Warp Speed have prompted the Defendants to request that I 

“review the actual documents to ensure that the plaintiff has not misrepresented their 

contents and that any inference the plaintiff seeks to have drawn is a reasonable one.” In 

re CBS Corp. S’holder Class Action & Deriv. Litig., 2021 WL 268779, at *18 (Del. Ch. 

Jan. 27, 2021) (citations omitted). The Plaintiffs’ respective Confidentiality Agreements 

with the Company governing the production of Section 220 documents each provide that

all “documents” produced pursuant to the agreements “will be deemed incorporated by 

reference in any complaint relating to the subject matter referenced in the Demand[s].” 

Armistice Defs.’ Exs. 1 ¶ 11, 2 ¶ 13. The Confidentiality Agreement between the Company 
4

A. The Parties

Plaintiffs Cynthia Jaquith and Paul Bergeron have been Vaxart stockholders 

since April 2020.2

 Plaintiff Kenny Galjour alleges to have been a Vaxart stockholder 

“at all relevant times.”3

 They are collectively referred to as “Plaintiffs” herein.

Vaxart is a Delaware corporation based in San Francisco, California.4 The 

Company is a “clinical-stage biotechnology company focused on vaccine 

development.”5 “Vaxart has developed a proprietary delivery platform that allows 

the vaccines it develops to be administered orally.”6 Vaxart is the result of a 2018 

reverse merger (the “Merger”) between Vaxart, Inc. (“Private Vaxart”), then a 

and Jaquith and Bergeron makes incorporation conditional upon written confirmation from 

the Company that it “believes in good faith that it has completed production” of all inscope documents within five business days of making a “good-faith determination” as to 

such. Armistice Defs.’s Ex. 2 ¶ 14. Defendants have entered into the record an October 1, 

2020 letter representing that “on September 1, 2020, the Company provided the written 

certification required by Paragraph 14 of the Confidentiality Agreement, stating that it 

believes in good faith that it has completed its production of the documents that the 

Company stated it will produce, all of which are within the scope of the Demands.” Vaxart 

Defs.’ Ex. 28. Plaintiffs have not disputed this representation. Nevertheless, the 

incorporation by reference of documents produced under Section 220 “does not change the 

pleading standard that governs a motion to dismiss.” Amalgamated Bank v. Yahoo! Inc., 

132 A.3d 752, 798 (Del. Ch. 2016), abrogated on other grounds by Tiger v. Boast Apparel, 

Inc., 214 A.3d 933 (Del. 2019). “If there are factual conflicts in the documents or the 

circumstances support competing interpretations, and if the plaintiff makes a well-pleaded 

factual allegation, then the allegation will be credited. Id.

2 Compl. ¶ 20. 

3 Galjour Compl. ¶ 17. 

4 Compl. ¶ 21.

5 Id. ¶ 32. 

6 Id.
5

privately held company, and Aviragen Therapeutics, Inc. (“Aviragen”). 7 As a result 

of the Merger, Private Vaxart became a subsidiary of Aviragen and Aviragen

changed its name to Vaxart.

8 Certain Aviragen directors continued on after the 

Merger as directors of the post-Merger parent company (“Vaxart”).9 Shares of 

Vaxart’s common stock trade on the Nasdaq stock market under the symbol 

“VXRT.”10

Defendant Armistice Capital LLC, a Delaware limited liability company 

(“Armistice”), is a hedge fund focused on the health and consumer sectors.11 

Armistice was a Vaxart stockholder from September 26, 201912 until at least June 

29, 2020, the date of its last publicly reported trade.13 Plaintiffs allege that 

“Armistice was Vaxart’s controlling shareholder.”14 

7 Vaxart Defs.’ Ex. 3 at 95.

8 Id.

9 See Vaxart, Inc. Schedule 14A (Apr. 24, 2020) (“Proxy”) at 9–10, 12. 

10 Vaxart Defs.’ Ex. 3. 

11 Compl. ¶¶ 1, 22. 

12 Vaxart Inc., Schedule 13D (Oct. 1, 2019). I take judicial notice of this and other SEC 

filings cited in this Opinion to the extent they are “matters that are not subject to reasonable 

dispute.” In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 169 (Del. 2006). See 

Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 n.28 (Del. 2004) (noting that 

courts may take judicial notice of contents of public documents such as SEC filings 

required by law to be filed).

13 Vaxart Inc., Schedule 13D (June 30, 2020).

14 Compl. ¶ 22.
6

Defendants Steven Boyd and Keith Maher are employees of Armistice.15 

Boyd is the fund’s Chief Investment Officer and Maher is a Managing Director.16 

Boyd and Maher joined Vaxart’s board of directors (the “Board”) in October 2019.17 

Boyd and Maher are together the “Armistice Directors” and, together with 

Armistice, the “Armistice Defendants.” 

Defendant Wouter W. Latour is the Chairman of the Board.18 Latour served 

as a director and Chief Executive Officer (“CEO”) of Private Vaxart since 

September 2011 through the Merger, and has continued to serve as a director since 

then.19 He also continued to serve as the CEO of Vaxart since the Merger until his 

resignation on June 14, 2020.20

Defendant Andrei Floroiu is the current CEO of Vaxart.21 Floroiu joined the 

Board on April 13, 2020.22 The Board appointed him as CEO on June 15, 2020 

effective June 14, 2020.23

15 Id. ¶ 36.

16 Id.

17 Id. ¶¶ 23–24.

18 Id. ¶ 25. 

19 Proxy at 9.

20 Compl. ¶ 25. 

21 Id. 

22 Id. ¶¶ 38, 103. 

23 Vaxart Inc., Current Report (Form 8-K) (June 15, 2020). The Complaint alleges that 

Floroiu “served as . . . CEO of the Company since June 15, 2020.” Compl. ¶ 26. 
7

Michael J. Finney was on the board of Private Vaxart since July 2007 and has 

stayed on after the Merger as a Vaxart director.24 He also served as the CEO of 

Private Vaxart from 2009 until 2011.25

Defendants Robert A. Yedid and Todd Davis became Vaxart directors in 

October 2019 upon being appointed by the Board.26 Davis served on the Board’s 

Compensation Committee (the “Compensation Committee”) “at all times relevant 

hereto.”27

Anne M. VanLent was a director of Private Vaxart from 201328 until the 

Merger and stayed on as a Vaxart director until June 8, 2020.

29 VanLent was not 

nominated for reelection at the 2020 annual meeting of Vaxart stockholders.30

Latour, Boyd, Davis, Finney, Maher, Yedid, and VanLent were members of 

the Board when: (i) on March 24, 2020, the Board approved a grant of time-based 

stock options covering a total of 2,610,000 shares that would be “exercisable” upon 

approval by Vaxart stockholders of an amendment to Vaxart’s equity incentive plan 

(the “2019 Amendment”) and (ii) on April 13, 2020, the Board approved a grant of 

24 Proxy at 10.

25 Id. 

26 Compl. ¶¶ 28–29; Vaxart Inc., Current Report (Form 8-K) (Oct. 28, 2019). 

27 Compl. ¶ 28. 

28 Vaxart Inc., Form 10-K (Feb. 6, 2019) at 120. 

29 Compl. ¶ 30. 

30 See Proxy at 9. 
8

time-based stock options to Floroiu covering a total of 54,720 shares.31 Along with 

Floroiu, these individuals constituted the Board when: (i) on April 24, 2020, Vaxart 

issued the proxy statement (the “Proxy”) for stockholder approval of the 2019 

Amendment;32 (ii) on June 5, 2021, the Board approved by written consent the 

Warrant Amendments (as defined below);33 and (iii) on June 8, 2020, the annual 

meeting of stockholders took place.34 Floroiu, Latour, Boyd, Davis, Finney, Maher, 

and Yedid constituted the Board when (i) on June 8, 2020, the Board granted stock 

option awards to Davis, Finney, Yedid and approved changes to the terms of 

VanLent’s stock options35 and (ii) on June 13, 2020, the Board approved the terms 

of a separation agreement with Latour permitting his stock options to continue to 

vest after his resignation as CEO and granted Floroiu additional stock options upon 

his appointment as CEO.36

31 Proxy at 32–33. Defendants assert that Floroiu was not a member of the Board when it 

approved his stock option award and that he only “joined the Board later that same day.” 

Defs.’ Opening Br. at 11. Plaintiffs do not dispute this assertion or allege otherwise; the 

Complaint asserts only that “on April 13, 2020, Floroiu joined the Board” but does not 

specify when Floroiu’s appointment became effective. Compl. ¶ 38. 

32 See Compl. ¶ 93; Armistice Defs.’ Ex. 26; Proxy at 33.

33 Compl. ¶ 8; Vaxart Defs.’ Ex. 14. 

34 Compl. ¶ 15. 

35 See id. ¶ 53; Vaxart Defs.’ Ex. 26. 

36 Vaxart Defs.’ Ex. 27. 
9

Latour, Boyd, Davis, Finney, Maher, Yedid, VanLent are together the 

“Director Defendants.”

B. Armistice Executes a Warrant Agreement and Later Becomes 

Vaxart’s Controlling Stockholder.

On April 11, 2019, Armistice and Vaxart entered into a Common Stock 

Purchase Warrant (the “April 2019 Warrant”) giving Armistice the right to purchase 

from Vaxart up to 4,090,909 shares of Vaxart’s common stock at an exercise price 

of $1.10 at any time until April 11, 2024.37 

On September 26, 2019, two weeks after engaging in two short-sale trades, 

Armistice began buying Vaxart shares on the open market.38 By September 30,

2019, it had accumulated an equity stake sufficiently large to give it, as of that date,

“approximately 52% of the voting power of [Vaxart’s] outstanding shares of

common stock.”39 

On September 30, 2019, Armistice and Vaxart entered into a second Common

Stock Purchase Warrant (the “September 2019 Warrant” and together with the April

2019 Warrant, the “Warrants”) giving Armistice the right to purchase another

16,666,667 shares at an exercise price of $0.30 per share until September 30, 2024.40 

37 Armistice Defs.’ Ex. 9. 

38 Vaxart, Inc., Schedule 13D (Oct. 1, 2019).

39 Vaxart, Inc., Form 10-Q (Nov. 12, 2019) at 36.

40 Armistice Defs.’ Ex. 10. 
10

Each Warrant contained a blocker provision (“Blocker”).

41 Section 2(e) of 

the April 2019 Warrant provides:

The Holder shall not have the right to exercise any portion of this Warrant, 

pursuant to Section 2 or otherwise, to the extent that after giving effect to such 

issuance after exercise as set forth on the applicable Notice of Exercise, the 

Holder (together with the Holder’s Affiliates, and any other Persons acting as 

a group together with the Holder or any of the Holder’s Affiliates (such 

Persons, “Attribution Parties”)), would beneficially own in excess of the 

Beneficial Ownership Limitation (as defined below).42

Section 2(e) also makes clear that:

For purposes of the foregoing sentence, the number of shares of Common 

Stock beneficially owned by the Holder and its Affiliates and Attribution 

Parties shall include the number of shares of Common Stock issuable upon 

exercise of this Warrant with respect to which such determination is being 

made, but shall exclude the number of shares of Common Stock which would 

be issuable upon (i) exercise of the remaining, nonexercised portion of this 

Warrant beneficially owned by the Holder or any of its Affiliates or 

Attribution Parties . . . .

43

Id. The Beneficial Ownership Limitation in the April 2019 Warrant “shall be 4.99% 

of the number of shares of the Common Stock outstanding immediately after giving 

effect to the issuance of shares of Common Stock issuable upon exercise of this 

Warrant.”44 Section 2(e) also gives the holder of the Warrant the right to increase 

the Holder’s Exercise Limitation to 9.99% upon giving Vaxart 60-days’ notice:

41 Compl. ¶ 60; Armistice Defs.’ Exs. 9–10. 

42 Armistice Defs.’ Ex. 9. § 2(e). 

43 Id. 

44 Id.
11

The Holder, upon notice to the Company, may increase or decrease the 

Beneficial Ownership Limitation provisions of this Section 2(e), provided that 

the Beneficial Ownership Limitation in no event exceeds 9.99% of the number 

of shares of the Common Stock outstanding immediately after giving effect 

to the issuance of shares of Common Stock upon exercise of this Warrant held 

by the Holder and the provisions of this Section 2(e) shall continue to apply. 

Any increase in the Beneficial Ownership Limitation will not be effective 

until the 61st day after such notice is delivered to the Company.45

Blockers (also called conversion caps) like the one here permit a stockholder to avoid 

triggering certain federal securities law requirements tied to beneficial ownership.46 

Most notable here, conversion caps permit a stockholder that would otherwise be 

forced to disgorge profits from short-term sales of the issuer’s securities under 

Section 16 of the Securities Exchange Act of 1934 (the “Exchange Act”) to engage 

in short-term trading of the issuer’s stock so long as its stock holdings do not exceed 

10%, even as the stockholder retains the option to buy additional shares.

47

45 Id.

46 See, e.g., 17 C.F.R. § 240.13d-1(a) (requiring certain SEC filings for persons who are, 

directly or indirectly, the beneficial owners of any class of equity securities of the 

registrant). 

47 See ION Geophysical Corp. v. Fletcher Int’l, Ltd., 2010 WL 4378400, at *13 (Del. Ch. 

Nov. 5, 2010) (“Conversion caps often are structured to prohibit an investor from 

converting preferred stock if such conversion would result in the investor owning more 

than a specified percentage of the issuer’s common stock so as not to trigger § 16(b).”). 

Under the disgorgement rule of Section 16(b) of the Exchange Act, “statutory insiders—

those with a beneficial ownership interest of more than 10% in an equity security”—must 

“disgorge all profits realized from any purchase and sale (or sale and purchase) of the same 

security made within a six-month period.” Analytical Survs., Inc. v. Tonga Partners, L.P., 

684 F.3d 36, 43 (2d Cir. 2012). Under the SEC’s implementing regulations, “Section 16 

adopts the definition of ‘beneficial owner’ found in Section 13(d) of the Exchange Act and 

the rules promulgated thereunder solely for purpose of determining who is a ‘beneficial 
12

The September 2019 Warrant Blocker was identical to the one in the April

2019 Warrant with one exception: the September 2019 Warrant had a higher

Beneficial Ownership Limitation threshold of 9.99%.48 

On October 25, 2019, the Board appointed Boyd and Maher (the “Armistice

Directors”), along with Yedid and Davis, who replaced two directors who resigned

that day.49 

C. Vaxart’s Vaccine Development Efforts

As of December 31, 2019, Vaxart only had 14 full-time employees,50 had 

experienced two consecutive years of net losses,51 and had never brought a vaccine 

to market.52 On January 31, 2020, in the early stages of the COVID-19 pandemic, 

owner’ of more than ten percent of the issuer.’ Roth v. Solus Alternative Asset Mgmt. LP, 

124 F. Supp. 3d 315, 321 (S.D.N.Y. 2015); 17 C.F.R. § 240.16a–1(a)(1). Beneficial 

ownership also attaches to the right to acquire securities “within sixty days,” 17 C.F.R. § 

240.13d–3(d)(1)(i), “deeming owners of such a right as owners of the underlying stock 

itself.” Roth, 124 F. Supp. 3d at 321. 

48 Armistice Defs.’ Ex. 10. § 2(e). The September 2019 Warrant also gave the Warrant 

holder the right to “increase” the threshold with 60 days’ notice, but that provision was

dead letter since the Warrant holder may only increase the threshold up to 9.99%. 

49 Compl. ¶ 36; Vaxart, Inc., Current Report (Form 8-K) (Oct. 28, 2019). 

50 Vaxart Inc., Form 10-K (Mar. 19, 2020) at 38. 

51 Id. at 120.

52 Compl. ¶ 33; see Vaxart Inc., Form 10-K (Mar. 19, 2020) at 38 (“[W]e . . . have not yet 

successfully completed a large-scale, pivotal clinical trial, obtained marketing approval, 

manufactured our tablet vaccine candidates at commercial scale, or conducted sales and 

marketing activities that will be necessary to successfully commercialize our product 

candidates.”). 
13

Vaxart “announced it was developing a vaccine for COVID-19.”53 Vaxart’s stock 

price closed at $1.25 per share that day.

54 In March 2020, Vaxart disclosed that 

“our business currently depends heavily on the successful development, regulatory 

approval and commercialization of our coronavirus and norovirus tablet 

vaccine.”55 That month and in ensuing months, Vaxart disclosed its incremental 

COVID-19 vaccine development progress in its Form 8-K filings with the 

Securities & Exchange Commission (“SEC”): 

• On March 18, 2020, Vaxart announced a contract with Emergent 

BioSolutions, Inc. to use Emergent’s “molecule-to-market contract 

development and manufacturing (CDMO) services” to help develop and 

manufacture Vaxart’s COVID-19 oral vaccine candidate.56 Vaxart’s stock 

price closed at $2.34 per share that day.

57

53 Compl. ¶ 39. 

54 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law. Here 

and elsewhere, “I take judicial notice of these reported stock prices because they are not 

subject to reasonable dispute.” Lee v. Pincus, 2014 WL 6066108, at *4 n.11 (Del. Ch. Nov. 

14, 2014) (citing D.R.E. 201(b)(2)). 

55 Vaxart Inc., Form 10-K (Mar. 19, 2020) at 40.

56 Vaxart, Inc., Current Report (Form 8-K) (Mar. 19, 2020), Ex. 99.2. 

57 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law.
14

• On April 21, 2020, Vaxart “announced that its lead vaccine candidates 

generated anti-SARS CoV-2 antibodies in all tested animals after the first 

dose.”58 Vaxart’s stock price closed at $3.16 per share that day.59 

• On May 12, 2020, the Company reported that “the Company’s lead vaccine 

candidates generated robust anti-SARS CoV-2 antibodies in all tested 

animals after both the first and second dose, with a clear boosting effect 

after the second dose.”60 Vaxart’s stock price closed at $2.93 per share 

that day.61

• On June 18, 2020, Vaxart released a corporate presentation describing its

“Covid-19 program” as “advancing rapidly.”62 Vaxart’s stock price closed 

at $2.57 per share that day.63 

Vaxart also sought government funding for its vaccine development efforts.64

Obtaining such funding, Plaintiffs allege, would be a “watershed moment”65 for “one 

58 Vaxart, Inc., Current Report (Form 8-K) (April 29, 2020), Ex. 99.1; Compl. ¶ 41. 

59 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law.

60 Vaxart, Inc., Current Report (Form 8-K) (May 12, 2020), Ex. 99.1 

61 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law.

62 Vaxart, Inc., Current Report (Form 8-K) (June 18, 2020), Ex. 99.1 at 14. 

63 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law.

64 Compl. ¶ 41. 

65 Id. ¶ 52. 
15

of many clinical stage biopharmaceutical companies enmeshed in the slow struggle 

to commercialize a drug.”66

In March 2020, Vaxart completed an offering to sell 4,000,000 shares of its 

common stock and warrants to purchase up to 2,000,000 shares of its common stock 

to certain undisclosed “institutional and accredited investors.”67 The offering had 

the effect of diluting Armistice’s equity stake; as of March 17, 2020, Armistice no 

longer owned more than 50% of Vaxart’s common stock but still “beneficially 

owned more than 35% of the voting power of [Vaxart’s] outstanding shares.”68 

66 Id. ¶ 49. 

67 Vaxart Inc., Current Report (Form 8-K) (Mar. 2, 2020). Plaintiffs allege that Armistice 

provided equity financing through a private investment in public equity or “PIPE” 

transaction in January 2020. Compl. ¶¶ 34–35. Armistice disputes that allegation, noting 

that Boyd’s director questionnaire inadvertently represented: “Pursuant to a PIPE 

Agreement with the Company on January 22, 2020, the Company appointed Steven Boyd 

and Keith Maher to its board of directors.” Armistice Defs.’ Ex. 8 at VAXART000334. 

Instead, according to the Armistice Defendants, Boyd was referring to a January 2020 PIPE 

transaction between Armistice and another entity, “Tetraphase Pharma.” Armistice 

Opening Br. at 7 n.2. 

Plaintiffs did not dispute this in their answering brief. I accept the Armistice Defendants’ 

explanation, particularly since (1) Maher’s director questionnaire did not make the same 

reference to a PIPE transaction (Armistice Defs.’ Ex. 7 at VAXART000083); (2) Boyd and 

Maher were appointed as directors in October 2019, not January 2020; and (3) Tetraphase 

Pharmaceuticals, Inc. (“Tetraphase”), a Delaware corporation, entered into a PIPE 

Agreement on January 22, 2020 with Armistice pursuant to which the fund acquired 

1,270,000 shares of Tetraphase common stock and warrants to purchase an additional 

2,063,334 shares. Tetraphase Pharmaceuticals, Inc., Current Report (Form 8-K) (Jan. 23, 

2020). 

68 Vaxart Inc., Form 10-K (Mar. 19, 2020) at 43.
16

Shortly thereafter, Armistice began selling off its Vaxart stock in April 2020,69

to “lock in gains” from the appreciation of Vaxart’s share price in the first three 

months of 2020.70 Armistice continued its selling “nearly without pause” through 

June 3, 2020.71 By that time, Armistice’s ownership fell to approximately 7 million 

shares, or just under 10 percent of all outstanding common stock.

72 Armistice halted 

its selling spree on June 3, 2020.73 As discussed below, Plaintiffs allege that 

“Armistice knew as of June 3, 2020, and likely on May 28, 2020,” that the Company 

had been chosen to participate in Operation Warp Speed, the federal government’s 

effort to speed development and distribution of a COVID-19 vaccine.

74 

D. The Vaxart Board Approves the Warrant Amendments. 

Amidist Armistice’s sell-off of Vaxart shares, Boyd called Latour on May 14, 

2020 to discuss amending the Warrant Agreements to remove or adjust the 

Beneficial Ownership Limitations in the Blockers.

75 That same evening, Latour 

contacted Faith Charles, Vaxart’s outside counsel at Thompson Hine, and requested 

69 Compl. ¶ 43.

70 Id. ¶ 42.

71 See id. ¶¶ 43–44.

72 Vaxart, Inc., Statement of Changes in Beneficial Ownership (Form 4) (June 3, 2020) 

(Armistice Capital, LLC filing); see Vaxart, Inc., Schedule 13D (June 9, 2020). 

73 Compl. ¶ 45. 

74 Compl. ¶ 122 (emphasis omitted).

75 Id. ¶¶ 59, 63; Armistice Defs.’ Ex. 11.
17

a call the next day, noting it was “not a huge rush.”76 Two weeks later, on May 28, 

2020, Latour and Boyd discussed the terms of the amendments to the Warrant 

Agreements (“Warrant Amendments”); after the call, Latour relayed to Charles that 

Boyd was comfortable “with the 19.99%” and requested another call.77

On May 19, 2020, four days after Boyd had first raised amending the Warrant 

Agreements, Yedid reached out to Latour to sell him on the idea.78 Yedid indicated 

that doing so would help position Vaxart for inclusion in the Russell 3000 index.79 

Yedid also said that removing the 9.99% Blocker “will get more shares outstanding 

and maximize the number of Vaxart shares that would have to be bought . . . on the 

open market by the index funds that mimic the Russell 2000 or 3000.”80 Yedid 

emailed Latour again on May 28, 2020, noting he was aware of Latour’s discussions 

with Armistice, adding that “he would like to get a better understanding of the status 

of the Russell rebalancing process and whether VXRT can benefit” from moving 

forward with the Warrant Amendments.81 

76 Armistice Defs.’ Ex. 11. 

77 Compl. ¶¶ 72–73.

78 Id. ¶ 68; Vaxart Defs.’ Ex. 19. The Complaint conflates the May 19 and May 28, 2020 

email exchanges. 

79 Vaxart Defs.’ Ex. 19. 

80 Id.

81 Compl. ¶ 67; Vaxart Defs.’ Ex. 20. 
18

On May 28, 2020, Latour sent an email to the Board, excluding the two 

Armistice Directors, to inform them of Latour’s negotiations with Armistice about 

the Warrant Amendments.82 Latour proposed a call, noting that “[t]he matter is 

complex, with a range of pros and cons.”83 Floroiu responded, copying the group, 

and asked Latour to “send us what you think the pros and cons are before the call, 

so we could give this some thought.”84 Latour did not respond by email, if at all.85 

The call took place on June 1, 2020.

86 No record of what was discussed at the 

meeting exists.87 Nothing indicates any financial advisors joined the meeting. 

E. The 2019 Equity Incentive Plan

Like many early-stage biotech companies with little to no cash flow, Vaxart 

used equity awards to incentivize and compensate employees, directors, and 

contractors. On April 23, 2019, Vaxart’s stockholders approved an equity incentive 

plan (the “2019 Plan” or “Plan”). The Plan authorized the Board to grant individual 

equity-based compensation “Awards”—among others, stock options, restricted

stock awards, and stock appreciation rights (“SARs”)—to “Employees, Directors

82 Compl. ¶ 73; Armistice Defs.’ Ex. 16. 

83 Compl. ¶ 73; Armistice Defs.’ Ex. 16. 

84 Compl. ¶ 73; Vaxart Defs.’ Ex. 22. 

85 Compl. ¶ 74.

86 Id.

87 Id.
19

and Consultants.”88 The purpose of the Plan is to “provide incentives for such 

persons to exert maximum efforts for the success of the Company and any Affiliate, 

and provide a means by which the eligible recipients may benefit from increases in 

value of the Common Stock.”89 The Plan authorized the Board to:

• Determine “who” will receive awards under the plan, the “type” of 

award granted, and “when and how” they will be granted, the “number 

of shares” in each award, and the “provisions of each Award.”90

• “To accelerate, in whole or in part, the time at which an Award may be 

exercised or vest.”91 

• “[T]o amend the terms of any one or more Awards, including, but not 

limited to, amendments to provide terms more favorable to the 

Participant than previously provided in the Award Agreement, subject 

to any specified limits in the Plan that are not subject to Board 

discretion” and, among other restrictions, provided that the “rights 

under any Award will not be impaired by any such amendment.”92

88 Current Report (Form 8-K) (Apr. 23, 2019), Ex. 10.1 (the “2019 Plan”).

89 Id.

90 2019 Plan, § 2(b)(i). 

91 Id. § 2(b)(iv). 

92 Id. § 2(b)(viii).
20

• “[C]onstrue and interpret the Plan and Awards granted under it.”93

Additionally, “[a]ll determinations, interpretations and constructions 

made by the Board in good faith will not be subject to review by any 

person and will be final, binding and conclusive on all persons.”94

The 2019 Plan contained other restrictions on the Board’s authority. With 

certain exceptions, not pertinent here, “the exercise or strike price of each Option or 

SAR will be not less than 100% of the Fair Market Value of the Common Stock 

subject to the Option or SAR on the date the Award is granted.”95 Where, as here, 

Common Stock refers to shares of common stock “listed on any established stock 

exchange or traded on any established market,” “Fair Market Value” is: 

unless otherwise determined by the Board, the closing sales price for such 

stock as quoted on such exchange or market (or the exchange or market with 

the greatest volume of trading in the Common Stock) on the date of 

determination, as reported in a source the Board deems reliable.96

The Plan limited the number of shares of stock issuable under the 2019 Plan 

(the “Share Reserve”) at 1.6 million shares of Vaxart common stock.97 

93 Id. § 2(b)(ii). 

94 Id. § 2(e).

95 Id. § 5(b). 

96 Id. § 13(x)(i). 

97 Id. § 3(a)(i).
21

The Plan empowered the Board “[t]o amend the Plan in any respect the Board 

deems necessary or advisable, including, without limitation, by adopting 

amendments relating to Incentive Stock Options,” but that authority was “subject to 

the limitations, if any, of applicable law.”98 The Plan also requiresthat, “[i]f required 

by applicable law or listing requirements,” 

the Company will seek stockholder approval of any amendment of the Plan 

that (A) materially increases the number of shares of Common Stock available 

for issuance under the Plan, (B) materially expands the class of individuals 

eligible to receive Awards under the Plan, (C) materially increases the benefits 

accruing to Participants under the Plan, (D) materially reduces the price at 

which shares of Common Stock may be issued or purchased under the Plan, 

(E) materially extends the term of the Plan, or (F) materially expands the types 

of Awards available for issuance under the Plan.99

F. Vaxart Board Approves Stock Option Grants and Seeks to Amend

the 2019 Plan.

On February 21, 2020, the Board approved an amendment to the Plan (the 

“2019 Amendment”) that would increase the Share Reserve from 1.6 million to 8 

million shares.100 On March 24, 2020, the Board approved a grant of time-based 

98 Id. § 2(b)(vi).

99 Id.

100 Compl. ¶ 92. The Complaint calls the “increase [of] the shares reserved for issuance 

under the Company’s equity incentive plan” the “2020 Plan.” Id. ¶ 14. The Complaint 

alleges that “[t]he Vaxart Board approved the 2020 Plan on March 24, 2020. To effect it, 

the stockholders would still have to vote to approve it.” Id. ¶ 92. The Proxy made clear 

that stockholders were being asked to vote on an amendment to the 2019 Plan, not a new 

plan. See Proxy at 3 (describing “Proposal No. 3” thus: “To approve an amendment to our 

2019 Equity Incentive Plan to increase the number of shares of common stock reserved for 

issuance thereunder by 6,400,000 shares to 8,000,000 shares.”). 
22

stock options covering a total of 2,610,000 shares—including 900,000 shares to 

Latour—at a per share exercise price of $1.70101—the closing price of Vaxart’s 

shares on that day (the “March Awards”).102 Of the granted stock options, 25% 

vested on March 24, 2020, and the remaining shares would vest over two years every 

month thereafter.103 

On April 13, 2020, the Board approved a grant of stock options covering 

54,720 shares to Floroiu upon his joining the Board (the “April Awards”).104 

Floroiu’s time-based stock options would vest in “three equal annual installments 

over three years” at a per share exercise price equal to $1.71,105 the closing price of 

Vaxart’s shares on April 13, 2020.106 

The March Awards and the April Awards exceeded the number of shares 

available for issuance from the Plan’s 1.6 million Share Reserve. On April 24, 2020, 

the Company issued the Proxy for the annual meeting of Vaxart stockholders to be 

held on June 8, 2020 (the “Annual Meeting”). The Proxy included a proposal to 

101 Compl. ¶ 94.

102 Proxy at 22. 

103 Id.

104 Id. at 33.

105 Compl. ¶ 89.

106 Proxy at 33. 
23

amend the certificate of incorporation to increase the number of authorizes shares to 

$150 million.107 The Proxy also sought stockholder approval of

an amendment to our 2019 Equity Incentive Plan to increase the number of 

shares of common stock reserved for issuance thereunder by 6,400,000 shares 

to 8,000,000 shares.108

Noting that the Share Reserve had been depleted to just 110,276 issuable shares,109

the Proxy warned: “If stockholders do not approve the Plan Amendment, our ability 

to attract, motivate and retain key employees and directors necessary to compete in 

our industry could be seriously harmed.”110 The Proxy also stated that: 

In determining the number of additional shares to reserve for issuance under 

the 2019 Plan, our board of directors considered the number of shares 

available for future awards, the potential dilution resulting from the proposed 

increase, equity plan guidelines established by certain proxy advisory firms, 

and advice provided by the Compensation Committee’s compensation 

consultant.111

The Proxy also disclosed the terms of the March Awards of time-based stock 

options the Board had approved on March 24, 2020, including the specific grants of 

shares to Latour and two other executives.112 The Proxy also disclosed the terms of 

107 Id. at 3.

108 Id.

109 Id. at 19.

110 Id. at 21. 

111 Id. at 22.

112 Id. at 32. 
24

the April Awards to Floroiu.113 The Proxy revealed that the March Awards and the 

April Awards would be “exercisable” only if stockholders approved the 2019 

Amendment.114 The Proxy also described the key features of the 2019 Plan, 

including that no stock options or stock appreciation rights would be “discounted”:

All stock options and stock appreciation rights granted under the 2019 Plan 

must have an exercise or strike price equal to or greater than the fair market 

value of our common stock on the date the stock option or stock appreciation 

right is granted.115

After the Company disseminated the Proxy, but before the Annual Meeting, 

the Board’s Compensation Committee—then consisting of Davis and Maher—

recommended annual stock option awards for consideration at a meeting of the 

Board to be held immediately after the June 8, 2020 Annual Meeting of 

stockholders.116 On May 28, 2020, the Compensation Committee recommended 

that Davis, Finney, and Yedid each receive an annual stock option grant covering 

65,700 shares that would fully vest one year later on June 8, 2020.117 Boyd and 

Maher were ineligible for stock grants under Armistice policy.118 Floroiu was also 

deemed ineligible for an annual grant of options because he had joined the Board 

113 Id. at 33.

114 Id. at 22, 32, 33. 

115 Id. at 22.

116 Vaxart Defs.’ Ex. 24; Compl. ¶ 149. 

117 Vaxart Defs.’ Ex. 24.

118 Id.
25

within the last six months, and had already been granted options in the April 

Award.119 The Committee also approved “[a]ccelerated vesting and [a] two year 

extension to exercise for [VanLent]” which “is consistent with what was provided 

other departing directors in the past.”120 

G. Operation Warp Speed 

On May 15, 2020 the White House announced Operation Warp Speed 

(“OWS”)—a “public-private partnership to facilitate the development, 

manufacturing, and distribution of COVID-19 countermeasures.”121 On June 3,

2020, Bloomberg reported that “[t]he White House is working with seven 

pharmaceutical companies” as part of OWS.122 “The June 3 Bloomberg article 

revealed the names of five of the seven companies included in OWS. Vaxart was 

not one of the five identified in the Bloomberg article.”123 Plaintiffs allege that, 

nevertheless, the Board knew by no later than the publication of the Bloomberg story 

that “Vaxart was among the companies chosen to participate in an OWS 

119 Id.

120 Id.

121 Id. ¶¶ 46 & n.2. 

122 Id. ¶ 46. 

123 Id. ¶ 50. 
26

program.”124 Vaxart’s vaccine, however, was never one of seven vaccine candidates 

selected to receive federal government funding through OWS.125

H. The June 8, 2020 Meetings and Subsequent Events 

Vaxart’s Annual Meeting of stockholders was scheduled for Monday, June 8, 

2020, which was to be followed by a meeting of the Board. By Sunday, June 7, 

Latour had collected all of the written consents of the Board members reflecting their 

June 5, 2020 approval of the Warrant Amendments. 126 That day, Latour emailed 

124 Id. ¶ 50, 122 (bolding and emphasis omitted). 

125 See Simi V. Siddalingaiah, Congressional Research Service, Domestic Funding for 

COVID-19 Vaccines: An Overview (Mar. 1, 2021), 

https://crsreports.congress.gov/product/pdf/IN/IN11560/7 (“Vaccine candidates that 

received federal government support for development include Moderna, Janssen 

Pharmaceuticals, Sanofi/GSK, and Merck/IAVI . . . whereas the Pfizer/BioNTech, Janssen, 

and Novavax candidates participated in OWS through federal purchase of doses only.”); 

Kavya Sekar, Congressional Research Service, Domestic Funding for COVID-19 

Vaccines: An Overview (Mar. 29, 2021), 

https://crsreports.congress.gov/product/pdf/IN/IN11556 (noting that “[s]ome vaccine 

R&D has been supported by NIH, BARDA, and DOD separately from the OWS efforts”). 

I take judicial notice of these facts because they are “capable of accurate and ready 

determination by resort to sources whose accuracy cannot reasonably be questioned.” In 

re Gen. Motors, 897 A.2d at 169 (citing D.E.R. 201(b)(2)). Congressional Research 

Service reports are reliable sources. Kareem v. Haspel, 986 F.3d 859, 867 (D.C. Cir. 2021). 

See also “BARDA’s Expanding COVID-19 Medical Countermeasure Portfolio,” Medical 

Countermeasures.gov, U.S. Department of Health & Human Services, 

https://www.medicalcountermeasures.gov/app/barda/coronavirus/COVID19.aspx?filter=

vaccine (accessed Nov. 8, 2021) (describing seven vaccine candidates to have received 

“awards,” none of which is Vaxart’s). I also take judicial notice of this fact. See Stewart 

v. JP Morgan Chase Bank, N.A., 2020 WL 444248, at *3 (N.D. Ill. Jan. 28, 2020) 

(affirmatively noting party’s argument that “courts can take judicial notice of official 

federal websites without converting a motion to dismiss into a motion for summary 

judgment”); see accord Stafford v. State, 2012 WL 691402, at *3 n.2 (Del. Mar. 1, 2012) 

(taking judicial notice of website for Delaware Criminal Justice Information System).

126 Compl. ¶ 79.
27

Charles, the Company’s outside counsel, stating that he would “send them to 

Armistice tomorrow morning, immediately after the board meeting.”127 After 

counsel responded, Latour agreed to “send them out now” instead.128 Latour sent 

Armistice partially executed copies of the Warrant Amendments with the Board 

signature pages to Armistice that afternoon.129 Armistice returned “fully signed” 

copies of the Warrant Amendments at 10:57am on June 8, 2021.130

Also on June 7, 2020, the directors received an agenda for the June 8 Board 

Meeting.131 The agenda items included updates on “Status Covid program” and 

“Status COVID funding.”132 Latour, Boyd, Davis, Finney, Floroiu, Maher, and 

Yedid attended the meeting; Charles served as the meeting secretary.133 Latour gave 

the Board a “brief summary of the results” of the immediately preceding 2020 

Annual Meeting, noting that “all proposals passed or were approved and adopted by 

127 Id.

128 Id. The body of counsel’s response is redacted from the email.

129 Compl. 80; Armistice Defs.’ Ex. 20. The Complaint draws on the exhibit when it asserts 

that Latour sent “these Warrant Amendments on a Sunday before the Board meeting.” This 

is a misleading characterization. The exhibit makes clear that what Latour sent was a 

partially executed copy of the Warrant Amendments with the Board signature pages, which 

Armistice returned the following Monday. 

130 Armistice Defs.’ Ex. 20. 

131 Compl. ¶ 141. 

132 Armistice Defs.’ Ex. 24. 

133 Vaxart Defs.’ Ex. 26. 
28

the stockholders.”134 Latour then provided an update on Vaxart’s COVID-19 

vaccine development program, noting that:

the Company was invited to participate in a non-human primate study 

organized by Operation Warp Speed and was negotiating the relevant 

documentation.135 

The precise date that Vaxart was invited to participate in the study is unclear. 

Also unclear, and a subject of sharp dispute in this case, is when Latour and the other 

directors, including the Armistice Directors, became aware of it. The Plaintiffs insist 

that “Vaxart’s management, the Board, and Armistice knew as of June 3, 2020, and 

likely on May 28, 2020, that the Company had been chosen as an OWS 

participant.”136 Plaintiffs cite no document reflecting such knowledge as of those 

dates.

Latour’s June 8, 2020 discussion also provided a status update on the 

development and manufacturing of the Company’s “oral COVID-19 vaccine 

candidate.”137 Turning to the subject of “COVID-19 Funding,” Latour “summarized 

the status of various funding initiatives and potential funding sources, including the 

134 Id.

135 Id.

136 Compl. ¶ 66.

137 Id.
29

March 2020 submission to [REDACTED], the BARDA/NIH funding, 

[REDACTED], and [REDACTED].”138 

Representatives of Cantor Fitzgerald then joined the meeting and presented to 

the Board “potential financing transactions,” including “at the market” offerings.139 

The Board next turned to various administrative matters, including a revised insider 

trading policy, which the Board adopted, effective immediately.140 The Board 

received a presentation from the Compensation Committee on “annual director 

compensation and stock option grants for the directors.”141 The Board agreed to the 

acceleration of vesting in full of VanLent’s shares and to grant 65,700 stock options 

to Davis, Finney, and Yedid.142

The Board Meeting proved to be Latour’s last as CEO. On June 13, 2021, the 

Board (including Latour) executed a written consent deeming it in the best interests 

of the Company and its stockholders that Latour resign from his position as President 

and CEO of Vaxart.143 The written consent also provided that Latour would retain 

his position on the board. The Board also approved a separation agreement with 

138 Id.

139 Id.

140 Id.

141 Id.

142 Id.

143 Compl. ¶ 102; Vaxart Defs.’ Ex. 27. 
30

Latour permitting his stock options to “vest for so long as he continues to serve on 

the Board.”144 The separation agreement also provided for a general release of 

claims that Latour may have against the Company, its officers, directors, agents, and 

others.145

Latour formally resigned on June 14, 2021, and the Company announced his 

resignation on June 15, 2021, the day it announced Floroiu as his successor.146 “No 

explanation was provided for Latour’s resignation.”147 

Upon his appointment as CEO, Floroiu received both time-based and 

performance-based options. The time-based options gave Floroiu the right to 

purchase 1,745,280 shares of Vaxart’s common stock at a strike price of $2.46 per 

share, the closing price of Vaxart shares on June 15, 2020.148 A quarter of the stock 

option grant would vest on June 15, 2021 with the remaining options vesting in equal 

monthly installments over the following three-year period, subject to acceleration 

under certain circumstances.149 The performance-based options gave Floroiu the 

right to purchase up to 900,000 shares of Vaxart’s common stock at a strike price of 

144 Compl. ¶ 102; Vaxart Defs.’ Ex. 27.

145 Vaxart Defs.’ Ex. 9 (§§ 2(b), 3, Ex. C). 

146 Compl. ¶ 101; Vaxart, Inc., Current Report (Form 8-K) (June 15, 2021). 

147 Compl. ¶ 105; see Vaxart Defs.’ Ex. 27.

148 Compl. ¶ 104; Vaxart Defs.’ Ex. 27. 

149 Compl. ¶ 104; Vaxart Defs.’ Ex. 27. 
31

$2.46 per share.150 One-third of the grant would vest if Vaxart’s shares closed at a 

per share price of $5, $7.50 and $10, respectively, for ten consecutive trading days 

between June 15 and November 30, 2020.151

I. Further Positive Public Announcements

Just two weeks after the Annual Meeting, Vaxart made three public 

announcements. On June 24, 2020, the Company announced that it would be 

included in the Russell 3000.152 “On this news, Vaxart’sstock increased nearly 20%, 

from a closing price of $2.66 on June 23, 2020 to a closing price of $3.19 on June 

24, 2020.”153 “On June 25, 2020, Vaxart announced a manufacturing deal with 

Attwill Medical Solutions Steriflow, LP for Vaxart’s oral COVID-19 vaccine.”154 

The Company’s stock price closed at $6.26 per share that day, as compared to $2.66 

per share on June 23, 2020 and $3.19 per share on June 24, 2020.155

150 Compl. ¶ 105; Vaxart Defs.’ Ex. 27. 

151 Compl. ¶ 105; Vaxart Defs.’ Ex. 27.

152 Press Release, Vaxart, Inc., Vaxart, Inc. Set to Join Russell 3000® Index (June 24, 

2020), https://investors.vaxart.com/news-releases/news-release-details/vaxart-inc-setjoin-russell-3000r-index. I take judicial notice of Vaxart’s announcement as a “publicly 

available press release.” In re Duke Energy Corp. Derivative Litig., 2016 WL 4543788, at 

*4 n.34 (Del. Ch. Aug. 31, 2016). Plaintiffs misleadingly assert that, on June 24, 2020, 

“news emerged that the Company would be included in the Russell 3000”—as if the news 

came from outside Vaxart. Compl. ¶ 111. 

153 Compl. ¶ 111.

154 Compl. ¶ 112; Vaxart, Inc., Current Report (Form 8-K) (June 30, 2021) (Ex. 99.1). 

155 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law.
32

On Friday, June 26, 2020, Vaxart issued a news release titled “COVID-19 

Vaccine Selected for the U.S. Government’s Operation Warp Speed.”156 Once the 

reader got past the headline, she would not learn that Vaxart’s vaccine was among 

the seven vaccine finalists referenced in the June 3, 2020 Bloomberg article or the 

White House announcement of the project. Instead, the body of Vaxart’s news 

release explained that its “oral COVID-19 vaccine has been selected to participate 

in a non-human primate (NHP) challenge study, organized and funded by Operation 

Warp Speed.”157

 “On this news, Vaxart’s stock price jumped to a high of $14.30 and closed 

at $8.04 on June 26, 2020,” reflecting a 128% increase from the prior day’s close of 

$6.26. 158 Thereafter, Vaxart’s share price eventually reached a closing price of 

$16.97 on July 14, 2020.159 “Since public disclosure of the [OWS Study selection] 

the stock price has not closed a trading day trading lower than $4.78 per share.”160 

On Friday, June 26, 2020, Armistice exercised the September 2019 Warrant, 

acquiring 16,666,667 shares of Vaxart at an exercise price of $0.30 per share.161 It 

156 Vaxart, Inc., Current Report (Form 8-K), June 30, 2021 (Ex. 99.2)

157 Id.

158 Compl. ¶ 35. 

159 “VXRT US Equity: Historical Values,” accessed Nov. 8, 2021, Bloomberg Law. 

160 Compl. ¶ 37. 

161 Id. ¶ 114.
33

then immediately sold those shares on the open market that day.162 Plaintiffs 

calculate that Armistice made an immediate profit of “nearly 170 million.”163 

Armistice also resumed liquidating its pre-existing position, selling an additional 

1,560,000 additional shares that day.164

On the next trading day, Monday, June 29, 2020, Armistice exercised the 

April 2019 Warrant, acquiring 4,090,909 Company shares at an exercise price of 

$1.10 per share.165 And again, it sold those shares on the open market. Plaintiffs 

calculate Armistice made a profit of “nearly $30 million” on that trade.166 Armistice 

continued selling off its pre-existing position, selling another 5,294,477 shares it had 

previously held.167 As of June 29, 2020, Armistice owned a stake of 145,523 shares, 

0.2% of the Company’s outstanding shares.168

On August 12, 2020, Latour exercised certain of his stock options to buy 

166,667 shares of Vaxart at $0.30 per share. 169 Vaxart’s stock price closed at $9.20 

that day, meaning Latour “enjoyed an instant (unrealized) paper profit of over $1.148 

162 Id.

163 Id. ¶ 11. 

164 Id.

165 Compl. ¶ 12. 

166 Id.

167 Id.

168 Vaxart Inc., Schedule 13D (June 30, 2020). 

169 Vaxart, Inc., Statement of Changes in Beneficial Ownership (Form 4) (Aug. 12, 2020). 
34

million.”170 In addition, Floroiu’s 900,000 performance-based options became fully 

vested after the Company’s stock closed above $10 per share for ten consecutive 

trading days after July 15, 2020.171

J. Procedural History

On September 8, 2020, Plaintiff Galjour filed his complaint. On October 9,

2020, the Vaxart Defendants and the Armistice Defendants both moved to dismiss 

that complaint in its entirety.172 On October 20, 2020, Plaintiffs Jacquith and Paul 

Bergeron filed their complaint. The court consolidated the actions on November 12, 

2020.173 On December 14, 2020, the court entered an order establishing a leadership 

structure for the Plaintiffs and designated the Jacquith-Bergeron complaint as the 

operative complaint.

174 Defendants moved to dismiss the operative complaint. The 

court heard argument, taking the matter under submission on August 24, 2021.

175

On August 4, 2020, plaintiffs not involved in this case initiated separate 

litigation against Floroiu, Latour, Davis, Finney, Yedid, Boyd, and Maher (the 

“California Defendants”) in the California Superior Court in San Mateo County (the 

170 Compl. ¶ 117. 

171 Id. ¶108.

172 Dkt. 18. 19. 

173 Dkt. 53. 

174 Dkt. 72. 

175 Dkt. 121, Dkt. 119. 
35

“California Litigation”).176 On November 25, 2020, the plaintiffs in the California 

Litigation filed a Second Amended Complaint.177 On December 30, 2020, the 

California Defendants filed a demurrer.178 On March 15, 2021, the California 

Superior Court granted the demurrer, without prejudice and with leave to replead.179 

On June 17, 2021, the plaintiffs in the California action filed a Third Amended 

Complaint.180 On August 18, 2021, the California Defendants filed a demurrer to 

the Third Amended Complaint.181 Briefing is ongoing.182 

II. ANALYSIS

The Complaint contains five counts. Count I is a derivative claim alleging the 

Director Defendants breached their fiduciary duties by approving the Warrant 

Amendments. Count II is a derivative unjust enrichment claim alleging the Director 

Defendants breached their fiduciary duties by issuing spring-loaded options in 

violation of the 2019 Plan. Count III is a direct claim alleging Floroiu, Latour, Davis, 

Finney, Yedid, and VanLent breached their fiduciary duty by failing to disclose 

Vaxart’s selection to participate in the OWS study prior to the stockholder vote on 

176 Defs.’ Joint Suppl. Br. in Further Supp. of Their Mots. to Dismiss, Ex. 37. 

177 Id.

178 Id.

179 Dkt. 116; Ennis v. Latour, 20-civ-03253 (Cal. Super. Ct. Mar. 15, 2021). 

180 Ennis v. Latour, 20-civ-03253 (Cal. Super. Ct. Mar. 15, 2021).

181 Ennis v. Latour, 20-civ-03253 (Cal. Super. Ct. June 17, 2021). 

182 Ennis v. Latour, 20-civ-03253 (Cal. Super. Ct. Aug. 18, 2021). 
36

the 2019 Amendment. Count IV is a derivative unjust enrichment claim against 

Armistice. Count V alleges Armistice breached its fiduciary duties as a controlling 

shareholder or, in the alternative, aided and abetted the Director Defendants’ 

breaches of fiduciary duties. 

A. Standard of Review 

1. Motion to Dismiss for Failure to State a Claim 

On a motion to dismiss for failure to state a claim under Court of Chancery 

Rule 12(b)(6):

(i) all well-pleaded factual allegations are accepted as true; (ii) even 

vague allegations are well-pleaded if they give the opposing party 

notice of the claim; (iii) the Court must draw all reasonable inferences 

in favor of the non-moving party; and ([iv]) dismissal is inappropriate 

unless the plaintiff would not be entitled to recover under any 

reasonably conceivable set of circumstances susceptible of proof.

Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002) (cleaned up). At the 

motion to dismiss stage of the litigation, “[p]laintiffs are entitled to all reasonable 

factual inferences that logically flow from the particularized facts alleged, but 

conclusory allegations are not considered as expressly pleaded facts or factual 

inferences.” White v. Panic, 783 A.2d 543, 549 (Del. 2001). “[A] claim may be 

dismissed if allegations in the complaint or in the exhibits incorporated into the 

complaint effectively negate the claim as a matter of law.” Malpiede v. Townson, 

780 A.2d 1075, 1083 (Del. 2001). The court also need not “accept every strained 

interpretation of the allegations proposed by the plaintiff.” In re Gen. Motors 
37

(Hughes) S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (quoting Malpiede, 780 

A.2d at 1083). 

2. Motion to Dismiss for Failure to Make a Demand

“Court of Chancery Rule 23.1 and Delaware law require that a stockholder 

initiating a derivative action plead ‘with particularity’ either that demand was made 

on the corporation to initiate suit on its own, or that such demand ‘would have been 

futile.’” Friedman v. Khosrowshahi, 2014 WL 3519188, at *9 (Del. Ch. July 16, 

2014), aff’d, 2015 WL 1001009 (Del. Mar. 6, 2015). Where, as here, the stockholder 

plaintiffs forgo a demand on the board, they must plead particularized facts creating 

a reasonable doubt concerning the board’s ability to consider the demand. Patel v. 

Duncan, 2021 WL 4482157, at *17 (Del. Ch. Sept. 30, 2021); In re CBS Corp. 

S’holder Class Action & Deriv. Litig., 2021 WL 268779, at *28 (Del. Ch. Jan. 27, 

2021). “The purpose of the demand-futility analysis is to assess whether the board 

should be deprived of its decision-making authority because there is reason to doubt 

that the directors would be able to bring their impartial business judgment to bear on 

a litigation demand.” United Food and Com. Workers Union v. Zuckerberg, 2021 

WL 4344361, at *16 (Del. Sept. 23, 2021) (“Zuckerberg II”). 

In Zuckerberg II, the Delaware Supreme Court recently adopted a “refined” 

demand futility test that blends the analytical elements of Aronson v. Lewis, 473 

A.2d 805 (Del. 1984), and Rales v. Blasband, 634 A.2d 927 (Del. 1993). Zuckerberg 
38

II, 2021 WL 4344361, at *16–18. Under this test, when evaluating demand futility, 

a court must ask three questions on a director-by-director basis: 

(i) whether the director received a material personal benefit from the alleged 

misconduct that is the subject of the litigation demand;

(ii) whether the director faces a substantial likelihood of liability on any of the 

claims that would be the subject of the litigation demand; and

(iii) whether the director lacks independence from someone who received a 

material personal benefit from the alleged misconduct that would be the 

subject of the litigation demand or who would face a substantial likelihood of 

liability on any of the claims that are the subject of the litigation demand.

Id. at *18. “If the answer to any of the questions is ‘yes’ for at least half of the 

members of the demand board, then demand is excused as futile.” Id. This refined 

demand utility standard “is consistent with Aronson, Rales, and their progeny” and 

the “cases properly applying those holdings remain good law.” Zuckerberg II, 2021 

WL 4344361, at *2. 

Demand futility is “conducted on a claim-by-claim basis.” Cambridge Ret. 

Sys. v. Bosnjak, 2014 WL 2930869, at *4 (Del. Ch. June 26, 2014). To successfully 

plead demand futility, plaintiffs must therefore focus “upon each particular action, 

or failure to act, challenged by a plaintiff.” In re INFOUSA, Inc. S’holders Litig., 

953 A.2d 963, 983 (Del. Ch. 2007); accord Khanna v. McMinn, 2006 WL 1388744, 

at *14 (Del. Ch. May 9, 2006) (“This analysis is fact-intensive and proceeds directorby-director and transaction-by-transaction.”).
39

When the complaints were filed on September 8, 2020 and October 20, 2020, 

respectively, the Board consisted of Defendants Floroiu, Latour, Boyd, Davis, 

Finney, Maher, Yedid, and non-defendant Karen J. Wilson—who had joined the 

Board on August 25, 2020 (such individuals together, the “Demand Board”).183 

B. Warrant Amendments Claims

Count I alleges a derivative claim that the Director Defendants breached their 

fiduciary duties by approving the Warrant Amendments.184 Count I also alleges a 

derivative claim that the “Armistice Directors breached their fiduciary duties by 

trading on material, nonpublic information.”185 Count IV alleges that Armistice was 

unjustly enriched as a result of the Director Defendants approving the Warrant 

Amendments. Count V alleges Armistice breached its fiduciary duties as a 

controlling stockholder in obtaining the Warrant Amendments. In the alternative, 

Plaintiffs allege Armistice aided and abetted the Director Defendants’ breaches of 

their fiduciary duties in approving the Warrant Amendments.

183 Compl. ¶ 129; Galjour Compl. ¶ 69.

184 Compl. ¶ 168. 

185 Id. ¶ 169.
40

1. Armistice Was Not a Controlling Stockholder at the Time of 

the Transaction. 

Plaintiffs allege that Armistice was a controlling stockholder, owing fiduciary 

duties to Vaxart and its stockholders. The allegations of control permeate the 

Complaint and underly allegations that the Demand Board is incapable of 

considering a demand to assert the claims asserted in this action.

Under Delaware law, a controller owing fiduciary duties arises in two 

circumstances: (1) the alleged controller “owns more than 50% of the voting power 

of a corporation” or (2) “owns less than 50% of the voting power of the corporation 

but exercises control over the business affairs of the corporation.” In re GGP, Inc. 

S’holder Litig., 2021 WL 2102326, at *12 (Del. Ch. May 25, 2021). 

Plaintiffs do not allege that Armistice owned more than 50% of Vaxart’s 

voting power at the time of any of the challenged transactions. Instead, Plaintiffs 

cobble together allegations of acts that pre-dated the challenged transactions, either 

before or during the time that Armistice was selling down its equity position. The 

question of control is measured at the time of the challenged transaction. See id. at 

*3 (holding that “I cannot reasonably infer from the Complaint that Brookfield was 

GGP’s controlling stockholder at the time of the Transaction”); see also Carr v. New 

Enter. Assocs., Inc., 2018 WL 1472336, at *9 (Del. Ch. Mar. 26, 2018) (holding that 

the “Complaint is devoid of any well-pled facts supporting the assertion that there 

was a controlling stockholder at the time of that transaction”). 
41

When the assertion of control is not based upon ownership of more than 50% 

of the voting power of the Company, a plaintiff must plead facts to support a 

reasonable inference that the alleged controller possessed “(i) control over the 

corporation’s business and affairs in general or (ii) control over the corporation 

specifically for purposes of the challenged transaction.” Voigt v. Metcalf, 2020 WL 

614999, at *11 (Del. Ch. Feb. 10, 2020). “To plead that the requisite degree of 

control exists generally, a plaintiff may allege facts supporting a reasonable 

inference that a defendant or group of defendants exercised sufficient influence that 

they, as a practical matter, are no differently situated than if they had majority voting 

control.” Id. (quoting In re PNB Hldg. Co. S’holders Litig., 2006 WL 2403999, at 

*9 (Del. Ch. Aug. 18, 2006). “One means of doing so is to plead that the defendant, 

as a practical matter, possesses a combination of stock voting power and managerial 

authority that enables him to control the corporation, if he so wishes.” Id. (quoting 

In re Cysive, Inc. S’holders Litig., 836 A.2d 531, 553 (Del. Ch. 2003)). “To plead 

that the requisite degree of control existed for purposes of a particular transaction or 

decision . . . the plaintiff must plead facts supporting a reasonable inference that the 

defendant in fact exercised actual control” over the board in connection with that 

transaction.” Id. at *12. (emphasis added). Because the controller analysis is factintensive, the court is unlikely to find control unless plaintiffs can plead a 

“constellation of facts” supporting control. Id. at *22.
42

In support for their position that Armistice was a controller, Plaintiffs point 

to: (1) the fund’s equity position prior to selling off its equity stake in the Company; 

(2) the Board’s appointment of certain directors in October 2019 when Armistice

owned more than 50% of the outstanding stock; (3) Armistice’s relationships with 

certain directors and officers; (4) the Warrants; and (5) the Company’s March 2020 

disclosure that Armistice could exert significant control through its ownership 

position. These factors are among the relevant considerations of determining 

control. See Voigt, 2020 WL 614999, at *12 (describing and discussing the relevant 

sources of potential control). Yet the facts alleged in the Complaint, considered 

collectively, fail to support the inference that Armistice had general or specific 

control at the time of the challenged transactions.

As a threshold matter, the only transaction in which it is alleged that Armistice 

received an improper benefit is the Warrant Amendments. There are no allegations 

that Armistice derived a direct benefit from the March Grants or the April Grants. 

By March 19, 2020, Armistice no longer owned a majority of the shares of the 

Company’s outstanding stock.

186 By April 9, 2020, Armistice owned 34.5% of the 

186 Vaxart Inc., Form 10-K (March 19, 2020) at 43.
43

shares of the Company’s outstanding stock. 187 Plaintiffs allege that between April 

28, 2020 and June 3, 2020, Armistice sold “approximately 18.2 million shares.”188 

Thus, by the time the Board approved the Warrant Amendments on June 5, 2020, 

Armistice’s ownership was less than 10% of the Company’s outstanding common 

stock.189 As to shares underlying the Amended Warrants, Armistice could not 

exercise the Warrants if doing so would cause it to own more than 19.99% of 

common stock in the Company. Moreover, even if Armistice could exercise all 20.8

million shares, it would not own more than 50% of the Company’s voting power.190 

To bridge the gap between Armistice’s steadily declining voting power and 

Plaintiffs’ assertion of control, Plaintiffs point to a March 2020 disclosure by Vaxart 

that, as of March 2020, the fund could “exert significant control through this 

187 Proxy at 37.

188 Compl. ¶ 44. 

189 As of April 9, 2020, Armistice owned 25,200,000 out of 72,054,720 shares outstanding.

Proxy at 37. After pausing its sell-off of on June 3, 2020, Armistice owned 7 million 

shares. Vaxart, Inc., Statement of Changes in Beneficial Ownership (Form 4) (June 3, 

2020) (Armistice Capital, LLC filing). Assuming the Company did not issue any other 

shares between April 9 and June 3, 2020, Armistice’s stock ownership constituted 9.7% of 

total outstanding. In fact, by June 5, 2020, Vaxart’s total outstanding stock had increased 

to 74,184,322 shares. See Vaxart, Inc., Schedule 13D (June 9, 2020) (disclosing Vaxart’s 

total beneficial ownership with 19.99% conversion cap on June 5, 2020 to be 16,785,583 

shares out of 83,969,905 total outstanding). With the conversion cap, Vaxart was permitted 

to purchase only another 9,785,583 shares under the Warrants. Based on these figures, 

Vaxart’s actual ownership on June 5, 2020 was approximately 9.4%. 

190 Full exercise of the Warrants would increase the shares outstanding to approximately 

94,941,898, with Armistice owning 27.8 million, or 29% of the outstanding shares.
44

ownership position.”191 A company’s own disclosures recognizing control may be 

relevant in the control analysis. For example, in Voigt, the company disclosed in an 

SEC filing that that a 34.8% stockholder “will have the ability, subject to the 

fiduciary duties of the individual directors, to control the decisions of the Board.” 

2020 WL 614999, at *15. The court concluded that, for pleadings-stage purposes, 

“the plaintiff is entitled to the benefit of the inference that the disclosure meant what 

it said by describing [the stockholder] as exercising control at the Board level 

through the five directors it had appointed, including [two nominally independent 

directors].” Id.

Vaxart’s disclosure in its March 2020 Form 10-K is not entitled to the same 

weight as the disclosure in Voigt, even for pleadings-stage purposes. First, Vaxart’s 

disclosure about control was directly tied to Armistice’s March 17, 2020 “ownership 

position” of more than 35%. Compl. ¶ 40. At the time of the Warrant Amendments, 

however, Armistice did not hold anything close to 35%. Second, unlike in Voigt, 

Vaxart did not state that Armistice could “control the decisions of the Board.” Voigt, 

2020 WL 614999, at *15. Thus, Vaxart’s March 2020 disclosure is entitled to little 

weight in the overall analysis. 

191 Pls. Ans. Br. at 49. 
45

The presence of Armistice designees Boyd and Maher on the Board does not 

establish control. Boyd and Maher constituted two of the eight directors on the 

Board at the time of the challenged transactions and as of the filing of the operative 

Complaint. Neither of them is an officer of Vaxart and neither of them is alleged to 

have taken action to exert control over Vaxart’s affairs or any of the challenged 

transactions.

Plaintiffs then try to stitch together relationships between Armistice, its 

designees, and other members of the Board to pin control on Armistice. For 

example, Plaintiffs allege that Yedid and Davis joined the Board in October 2019 at 

the same time as Boyd and Maher.192 There are no other allegations suggesting 

Armistice controlled Davis or that he could not act independently of Armistice. As 

to Yedid, Plaintiffs add allegations that he had communicated with Latour about the 

benefit of removing or adjusting the Blockers on the Warrants in the context of 

Vaxart’s gaining a listing on the Russell 2000 or 3000 index.193 Plaintiffs claim this 

was “pretextual” because the Company had other alternatives, such as an equity 

capital raise or stock split.194 Plaintiffs’ second-guessing, and speculation of pretext, 

192 Compl. ¶ 4. 

193 Id. ¶¶ 67-71. 

194 Id. ¶ 70. 
46

absent any well-pleaded allegations of Armistice’s control over Yedid, do not 

support an inference of Armistice as a controller.

Plaintiffs next allege that Floroiu previously worked at Armistice as a Senior 

Analyst at some unknown time before joining Armistice, and before that, he had 

previously worked with Boyd at McKinsey.195 Well-pleaded allegations of prior 

relationships and influence over a director may be a factor to support control. Voigt, 

2020 WL 614999, at *20 (“[a]n obvious source of influence that can lead to an 

inference of actual control is existence of relationships between the alleged 

controller and members of a company’s board of directors.”). But the allegations of 

Floroiu’s connections to Armistice and Boyd do not support a pleadings-stage 

inference of a lack of independence, let alone susceptibility to domination. Plaintiffs 

offer no allegations of (1) when Floroiu was employed at Armistice; (2) the duration 

of his employment at Armistice; (3) Floroiu’s compensation from Armistice; or (4) 

any indicia of Floroiu’s personal relationships or other evidence of allegiance to 

Armistice.

Plaintiffs’ bare allegations of Floroiu’s prior employment at Armistice do not 

support an inference that Armistice dominated him or that Floroiu would be unable 

to exercise his fiduciary duties out of fear for retribution. See Orman v. Cullman, 

195 Id. ¶ 152. 
47

794 A.2d 5, 27 (Del. Ch. 2002) (“The naked assertion of a previous business 

relationship is not enough to overcome the presumption of a director’s 

independence.”); accord Friedman, 2014 WL 3519188, at *11. Nor is there any 

allegation of the type of long-standing relationship or past conferral of benefits

giving rise to “a sense of ‘owingness,’” Orman, 794 A.2d at 27, that would call into 

question Floroiu’s independence and render him susceptible to a controller’s

influence. See In re Tesla Motors, Inc. S’holder Litig., 2018 WL 1560293, at *17 

(Del. Ch. Mar. 28, 2018) (noting that a director is “less likely to offer principled 

resistance when the matter under consideration will benefit him or a controller to 

whom he is beholden”); see also In re Freeport–McMoran Sulphur, Inc. S’holder 

Litig., 2005 WL 1653923, at *12 (Del. Ch. June 30, 2005) (noting the “extensive 

ties” needed to call into question a director’s independence from a controlling 

entity). The bare allegation that Floroiu worked at McKinsey with Boyd, many years 

ago—the Complaint lacks any mention of duration—is similarly weak. 

Plaintiffs do not even attempt to explain how Floroiu’s appointment as 

Vaxart’s CEO bears the imprint of Armistice’s influence other than asserting that 

Floroiu was “Armistice’s former senior analyst.”196 For reasons discussed above, 

this bare assertion fails to sustain an inference of indebtedness, let alone control. 

196 Pls.’s Ans. Br. at 50. 
48

That leaves Plaintiffs with the allegation that Armistice was a controller 

because it obtained a Warrant Amendment on favorable terms. That allegation is 

inherently circular, but even if that assertion were true, “[m]ore is needed.” GGP, 

Inc., 2021 WL 2102326, at *12. There are no well-pleaded allegations that 

Armistice had the ability to or exercised control over the Board at the time of, or 

with respect to, any of the challenged transactions. Accordingly, Plaintiffs have not 

created a pleadings-stage inference that Armistice owed fiduciary duties to Vaxart 

as a controller.

2. Demand Is Not Excused as to Claims Concerning the 

Warrant Amendments.

Even if Armistice were a controller, that would not, by itself, excuse demand. 

Beam v. Stewart, 845 A.2d 1040, 1054 (Del. 2004) (“A stockholder’s control of a 

corporation does not excuse presuit demand on the board without particularized 

allegations of relationships between the directors and the controlling stockholder 

demonstrating that the directors are beholden to the stockholder.”); Teamsters Union 

25 Health Servs. & Ins. Plan v. Baiera, 119 A.3d 44, 67 (Del. Ch. 2015) (noting that 

“neither the presence of a controlling stockholder nor allegations of self-dealing by 

a controlling stockholder changes the director-based focus of the demand futility 

inquiry”). 

Applying Zuckerberg II’s refined demand futility test (the “Refined Test”) to 

the facts here, I conclude that Plaintiffs have failed to establish that at least half the 
49

members of the Demand Board was incapable of fairly and impartially considering 

a litigation demand as to the Warrant Amendments. Plaintiffs concede that Wilson, 

who joined the Demand Board after the alleged wrongdoing, would be impartial as 

to any demand with respect to the claims in the Complaint.

197 On the other hand, 

Defendants concede that Boyd and Maher are not independent and disinterested as 

to the Warrant Amendments.198 Plaintiffs must therefore allege particularized facts 

to support a reason to doubt that two of the remaining five members of the Demand 

Board are capable of considering a demand. 

a. Were Latour and Floroiu Dependent on the Armistice 

Directors? 

Plaintiffs argue that Latour and Floroiu lacked independence from Boyd and 

Maher because the Armistice Directors “conferred valuable benefits” upon them, 

causing them to suffer from excessive “owingness.”199 As to Latour, Plaintiffs argue 

the Armistice Directors (1) supported his stock option March 2020 stock grant in 

exchange for Latour’s support of the Warrants Amendments and (2) “allowed Latour 

to remain on the Board” after his resignation as CEO and approved his separation 

package.”200 As to Floroiu, Plaintiffs allege Floroiu was indebted to the Armistice 

197 Pls.’ Ans. Br. at 30 n.10.

198 Vaxart Defs.’ Opening Br. at 25. 

199 Pls.’ Ans. Br. at 29. 

200 Id. at 29–30.
50

Directors because the Armistice Directors appointed him to his CEO position and 

approved his “enormously lucrative stock options.”201

These allegations fail to cast doubt on Latour or Floroiu’s independence. 

Without more, pleading that a board of directors elevated an executive to her current 

role or approved her compensation is insufficient to establish that the recipient is 

‘beholden’ to any director who approved that decision. See In re Nine Sys. 

Corporation S’holders Litig., 2014 WL 4383127, at *31 (Del. Ch. Sept. 4, 2014), 

aff’d, 129 A.3d 882 (Del. 2015) (“[T]he Board’s appointing Snyder as CEO and 

electing him as a director, without further evidence, is insufficient to demonstrate 

that Snyder lacked independence . . . .”); Aronson, 473 A.2d at 816 (“It is not enough 

to charge that a director was nominated by or elected at the behest of those 

controlling the outcome of a corporate election. That is the usual way a person 

becomes a corporate director.”); In re INFOUSA, 953 A.2d at 983 (“Mere recitations 

of elephantine compensation packages and executive perquisites, however 

amusingly described, will rarely be enough to excuse a derivative plaintiff from the 

obligation to make demand upon a defendant board of directors.”). Moreover, the 

written consent executed by the Board contradicts Plaintiffs’ assertion that Latour 

201 Id. at 26. 
51

was “allowed” to stay on the Board.

202 The written consent states that the Board 

“requested that Dr. Latour not tender his resignation.”203 

The Plaintiffs’ other allegations against Latour likewise fail to establish their 

claims. First, the arguments challenging Latour’s ability to consider demand are not 

supported by the allegations of the Complaint. A plaintiff “cannot supplement the 

complaint through its brief.” MCG Capital Corp. v. Maginn, 2010 WL 1782271, at 

*5 (Del. Ch. May 5, 2010); see also Orman, 794 A.2d 5 at 28 n.59 (“Briefs relating 

to a motion to dismiss are not part of the record and any attempt contained within 

such documents to plead new facts or expand those contained in the complaint will 

not be considered.”). Second, the quid pro quo claim against Latour is conclusory 

and temporally untethered. The Board awarded Latour the stock options months 

before Boyd called Latour to propose the Amendments. And when Boyd reached 

out, Latour immediately turned to outside counsel for advice—undermining 

Plaintiffs’ theory that Latour worked “hand-in-glove” with the Armistice 

Directors.204

As explained above, the Complaint’s meager references to Floroiu’s 

employment history do not undermine his presumed independence. The barebones 

202 Pls.’ Ans. Br. at 29.

203 Vaxart Defs.’ Ex. 27 (emphasis added).

204 Pls.’ Ans. Br. at 29. 
52

allegations that Floroiu once worked at Armistice and with Boyd at McKinsey do 

not come close to satisfying Plaintiffs’ burden of pleading facts that credibly call 

into question a director’s independence. See, e.g., Baiera, 119 A.3d at 59–60

(holding that an Orbitz director’s sixteen-year employment relationship with 

Travelport, Orbitiz’s controller, was insufficient to call into question his 

independence from Travelport because three years had lapsed since the employment 

relationship had ended).

That leaves Plaintiffs with the claim that Floroiu was dependent on the 

Armistice Directors for his compensation. This, too, is makeweight. Excluding 

Floroiu, Boyd and Maher were just two of the seven directors on the Board. They 

lacked “unilateral power . . . to decide whether the challenged director continues to 

receive a benefit.” Orman, 794 A.2d at 25 n.50 (emphasis added). 

b. Did Floroiu, Latour, Davis, Finney, and Yedid Receive 

a Material Benefit from the Warrant Amendments? 

Plaintiffs argue that Floriu, Latour, Davis, Finney, and Yedid (the “Stock 

Option Recipients”) were interested in the Warrant Amendments because they 

shared a common goal with the Armistice Directors: to keep the “OWS study secret 

until after the public stockholders approved the 2020 Plan so that they could grant 

themselves and, in the case of Latour, keep stock options at an artificially low 
53

exercise price.”205 Plaintiffs cite to In re Investors Bancorp, Inc. S’holder Litig., 177 

A.3d 1208, 1226 (Del. 2017), for the proposition that beneficiaries of two separate 

transactions premised on or enabled by the same alleged misconduct have a disabling 

interest in the litigation concerning related transactions. In that case, the Delaware 

Supreme Court held that demand was excused with respect to allegations made 

against allegedly excessive equity awards, even though each stock option grant was 

a different “transaction.” As this court put it in Calma on Behalf of Citrix Sys., Inc. 

v. Templeton, 114 A.3d 563, 576 (Del. Ch. 2015),

in a derivative challenge to director compensation, there is a reasonable doubt 

that the directors who received the compensation at issue—regardless of 

whether that compensation was material to them on a personal level—can be 

sufficiently disinterested to consider impartially a demand to pursue litigation 

challenging the amount or form of their own compensation . . . [T]his 

conclusion has even more force where, as here, the directors received equity 

compensation from the corporation because those individuals “have a strong 

financial incentive to maintain the status quo by not authorizing any corrective 

action that would devalue their current holdings or cause them to disgorge 

improperly obtained profits.” 

114 A.3d at 576 (quoting Conrad v. Blank, 940 A.2d 28, 38 (Del. Ch. 2007).

But the court’s reasoning in these cases cannot serve to fuse the claims against 

the Armistice Directors and the Stock Option Recipients. Even if one assumes, 

arguendo, that the stock option awards granted to different recipients over four 

months can be treated as a single transaction, the stock option grants and the Warrant 

205 Id. at 24. 
54

Amendments involved two wholly distinct transactions. The claims challenging 

these transactions invoke two different legal theories. The claim against the Stock 

Option Recipients turns on whether the board issued spring-loaded stock options 

while withholding information from stockholders. The claim against the Defendant 

Directors for approving the Warrant Amendments turns on whether the Board 

‘gifted’ these amendments for inadequate consideration. Whether the Board sat on 

inside information which it used to issue spring-loaded options is not pertinent to the

Warrant Amendment claims. 

Plaintiffs have also failed to plead sufficient “intermediate facts to link the 

approval of any of these [otherwise unrelated] transactions.” Cal. Pub. Emps.’ Ret. 

Sys. v. Coulter, 2002 WL 31888343, at *8 (Del. Ch. Dec. 18, 2002). Plaintiffs fail 

to plead, for example, that the Armistice Directors had the ability to block the stock 

option awards or cause the stockholders to vote down the 2019 Amendment if the 

Stock Option Recipients did not approve the Warrant Amendments.206 The 

Complaint thus fails to sustain the reasonable inference the Stock Option Recipients 

received a material benefit from the Warrant Amendments or stood to lose a related 

material benefit by challenging the decision to approve the Warrant Amendments. 

206 Plaintiffs also fail to plead that the stock options were a material benefit to each of the 

Stock Option Recipients. 
55

c. The Board Did Not Face a Substantial Risk of 

Liability.

The Plaintiffs advance two theories that can be construed under Zuckerberg 

II as bids to satisfy the second prong of the Refined Test. Plaintiffs argue, first, that 

demand is excused because (1) the Warrant Amendments are properly subject to 

entire fairness review “due to directorial interestedness and nonindependence and 

the presence of a conflicted, controlling stockholder”207 and (2) the “Complaint 

pleads unfair dealing and unfair price for both Warrant Amendments.”208 Plaintiffs 

also argue that demand is excused because the Board approved the Warrant 

Amendments in bad faith. 

Where, as here, the certificate of incorporation includes an exculpatory 

provision pursuant to 8 Del. C. § 102(b)(7), “a substantial likelihood of liability may 

only be found to exist if the plaintiff pleads a non-exculpated claim against the 

directors based on particularized facts.” Baiera, 119 A.3d at 62. That is because the 

“mere fact that a plaintiff is able to plead facts supporting the application of the entire 

fairness standard to the transaction, and can thus state a duty of loyalty claim against 

the interested fiduciaries, does not relieve the plaintiff of the responsibility to plead 

a non-exculpated claim against each director who moves for dismissal.” In re 

207 Pls.’ Ans. Br. at 36. 

208 Id. at 39.
56

Cornerstone Therapeutics Inc, S’holder Litig., 115 A.3d 1173, 1180 (Del. 2015). To 

establish individual liability, Plaintiffs must therefore plead particularized facts that 

the directors who approved the challenged transaction “harbored self-interest 

adverse to the stockholders’ interests, acted to advance the self-interest of an 

interested party from whom they could not be presumed to act independently, or 

acted in bad faith.” Id. at 1179–80. The specter of directorial liability risk only 

arises, however, if the plaintiff can plead sufficient facts to overcome the business 

judgement rule or trigger a heightened standard of review. Plaintiffs here have failed 

to cross that initial pleading threshold. 

i. Entire Fairness Not Triggered 

a. There Was No Controller. 

For reasons discussed above, Armistice was not a controlling stockholder at 

the time the Board approved the Warrant Amendments. 

b. There Was No Majority Conflicted Board. 

“Delaware decisions have applied the entire fairness framework to 

compensation arrangements, consulting agreements, services agreements, and 

similar transactions between a controller or its affiliate and the controlled entity.” In 

re Ezcorp Inc. Consulting Agreement Deriv. Litig., 2016 WL 301245, at *15 (Del. 

Ch. Jan. 25, 2016). To trigger entire fairness review, plaintiffs must plead sufficient 

facts to support the inference that “the directors making the decision did not 
57

comprise a disinterested and independent board majority.” In re Trados Inc. 

S’holder Litig., 73 A.3d 17, 36 (Del. Ch. 2013). “To determine whether the directors 

approving the transaction comprised a disinterested and independent board majority, 

the court conducts a director-by-director analysis.” Id. at 44–45. 

As already discussed above, the Defendants have conceded that the Armistice 

Directors had a disabling interest in the transaction. But the pleaded facts fail to 

support the allegation that Latour or Floroiu lacked independence from the Armistice 

Directors as to the Warrant Amendments. The Complaint also fails to sustain the 

proposition that Floriu, Latour, Davis, Finney, and Yedid had an interest in the 

Warrant Amendments by virtue of being granted their stock options. 

c. The Board Did Not Act in Bad Faith. 

This court’s default standard of review is the business judgement rule—the 

presumption that the directors “acted on an informed basis, in good faith and in the 

honest belief that the action taken was in the best interests of the company.” 

Quadrant Structured Prod. Co. v. Vertin, 102 A.3d 155, 183 (Del. Ch. 2014). 

“Unless one of its elements is rebutted, the court merely looks to see whether the 

business decision made was rational in the sense of being one logical approach to 

advancing the corporation’s objectives.” In re Trados, 73 A.3d at 43 (quoting In re 

Dollar Thrifty S’holder Litig., 14 A.3d 573, 598 (Del. Ch. 2010)). “Only when a 
58

decision lacks any rationally conceivable basis will a court infer bad faith and a 

breach of duty.” Id. 

The business judgement rule may be rebutted by pleading sufficient facts that 

(1) “the directors making the decision did not comprise a disinterested and 

independent board majority,” In re Trados, 73 A.3d 17 at 36; (2) a controlling 

stockholder stood “on both sides of the deal,” Larkin v. Shah, 2016 WL 4485447, at 

*8 (Del. Ch. Aug. 25, 2016), or “receive[d] a benefit not shared with the minority,” 

In re Primedia, Inc. S’holders Litig., 67 A.3d 455, 486 (Del. Ch. 2013); or (3) “the 

decision under attack is so far beyond the bounds of reasonable judgment that it 

seems essentially inexplicable on any ground other than bad faith.” Alidina v. 

Internet.com Corp., 2002 WL 31584292, at *4 (Del. Ch. Nov. 6, 2002). 

Plaintiffs argue that the Board acted in bad faith by “[g]ifting these 

amendments” to Armistice so that the latter “could profit from its inside information 

about Vaxart OWS study selection.”209 Even assuming that the Complaint alleges 

facts to support a reasonable inference that the Board knew about the OWS Study 

selection when it approved the Warrant Amendments on June 5, 2020, Plaintiffs fail 

to explain how the approval of the Warrant Amendments constituted bad faith. 

Armistice had a pre-existing right to purchase 4,090,909 shares at an exercise price 

209 Pls.’s Ans. Br. at 33. 
59

of $1.10 per share under the April 2019 Warrant and 16,666,667 shares at an exercise 

price of $0.30 per share under the September 2019 Warrants. Removing or adjusting

the Blockers did not change that. 

Plaintiffs’ bad faith claim boils down to the allegation that the Board “gift[ed] 

the Warrant Amendments without asking for or receiving any consideration.”210 

Although they have not labeled it as such, Plaintiffs essentially argue that the 

Warrant Amendments amounted to corporate waste. To prevail here, Plaintiffs must 

plead facts supporting the inference that “the board’s decision was so egregious or 

irrational that it could not have been based on a valid assessment of the corporation’s 

best interests.” White v. Panic, 783 A.2d 543, 554 n.36 (Del. 2001). First, even if 

Vaxart received no monetary consideration for the Amendments, the Warrants 

themselves were hardly a gift; their exercise “increase[d] the Company’s cash on 

hand by $5 million.”211 It would not be unreasonable for the Directors to believe that 

raising the conversion caps would increase the chances of their exercise, however 

slightly. Plaintiffs’ argument that the Company could raise capital in better ways 

“involves the sort of second-guessing that the business judgment rule precludes,” In 

re MFW S’holders Litig., 67 A.3d 496, 518 (Del. Ch. 2013), aff’d, 88 A.3d 635 (Del. 

2014), and does not demonstrate waste. 

210 Id.

211 Compl. ¶ 86. 
60

Defendants offer as a separate rationale the fact that Armistice’s exercise of 

the Warrants and subsequent sale of Vaxart shares would make the shares 

“potentially available for purchase by institutional investors, which could help 

facilitate Vaxart’s inclusion on the Russell 2000 or 3000 index.”212 Effectively 

conceding this rationale suffices, Plaintiffs respond that this decision “was a pretext” 

for the Board’s decision to enable Armistice to trade on material, non-public 

information. As discussed above, that argument has no legs.213 The Complaint 

shows that the Board did consider the “pro and cons” of the Amendments and 

apparently determined that the pros outweighed the cons.214 Plaintiffs argue that, 

because no record of the Company’s deliberations exist, Plaintiffs are entitled to “an 

adverse inference of the Board’s motivations.”215 But Plaintiffs are only entitled 

only to reasonable inferences. And the Complaint fails to support the reasonable 

inference that the Board directors were motivated “to enrich” Boyd and Maher.216 

For these reasons, a majority of the Demand Board did not either receive (i) a 

material benefit from the Warrant Amendments; (ii) face a substantial risk of 

personal liability for the claims related to the Warrant Amendments; or (iii) lack 

212 Armistice Defs.’ Opening Br. at 11. 

213 Pls.’ Ans. Br. at 33.

214 Compl. ¶ 73; Armistice Defs.’ Ex. 16. 

215 Pls.’ Ans. Br. at 11. 

216 Id. at 1. 
61

independence from someone satisfying either (i) or (ii). The claim alleging breach 

of fiduciary duties for approval of the Warrant Amendments is dismissed because 

demand is not excused. 

3. Plaintiffs’ Fiduciary Duty Claim for Insider Trading 

Plaintiffs next allege that “the Armistice Directors breached their fiduciary 

duties by trading on material, nonpublic information”—their alleged knowledge of 

the OWS study selection.217 To successfully plead that a corporate fiduciary 

breached his fiduciary duties by engaging in insider trading—a so-called Brophy

claim218—a plaintiff “must show that: 1) the corporate fiduciary possessed material, 

nonpublic company information; and 2) the corporate fiduciary used that 

information improperly by making trades because she was motivated, in whole or in 

part, by the substance of that information.” Kahn v. Kolberg Kravis Roberts & Co., 

L.P., 23 A.3d 831, 838 (Del. 2011). The doctrine’s focus is “preventing unjust 

enrichment based on the misuse of confidential corporate information.” Id. at 840. 

217 Compl. ¶ 169. 

218 That test is so named after Brophy v. Cities Service Co., 70 A.2d 5 (Del.Ch. 1949). 

Brophy was “distilled to its essence” in In re Oracle Corp., 867 A.2d 904, 906 (Del. Ch. 

2004), aff’d 872 A.2d 960 (Del. 2005). 
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Plaintiffs lodge the Brophy claim against two members of the Demand 

Board—Boyd and Maher.219 Plaintiffs assert their Brophy claim as a derivative 

claim, alleging that “Vaxart has suffered harm” from Boyd and Maher’s profiting 

“off of material, non-public information.”220 This court treats as derivative Brophy

claims alleging that a fiduciary possessing material, nonpublic information breached 

her fiduciary duties by trading on that information. See In re TrueCar, Inc. S’holder 

Derivative Litig., 2020 WL 5816761, at *7, *26 (Del. Ch. Sept. 30, 2020)

(dismissing Brophy claim for failure to plead demand futility); In re GoPro, Inc., 

2020 WL 2036602, at *9, 11, 15 (Del. Ch. Apr. 28, 2020) (dismissing Brophy claim 

against corporate officers who sold shares while allegedly withholding information 

from the market that later caused stock price to sink); see also Diep on behalf of El 

Pollo Loco Hldgs., Inc. v. Sather, 2021 WL 3236322, at *24 (Del. Ch. July 30, 2021) 

(granting special litigation committee’s motion to dismiss Brophy claim that block 

trade wasimproper). That means the Plaintiffs must explain why two other members 

of the Demand Board would not be able to consider the litigation demand fairly and 

impartiality. Plaintiffs’ theory for why demand is excused under Rule 23.1 seems 

to be that none of the Director Defendants who approved the Warrant Amendments 

219 There is no allegation that either Boyd or Maher personally made any trades involving 

Vaxart stock while in possession of material non-public information. Because I dismiss 

this claim for failure to plead demand futility, I need not reach the merits of the claim.

220 Compl. ¶ 169–70.
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would be able to fairly and impartially consider the Brophy claims because they were 

“interested in approving the Warrant Amendments and knowingly facilitated 

Armistice’s insider trading.”221 For the same reasons discussed above, the 

Complaint fails to plead sufficient facts to support the reasonable inference that any 

of the other Director Defendants approved the Warrant Amendments to receive a 

material benefit from Armistice’s alleged insider trading; lacked independence from 

Armistice, Boyd, or Maher; or faced a substantial risk of personal liability from 

approving the Warrant Amendments. Most pertinent here, the Complaint fails to 

plead sufficient facts to sustain the inference that the Defendant Directors were 

motivated to “to enrich” Boyd and Maher in any way and thus invited a substantial 

risk of liability for conferring a benefit on the Armistice directors out of disloyalty 

or otherwise in bad faith.222 The claims against the Armistice Directors are

accordingly dismissed because demand was not excused. 

4. Unjust Enrichment Claim Against Armistice 

Count IV is an unjust enrichment claim against Armistice premised on the 

breach of fiduciary duty claims against the Board for approving the Warrant 

Amendments. Plaintiffs allege that “[t]he Warrant Amendments allowed Armistice 

to realize nearly $267 million in cash proceeds over two trading days” and that 

221 Pls.’s Ans. Br at 18. 

222 Id. at 1. 
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“[t]hese benefits were derived from improper means.”223 As the predicate claim 

alleging breach of fiduciary duty has been dismissed for failure to make a demand, 

the claim alleging unjust enrichment must be dismissed as well. See Seinfeld v. 

Slager, 2012 WL 2501105, at *16 (Del. Ch. Jun. 29, 2012) (dismissing “claims [that] 

are derivative of the claims that I have already dismissed above”); Friedman, 2014 

WL 3519188, at *13 (dismissing unjust enrichment claim that was derivative of 

fiduciary duty claim subject to dismissal for failure to plead demand futility). 

5. Breach of Fiduciary Duty Claims or, in the alternative, 

Aiding and Abetting Claims Against Armistice 

Count V is a breach of fiduciary duty claim against Armistice. To state a 

claim for breach of fiduciary duty, a plaintiff must first allege that the defendant 

“actually owed a fiduciary duty.” Triton Const. Co. v. E. Shore Elec. Servs., Inc., 

2009 WL 1387115, at *9 (Del. Ch. May 18, 2009), aff’d, 988 A.2d 938 (Del. 2010).

This claim fails because, as discussed above, Armistice did not owe a fiduciary duty 

to Vaxart or its stockholders. See Ivanhoe P’rs v. Newmont Min. Corp., 535 A.2d 

1334, 1344 (Del. 1987) (“Under Delaware law a shareholder owes a fiduciary duty 

only if it owns a majority interest in or exercises control over the business affairs of 

the corporation.”). 

223 Compl. ¶ 184.
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Plaintiffs argue that, in the alternative, Armistice is liable for aiding and 

abetting the Director Defendants’ breaches of fiduciary duties in approving the 

Warrant Amendments. To state a claim for aiding and abetting, a plaintiff must 

allege: “(1) the existence of a fiduciary relationship, (2) the fiduciary breached its 

duty, (3) a defendant, who is not a fiduciary, knowingly participated in a breach, and 

(4) damages to the plaintiff resulted from the concerted action of the fiduciary and 

the non-fiduciary.” Gotham P’rs., L.P. v. Hallwood Realty P’rs, L.P., 817 A.2d 160, 

172 (Del. 2002) (quoting Fitzgerald v. Cantor, 1999 WL 182573, at *1 (Del. Ch. 

Mar. 25, 1999)). “Knowing participation in a board’s fiduciary breach requires that 

the third party act with the knowledge that the conduct advocated or assisted 

constitutes such a breach.” Malpiede, 780 A.2d at 1097. The participation 

requirement can be satisfied by adequately pleading that the third party “participated 

in the board's decisions, conspired with [the] board, or otherwise caused the board 

to make the decisions at issue.” Id. at 1098. It is a “long-standing rule that arm’slength bargaining is privileged and does not, absent actual collusion and facilitation 

of fiduciary wrongdoing, constitute aiding and abetting.” Morgan v. Cash, 2010 WL 

2803746, at *8 (Del. Ch. July 16, 2010). Likewise, “conclusory allegations that a 

third party received ‘too good of a deal,’ without more, will also be insufficient to 

state a claim for aiding and abetting the breach of fiduciary duties. In re Saba 

Software, Inc. S’holder Litig., 2017 WL 1201108, at *24 (Del. Ch. Mar. 31, 2017). 
66

A third party can, however, participate in a fiduciary breach by (i) “facilitating or 

inducing a breach of the duty of care”; (ii) “misleading the fiduciary with false or 

materially misleading information”; or (iii) “withholding information in a manner 

that misleads the fiduciary on a material point.” Firefighters’ Pension Sys. of City 

of Kansas City, Missouri Tr. v. Presidio, Inc., 251 A.3d 212, 275 (Del. Ch. 2021). 

“Prior decisions of this court have validated the unsurprising proposition that 

an aiding and abetting claim premised on a derivative cause of action is necessarily 

derivative itself.” Sheldon v. Pinto Tech. Ventures, L.P., 2019 WL 336985, at *13 

(Del. Ch. Jan. 25, 2019), aff’d, 220 A.3d 245 (Del. 2019) (quoting Feldman v. 

Cutaia, 956 A.2d 644, 662 (Del. Ch. 2007), aff’d, 951 A.2d 727 (Del. 2008). See, 

e.g., In re First Interstate Bancorp Consol. S’holder Litig., 729 A.2d 851, 864 (Del. 

Ch. 1998) (“If, as [the court has] found to be the case, the claims of primary liability 

against the defendant directors belong to the corporation and could only be 

maintained by [the plaintiff] in a derivative capacity, that finding logically applies 

with equal force to the alleged claims of secondary liability against [an alleged aider 

and abettor].”). 

Here, the breach of fiduciary duty claims related to the Director Defendant’s 

approval of the Warrant Amendments were derivative; the aiding and abetting claim 

is derivative as well. Plaintiffs here have alleged an aiding and abetting claim against 

Armistice alone. As employees of Armistice, Boyd and Maher have a disabling 
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interest in the outcome of the litigation against their employer. See, e.g, Silverberg 

v. Padda, 2019 WL 4566909, at *8 (Del. Ch. Sept. 19, 2019) (noting that a director 

“faces the dual fiduciary problem when she approves a stock issuance if he or she is 

in a fiduciary relationship with the recipient of that stock” and that it was reasonable 

to infer that a partner and managing director of the recipient entity would not be 

impartial as to the demand). For reasons already discussed above, Plaintiffs have 

failed to plead sufficient facts to support their theory that any other members of the 

Demand Board would be unable to consider a litigation demand against Armistice 

or the Armistice Directors. Armistice was not a controlling stockholder. Even 

assuming the fund received a material benefit from the Warrant Amendments, no 

members of the Board were dependent on Armistice, the Complaint fails to allege 

particularized facts creating a reasonable doubt as to the capacity of a majority of 

the Demand Board to impartially consider a demand. Demand is not excused, and

the aiding and abetting claim is dismissed. 

III. CONCLUSION

For the foregoing reasons, the motions to dismiss by the Vaxart Defendants 

and the Armistice Defendants are granted as to Counts I, IV and V. The court 

requests supplemental briefing and submission of documents cited in the Complaint, 

which will be detailed in a separate letter to the parties. 

IT IS SO ORDERED.