Pharmaceutical Company Reverse Merger - Fairness Opinion

Stout was engaged to render an opinion to the board of directors of a development-stage pharmaceutical company with respect to the fairness, from a financial point of view, of the equity exchange ratio contemplated in a proposed reverse merger transaction in which the company’s outstanding common stock would be extinguished and exchanged into newly-issued shares of a public company.

Stout’s analysis relied on the discounted cash flow method based on cash flow projections from management and an analysis of market rates of return, in order to assess the relative value of each party’s equity contributions to the merger, and thus the applicable equity exchange ratio for the transaction.

We issued an opinion that the equity exchange ratio in the transaction was fair, from a financial point of view, to the company’s shareholders. This enabled the board of directors to recommend the transaction with confidence.

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