Market Overview

Affymax Adopts Tax Benefit Preservation Plan to Protect Net Operating Loss Carryforwards

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CUPERTINO, Calif.--(BUSINESS WIRE)--

Affymax, Inc. (OTCQB: AFFY) announced today that its Board of Directors has adopted a Tax Benefit Preservation Plan, or Rights Plan, in an effort to preserve the value of its significant net operating loss carryforwards, or NOLs, in relation to the potential limitations under Section 382 of the Internal Revenue Code.

The Company had federal NOLs totaling approximately $481 million at December 31, 2013, a substantial portion of which are limited due to a prior “ownership change” (as defined in Section 382 of the Internal Revenue Code). The Company's use of the remaining NOLs could be substantially limited if the Company experiences another “ownership change”. In general, an ownership change occurs if there is a cumulative change in a company's ownership by “5-percent shareholders” (as defined in Section 382 of the Internal Revenue Code) that increases by more than 50 percentage points over the lowest percentage owned by such stockholders at any time during the prior three years on a rolling basis. The Company noted that the Rights Plan is designed to serve the interests of all stockholders by helping to protect the Company's ability to use its NOLs to offset future tax liabilities and is similar to plans adopted by other companies with significant tax attributes.

In connection with the adoption of the Rights Plan, on November 26, 2014, the Board declared a non-taxable dividend of one preferred share purchase right, or Right, for each outstanding share of common stock to the Company's stockholders of record as of the close of business on December 8, 2014. While the Rights Plan is in effect, any person or group that acquires beneficial ownership of 4.99% or more of the Company's common stock without approval from the Board would be subject to significant dilution in their ownership interest in the Company. Stockholders who currently own 4.99% or more of the common stock will not trigger the Rights unless they acquire additional shares. In addition, the Board has established procedures to consider requests to exempt certain acquisitions of the Company's securities from the Rights Plan if the Board determines that doing so would not limit or impair the availability of the NOLs or is otherwise in the best interests of the Company.

The Rights will expire on the earliest of (i) 5:00 p.m., New York City time, on November 26, 2017, (ii) the time at which the Rights are redeemed or exchanged under the Rights Plan, (iii) the repeal of Section 382 or any successor statute and the Board's determination that the Rights Plan is no longer necessary for the preservation of the Company's NOLs or (iv) the beginning of a taxable year of the Company to which the Board determines that no NOLs may be carried forward.

The issuance of the Rights is not a taxable event and will not affect the Company's financial condition or results of operations (including earnings per share).

A copy of the full text of the Rights Plan will be posted on the Company's website.

About Affymax

Affymax, Inc. is a biopharmaceutical company based in Cupertino, California. For additional information, please visit www.affymax.com.

Cautionary Statement About Forward-Looking Statements

This press release contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, including, without limitation, statements relating to the possibility that the Company may be able to acquire one or more revenue or income generating assets in the future and the potential for opportunities to further maximize value for stockholders, including the potential for a private to public reverse merger, investments and acquisitions among other alternatives. In some cases, you can identify forward-looking statements by terminology such as “may,” “will,” “should,” “expect,” “plan,” “intend,” “anticipate,” “believe,” “estimate,” “predict,” “potential” or “continue,” the negative of these terms or other terminology.

Forward-looking statements are based on the opinions and estimates of management at the time the statements are made and are subject to certain risks and uncertainties that could cause actual results to differ materially from those anticipated in the forward-looking statements. The Company's actual results may differ materially from those expressed or implied by these forward-looking statements based on a number of factors, including the Company's failure to acquire one or more revenue or income generating assets or to identify and execute upon any opportunities to further maximize value for stockholders, and other risks and uncertainties. Readers are cautioned that these forward-looking statements and other statements contained in this press release regarding matters that are not historical facts, are only estimates or predictions. Readers are cautioned not to place undue reliance upon these forward-looking statements, which speak only as of the date of this press release. The Company undertakes no obligation to update any forward-looking statements whether as a result of new information, future events or other factors, except as required by law.

Affymax
Mark Thompson, 650-812-8700
Chief Financial Officer
The Brenner Group

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