VIV Avivagen CEO says company makes progress on six goals

AVIVAGEN ANNOUNCES CEO UPDATE LETTER

Avivagen Inc. has released a chief executive officer update letter.

Dear Shareholders,

It is my pleasure to provide a further update on the progress of our Company.

My update to you in June provided my impressions after three months as CEO: a great team, an exciting technology and substantial market opportunities. It also outlined the challenges that are inherent to building a successful life sciences business. In that update, I concluded by setting forth six goals. I believe we have made material progress on all of them: 1.Support U.S. marketing of Oximunol(TM) Chewable Tablets by Bayer Animal Health. We have helped our partner in developing new materials to support its marketing of this product line. In evidence of this, a shipment of new Bayer-labelled product was delivered and accepted on November 13th. The rate of sales and re-ordering will now be determined by our partner’s success in marketing this exciting canine health supplement to United States veterinarians.2.Launch a new direct-to-consumer canine product in the United States. In July, Avivagen took delivery of a first U.S. batch of its Vivamune(TM) Health Chews for large dogs. Since then, we have tested a print-based advertising campaign, tested internet marketing approaches and attended three pet-oriented expositions – to sample product and refine our direct sales messaging. We will expand our marketing commitment once we are satisfied our approach is optimal.3.Create further direct-to-consumer companion-animal products. In August, Avivagen took delivery of an initial batch of its second and third U.S. direct-to-consumer products; Vivamune(TM) Health Chews for Small Dogs and Vivamune(TM) Health Chews for Cats. These are now being test marketed alongside Vivamune(TM) Health Chews for Large Dogs.4.Generate initial food-animal product sales in selected international markets. In June and shortly after our first shareholder update, we announced our first commercial sale of OxC-beta: within the Kingdom of Thailand, where we have approval for commercial use. Work is now advancing on registering OxC-beta for sale in other Asian nations. We aim to announce such registrations when they are completed and as local distribution arrangements are finalized.5.Undertake business development activities for current and new products. Since June, we have created relationships with potential OxC-beta customers across Asia: in countries with large livestock industries, including Thailand and five other nations. Consequently, we expect that OxC-beta will soon be tested in multiple customer-driven food animal studies – in both aquatic and terrestrial livestock species. Should the results of one or more of such studies be as targeted, we believe there is the potential for material sales of OxC-beta for livestock in 2014.6.Communicate progress on the above to all of our stakeholders. We believe in building credibility with stakeholders and proving our seriousness with real achievements. This process started with clearing legacy liabilities and building our base of shareholders’ equity. We are now proceeding to generate further proof of the utility of our product – by way of our business development activities and by publishing peer-reviewed scientific articles. As specific facts about those initiatives become available to communicate through 2014, we are committed to work with the media to maximize investor awareness of our achievements. Of the matters outlined above, I’d like to highlight our work in Asian markets. It is important, as it has the potential to jump-start the revenues of our Company. The six countries in which we have built relationships have a combined population of approximately 1.7 billion people. This is around fifty (50) times the population of Canada, and their livestock markets are, in some cases, much larger than their populations suggest due to a focus on exports. While we cannot go into the business of forecasting future sales, our choice of geographies, species and trial designs are all directed to providing the best possible probabilities of material success for OxC-beta. When we receive customer test results, registrations and product orders, we will disclose it to the greatest appropriate extent.

It is important to recognize that such success is not built overnight: we are dealing with sophisticated livestock and feed producers who need to see real results and benefits from their adoption of OxC-beta. This requires us to engage with them to develop product-usage protocols in their species of interest and demonstrate our commitment to customer service. Our staff and outside collaborators are working intensively at such matters, which are vital to making a commercial success of our technology.

Demonstration of staying-power is also important to such livestock customers. We therefore undertook steps to strengthen our financial position over these past months. While this update is being written prior to the release of our October 31 results, our balance sheet has been dramatically strengthened. Review of our draft fiscal year-end financials show that our working capital and shareholders’ equity have each been improved on a year-over-year basis: with the addition of the new equity from our financing this fall, Avivagen can better demonstrate stability to customers, suppliers, staff and investors and is in a stronger position to fund scale-up of production and sales.

While no management can perfectly ensure the successful commercialization of a technology, we believe we are providing OxC-beta the right positioning to become a big winner:

– In companion animals, we have multiple products and marketing channels in the United States – the world’s largest consumer market. – For livestock, relationships with leading companies in some of the world’s largest livestock production markets and for the most commercially important species. – We have also secured capital needed to execute our stated corporate strategies.

With our company’s position now stronger than ever, we expect 2014 to be a pivotal year for Avivagen.

We remain committed to developing Avivagen into a pre-eminent creator of products for companion and food animals. We are realizing that goal by developing internal skills for validating product applications, creating commercially-viable product formulations and managing supply and fulfillment logistics. Using this model, we intend to build exceptional value for our shareholders.

I look forward to providing updates about the above matters and believe our work towards achieving our corporate objectives will soon be reflected in the market value of our Company.

Thank you for being a shareholder of Avivagen, for taking the time to read this update and for your continuing support for our efforts.

We seek Safe Harbor.

© 2013 Canjex Publishing Ltd.