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I don’t know how this deal looks fair to you. It looks very far from fair to me. Do the same math assuming $1 pps. It’s $17 million owed for 2016 and $26 million for 2017. 43 million in total. So, it would take 43 million shares to settle this entire balance, without having to write anything off. 21.5 million shares of pps is $2. Not 160 million shares! Cognate have been waiting for a long time, why can’t they wait a few more weeks?
Write off is an excellent excuse and a defense that LP and Cognate will be using in court to justify that the transaction was in the best interest of NWBO shareholders. While in reality it wasn’t. You will realize this when pps shoots through the roof upon the announcement of trial results. We got robbed. Too bad very few people understand this.
What is the preferred to common conversion ratio? I don’t think they disclose it anywhere. It can’t be 1:1 because we’re talking about roughly 80 million shares plus warrants here while they only have 40 million preferred shares authorized.
In the light of the recent talks about a possible preferred stock deal with some “white night” this information would be particularly useful.
I think the real question here is why settle this now at rock bottom prices? Why not wait till after the trial results announcement and settle this at a fraction of cost? Cognate have been waiting for a while, they can wait a few more weeks.
Instead, they basically gave away 160 million shares to a private company controlled by CEO. This is a great deal for Cognate and LP, but this is not in the best interests of NWBO shareholders and represents a breach of fiduciary duty, imho.
Are you expecting a drop tomorrow morning? I wouldn’t be surprised to see a 30-35% dive, consistent with what the dilution will be approximately. Obviously this hasn’t been priced in yet...
The question I have is how can they do this knowing that that all these additional shares and warrants when converted are going to push the outstanding share count above the authorized limit?
I’m wondering if anyone saw/read the charter. It may have a provision in it that permits the company to increase its authorized limit if there isn’t enough unissued common stock to cover the conversion of the preferred stock. It may require shareholders approval, or it may not, depending on what the charter says.
They are not mutually exclusive. There is a scenario where NWBO common shareholders loose everything while the preferred shareholder (LP and Cognate) loose the money they invested in NWBO shares but gain something far more valuable - NWBO assets, specifically the vaccine that potentially is worth billions.
Read the 10-Q. You’re missing another 12 million worth of shares. It’s not 5 million, it’s 17.
So, dilution doesn’t concern you? At all?
That’s the way I interpreted this, too. Just wanted to hear a second opinion...
Hope we’re both wrong but I just don’t see any other way this will work.
Yes, I believe if they ever have to pay the suspension fee, it will no longer be 3 million as per the previous agreement, it will be less. At least that’s the way I read it.
I believe you are interpreting it incorrectly. None of the fees were triggered. But as part of the settlement agreement between Cognate and NWBO the fees were re-negotiated and reduced, including the fees for the suspension of the programs. That’s the way I read it.
Well, I get that, but how in the world would all these warrants and the preferred stock be convertible? Aren’t they already at their authorized limit? Wouldn’t the issuance of these warrants put them above the limit?
Read the 10-Q. Page 27. They are about to issue preferred stock to pay Cognate debt.
Yes, it appears they have. Which means LP (through Cognate) can do whatever she wants know, including increasing authorized shares limit, approving RS, etc. Our votes are now irrelevant.
I’m actually with him on this one. In case of insolvency Cognate will get everything because they are preferred shareholders.
I’m also confused how this is going to work: they are paying $17 million of debt by issuing preferred stock. Preferred stock is convertible to common at 0.23. But they only have 40 million preferred shares authorized, at 0.23 its only going to cover 9 million, not 17 million. What am I missing?
Per the 10-Q, the amendment to the research agreement with Sanofi was signed on October 20th, so I’m not sure what makes you think that it restarted months ago.
Already sold. I used to like the risk-reward proposition here, but after the recent news this is dead money for at least the next 6 months or so, imho. Have my money on NWBO now, they should disclose p3 results in the next couple months.
Meaning what? That it’s not true?
Going concern has nothing to do with Safe Harbor. It is a disclosure required by GAAP that states that entity’s management should evaluate whether there are conditions or events that raise substantial doubt about the entity’s ability to continue as a going concern within one year after the date that the financial statements are issued. And here in the 10-Q the management discloses that such conditions do exist.
These are not some forward-looking statements, these are the facts pertaining to the company’s financial statements and to the current stage of the products development.
Straight from the 10-Q:
“As of September 30, 2017, the Company is in the preclinical testing of some of its vaccine candidates and a commercially viable product is not expected for several more years...
“...the Company’s current liabilities exceed its current assets by E48,541 as of September 30, 2017, and there is no assurance that cash will become available to pay current liabilities in the near term. Management is seeking additional financing but there can be no assurance that management will be successful in any of those efforts. These conditions raise substantial doubt about the Company’s ability to continue as a going concern...”
Put 2 and 2 together and translated into plain English this means: “it will take the company several years to develop anything commercially viable, however, there’s a substantial doubt the company can survive that long”.
• $10 million funding commitment just completed with Lincoln Park Capital
You failed to mention that this represents approx. 20% dilution.
The company has 3.6 million in current liabilities (due within 1 year) and only 1.2 million in cash. How are they going to pay?
Answer: Dilute the heck out of current shareholders.
Don’t you guys know how it’s done?! Insiders are selling to each other artificially pushing the price up. This will go back down to 2 bucks in a blink of an eye.
They would typically try to bring the share price up and then short it up there so they would make bigger profit. Look at the previous round - it went up from 0.17 to 0.22 couple days before the equity raise.
All imo, from one CPA to another.
Can't respond to your private message because I don't have premium subscription so I'm just going to respond here.
Yes, I added to my small position when they filed the application. And yes, it's very risky. That's why when it comes to stocks like this I typically try to limit the exposure to approx 1-2% of my portfolio.
This was only filed a week ago. It will most likely take at least 3-4 months until the court decision is made. Hopefully, by that time the data will be released and NWBO will have access to capital on much more favorable terms than now...
I agree that all this doesn't look pretty, but I'm not surprised they didn't pay - consulting fees can wait because available funds need to be used to keep the lights on and take care of much more important stuff (i.e. having the trial completed). I would prioritize things the same exact way if I was running the company.
LOL
Yeah, 50B may be a bit of an exaggeration, but this is clearly the best risk/reward proposition I've ever seen in my life, period.
We're currently at a MC of 50M. I think a MC of 5B is attainable if DCVax is approved. Here's my post from SA from a while back:
Assumptions: 20%-40% market share, 150K per treatment.
If you extrapolate 13K cases/year in U.S. (0.004%) to world population you'll get 300K cases/year. Now let's assume that only 15% of those (predominantly North America, Europe, Australia, some Asian countries) will be able to afford it or have it covered by insurance. That still leaves us with 45K addressable market. Assuming NWBO's market share of 20-40% (and that's pretty conservative, should probably be more like 50-70%) gives us a range of 9K-18K cases. Using 150K/treatment this translates to 1.4-2.7B in annual revenues, just for DCVax-L.
An alternative approach would be to take just the population of U.S., Canada, Europe and Australia (325+32+740+20=1.1B), then using 0.004% this would translate to 44K cases/year. Taking 20%-40% market share of that still leaves us with the same range of 9-18K cases, or 1.4-2.7B annual revenue.
Apply whatever multiple you want to this, I'd probably do 4x or 5x to be conservative. That will leave us with a MC of 5.6B minimum. 100 times more than what the current MC is...
I did read some of the HH's dd. What I don't quite understand is all the hype about MACIVIVA. From what I read, MYMX is just one of several companies contracted to work on the project. It's not like they will own exclusive rights to this manufacturing process or any IP associated with it. It's just a manufacturing process. To create thermostable vaccines. But you do need to have an approved vaccine to be able to benefit from this process, don't you? And how many approved vaccines does MYMX currently have? Or how many pII-pIII trials are they currently running? That's what I'm talking about... They are years away from having anything approved or even starting a pII trial. Hence my question about catalysts.
Then, this preclinical data that you are referring to. The article says that it was already presented, during Sep 12-14 and 16-18 conferences, isn't that right? The October conference would just repeat what has already been disclosed, so this news is already priced in. Am I misunderstanding something?
Could you please specify which news you are referring to? I've just started researching this company couple days ago. And from what I can see on their website, they are not currently working on a single vaccine, everything (PSV, flu, HIV, malaria) is in hold (evaluating funding opportunities). Chikungunya seems to be the only one that they are preparing for the pre-clinical studies. So, what are the possible catalysts here?
So, which parts of this process are performed by an independent third party rather by NWBO? Isn't all data analysis performed by someone else?
Yeah, that was interesting. But can someone please explain me how in the world someone sold 100k shares after hours? I thought one couldn't trade this stock pre-market or after hours since it's OTC?
Fake news.
That article is back from 2015. How is it relevant now?
And where are the multi-million dollar positions that you said three funds would be taking this week?
I'm sure the 90-min conf call is the same made up bs...
"I'm in the company..."
You mean you work for the company? Please clarify.
You really don't get it, do you...
Here's the prospectus filed on 6/15:
PROSPECTUS
36,090,857 shares of common stock
This prospectus relates to the sale of up to 36,090,857 shares of our common stock by persons who have purchased shares in a series of private placements. The aforementioned persons are sometimes referred to in this prospectus as the selling stockholders. The shares offered under this prospectus by the selling stockholders may be sold on the public market, in negotiated transactions with a broker-dealer or market maker as principal or agent, or in privately negotiated transactions not involving a broker dealer. The prices at which the selling stockholder may sell the shares may be determined by the prevailing market price of the shares at the time of sale, may be different than such prevailing market prices or may be determined through negotiated transactions with third parties. We will not receive proceeds from the sale of our shares by the selling stockholders.
And your point is? that it's impossible? Cancer drugs in general don't get approved too often, you know... The key words here are "unmet medical need", which in case of GBM there clearly is one.
PTLA recently got approved with their drug failing the primary endpoint. Whether it's cancer drug or not is irrelevant, the point is FDA have done it before.
Shorting a volatile biotech penny stock may just be the dumbest idea ever. Have you really just done this?
Well, be prepared for this then:
http://www.businessinsider.com/joe-campbell-gofundme-page-for-e-trade-2015-11
Pseudoprogression as a surrogate endpoint? Has this been done before? Sorry, I'm by no means an expert; haven't seen PsP anywhere in this FDA document:
https://www.fda.gov/downloads/Drugs/.../Guidances/ucm071590.pdf
Here is some nice modeling work on mOS and mPFS:
https://askthebranko.blogspot.com/?m=1
They didn't unblind because PFS is a surrogate endpoint and they need sufficient data to show correlation between PFS and OS. The more OS events - the more data to analyze and show strong correlation.