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Based on your extensive anlaysis of previous case studies of naked shorting?
The 8-K mentions the German tax issue, but only in the sense that there is no issue with Marcum about it.
We'll never know what prompted the Audit Committee to perform a review of the auditor and recommend a change. The only thing the 8-K mentions is fees.
Maybe next year someone will remember to compare the CB fees to the earlier Marcum fees.
This is most likely routine business. There are proposals that firms should change accounting/audit firms every few years as a best practice.
Marcum is not exactly a top tier firm. I always recall them as Martin Shkreli's auditor of choice.
I'd only consider it a warning sign if there had been disagreements or multiple restatements. First impression, this seems like an upgrade.
UCLA used to have a page listing the treatments they were testing against GBM. There were over 100. That's GBM alone.
If you believe that UCLA's GBM treatment is solely about DCVAX or DC variants, you need to do more due diligence.
A donation to a worthy charity would suffice nicely.
Give me a break.
Everyone agrees that GBM is a terrible disease, but people are invested in nwbo to profit.
If their reasons were purely altruistic, they would donate to the American Cancer Society or even to a specific UCLA program.
@Kab, you nailed it.
Zero revenue is not materially worse than zero current revenue.
Zero cash flow is not materially worse than current negative cash flow.
There is nothing on the Balance Sheet or Income Statement to impair.
That interpretation does not fit the Form 4 info.
The code is "D" for disposition.
The footnote text is "gift from Dr. Boynton", not to him.
Look at the Form 4 filings on 7/2/2020 for examples of how options grants to officers are reported.
Thank you for the classy response. Much appreciated, and far too rare on this forum.
Wrong. I suggested nothing of the sort. In fact I said nothing regarding the market value of nwbo patents.
Those patents are on the books at nominal value, so there is nothing to write down in event of failure. Accounting value (as stated by nwbo) can be quite different from market value.
The current 1.2b common authorization could cover the 341m warrants, and is certainly sufficient for all non-management warrants.
What is not covered is mgmt and Board options, notably including the additional 200m options granted to themselves in the last quarter.
nwbo still has the full Preferred authorization available too, although convertibility and warrants mean this defers the common authorization issue rather than solves it.
A February stockholder meeting would be a surprise. It seems inconsistent with the type of votes you expect.
For an uneventful meeting (reapprove Board members, ratify accounting firm) they need several weeks of notice time to shareholders.
For the issues you expect, they would need even more time for proxy solicitors to do their work as some items require a majority of outstanding shares, not just a majority of shares that vote.
10-Q financial statements and notes just reported are as of 9/30/2020.
There is a section on Subsequent Events after that date. They also reported shares outstanding as of 1/10/2021 (822 million).
The books are already closed on Q4. Because the next report is a 10-K rather than 10-Q, it is not due until mid-April.
There should also be a Proxy for the annual shareholder vote. In theory it is every 12 months based on nwbo's December fiscal year, but being quite late the last 2 years may push out the due date.
Do you even understand what a writeoff means in Accounting?
It means there has to be an asset, which can be impaired, which would need to have its value reduced.
There is no asset on the nwbo balance sheet to write down. Here is the full list of items on nwbo's BS from the 10-Q
cash
prepaid expenses
construction in progress
right-of-use asset
indefinite lived intangible
goodwill
other assets
None of those are going to be impaired by a trial failure, which means that there is nothing to impair or write down.
This entire "4 day rule" thread is complete BS.
No, you are completely wrong. You are just making sheet up to try to suit your preferred scenario.
Material impairment is a specific terminology referring to something that would require an accounting writedown of asset values.
Hypothetically, if nwbo was carrying patents on its balance sheet with a significant value (which they are not), perhaps then a trial failure could require a writedown.
In reality, there is nothing on the nwbo balance sheet to write down, so Material Impairment is irrelevant.
Seriously?
Linda Powers loaned money to her own firm.
She decided to put the loan into default.
She paid herself penalty interest.
She granted herself warrants, but did not decide the quantity or terms until much later.
The warrants had a value AT ISSUANCE equal to 80% of the loan amount.
And she already got repaid in full, so zero skin in the game. She has vast nwbo holdings and derivatives while paying for none of them.
No. The value at issuance is straight from the 10-Q, nwbo's own calculation.
Deferring a loan for a few months generates warrants worth 80% of the principal at issuance, and you see nothing wrong?
Truly bizarre.
10-Q Linda Powers self-dealing at its finest.
Warrants issued to Linda Powers
As previously reported in a Form 4 filing, on July 2, 2020, the Company issued approximately 15.2 million warrants (the "Forbearance Warrants") to Ms. Powers in consideration for Ms. Powers' forbearance and extension of loans of $5.4 million from Ms. Powers to the Company. These warrants were approved by the Board in November 2018 when the loans were long overdue, as previously reported, and the warrants were re-approved in January 2020, but were not issued until July 2, 2020.
The Forbearance Warrants have an exercise price of $0.21 per share with 5-year contractual term. The fair value of the Forbearance Warrants was approximately $4.3 million on the grant date, which was recognized as an additional interest expense.
So for deferring (not forgiving) repayment of a $5.4m loan, Linda gets warrants valued at $4.3m at issuance, now more than $15m in the money.
It would be interesting to know if the drop in short interest is related to warrants coming off lockup. That requires info from nwbo which has not been forthcoming.
Whenever the third quarter 10-Q comes out, the "Subsequent Events" section is going to cover more than 3 months.
@Senti, we agree on something! Sign of the apocalypse?
The delay is going to be for the reasons cited in the NT 10-Q.
The 6 week delay in the first quarter 10-Q was pretty insignificant, so there is precedent for a long delay over minor issues.
I bet it was "ad hock" that got to him. :)
Disagree.
Flaskworks is tiny, both in assets and employees. It is barely material to nwbo. Assign a value to the assets. Create a goodwill account for anything else. Start depreciation of the assets and amortization of the goodwill. Done.
There is no requirement to restate historical statements for acquisitions. Bringing Flashworks onto nwbo's books is a one time exercise of minimal complexity.
No. The NT filing for Q1 specifically stated "unanticipated accounting complications related to a German tax issue".
The eventual 6/24 10-Q explained the German tax issue.
I'd argue that the entire matter was not material (accounting sense) and should have been footnoted. However, I have no problem with the NT noting the issue and the 10-Q explaining more.
"Common reasons include" does not override the fact that nwbo explicitly stated the reasons for delay. You are grasping at straws.
Unless you believe that nwbo lied to the SEC in its NT 10-Q filing, the delay is about options and Flaskworks, and nothing else. So far the only thing that looks bad is that they said they expected to file in the 5 day extension period.
There is nothing about TLD, buyout, partnership, FDA that would require (or even make permissable) extraordinary delay of the 10-Q filing. That is all just ihub nonsense and wishful thinking.
Options
- Some employee or Board member thinks some options should have vested, and LP is saying no?
- LP thinks some of her options should have vested, and the accountants are saying no?
- Option valuation is not that complex, so that seems an unlikely issue to me.
Flaskworks
- The PR announcing the acquisition mentions some deferred payment and milesone based payment. Maybe there is a dispute about the pricing of shares to be used as payment? The stock price has changed quite a bit since 9/1 at $0.41
One thing we learned from the 6-week delayed 10-Q back in June is that a long delay does not necessarily mean a material reason. The German tax dispute appears to be less than $1 million.
SKI WHISTLER
If you are going to SKI WHISTLER, you should really DRINK KOKANEE, a very decent British Columbia beer.
The NT filing says "due to subsequent events (after September 30) affecting the accounting for option awards during the quarter."
Since the award happened in Q3, we don't know much for certain:
- Recipients and amounts
- Terms; strike, duration
- Vesting
- Valuation
- Treatment as compensation expense
nwbo uses Black-Scholes for valuation, which is pretty simple. One component that might be an issue is volatility with an impending binary event, but changing an assumption should be minutes rather than weeks.
We're left to guess at what happened after 9/30 that would impact some aspect of that. Since 9/30 the only 8-K info is about Flaskworks and some securities sales. Neither of those seems related to management options.
The Q1 delay for the German tax issue was less than $1m, so the reason for Q3 delay may not even be material.
nwbo has 2 more days before the Q3 10-Q is as late as Q1 (6/24).
I think it would be a particularly bad look to close Q4 without publishing Q3, so there should be some urgency.
The NT 10-Q reference to "subsequent events" and option accounting does not necessarily have to be a corporate milestone. It could be a simple as the early October price spike relative to the strike price for options.
One R/S example you might find interesting and relevant is CYTR. Note CEO is considered seriously sketchy.
CYTR first proposed a R/S with no adjustment to shares outstanding. Shareholders rejected it. After some negotiation, a second R/S proposal with proportional shrinkage of SharesOut was approved.
nwbo claims to have still been blinded as of the last PR in October. That would make it pretty much impossible that they've been working on a results paper for months.
You're citing ihub users as experts. It is hard to imagine anything that would be a better definition of SPIN.
@Kab, my recollection is that nwbo never reporting results was more iclight than ex.
You are correct that I am profoundly skeptical of LP. Nothing this year has changed my thinking on that point.
@Kab, You are mistaken. I never said anything about results never being released, and I'm not saying that now.
The only comment I recall making on trial results was to pick 7/1/2021 in Evaluate's contest. That's one of very few dates in that survey that has not already passed by.
I do think that folks are silly to tie TLD predictions to warrant suspensions. There have been 5 years worth of failed predictions of "any day now" based on all kinds of hunches. ihub(nwbo) has proven a collective lack of predictive ability, yet they plug on believing the new guess might be correct.
Interesting.
So for each of the several previous nwbo warrant extensions you also thought you were "about to get TLD"? Or just this one?
How many extensions without TLD would it take for you to change that thesis?
@Hank, I don't believe that anything about nwbo investing is being driven by taxes. The only exception is Linda Powers who is up many million on securities granted to herself with effectively a zero basis.
nwbo is a seriously speculative stock. If a low probability speculation succeeds, you cash it in. There is no way anyone could confidently hold nwbo and claim to know there would be a price floor for 12 months.
This is not a situation where taxes should drive buy/sell timing.
Given the expense of shorting nwbo (some folks here have seen rates as high as 39%), I would expect a few million warrant conversion shares to be delivered to cover.
Given the amount of borrow demand to push short interest to 20m shares, that's a pretty strong indication of a desire to lock in gains.
Extensive exercise and hold would surprise me.
No. No one is allowed to trade while in possession of material non-public information. Not insiders. NDA is irrelevant.
https://www.investor.gov/introduction-investing/investing-basics/glossary/insider-trading
You have a few nwbo issues, some of which tie to others.
1) Linda must retain full and total control. All other issues are less important.
2) 10-Q is overdue. Not as late as Q2 yet, but getting close. Given the SEC settlement with late filings as a key issue, I think there is some real pressure here.
3) Share authorization limit. It's an ongoing issue, but not critical for now. Even if all the warrants exercized, they still scrape by.
4) Warrant suspensions. They expire 12/15. Some folks claim there is another deal to further extend, but nothing announced publicly. This mitigates pressure on the authorization limit, but I don't see a big problem if some exercise rather than extend.
5) Proxy. Last proxy was 3/27/20, so I believe they are ok for another 3 months. Nothing imminent.
6) TLD. Who knows, but my guess is that it is after the date for any further warrant suspensions. Hard to not break one law or another otherwise.
7) Fundraising. There have been so many moving parts since the last 10-Q, hard to tell where nwbo stands on cash. Even when the Q3 10-Q is released, that data will be over 2 months old.