NorthWest Biotherapeutics Inc (NWBO)

[TZOR]

Well I had time to review three different companies annual 10-K's (for purpose of comparison I used 12/31/14 as all three have filed their 2014 10-K)

NWBO, AGEN, and CLDX (I own NWBO and CLDX)

all the data listed here can be found in their 10-K's




As you can see, compared in absolute dollars we are spending the least dollars on rent and leases of the three to the tune of roughly 22% of what AGEN spends on rent and 15% of what CLDX spends on rent. I was also able to confirm the exact figures for each location of NWBO from their 10-K (see image or 10-K).

If you compare the cost per square foot we are in the middle of the pack. Again this hardly supports the claim that NWBO is goosing shareholders for rental income.

Now on to the arm's length issue.....

Apparently there are some who would argue that NWBO's deal back in 2008 and 2009 was not at arm's length. Well in case you didn't know what that meant here is one definition (my apologies for formatting)

(b) Arm's length standard--(1) In general. In determining the true taxable income of a controlled taxpayer, the standard to be applied in every case is that of a taxpayer dealing at arm's length with an uncontrolled taxpayer. A controlled transaction meets the arm's length standard if the results of the transaction are consistent with the results that would have been realized if uncontrolled taxpayers had engaged in the same transaction under the same circumstances (arm's length result). However, because identical transactions can rarely be located, whether a transaction produces an arm's length result generally
will be determined by reference to the results of comparable
transactions under comparable circumstances. See Sec. 1.482-1(d)(2)
(Standard of comparability). Evaluation of whether a controlled
transaction produces an arm's length result is made pursuant to a method selected under the best method rule described in Sec. 1.482-1(c).
(2) Arm's length methods--(i) Methods. Sections 1.482-2 through
1.482-6 provide specific methods to be used to evaluate whether
transactions between or among members of the controlled group satisfy the arm's length standard, and if they do not, to determine the arm's length result.
(ii) Selection of category of method applicable to transaction. The methods listed in Sec. 1.482-2 apply to different types of transactions, such as transfers of property, services, loans or advances, and rentals. Accordingly, the method or methods most appropriate to the calculation of arm's length results for controlled transactions must be selected, and different methods may be applied to interrelated transactions if such transactions are most reliably evaluated on a separate basis. For example, if services are provided in connection with the transfer of
property, it may be appropriate to separately apply the methods
applicable to services and property in order to determine an arm's
length result. But see Sec. 1.482-1(f)(2)(i) (Aggregation of
transactions). In addition, other applicable provisions of the Code may affect the characterization of a transaction, and therefore affect the methods applicable under section 482. See for example section 467.


In English, when two unrelated parties agree upon a price for a transaction. When they are related there must be some basis for the transaction to an unrelated party......and wouldn't you know it but AVII provided us all with a fantastic comparable property and rental figure in his post earlier today. If you review his post you would see that the price that Toucan charged NWBO was not materially different then the comparable lease agreement AVII posted for a different unit in the same building, therefore comparable and a representation of market rates. Sooooo if Toucan charged NWBO market rates for the rental then the transaction was done at arm's length.

If Toucan charged NWBO materially more or less than the market rate as evidenced by AVII's post then the transaction would not have passed arm's length.

Now on to RK and the "ridiculous spending" comments. RK now armed with a comparison of what NWBO and NWBO's competitors have been spending on rent and are in similar stages of development, do you maintain that NWBO is spending ridiculously?

I would argue that the facts do not support your claim.

Good Night