NorthWest Biotherapeutics Inc (NWBO)

[AVII77]

Beartrap, I do not think anybody knows for a fact if the pref A/B can vote prior to conversion, but I lean towards they can not.

I think that perhaps the issue is the preferred A/B can not vote on an 'as-converted' basis unless the available authorized common shares are sufficient to allow conversion (even if they don't convert).

By locking in the warrant holders (getting them to agree they can not exercise) that frees up common shares within the authorized common share count.

With the common shares now available, the preferred can now vote on as as-converted basis with the common shares (again, w/o actually converting).

From a white paper discussing DGCL they cite:

Hildreth v. Castle Dental Ctrs., Inc., 939 A.2d 1281, 1283–84 (Del. 2007) (holding that preferred stock was not void, although preferred shares were unable to convert into common stock because of the absence of authorized (non-issued) common shares, thereby rendering the conversion rights of the stock unenforceable)

I'm not a lawyer and this is just guess. But it seems that the company could have issued Preferred with exclusive voting rights to allow an increase (sort of like Delcath did after 2 failed votes) but what they did instead is grant preferred an as-converted voting right but there were no available shares (because the warrants, though not excercised, had to be reserved from the authorized share count. Now, since the warrants can't be excercised, they no longer have to be reserved and the Preferred can vote on an 'as-converted' basis)

Thoughts?

That white paper linked above is interesting and discusses what happens if a company makes a mistake with issuing shares: "Curing Defects in Stock Issuances Under Delaware Law". Apparently not that uncommon.