NorthWest Biotherapeutics Inc (NWBO)

[JerryCampbell]

Let’s try an example and see if that helps. I’ve rounded some numbers for simplicity.

Shares Outstanding – 500m
Warrants Outstanding – 500m
Warrant Strike Price - $0.30
Buyout price - $0.50

Cost for Outstanding Shares = 500m * $0.50 = $250m. I assume that is non-controversial.

Now I’ll calculate the additional cost for warrants 3 different ways, all with the same answer.

1) Exercise for Cash

Warrant holders pay 500m * $0.30 = $150m
Warrant holders now have 500m shares that the acquirer must buy for 500m * .50 = $250m
Net additional cost to acquirer = $250m - $150m = $100m

2) Cashless Exercise

The formula for the number of cashless shares received is from nwbo SEC filings.

cashless shares = [(A - B) * X ] / A
A = market price
B = strike price
X = number of shares covered by warrant

Cashless shares = ($0.50 - $0.30) * 500m / $0.50 = 200m
Acquirer has to buy 200m additional shares for $0.50 = $100m

3) How much are the warrants in the money

($0.50 - $0.30 ) * 500m = $100m

Conclusion: In-the-money warrants require an additional expense by the acquirer.