NorthWest Biotherapeutics Inc (NWBO)

[Gus McCrae]

I was an advocate of a R/S because it would solve both the authorized share and uplisting issues. 2 birds, 1 stone. However, the company didn't feel the need to address either of these issues at this year's ASM. So the issue is moot at the moment.

Here's the problem: If TLD is positive, they need to raise a significant amount of money in anticipation of pursuing regulatory approvals and commercialization (around $50 million?). But I don't see how they can do that without either increasing the amount of shares that are authorized for further issuance or doing a reverse split to bring the number under the current authorization.

Right now, they are authorized to issue up to 1.2 billion shares of common stock. As of Dec. 31, 2020, they were 829.6 million shares issued and outstanding, 331.7 million warrants outstanding and 308.0 million options outstanding. That is 1.47 billion securities outstanding, or 269.0 million securities over what they are allowed to issue.

I know that the employees are agreeing to suspend their ability to exercise warrants and options, but even with these friendly agreements, they don't have the cushion to issue equity in an underwritten public offering. So what is the plan? We have to assume they have TLD by now. They should have a good idea of how the market will react to the news.

In my opinion, these are the 3 most likely scenarios: (i) they are planning to sell the company shortly after the release of TLD, which will require a special meeting, at which point, they can add the increase in authorized shares as a proposal; (ii) they are going to enter into a licensing agreement with BP that will provide the cash they need to get through the next year and all of the employees are fine to wait another year before they exercise their warrants/options; (iii) they are still months away from releasing TLD and they plan to run on fumes from warrant exercises until then.

I do not believe in the Merck/Duffy fantasy. The idea that Merck has been "calling the shots" for the last couple years is ridiculous. But, we have to be getting close to some kind of resolution. The timing works out for ASCO. Let's hope that the misguided delay in releasing TLD is because their advisors told them to wait until ASCO to make the big reveal, and that TLD will be worth the wait.