NorthWest Biotherapeutics Inc (NWBO)

[Nick119]

German tax matter details finally clear:

The German tax authorities have audited our wholly owned subsidiary, NW Bio GmbH, for 2013-2015. During those years, NWBio, Inc. sent funds to NWBio GmbH to pay for operating expenses and costs associated with the Phase III clinical trial. The German tax authorities have asserted that the subsidiary should have charged NWBio parent company a profit margin on top of these costs, that they will deem that such a profit margin was charged by the subsidiary (even though it was not) and that they will tax this deemed profit margin, although neither NW Bio, Inc. nor NW Bio GmbH made any profit during the period in question (or at any other time), and even though the funds provided by NW Bio, Inc. were used by NW Bio GmbH entirely for operating expenses and clinical trial costs. They have also made claims for other taxes including penalties and interest.

The NW Bio GmbH submitted substantial documentation to refute certain aspects of the assessments and the German tax authorities agreed in principle with the Company’s proposed revised approach and settlement offer. The Company has provided and accrued for the following proposed settlement and is awaiting formal acceptance. The proposed tax settlement offer includes €346,000 (approximately $406,000 as of December 31, 2020) for the years under audit, with an addition of €101,000 (approximately $118,000) for the more recent years to date. Penalties and interest on the proposed amounts are still under negotiation. After considering further negotiations, under its evaluation under ASC 740, it is the view of the Company currently that it is not more likely than not that the resolution of these tax matters will ultimately result in a net material charge to the Company.