NorthWest Biotherapeutics Inc (NWBO)

[Gus McCrae]

I don't know what ATL's question was as I'm done paying attention to him for the moment, but I will try to answer yours.

First, you are correct about Item 1.02. If any of these four contracts listed below were terminated early, then there should have been an 8-K disclosure:

10.37 DC Vax ®-L Manufacturing and Services Agreement between the Company and Cognate BioServices, Inc. dated January 17, 2014 (incorporated by reference to Exhibit 10.40 filed with the Company’s Quarterly Report on Form 10-Q on May 15, 2014).
10.38 DC Vax ®-L Direct Manufacturing and Services Agreement between the Company and Cognate BioServices, Inc. dated January 17, 2014 (incorporated by reference to Exhibit 10.41 filed with the Company’s Quarterly Report on Form 10-Q on May 15, 2014).
10.39 Ancillary Services Agreement between the Company and Cognate BioServices, Inc. dated January 17, 2014 (incorporated by reference to Exhibit 10.42 filed with the Company’s Quarterly Report on Form 10-Q on May 15, 2014).
10.40 Manufacturing Expansion Service Agreement between the Company and Cognate BioServices, Inc. dated January 17, 2014 (incorporated by reference to Exhibit 10.43 filed with the Company’s Quarterly Report on Form 10-Q on May 15, 2014).

Those 4 agreements were listed as material contracts in NWBO's Form 10-K from 2015 to 2020. Then they disappeared from NWBO's 10-K in 2021. My question is why? If they didn't terminate on their own, and they are in fact terminated, then this should have been disclosed. However, if there are still performance obligations remaining AND the contracts are still deemed material, then they should have been listed in the 10-K exhibit index due to the requirements of Item 601(b)(10) of Regulation S-K.

So either the contracts were terminated and they failed to file the 8-K or the company made a determination that the 4 agreements above are no longer material and that is why they left them off the exhibit list in 2021. Personally, I don't see how the Cognate manufacturing agreements could not be considered material to NWBO. Despite what biosectorinvestor stated, determining whether a contract is material or not is not complicated (at least for people who understand the rules), and where there is a close call, the best practice is to disclose it. In this instance, they had been disclosing these agreements as material contracts for the past 5 years, so something must have changed. Otherwise, they would have continued to list them, as that is the path of least resistance and what every public company that I am aware of always does. If the company did in fact determine that the Cognate manufacturing agreements are no longer material, then investors are missing a big piece of the puzzle.

I encourage you to read the manufacturing disclosure from the 2020 10-K and compare them to the 2021 10-K. It's not just the Cognate agreements that disappeared, but all of the prior disclosures about Cognate manufacturing DCVAX-L in the United States (or at all) also disappeared. Cognate was only mentioned 14 times total in the 2021 10-K, while it was mentioned 70 times in the 2020 10-K...obviously, the amount of times that the name Cognate is used is not dispositive of anything in and of itself, but if you take the time to read the disclosures, you will see a shift in how they talk about manufacturing.

As I've said previously, I don't have an answer as to why they changed these disclosures, but whatever it is likely important. Maybe these changes were done for bullish reasons and maybe not. Maybe they made a mistake and simply left the exhibits off in error. Who knows? Despite what others around here say, I don't raise issues to cast doubt on the future stock price of NWBO. Instead, I'm paying attention to what little information the company itself is providing to us and raising issues that I can't figure out or that I find interesting in some way.

I hope the above answers your question or at least provides you with enough background info for you to go form your own opinions on the matter, or maybe it's at least good enough for you to say, "this is a big nothing burger and I don't care one way or another," which it certainly might be. I will say this though, if it's a nothing burger, then it's the company's fault for the poor disclosure around manufacturing, which as we all know, is a critical matter for NWBO.