NorthWest Biotherapeutics Inc (NWBO)

[Poor Man -]

Knew I could count on you!

That is exactly is the crux of the problem: Who is funding the project versus who is receiving the equity rate of return from the good use of those funds. NWBO has provided assets; it has provided leased space; and it has made upfront payments to provide the working capital to start the business. In the financial world, all those costs are typically funded by equity or quasi equity in the company who uses those funds; in other words, equity from the shareholders of Advent: that would be Toucan.

The issue then would go back to the origins of Advent. Specifically whether nwbo used nwbo funds to create and/or equip Advent in London? Is LP the founder/owner/other of Advent and did LP directly use nwbo funds/assets to provide them to Advent for no negotiated value to nwbo

Now to your point, the assets remain owned by NWBO and all those upfront payments are at least tied to contractual obligations. So by appearances that at least all seems kosher in terms of legality - certainly legally defensible. Although if this were a larger public company with institutional investors, and the dollars involved were larger, that arrangement might invite lawsuits.

But putting that aside, in terms of proper business practice and fundamental fairness to shareholders, the arrangement between Advent and NWBO is highly questionable. And NWBO capital is very very expensive, so there should be an expected rate of return — perhaps at venture capital rates — for the use of NWBO’s equity. The only way to properly compensate shareholders for the high cost of NWBO ‘s investment in all those upfront costs (and receive an equity return) is to make Advent a subsidiary. That simple.

This is actually even more complicated from a business perspective in terms of the long term disposition of those assets in the event that NWBO is sold. But different discussion.