Synopsis of Linda's New Favorite Financier John M. Fife (Owner of Iliad Research and Trading, L.P., Streeterville Capital, LLC, etc.), the Three Financing Deals
Both John and Linda are graduates from Harvard Law School with a JD.
John seems to have been known to the Wall Street as a toxic financier, and has had prior lawsuits against him for manipulating the market or distortion.
NWBio has so far had three financing deals with John (see the relevant excerpts attached below for reference).
Both Linda and John have a parent died from cancer.
All three financing deals with John, i.e., about $5.5 million promissory note on 14 August 2020, about $11 million loan on 1 March 2021, and about $15 million loan on 22 Nov 2021, are of good terms (not toxic by any book or practice), despite his toxic financier reputation on the Wall Street.
It is of interest to note:
1) It's only after June and August 2021 when NWBio entered into multiple four-month notes with various individual lenders (John may not be part of it) for a total of about $3.3 million, which included the right to purchase (exchange for) shares at price of the next offering at 12% discount (note it's called Next Offering, not the first offering after TLD/publication), that John's loan on 22 Nov 2021 appeared to have the similar direct share purchase (exchange) term for the first time. Also be to noted in the deal the event of TLD is specifically mentioned;
2) In the March 2021 loan, "The Loan Agreement allows prepayment at any time at the Company’s election. If the Company elects to prepay, the prepayment would include a 10% charge" while in 22 November 2021 loan "The Loan allows prepayment at any time at the Company’s election," So it appears the former loan if prepaid would cost the company 10% charge while the latter loan would not charge company for prepayment, but instead, it gives the lender the right to exchange for share at discount if TLD is announced and there is offering of shares after that; and
3) The 22 Nov 2021 loan for the first time gives the lender John the right to exchange for "common shares priced at the price of the first private placement transaction following TLD less a 12% discount and to purchase another 50% of that number of shares at the same price. This then-springing right expires 14 days after the post-TLD private placement."
So it makes sense the reason that there would be no payments due for the first 8 months of the Loan term. Because of the share price exchange term, if I were John I would prefer the period of no payment as long as possible, for example, I would prefer 12 months, instead of 8 months, so that when TLD is announced I can be sure all my money is intact, ready for exchanging shares at 12% discount of the price of the first offering. This deal in and by itself for this reason is positive indication of his belief on positive trial outcomes, and is essentially intended for exchanging shares at maximally as possible at 12% discount of the first offering share price.
On the one hand, obviously it seems John wants to be a big shareholder of NWBio, and he has been kind to the company in providing much needed funds; on the other hand, it is understood he wants to maximize the return of his investment, and he can achieve that by 1) his $15 million loan deal with the company which gives him the rights for exchanging shares at discount (this is a fact), and 2) I suspect John and/or his associates might have already well dispositioned a long time ago in this endeavor.
I further suspect John and/or his associates might have been part of the force behind the recent month-long steady share suppressing activities, coincided with a large number of warrant exercising for shares with which at least part of the shares have been sold.
Obviously John wants the share price as low as possible. Nonetheless market is very fluid, dynamic and unpredictable, with always a myriad of forces with various interests acting and counter-acting on the market.
So it's yet to be seen in what direction the price will be trading. Personally I believe it will regain traction and heading north, because there will be milestones on the horizon, including TLD/journal (the 8-month no payment term means nothing in this regard, please refer to what I have said re it above); the share price can only go as low as it practically can. At the current price I think it is almost as if the trial would miss its primary endpoint; and this $15 million deal actually reveals a lot. I don't believe John had a look under the hood before he reached the deal with the company, but the deal by and in itself makes the deal even more bullish for the share price.
Buy as many shares as you can afford!
Excerpts of related financing deals below:
Promissory Note Issued for Loan Made By Iliad Research and Trading, L.P.
On August 14, 2020, Northwest Biotherapeutics, Inc. (the “Company”) entered into a Note Purchase Agreement and Note (collectively, the “Note”) with Iliad Research and Trading, L.P. (the “Holder”) in the amount of $5,505,000. The Note has a maturity of 21 months. There are no repayments during the first 7 months of the term. During months 8 through 21, the Note will be amortized in monthly installments of 110% of the pro rata principal amount. Interest on the Note accrues at a rate of 8% per annum, and the Note includes an original issue discount of $500,000.
The Note contains customary default provisions, including provisions for potential acceleration of the Note and default interest
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On March 1, 2021, Northwest Biotherapeutics, Inc. (the “Company”) entered into a Commercial Loan Agreement and Note (collectively, the “Loan Agreement”) with Streeterville Capital, LLC (the “Holder”) in the amount of $11,005,000. The Loan Agreement has a maturity of 22 months. Repayments do not start until November 1, 2021.
Following November 1, 2021, the Loan Agreement will be amortized in 14 equal monthly installments of principal at 110% of the pro rata amount, plus accrued interest. Interest on the Loan Agreement accrues at a rate of 8% per annum, and the Loan Agreement includes an original issue discount of ten percent. The Loan Agreement allows pre-payment at any time at the Company’s election. If the Company elects to pre-pay, the pre-payment would include a 10% charge. The Loan Agreement contains customary default provisions, including for potential acceleration.
The funds will be used for the Company’s ongoing business operations.
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Between June and August, 2021, the Company entered into four-month note agreements (the “Notes”) with various individual lenders (the “Holders”) with an aggregate principal amount of $3.3 million for net proceeds of $3.1 million. The Notes contain a conditional piggy-back right to independently purchase shares from the Company, which provides a right for the Holders, contingent on the release of clinical trial data and a next private placement offering (“Next Offering”) after this release, to (a) purchase shares from the Company within seven days following such Next Offering at a 12% discount from the share price of the Next Offering for a variable number of shares equal to an amount up to 50% of the principal amount of the loan (the “Contingent Right”)and (b) exchange some or all of the outstanding loan amount for a variable number of shares, within seven days after the Next Offering at a 12% discount, resulting in a reduced cash amount repayable under the loan agreement (the “Contingent share-settled redemption feature”). The Company accounted for the Contingent Right as a freestanding financial instrument, which was classified as a warrant liability at fair value on the Consolidated Balance Sheet with changes in fair value recognized in the Consolidated Statement of Operations. The Company accounted for Contingent Share-settled Redemption Feature as an embedded derivative liability at fair value which requires to be bifurcated, and with changes in fair value recognized in the Consolidated Statement of Operations.
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On November 22, 2021, Northwest Biotherapeutics, Inc. (the “Company”) entered into a loan financing with Streeterville Capital, LLC (the “Lender”) pursuant to which the Company received net proceeds of $15,000,000 (the “Loan”). The Loan has a maturity of 22 months. No payments are due for the first 8 months of the Loan term.
Thereafter, the Loan will be amortized in 14 equal monthly installments of principal at 110% of the pro rata amount, plus accrued interest. The interest on the Loan is 8% per annum, and there is a 10% OID. The Loan allows pre-payment at any time at the Company’s election. The Loan documents contain customary default provisions.
Upon announcement of the top line data (“TLD”) from the Company’s Phase III clinical trial of DCVax®-L for glioblastoma brain cancer, the Lender has a then-springing right to exchange the outstanding balance of the loan for common shares priced at the price of the first private placement transaction following TLD less a 12% discount and to purchase another 50% of that number of shares at the same price. This then-springing right expires 14 days after the post-TLD private placement.
The funds will be used for the Company’s ongoing business operations.
