NorthWest Biotherapeutics Inc (NWBO)

[hyperopia]

Yes, the first milestone was completed then. The numbers are very clear. With the 1.5M shares for each of the 4 milestones and 1.5M share issued.

On the other hand, there is no mention of another 1.5M shares being paid for the second milestone. That is a bright line.

The clause you bold is messy. Recognizing expenses is not the same as a milestone being achieved.

Right, like I said, it’s not clearly stated. That’s why I also included the previous paragraph where it explains the Stock Consideration Agreement, and that the stock consideration may be recognized differently for tax and accounting purposes. (I included that section from the 10K below)

No, it’s not 1.5M shares for each milestone. The grand total is ~$2M worth of shares. ($1.95M for Shashi Murthy and $60k for Andrew Kozbial) The stock price was $1.40 on December 1, 2020 so that equates to the1.5M shares in total. The shares were issued, but they don’t all vest until the milestones are reached. It appears (to me) that when they are reached, NWBO recognizes them as a $0.5M research and development expense. One was recognized in 2020, and one was recognized in 2021.

You assert the second milestone should be easy, all they need to do is replicate what they did in their labs. That is false. You are saying a generic DC manufacturing process is the same as NWBO's "secret sauce" process.

No it’s not false. I’m not saying it’s exactly the same process, but it’s almost the same. The difference or “secret sauce” of the DCVax culturing protocols, is in the exact mixture of differentiation media (IL-4, GM-CSF, TNF-a etc.), the exact length of time for culturing, maturation, etc., but yes, it’s basically the same experiment. And it only required verification by “yield, phenotype and functional assay data.” (which is basically generic therapeutic dendritic cells) The second milestone does not require that EDEN produce the equivalent to DCVax, as defined by Northwest Bio’s assays, because that’s the third milestone.

That original EDEN culture cartridge that Advent almost certainly tested prior to the acquisition of Flaskworks, was supplied by Corning. The first milestone required finding a replacement manufacturer and a prototype of that EDEN cartridge. So the second milestone required Advent’s verification that the prototype from the new supplier performed the same as the one supplied by Corning.

Flaskworks Acquisition
On August 28, 2020, the Company entered into a Unit Purchase Agreement (the “Agreement”) to acquire Flaskworks. Included in the consideration pursuant to the Agreement was Stock Consideration in the amount of approximately $2 million. This Stock Consideration is issued in the form of Rights to receive such value in shares issued pursuant to and subject to the vesting criteria set forth in a Rights Issuance Agreement entered into in connection with the closing of Flaskworks Acquisition. Because the Rights were subject to future employment and performance conditions, the Stock Consideration was not included in consideration payable for the Flaskworks Acquisition but rather was recorded as contingent consideration payable to employees for accounting purposes. The Company anticipates that the treatment of this Stock Consideration for tax purposes may be different than for accounting purposes, and will reflect the fact that this Stock Consideration was payment for acquisition of the ownership interests of certain shareholders of Flaskworks.

On December 1, 2020, the Company issued 1.5 million shares of common stock based upon the Flaskworks team having completed a significant milestone, in accordance with the Rights Issuance Agreement entered on August 28, 2020. During the year ended December 31, 2021 and 2020, the Company recognized approximately $0.7 million and $1.0 million stock-based compensation related to the Flaskworks Acquisition, respectively. Approximately $0.1 million was recognized in general and administrative and $0.5 million was recognized in research and development during the year ended December 31, 2021. Approximately $0.5 million was recognized in general and administrative and $0.5 million was recognized in research and development during the year ended December 31, 2020.