NorthWest Biotherapeutics Inc (NWBO)

[hankmanhub]

If what some are posting is correct, that the exercise of warrants is a taxable event, and worse yet it is ordinary income, not taxable gain, then LP has a double advantage over the rest of us non insider warrant holders. 1) She can keep extending her exercise date, with one consequence being that she postpones her taxable event by as many years as she gives herself, 2) By knowing when NWBO will be putting out news of success, she can time her exercise before that news goes public, so that the bulk of her gain will be capital gain and not ordinary gain, as opposed to the rest of us who will likely be converting after the news and thus be stuck with ordinary gain on that exercise. Thus she could use her insider information in a less obvious way than actually buying or selling shares before news is released.

Btw, if they are right what would the cost basis be for the warrants received with purchase of the shares but are not registered to trade so they have no "market value"? How much value of the original purchase price of the shares purchased with warrants do you appropriate to the warrants and how much to the shares? Are you free to say make it 50/50? Are you free to choose that ratio? Obviously, the more you apply to the warrants the less ordinary income you will have on exercise of the warrants and the more income you will have on sale of the shares - but at capital gain rates. What rules govern this allocation of "cost" between the shares and the warrants?