NorthWest Biotherapeutics Inc (NWBO)

[Poor Man -]

Here come the judge, here come the judge
Order in the courtroom, ‘cause here come the judge

Hear ye, hear ye
This court is now in session
His Honor, Vice Chancellor Travis Laster presiding
Hear ye, hear ye

VC’s Laster’s comments with regard to the true up as contained in the transcript for LP, LG, et. al. motion to dismiss:

Starting in January 2020, the defendants discussed the concept of what they referred to as "true-up options." It is reasonable to infer by that that they meant additional options designed to bring their equity ownership back up to 16 percent.

According to the plaintiffs, the defendants viewed this as appropriate to offset the dilution they suffered from capital raising. The defendants, of course, have a different view of what they were trying to do. But at this stage, it is one reasonable inference to draw from the allegations and supporting documents that the defendants were interested in true-up options in the sense of trueing up their percentage ownership.

The defendants had no right to any fixed percentage of ownership, and they still have no right to any fixed percentage of ownership. Not only that, but there is no immediate reason to think that they had suffered any identifiable harm from the dilution they inflicted on themselves and they are, therefore, plausibly -- and again, that's a higher standard than reasonably conceivable -- seeking to protect themselves from the dilution that they inflicted on everyone else.

Now, the defendants have to tried to argue that really the true-up awards were a way to value the work that the directors and executives had done and was an incentive to keep them around. That isn't a persuasive justification at the pleading stage, particularly when there's so many references to these being true-up awards.

It is a plausible inference that true-up awards were not meant as a way of keeping the directors around or compensating them, but were rather meant to true up their position in the company so that it was the same before the capital raises. So what we have, as a result, is a reasonable inference that the self-interested compensation was not entirely fair.

Today’s heavily discounted capital raise was just yet another example of all their dilutive capital raises over the years that accelerated the amount of dilution that shareholders have had to endure.

And another reason why a NO vote for the true-up makes the most sense, in my humble opinion.

Read the entire proxy before casting your vote.