Replies to post #20902 on NorthWest Biotherapeutics Inc (NWBO)

[TOB]

Do you know why there is a typically a lock up on warrants? Is this beneficial to the company in some way? -Ready4bluesky

Typically we see holding periods with a private placement (PIPE) which needs to comply with SEC Rule 144 which specifies a minimum lock-up holding period of 6 months.

In this case, the shares are already registered under the prior shelf, and the prospectus does not specify whether the 2,272,727 shares issued at $5.05 are also restricted for six months.

In regard to the additional 5% of warrants granted to the placement agent, FINRA Rule 5110(g)(1) applies as they are compensation warrants. This mandates a similar 180-day lock-up requirement. -Link

This is beneficial to the company as it avoids arbitrage with the purchaser shorting NWBO using the warrants as cover. It also postpones the dilution of the float by six months with only the OS diluted initially, and avoids issues if there were disclosures as part of the due intelligence done by the purchaser.