Replies to post #49020 on NorthWest Biotherapeutics Inc (NWBO)

[OutsideLane]

You must be very naive about business if you consider NWBO a shell company. What do you think holding companies are? Or any business that manages intellectual property, licensing, and serves as a base of executives, media personnel, and scientists who direct the intellectual and financial aspects of that entity. What do you think an independent movie studio is? What a about an Art Consultant firm? You're quite off the mark here friend.

I have been investing for decades, and am not naive one bit. I am invested here, but know the risks fully. I simply refuse to ignore the obvious.

I have invested in two of the most profitable holding companies. General Electric GE is a holding company, and operates through multiple entities. Danaher DHR is one of the most profitable holding companies of the last 20 years. They are operated from DC with a skeleton stall. Major differences exist between NWBO and those companies.

Those companies OWN the subsidiaries. Those subsidiaries are in the business of making money.
Those companies have assets, positive shareholder equity and net tangible assets. NWBO doesn't currently own the key assets, their patents, and the other two key measures are negative. I am sure you understand that as a development stage company, the most important assets the company should have are the intellectual property that distinguishes it from another company. This is either through outright owning the patents, or long term licensing agreements with the inventors (typically universities or other big pharma).

NWBO doesn't currently own any operating subsidiaries. All the subs owned are regional. Cognate is a related party, but NWBO has no ownership in it. The patents are assigned to someone else, outside the company. The company has $58M in assets of which $40M is for the UK property, and $13M is cash as of December 2014. $93M in liabilities are shown on the balance sheet.

Since you are such a finance whiz, why don't you tell me how the purchase of NWBO would be accounted for by an outside company, say a big pharma company. Say we get purchased for $1B, how would it show up on the purchaser's balance sheet?

Typically, most of the purchase of a purchase of a biotech would fall into three accounts: Intangible Assets (usually the IP/patents current and in development), PPE (to the extent that the company has property, plant and equipment), current assets (cash and cash equivalents) and the remainder is covered under goodwill and other minor accounts. How much would NWBO show in each of those categories?

Here's a link to the annual report if you want to actually give a real answer. I'm very naive so feel free to just make it up.

http://yahoo.brand.edgar-online.com/DisplayFiling.aspx?TabIndex=2&dcn=0001144204-15-016579&nav=1&src=Yahoo