Replies to post #575831 on NorthWest Biotherapeutics Inc (NWBO)

[exwannabe]

The 10% premium is added to the principal of the loan initially not every month. In total the firm pays only about 600K in interest in a 12 million dollar loan. We are not beginning payments until November.

NWBO received $10M. They will end up paying back about $13.5M.

There is also that bit about about 33.7M warrants being extended as part of the deal. We could discuss details but NWBO never really discloses WTF is going on with warrants extensions very well.

[biosectinvestor]

People who talk about the negative, sometimes even longs, are looking for advantage often, cheaper shares for themselves and more opportunity to take advantage of ambiguity and economic anxieties.

No doubt the loan has some non-obvious costs to a pedestrian. But it is also not off-market. In fact, without the equity or warrants, it is decent for a company without cash flow, pending approval, in this quite unsteady economy filled with many kinds of risks. The SVB blowup was due to the bank purchasing long-term treasuries and receiving huge deposits flows, basically. Naive new bank managers could not imagine the risks in having those two things coincide in the dynamic environment we are in. Others may not see or even overemphasize the risk of bank failures spreading. No one really knows at the moment, though it seems it should be unlikely. But had regulations stayed in place over the last 4-5 years, there’d likely be no worry. Now we have to depend on bank managers who are frequently pushed to make numbers and be aggressive rather than conservative. Incompetence drives the bus from the revenue side of the finance based economy these days. Regulations are the only check on that pressure and we have people in government who undo things they do not understand, which is a lot, because their financial sponsors want it and they can’t say no because they are not competent for the job, which is why they were financially sponsored.

Smart people who finance risk based ventures, regardless of the merits will typically want to have specific terms therefore. But that can be portrayed in all manner of ways by people making mischief.

The reality is, the economy is crazy right now, and the company, led by very able people, people that are quite a bit more competent than the bulletin board types, have negotiated as good a deal likely as possible, and avoided entanglement with a failing bank and all that comes with that. That’s a positive.

Had the company NOT put out its PR, we’d all be talking about SVB. That being taken off the table, suddenly the disadvantages of a loan adroitly taken before the fallout from SVB is “bad”.

Amazing how that happens.