v3.26.1
Business Combination
 12 Months Ended
Dec. 31, 2025
Business Combination  
Business Combination

5. Business Combination

On October 24, 2025 (the “Closing Date”), the Company completed the acquisition of Advent, a UK company, from Toucan Holdings, LLC (the “Seller”), which is a related party. As a result of the acquisition, Advent became a wholly owned subsidiary of the Company. Prior to the acquisition, Advent carried out the Company’s product and process development, manufacturing, cryostorage and distribution on a contract services basis.

The consideration for the acquisition will be paid in installments over two years, beginning 3 months after the closing of the acquisition, with potential acceleration after regulatory approval of the Company’s DCVax®-L product. The consideration includes a combination of a cash purchase price of approximately $1.9 million (£1.4 million) and cash payment of an amount equal to the net amount of accounts payable (“Net AP”) that was due from the Company to Advent prior to the acquisition for services already performed under the existing service contracts, totaling $6.0 million, which is net of $2.3 million buyer assumed liabilities, and certain Excluded Amounts (relating to non-Company matters prior to the acquisition date) that were retained by the Seller, totaling approximately $0.7 million (collectively, the “Purchase Consideration”), see Note 11. The unpaid balance will accrue interest at 7.5% annually.

The net assets received by the Company through the acquisition of Advent included 12 million shares of the Company’s common stock and 5.5 million fully vested stock options, which the Company had previously issued to Advent as compensation for contract services. The shares of the Company’s common stock were returned to the Company’s treasury and the stock options were cancelled at the Closing Date.

The Company anticipates that this acquisition will help enable efficiencies and scale-up of operations. The Company believes that integration of the companies can result in:

●A fully integrated platform combining the technologies, expertise and intellectual property of NW Bio, Advent and Flaskworks;
●Streamlining and efficiencies in supply chain management and facilities management;
●Closing of operations at the GMP facility in London and reallocation of resources to the Sawston, UK facility and to capacity development in the U.S;
●Facilitating scale-up of manufacturing capacity;
●Streamlining and efficiencies in interactions with clinical sites and distribution of DCVax products.

Based on the Company’s preliminary valuation, the consideration of $1.9 million has been allocated to assets acquired and liabilities assumed as of the Closing Date as follows (amount in thousands):

​

​

​

​

​

Total Non-AP Consideration (2)

  ​ ​ ​

$

1,864

​

​

​

​

Cash

​

 

359

Current assets

​

 

355

Fixed assets, net

​

 

909

Intangible assets

​

 

51,518

Total assets acquired

​

 

53,141

Accounts payable

​

 

(1,583)

Accounts payable to related party

​

 

(669)

Accrued expenses

​

 

(3,905)

Deferred tax liability (1)

​

​

(13,074)

Total liabilities assumed

​

 

(19,231)

Net identifiable assets acquired

​

 

33,910

​

​

​

​

Accrued liabilities forgiven

​

 

(3,386)

Capital contribution

​

$

(35,432)

​

(1)This deferred tax liability is solely an estimate of the hypothetical tax that could be due upon a re-sale of the intangible assets at the $52.0 million stepped up value included on the consolidated balance sheet (see Note 15).
(2)The Non-AP Consideration presented excludes additional Purchase Consideration comprised of payment equal to a Net AP amount of $6.0 million ($8.3 million AP netted against assumed liabilities of $2.3 million) related to contracted services performed prior to the acquisition, and Excluded Amounts of $0.7 million related to non-Company pre-acquisition matters. The consideration will be paid over time as described above.

The excess fair value of $35.4 million relating to the net identifiable assets acquired and liabilities assumed is considered a bargain purchase gain in accordance with ASC 805. However, since Advent was a related party of the Company, this was in essence a shareholder contributing its business to the Company at less than fair value. In such a situation, GAAP requires contributions from owners to be recorded in equity. Therefore, the bargain purchase gain was recognized as additional paid-in capital because the substance of the transaction was in essence a capital contribution from a related party.

Intangible assets acquired are comprised of $3.1 million of trademarks and trade name, $2.3 million of customer relationships and $46.1 million of indefinite-lived license.

The fair value of the trademarks and trade names was estimated based on a relief from royalty method and will be amortized over 10 years. The fair value of customer relationships was estimated based on the with-and-without method, which measures the incremental cash flows generated by these relationships compared to a scenario in which they did not exist, and will be amortized over 4 years. The fair value of the commercial license was determined using the multi-period excess earnings method. This method isolates the cash flows of the single asset by taking the total business earnings and subtracting contributory asset charges for all other assets to arrive at the total present value of the projected cash flows. The commercial license has an indefinite useful life and will not be amortized.

The Company incurred transaction expense of approximately $85,000 during the year ended December 31, 2025 related to its acquisition of Advent.