And if it decides to stop at that point, it would lose 3 millions.

So, again, the value maximizing decision would be to enter into litigation.

And so we'll take that $41 million and we'll substitute it for the decision node.

And, here, we're at the outcome of the event of the Phase one of the trail,

determining whether the patent's valid or not.

Again, we're going to select the maximum event outcome,

which is $41 million, substitute it for the event node, and finally,

Cellectis has a decision of whether to enter into litigation at all.

If it does enter into litigation,

it would have the chance of earning up to $41 million.

If it doesn't, its gonna have the chance of earning zero.

So Cellectis in this case would choose to enter into litigation.

And we see that to maximize its maximum payout,

Cellectis should proceed through all stages of litigation.

That's the only way it can earn a positive payout.

And it has the chance of running up to $41 million, if things work out for it.

[COUGH] So we've seen the maxi-min set of decisions,

maximizing the minimum outcome is to not enter into litigation at all.

And really, at any stage of the litigation, to stop.

The maxi-max set of decisions to maximize the maximum possible outcome, would be to

proceed through all stages of litigation to have a chance at that $41 million.

Finally, we're going to look at the expected value maximizing decision for

Cellectus.

Those are the risk neutral decisions that place equal weight on good and

bad outcomes.

As before, we're going to start with the tree's outcomes and

work backwards to its root.

At each event node, we're gonna calculate the expected value of the outcome.

So that's the weighted average of the outcomes.

We'll use the probabilities as the weights.

At each decision node, then, we'll choose the expected value maximizing decision.

So here we go again.

We're gonna start at the end, and we'll calculate the expected value of phase

three of the trial where we'll equally weight the $41,

$31, $21, and $11 million outcomes.

And when we calculate the expected value, it's $26 million.

And we'll substitute that for the event node.

So now, Cellectis must decide whether to enter into phase three litigation,

given that it made it that far.

If it does, the expected value is $26 million,

if it doesn't it's negative eight.

So Cellectis is going to choose to continue litigation if it makes

it that far.

And we'll substitute the $26 million for the decision node.

Again, we have an event node and we're gonna calculate the expected value

of the two events which would be if it wins phase 2,

ten the expected value from then on out would be $26 million.

If it loses phase 2, then the expected value is negative $8 million.