SEC EDGAR Deal-Term Extraction

1. What this section covers

PhaseFolio ingests deal-term data from SEC EDGAR for a curated cohort of public biotech sponsors. The extracted fields include upfront cash, near-term and total milestones, royalty ranges, equity consideration, counterparty, asset, indication, effective date, territory, and exclusivity.

v1 extends the v0 ingestion substrate into a canonical read layer and wizard integration. On non-Full-Ownership deal-type selection, the rNPV wizard can now suggest deal terms sourced from aggregate SEC comparator medians when enough high-quality comparables exist (engine 2.4.0, wizard-suggest behavior unchanged since 2.3.2). The user sees the suggestion, reviews it, and can accept, edit, or clear any field before computing.

2. Data source and legal posture

The source is SEC EDGAR via the SEC's official endpoints (data.sec.gov and www.sec.gov). SEC expressly permits free access and reuse of EDGAR public filing content; PhaseFolio extracts factual deal terms from public filings and surfaces them with source links, short quotes, extraction-risk disclaimers, and no SEC endorsement language.

No AGPL- or other copyleft-licensed code sits in the ingestion path. The pipeline does not depend on the edgartools or sec-edgar-mcp projects.

3. Cohort and forms covered

The current dataset is the AMR-indication biotech sponsor cohort resolved from PhaseFolio's enriched antimicrobial trial dataset. The v1 ingestion path supports Form 8-K and Form 6-K filings filed on or after 2020-01-01. Customer-facing foreign-private-issuer cohort claims and 10-K/10-Q Exhibit 10.x extraction remain separate counsel-review events.

• 8-K Item 1.01: material definitive agreement summaries, used for the counsel-approved wizard-suggest disclosure.
• 6-K: ingestion-enabled for foreign private issuer coverage; any broader customer-facing FPI claims require supplemental counsel review.
• 10-K/10-Q Exhibit 10.x: out of v1 scope because operative agreement text, redactions, and deduplication require a separate design.

4. Extraction pipeline

1. Per-CIK submissions fetch. For each cohort sponsor, the pipeline pulls SEC submissions JSON and filters to supported forms on or after 2020-01-01.
2. Cheap deterministic classifier. Each candidate filing is passed through classifier@2026-05-25-v1 to drop obvious non-deal filings before LLM extraction. The Item 1.01 short-circuit applies to 8-K only because 6-K filings do not use the same item numbering.
3. LLM-assisted structured extraction. Deal candidates are sent to deal_terms_extractor@2026-05-25-v2, which separates equity dollars from equity share counts and gives platform-broad deals an indication-null path for cohort fallback.
4. Provenance capture. Every extraction stores field values, source section, a source quote capped at 500 characters, extractor version, raw response, and confidence.
5. Review gating. Rows below the confidence threshold are flagged with needs_review. Aggregate medians exclude unreviewed flagged rows until reviewed_at is populated by the admin review route.
6. Cohort classification (engine 2.4.0). Each ingested deal is also classified for cohort membership at extraction time. Two passes run on every filing: a deterministic include/exclude/ambiguous keyword pass and a context-aware LLM verdict using the filing's own source quote. Deals where the two passes disagree, or where an ambiguous pattern fires, are excluded from engine medians until a human reviewer clears the classification via the admin cohort-review route. Cohort assignments and their rule/LLM verdicts are stored alongside each deal as provenance. The engine cascade reads from the per-row cohort_indication field, decoupling per-cohort scoping from the LLM-raw indication string.

5. Fields extracted

• Upfront cash in USD millions.
• Near-term milestones and total milestones in USD millions.
• Royalty rate range, including low and high percentages when disclosed.
• Equity component, split into USD value and share count when filings disclose shares rather than dollars.
• Counterparty, licensor, licensee, asset or program, indication, effective date, territory, and exclusivity.

Royalty band conventions such as "low single-digit" and "mid teens" follow defensible industry anchors approximating BIO Industry Analysis 2021 and Tufts CSDD deal-term tables. Re-anchoring requires an extractor version bump.

6. Wizard integration (engine 2.4.0)

When a user selects a non-Full-Ownership deal type in the rNPV wizard (Royalty Only, Milestone + Royalty, or Profit Split), PhaseFolio queries the SEC EDGAR substrate for comparable deal medians and pre-fills the wizard's Step 4 deal-structure form with suggested values. The user sees a gold-bordered banner naming the source cohort, the number of comparables, and a link to this methodology page, and can accept, edit, or clear any field before computing the rNPV.

Cascading match (unchanged from v1):

1. Try indication × deal type. If at least 3 aggregate-eligible comparable deals exist, use their median economics.
2. Otherwise fall back to indication only. If at least 3 aggregate-eligible comparable deals exist, use their median economics.
3. Otherwise no suggestion is offered, and the user enters deal terms from scratch.

Only aggregate-eligible deal terms feed the medians: rows where needs_review = false, or rows that were flagged but later reviewer-cleared. Per-deal administrative display can include flagged rows, but engine medians cannot.

Full Ownership is treated as an explicit "no deal" signal — no suggestions, no pre-fill, no overlay. The engine computes the full-product rNPV under the user's explicit ownership choice.

Why this design: the prior engine 2.3.0 / 2.3.1 design auto-populated empty deal structures server-side, which silently overrode the user's intent when they had selected Full Ownership (the wizard default produces an empty deal_structure over the wire). 2.3.2 moves the suggestion to the wizard so the user has explicit visibility and consent before any SEC-sourced value enters their model. The results-page disclosure card discloses N comparables, match level, cohort, medians, methodology link, and source accession links — same fields as v1, with the framing corrected to "suggested + accepted" rather than "auto-populated".

7. Storage and access

Extracted data lives in a private Supabase schema (sec) with filings, deal_terms, ingestion_runs, and cohort_seed tables. Raw filing HTML is retained privately for reproducibility; customer-facing surfaces use source links, accession numbers, and short quotes rather than redistributing raw filing text.

Admin endpoints are gated by X-Admin-Key. The canonical read layer is query_sec_deal_terms for per-deal provenance and query_sec_deal_terms_aggregate for engine medians.

8. What we do not claim

• 8-K and 6-K summaries are not full contracts. They can omit true-up provisions, anti-stacking, step-downs, change-of-control terms, and other operative clauses.
• Redactions are not reconstructed. Current Reg S-K Item 601(b)(10)(iv) permits redaction of specific provisions or terms where the information is customarily and actually treated as private or confidential and is not material. Redacted fields surface as null unless another public filing discloses the same value.
• LLM extraction can be wrong. Values may be incomplete or incorrect, and the source filing controls.
• The cohort is curated, not exhaustive. v1 covers AMR comparators only. NSCLC, RA, modality matching, and Exhibit 10.x extraction are future scopes.
• No SEC endorsement. PhaseFolio is not affiliated with, endorsed by, or certified by the SEC.

9. Versioning

The outgoing methodology remains frozen at /methodology/sec-deal-terms?version=methodology@2026-05-26, ?version=methodology@2026-Q3, and ?version=methodology@2026-05-25 / ?version=2026-Q2.