##### Table of Contents



SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(Mark One)

|    |  |                                                                                        
|--- |  | ---------------------------------------------------------------------------------------
|[X] |  | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934

For The Quarterly Period Ended September 30, 2002

OR

|    |  |                                                                                         
|--- |  | ----------------------------------------------------------------------------------------
|[ ] |  | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934

Commission File Number 0-26825

NORTHWEST BIOTHERAPEUTICS, INC.

(Exact Name Of Registrant As Specified In Its Charter)


|                                                                        |  |                                                
|----------------------------------------------------------------------- |  | -----------------------------------------------
|DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization) |  | 94-3306718
(I.R.S. Employer Identification No.)

21720  23rd DRIVE SE, SUITE 100, BOTHELL, WA 98021
(Address Of Principal Executive Offices, Including Zip Code)

(425) 608-3000
(Registrants Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes [X] No [ ]

As of November 11, 2002, the registrant had outstanding 17,003,776 shares
of common stock, $0.001 par value.





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TABLE OF CONTENTS



|                               |                                                                                                |                                                      |  |  |  |  |  | 
|------------------------------ | ---------------------------------------------------------------------------------------------- | ---------------------------------------------------- |  |  |  |  |  | 
|PART I  FINANCIAL INFORMATION
|                               | Item 1. Financial Statements                                                                  
|                               |                                                                                                | Condensed Consolidated Balance Sheets               
|                               |                                                                                                | Condensed Consolidated Statements Of Operations     
|                               |                                                                                                | Condensed Consolidated Statements Of Cash Flows     
|                               |                                                                                                | Notes To Condensed Consolidated Financial Statements
|                               | Item 2. Managements Discussion and Analysis of
Financial Condition and Results of Operations.
|                               | Item 3. Quantitative And Qualitative Disclosures About Market Risk                            
|                               | Item 4. Controls and Procedures                                                               
|PART II  OTHER INFORMATION   
|                               | Item 2(D). Changes in Securities and Use of Proceeds                                          
|                               | Item 6. Exhibits and Reports on Form 8-K                                                      
|SIGNATURES                    
|CERTIFICATIONS                
|INDEX TO EXHIBITS             
|EXHIBIT 99.1                  
|EXHIBIT 99.2                  



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.

TABLE OF CONTENTS

|                               |  |                                                                                               |  |                                                                                                                                                                                             |  |     
|------------------------------ |  | --------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                               |  |                                                                                               |  |                                                                                                                                                                                             |  | Page
|PART I  FINANCIAL INFORMATION |  |                                                                                              
|                              
|                              
|                              
|                              
|                               |  | Item 1. Financial Statements (unaudited)                                                      |  |                                                                                                                                                                                            
|                              
|                              
|                              
|                              
|                               |  |                                                                                               |  | Condensed Consolidated Balance Sheets as of
September 30, 2002, and December 31, 2001                                                                                                       |  | 3   
|                              
|                              
|                              
|                              
|                               |  |                                                                                               |  | Condensed Consolidated Statements Of Operations for
the three and nine month periods ended September
30, 2002 and 2001 and the period from March 18,
1996 (inception) to September 30, 2002 |  | 4   
|                              
|                              
|                              
|                              
|                               |  |                                                                                               |  | Condensed Consolidated Statements Of Cash Flows for
the nine-month periods ended September 30, 2002 and
2001 and the period from March 18, 1996 (inception)
to September 30, 2002           |  | 5   
|                              
|                              
|                              
|                              
|                               |  |                                                                                               |  | Notes To Condensed Consolidated Financial Statements                                                                                                                                        |  | 6   
|                              
|                              
|                              
|                              
|                               |  | Item 2. Managements Discussion And Analysis Of Financial Condition And Results Of Operations |  | 9                                                                                                                                                                                          
|                              
|                              
|                              
|                              
|                               |  | Item 3. Quantitative And Qualitative Disclosures About Market Risk                            |  | 17                                                                                                                                                                                         
|                              
|                              
|                              
|                              
|                               |  | Item 4. Controls and Procedures                                                               |  | 17                                                                                                                                                                                         
|                              
|                              
|                              
|                              
|PART II  OTHER INFORMATION    |  |                                                                                              
|                              
|                              
|                              
|                              
|                               |  | Item 2. Changes In Securities And Use Of Proceeds                                             |  | 18                                                                                                                                                                                         
|                              
|                              
|                              
|                              
|                               |  | Item 6. Exhibits                                                                              |  | 18                                                                                                                                                                                         
|                              
|                              
|                              
|                              
|SIGNATURES                     |  | 19                                                                                           
|                              
|                              
|                              
|                              
|CERTIFICATIONS                 |  | 20                                                                                           
|                              
|                              
|                              
|                              
|INDEX TO EXHIBITS              |  | 22                                                                                           





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##### Table of Contents






PART I  FINANCIAL INFORMATION




Item 1. Financial Statements

NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY




Condensed Consolidated Balance Sheets
(unaudited)

(in thousands, except share data)

|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |         |        |        | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | -------------------------- | ------------------------------------------ | ------- | ------------- | ----- | ------------ | ------- | ------ | ------ | 
|                                     |                                                                                                                                                                                     |                            |                                            |         | SEPTEMBER 30, |       | DECEMBER 31,
|                                     |                                                                                                                                                                                     |                            |                                            |         | 2002          |       | 2001        
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |             
|Assets                               |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|Current assets:                      |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|                                     | Cash and cash equivalents                                                                                                                                                           |                            | $                                          | 4,014   |               |       | $            | 14,966  |       
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts receivable                                                                                                                                                                 |                            |                                            | 31      |               |       |              | 50      |       
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts receivable from affiliates                                                                                                                                                 |                            |                                            | 9       |               |       |              | 42      |       
|                                    
|                                    
|                                    
|                                    
|                                     | Stock subscription receivable                                                                                                                                                       |                            |                                            | 5       |               |       |              | 208     |       
|                                    
|                                    
|                                    
|                                    
|                                     | Prepaid expenses and other current assets                                                                                                                                           |                            |                                            | 401     |               |       |              | 421     |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     | Total current assets       |                                            |         | 4,460         |       |              |         | 15,687 |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|Property and equipment:              |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|                                     | Leasehold improvements                                                                                                                                                              |                            |                                            | 1,987   |               |       |              | 1,742   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Laboratory equipment                                                                                                                                                                |                            |                                            | 1,689   |               |       |              | 1,481   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Office furniture and other equipment                                                                                                                                                |                            |                                            | 633     |               |       |              | 433     |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     |                            | 4,309                                      |         |               |       | 3,656        |        
|                                    
|                                    
|                                    
|                                    
|                                     | Less accumulated depreciation and amortization                                                                                                                                      |                            |                                            | 1,343   |               |       |              | 871     |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     | Property and equipment, net                                                                                                                                                         |                            |                                            | 2,966   |               |       |              | 2,785   |       
|                                    
|                                    
|                                    
|                                    
|Restricted cash                      |                                                                                                                                                                                     |                            | 1,108                                      |         |               |       | 1,004        |        
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     |                            | Total assets                               |         | $             | 8,534 |              |         | $      | 19,476 | 
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|Liabilities And Stockholders Equity |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|Current liabilities:                 |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|                                     | Current portion of capital lease obligations                                                                                                                                        |                            | $                                          | 75      |               |       | $            | 65      |       
|                                    
|                                    
|                                    
|                                    
|                                     | Accounts payable                                                                                                                                                                    |                            |                                            | 537     |               |       |              | 1,341   |       
|                                    
|                                    
|                                    
|                                    
|                                     | Accrued expenses                                                                                                                                                                    |                            |                                            | 1,147   |               |       |              | 779     |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     | Total current liabilities  |                                            |         | 1,759         |       |              |         | 2,185  |       
|                                    
|                                    
|                                    
|                                    
|Long-term liabilities:               |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|                                     | Capital lease obligations, net of current portion                                                                                                                                   |                            |                                            | 115     |               |       |              | 123     |       
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred rent                                                                                                                                                                       |                            |                                            | 340     |               |       |              | 233     |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     | Total liabilities          |                                            |         | 2,214         |       |              |         | 2,541  |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|Stockholders equity:                |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                    
|                                    
|                                    
|                                    
|                                     | Common stock, $0.001 par value; 125,000,000 shares authorized and 17,003,776 and
16,868,754 shares issued and outstanding at September 30, 2002 and December 31, 2001,
respectively |                            |                                            | 17      |               |       |              | 17      |       
|                                    
|                                    
|                                    
|                                    
|                                     | Additional paid-in capital                                                                                                                                                          |                            |                                            | 63,924  |               |       |              | 63,622  |       
|                                    
|                                    
|                                    
|                                    
|                                     | Deferred compensation                                                                                                                                                               |                            |                                            | (857    | )             |       |              | (1,016  | )     
|                                    
|                                    
|                                    
|                                    
|                                     | Deficit accumulated during the development stage                                                                                                                                    |                            |                                            | (56,764 | )             |       |              | (45,688 | )     
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     | Total stockholders equity |                                            |         | 6,320         |       |              |         | 16,935 |       
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        
|                                     |                                                                                                                                                                                     |                            | Total liabilities and stockholders equity |         | $             | 8,534 |              |         | $      | 19,476 | 
|                                     |                                                                                                                                                                                     |                            |                                            |         |               |       |              |        

See accompanying notes to condensed consolidated financial statements.

3



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY




Condensed Consolidated Statements Of Operations

(unaudited)

(in thousands, except per share data)

|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |        |         |  
|-------------------------------------------------------------------------- | ------------------------------------------------------ | ------------------------ | ------ | ------------------ | ------ | ----------------- | ------ | -------------- | ------ | ---- | ------- | ------------------ | ------- | - | ------- | ----- | ------ | - | ------- | ------ | ------- | -
|                                                                           |                                                        |                          |        | Three Months Ended |        | Nine Months Ended |        | Period from   
|                                                                           |                                                        |                          |        | September 30,      |        | September 30,     |        | March 18, 1996
|                                                                           |                                                        |                          |        |                    |        |                   |        | (inception) to
|                                                                           |                                                        |                          |        | 2002               |        | 2001              |        | 2002           |        | 2001 |         | September 30, 2002
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                   
|Revenues:                                                                  |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Research material sales                                |                          | $      |                   |        |                   | $      | 13             |        |      | $       | 9                  |         |   | $       | 74    |        |   | $       | 336    |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Contract research and development from
related parties |                          |        |                   |        |                   |        |               |        |      |         |                   |         |   |         |      |        |   |         | 1,127  |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Research grants and other                              |                          |        |                   |        |                   |        |               |        |      |         |                   |         |   |         |      |        |   |         | 132    |        
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                           |                                                        | Total revenues           |        |                    |       |                   |        |                | 13     |      |         |                    | 9       |   |         |       | 74     |   |         |        | 1,595   |  
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Operating expenses:                                                        |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Cost of research material sales                        |                          |        |                   |        |                   |        | 9              |        |      |         | 7                  |         |   |         | 49    |        |   |         | 251    |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Research and development                               |                          |        | 1,657              |        |                   |        | 1,190          |        |      |         | 5,253              |         |   |         | 3,470 |        |   |         | 21,646 |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | General and administrative                             |                          |        | 1,721              |        |                   |        | 1,168          |        |      |         | 5,486              |         |   |         | 3,395 |        |   |         | 19,808 |        
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Depreciation and amortization                          |                          |        | 144                |        |                   |        | 114            |        |      |         | 449                |         |   |         | 337   |        |   |         | 1,719  |        
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                           |                                                        | Total operating expenses |        |                    | 3,522  |                   |        |                | 2,481  |      |         |                    | 11,195  |   |         |       | 7,251  |   |         |        | 43,424  |  
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                           |                                                        | Loss from operations     |        |                    | (3,522 | )                 |        |                | (2,468 | )    |         |                    | (11,186 | ) |         |       | (7,177 | ) |         |        | (41,829 | )
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Other income (expense):                                                    |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Interest expense                                       |                          |        | (8                 | )      |                   |        | (163           | )      |      |         | (31                | )       |   |         | (465  | )      |   |         | (7,776 | )      
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|                                                                           | Interest income                                        |                          |        | 29                 |        |                   |        | 69             |        |      |         | 141                |         |   |         | 149   |        |   |         | 689    |        
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Net loss                                                                   |                                                        |                          | (3,501 | )                  |        |                   | (2,562 | )              |        |      | (11,076 | )                  |         |   | (7,493  | )     |        |   | (48,916 | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Accretion of Series A preferred stock mandatory redemption
obligation      |                                                        |                          |       |                    |        |                   | (93    | )              |        |      |        |                    |         |   | (312    | )     |        |   | (1,872  | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Series A preferred stock redemption fee                                    |                                                        |                          |       |                    |        |                   |       |                |        |      |        |                    |         |   |        |       |        |   | (1,700  | )     
|                                                                          
|                                                                          
|                                                                          
|                                                                          
|Beneficial conversion feature of
Series D preferred stock                  |                                                        |                          |       |                    |        |                   |       |                |        |      |        |                    |         |   | (4,274  | )     |        |   | (4,274  | )     
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Net loss applicable to common stockholders                                 |                                                        | $                        | (3,501 | )                  |        | $                 | (2,655 | )              |        | $    | (11,076 | )                  |         | $ | (12,079 | )     |        | $ | (56,762 | )     
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Net loss per share applicable to common stockholders  basic
and diluted   |                                                        | $                        | (0.21  | )                  |        | $                 | (1.37  | )              |        | $    | (0.66   | )                  |         | $ | (6.24   | )     |        |   |         |       
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       
|Weighted average shares used in computing basic and diluted
loss per share |                                                        |                          | 16,896 |                    |        |                   | 1,936  |                |        |      | 16,887  |                    |         |   | 1,935   |       |        |   |         |       
|                                                                           |                                                        |                          |        |                    |        |                   |        |                |        |      |         |                    |         |   |         |       |        |   |         |       

See accompanying notes to condensed consolidated financial statements.

4



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY




Condensed Consolidated Statements Of Cash Flows

(unaudited)

(in thousands)

|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |        |  
|------------------------------------------------------------------------------------------- | ------------------------------------------------------------------------------------------- | - | ----------------- | ---- | -------------- | - | ------------------ | ------ | - | - | ----------- | ------ | -
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   | Period from
|                                                                                            |                                                                                             |   | Nine Months Ended |      | March 18, 1996
|                                                                                            |                                                                                             |   | September 30,     |      | (inception) to
|                                                                                            |                                                                                             |   | 2002              |      | 2001           |   | September 30, 2002
|                                                                                            |                                                                                             |   |                   |      |                |   |                   
|Cash flows from operating activities:                                                       |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Net loss                                                                                    |                                                                                             | $ | (11,076           | )    |                | $ | (7,493             | )      |   | $ | (48,916     | )     
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Adjustments to reconcile net loss to net cash used in operating activities:                 |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Depreciation and amortization                                                               |   |                   | 449  |                |   |                    | 337    |   |   |             | 1,720  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Amortization of deferred financing costs                                                    |   |                   |     |                |   |                    |       |   |   |             | 320    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Amortization of debt discount                                                               |   |                   |     |                |   |                    | 135    |   |   |             | 5,749  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Accrued interest converted to preferred stock                                               |   |                   |     |                |   |                    |       |   |   |             | 260    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Stock-based compensation costs                                                              |   |                   | 438  |                |   |                    | 268    |   |   |             | 797    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Loss on retirement of equipment                                                             |   |                   |     |                |   |                    |       |   |   |             | 86     |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Changes in operating assets and liabilities:                                                |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Accounts receivable                                                                         |   |                   | 53   |                |   |                    | 41     |   |   |             | (40    | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Prepaid expenses and other current assets                                                   |   |                   | 20   |                |   |                    | (32    | ) |   |             | (354   | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Accounts payable                                                                            |   |                   | (804 | )              |   |                    | 232    |   |   |             | 1,316  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Accrued expenses                                                                            |   |                   | 368  |                |   |                    | (282   | ) |   |             | 368    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Deferred rent                                                                               |   |                   | 107  |                |   |                    | 135    |   |   |             | 340    |  
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Net cash used in operating activities                                                       |                                                                                             |   | (10,445           | )    |                |   | (6,659             | )      |   |   | (38,354     | )     
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Cash flows from investing activities:                                                       |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Purchases of property and equipment, net                                                    |   |                   | (608 | )              |   |                    | (157   | ) |   |             | (4,451 | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Increase in restricted cash                                                                 |   |                   | (104 | )              |   |                    |       |   |   |             | (1,108 | )
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Net cash used in investing activities                                                       |                                                                                             |   | (712              | )    |                |   | (157               | )      |   |   | (5,559      | )     
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Cash flows from financing activities:                                                       |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Proceeds from issuance of note payable to
stockholder                                       |   |                   |     |                |   |                    |       |   |   |             | 1,650  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Repayment of note payable to stockholder                                                    |   |                   |     |                |   |                    | (900   | ) |   |             | (1,650 | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Proceeds from issuance of convertible promissory
notes and
warrants, net of issuance costs  |   |                   |     |                |   |                    |       |   |   |             | 5,064  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Borrowings under line of credit with Northwest
Hospital                                     |   |                   |     |                |   |                    |       |   |   |             | 2,834  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Repayment of line of credit with Northwest Hospital                                         |   |                   |     |                |   |                    |       |   |   |             | (2,834 | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Payments on capital lease obligations                                                       |   |                   | (20  | )              |   |                    | (44    | ) |   |             | (130   | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Proceeds from issuance of preferred stock, net                                              |   |                   |     |                |   |                    | 12,823 |   |   |             | 27,431 |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Proceeds from exercise of stock options and warrants                                        |   |                   | 225  |                |   |                    |       |   |   |             | 427    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Proceeds from issuances of common stock, net                                                |   |                   |      |                |   |                    | (499   | ) |   |             | 17,155 |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Series A preferred stock redemption fee                                                     |   |                   |     |                |   |                    |       |   |   |             | (1,700 | )
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Deferred financing costs                                                                    |   |                   |     |                |   |                    |       |   |   |             | (320   | )
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Net cash provided by (used in) financing activities                                         |                                                                                             |   | 205               |      |                |   | 11,380             |        |   |   | 47,927      |       
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Net increase (decrease) in cash and cash equivalents                                        |                                                                                             |   | (10,952           | )    |                |   | 4,564              |        |   |   | 4,014       |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|Cash and cash equivalents at beginning of period                                            |                                                                                             |   | 14,966            |      |                |   | 410                |        |   |   |             |       
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Cash and cash equivalents at end of period                                                  |                                                                                             | $ | 4,014             |      |                | $ | 4,974              |        |   | $ | 4,014       |       
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Supplemental disclosure of cash flow information  cash paid during the period for
interest |                                                                                             | $ | 31                |      |                | $ | 233                |        |   | $ | 1,429       |       
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|Supplemental schedule of noncash financing and investing activities:                        |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Equipment acquired through capital leases                                                   |   | $                 | 21   |                |   | $                  | 89     |   |   | $           | 307    |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Accretion of Series A preferred stock mandatory
redemption obligation                       |   |                   |     |                |   |                    | 312    |   |   |             | 1,872  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Beneficial conversion feature of convertible
promissory notes                               |   |                   |     |                |   |                    |       |   |   |             | 1,025  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Conversion of convertible promissory notes and
accrued interest to Series D preferred stock |   |                   |     |                |   |                    |       |   |   |             | 5,324  |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Issuance of Series C preferred stock warrants in
connection with lease agreement            |   |                   |     |                |   |                    |       |   |   |             | 43     |  
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                           
|                                                                                            | Issuance of common stock for license rights                                                 |   | $                 |     |                |   | $                  |       |   |   | $           | 4      |  
|                                                                                            |                                                                                             |   |                   |      |                |   |                    |        |   |   |             |       

See accompanying notes to condensed consolidated financial statements.

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Northwest Biotherapeutics, Inc.
(A Development Stage Company)
And Subsidiary




Notes To Condensed Consolidated Financial Statements

(unaudited)

1. Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of
Northwest Biotherapeutics, Inc. and subsidiary (the Company) have been
prepared in accordance with accounting principles generally accepted in the
United States of America for interim financial information and with the
instructions for Form 10-Q and Article 10 of Regulation S-X and reflect all
adjustments consisting of normal recurring adjustments which, in the opinion of
management, are necessary for a fair presentation of the results for the
periods shown. Accordingly, they do not include all of the information and
footnotes required by accounting principles generally accepted in the United
States of America for complete financial statements. The results of operations
for such periods are not necessarily indicative of the results expected for the
full fiscal year or any future period. These condensed consolidated financial
statements should be read in conjunction with the audited consolidated
financial statements and related notes included in the Companys 2001 Annual
Report on Form 10-K as filed with the Securities and Exchange Commission on
April 1, 2002.

The preparation of financial statements in conformity with accounting
principles generally accepted in the United States of America requires
management to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities
at the date of the financial statements and the reported amounts of revenues
and expenses during the reporting period. Actual results could differ from
those estimates.

2. Net Loss Per Share Applicable to Common Stockholders

Basic and diluted net loss per share applicable to common stockholders has
been computed using the weighted-average number of shares of common stock
outstanding during the period, less, for the three and nine months ended
September 30, 2002, 93,000 issued and outstanding restricted shares of common
stock that are subject to repurchase. Options to purchase 1,533,910 shares of
common stock and warrants to purchase 568,525 shares of common and preferred
stock were excluded from the calculation of diluted net loss per share for the
three and nine months ended September 30, 2002 as such securities were
antidilutive. Options to purchase 1,168,016 shares of common stock and warrants
to purchase 2,808,742 shares of common and preferred stock were excluded from
the calculation of diluted net loss per share for the three and nine months
ended September 30, 2001 as such securities were antidilutive.

3. Stockholder Rights Agreement

On March 6, 2002, the Company adopted a Stockholder Rights Agreement,
under which each common stockholder of record at the close of business on March
4, 2002 will receive a dividend of one right per share of common stock held.
Each right entitles the holder to purchase one share of common stock from the
Company at a price equal to $19.25 per share, subject to certain antidilution
provisions. The rights become exercisable only in the event that a third party
acquires beneficial ownership of, or announces a tender or exchange offer for,
at least 15% of the then outstanding shares of the Companys common stock and
such acquisition or offer is determined by the

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##### Table of Contents



Board of Directors to not be in the best interests of the stockholders. If the
acquisition or offer were determined by the Board of Directors to be in the
best interests of the stockholders, the rights may be redeemed by the Company
for $0.0001 per right. The rights will expire on February 25, 2012, unless
earlier redeemed, exchanged or terminated in accordance with the rights
agreement.

4. Operations and Financing

The Companys financial statements have been prepared on a going concern
basis. The consolidated financial statements do not include any adjustments
that might be necessary if the Company were unable to continue as a going
concern.

On October 9, 2002, the Company announced that its Board of Directors
authorized management to immediately initiate actions to conserve cash. This
consisted of reducing and eliminating future commitments, such as suspending
recruitment in its Phase III DCVax-Prostate clinical trial, selling fixed
assets, if necessary, and continuing to assess its alternatives.

The Company is implementing changes to restructure as a pre-clinical
antibody and dendritic cell development company, comprised of
approximately 13
employees, to lower cash expenditures, and, if successful in restructuring, to
shift its focus to further develop diagnostic and therapeutic antibodies
against its proprietary cancer targets for potential use in new cancer
products.

In this regard, the Company has withdrawn its Investigative New Drug
Application (IND) for its DCVax-Prostate, a prostate cancer treatment, and for
its DCVax-Lung, a potential treatment for non-small cell lung cancer. Although
it is maintaining its FDA clearance to initiate a multi-site Phase II clinical
trial to evaluate DCVax-Brain as a possible treatment for Glioblastoma
Multiforme, without additional funding the Company will not have sufficient
resources to initiate this trial.

Eighteen members of its research and administrative staff were terminated
on August 8, 2002. Severance and other related costs of that downsizing,
approximately $100,000, were fully paid as of September 30, 2002.

The Company terminated an additional 10 members of its research and
administrative staff, including its Executive Vice President and Chief Financial
Officer, in the month of October 2002 incurring severance and other related
costs in October 2002 of approximately $208,000.

Scheduled for the month of November 2002, is the termination of an
additional 20 members of its research and administrative staff, including its
Vice President and Chief Medical Officer with projected severance and other
related costs in November 2002 of approximately $165,000.

The Company accrued, as of September 30, 2002, approximately $263,000 for
severance costs coming due in October and November 2002. These costs
were fully paid as of November 11, 2002. The additional
severance costs not accrued as of September 30, 2002,
approximately $110,000, were expensed upon notification of the employees in October and November 2002.

After the November 2002 terminations, the remaining staff of approximately
13 is expected to provide the core personnel needed to maintain the Company
with a revised focus on pre-clinical antibody and dendritic cell development.

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The Company, on October 24, 2002, signed a conditional agreement to sell
certain rights, title, and interest in certain antigen targets pertaining to its
fully human monoclonal antibodies to a third party. Pursuant to this
October 24, 2002 agreement, the Company received a $500,000 non-refundable payment. The other party
to this agreement has an absolute right to cancel this agreement
under certain circumstances. The potential additional $2.5 million
payment from this particular Intellectual Property Rights sale is a
critical factor in determining whether the Company can, in-fact, restructure as
a pre-clinical antibody and dendritic cell development company.

In addition, the
October 24, 2002 conditional agreement, if consummated, will pay the Company a
royalty of 2% on net product sales.

If
successful in restructuring, the Company believes it can manage its
operating cash requirements so that its current cash balance,
including this potential additional $2.5 million in working capital, will be
sufficient to fund restructured operations into the fourth quarter of
2003 while retaining sufficient assets to satisfy its remaining
liabilities, in the event restructuring in unsuccessful.

If this agreements conditions are not satisfied and the agreement is not
consummated, the Company has determined that it will likely cease business
operations by December 31, 2002, and sell all tangible and intangible assets.
The carrying value of such assets may not be recoverable. The Company would
have a trustee appointed to finalize the Companys remaining business affairs
and the Company believes that it has sufficient assets to satisfy its remaining
liabilities.

Under
the terms of the October 24, 2002 agreement, if consummated, the Company will
purchase rights to certain other antigen targets in exchange for
2.0 million newly issued non-registered shares of our common stock and warrants
to purchase 800,000 shares of our common stock which could be dilutive to our
stockholders.

5. Collaboration Agreement

Under the terms of the Companys Collaboration Agreement with Medarex,
Inc., development of HuRx-Prostate has advanced to the stage where the costs
incurred on development of this product candidate are shared equally by Medarex
and the Company. As of September 30, 2002, the Company has accrued
approximately $400,000 representing its share of the costs incurred under the
cost sharing portion of the agreement. As of October 2002, agreements have
been signed that, if finally consummated, would result in each company waiving
its right to receive reimbursement of 50% of their respective development costs
incurred to date under this Collaboration Agreement (see note 4).

6. New Accounting Pronouncements

In July 2002, the FASB issued Statement No. 146, Accounting for Costs
Associated with Exit or Disposal Activities,which addresses financial
accounting and reporting for costs associated with exit or disposal activities.
Statement No. 146 nullifies EITF Issue No. 94-3, Liability Recognition for
Certain Employee Termination Benefits and Other Costs to Exit an Activity
(including Certain Costs Incurred in a Restructuring). The principal
difference between Statement No. 146 and Issue No. 94-3 relates to the
recognition of a liability for a cost associated with an exit or disposal
activity. Statement No. 146 requires that a liability be recognized for those
costs only when the liability is incurred, that is, when it meets the
definition of a liability in the FASBs conceptual framework. In contrast,
under Issue No. 94-3, a company recognized a liability for an exit cost when it
committed to an exit plan. Statement No. 146 also establishes fair value as the
objective for initial measurement of liabilities related to exit or disposal
activities. The Statement is effective for exit or disposal activities that are
initiated after December 31, 2002 although earlier application is encouraged.
The Company intends to adopt SFAS 146 on January 1, 2003.

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Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations.

FORWARD LOOKING INFORMATION

The following discussion and analysis of our financial condition and
results of operations should be read in conjunction with our condensed,
consolidated financial statements and the notes to those financial statements
included with this report. In addition to historical information, this report
contains forward-looking statements that are within the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995, and that
are subject to certain risks and uncertainties that could cause actual results
to differ materially from those projected. The words believe, expect,
intend, anticipate, and similar expressions are used to identify
forward-looking statements, but their absence does not mean that such statement
is not forward-looking. Many factors could affect our actual results, including
those factors described under Factors That May Affect Results of Operations
and Financial Condition at the end of this Item 2. These factors, among
others, could cause results to differ materially from those presently
anticipated by us. Readers are cautioned not to place undue reliance on these
forward-looking statements.

Overview

Northwest Biotherapeutics is a biotechnology company focused on
discovering, developing and commercializing immunotherapy products that safely
generate and enhance immune system responses to effectively treat cancer. The
Company has combined its expertise in dendritic cell biology, immunology and
antigen discovery with its proprietary technologies to develop cancer
therapies.

On October 8, 2002, the Company received notification from NASDAQ that its
common stock failed to maintain a minimum $1.00 per share bid price for 30
consecutive trading days as required by NASDAQ rules. The Company has 90
calendar days, or to January 6, 2003, to meet the minimum $1.00 per share bid
price for 10 consecutive trading days to regain compliance. If not, it may
apply for SmallCap status or become delisted. If the Companys securities are
delisted, stockholders ability to obtain price quotations and buy and sell
shares may be materially impacted. It is possible that the common stock may be
eligible for trading on the OTC bulletin board.

On October 9, 2002, the Company announced that its Board of Directors
authorized management to immediately initiate actions to conserve cash. This
consisted of reducing and eliminating future commitments, such as suspending
recruitment in its Phase III DCVax-Prostate clinical trial, selling fixed
assets, if necessary, and continuing to assess its alternatives.

The Company is implementing changes to restructure as a pre-clinical
antibody and dendritic cell development company, comprised of approximately 13
employees, to lower cash expenditures, and, if successful in restructuring, to
shift focus to further develop diagnostic and therapeutic antibodies against
its proprietary cancer targets for potential use in new cancer products.

In this regard, in November 2002, the Company suspended all clinical trial
activity for its DCVax product candidates. It has withdrawn its Investigative
New Drug Application (IND) for its DCVax-Prostate, a prostate cancer treatment,
and for its DCVax-Lung, a potential treatment for non-small cell lung cancer.
Although it is maintaining its FDA clearance to initiate a multi-site Phase II
clinical trial to evaluate DCVax-Brain as a possible treatment for Glioblastoma
Multiforme, without additional funding the Company will not have sufficient
resources to initiate this trial.

Eighteen members of its research and administrative staff were terminated
on August 8, 2002. Severance and other related costs of that downsizing, approximately $100,000,
were fully paid as of September 30, 2002.

The Company terminated an additional 10 members of its research and
administrative staff, including its Executive Vice President and Chief Financial
Officer, in the month of October 2002 incurring severance and other related
costs in October 2002 of approximately $208,000.

We have scheduled for the month of November 2002, the termination of an
additional 20 members of our research and administrative staff, including our
Vice President and Chief Medical Officer with projected severance and other
related costs in November 2002 of approximately $165,000.

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The
Company accrued, as of September 30, 2002, approximately
$263,000 for severance costs coming due in October and November 2002.
These costs were fully paid as of November 11, 2002. The
additional severance costs not accrued as of September 30, 2002,
approximately $110,000, were expensed upon notification of the
employees in October and November 2002.

After the November 2002 terminations, we expect the remaining staff of
approximately 13 to provide the core personnel needed to maintain
the Company in the near term with a revised focus on pre-clinical antibody and dendritic cell
development.

The Company, on October 24, 2002, signed a conditional agreement to sell
certain rights, title, and interest in certain antigen targets pertaining to its
fully human monoclonal antibodies to a third party. Pursuant to this
October 24, 2002 agreement, the Company received a $500,000
non-refundable payment. The other party to this agreement has an absolute right
to cancel this agreement under certain circumstances. The potential
additional $2.5 million
working capital from this particular Intellectual Property Rights sale is a
critical factor in determining whether the Company can, in-fact, restructure as
a pre-clinical antibody and dendritic cell development company.

In
addition, the October 24, 2002 conditional agreement, if
consummated, will pay the Company a royalty of 2% on net product
sales.

If successful in restructuring, the
Company believes it can manage its operating cash requirements so
that its current cash balance, including this potential additional
$2.5 million in working capital, will be sufficient to fund restructured operations into the fourth quarter of 2003 while retaining sufficient assets to satisfy its remaining liabilities, in the event restructuring is unsuccessful.

If this agreement's conditions are not satisfied and the agreement is not consummated, the Company has determined that it will most likely cease business operations by December 31, 2002, and sell all tangible and intangible assets. The carrying value of such assets may not be recoverable. The Company would
have a trustee appointed to finalize the Companys remaining business affairs
and the Company believes that it has sufficient assets to satisfy its remaining
liabilities.

Under
the terms of the October 24, 2002 agreement, if consummated,
the Company will purchase rights to certain other antigen targets in exchange for
2.0 million newly issued non-registered shares of our common
stock and warrants to purchase 800,000 shares of our common stock which could be dilutive to our stockholders.

Critical Accounting Policies and Estimates

These financial statements have been prepared on a going concern basis.
If we are unable to close our October 24, 2002 conditional agreement or to obtain additional funding, we will likely cease business
operations by December 31, 2002. As of September 30, 2002, we consider our
business to be a going concern and no adjustments have been made for the potential of ceasing business operations.

We currently believe that none of our other accounting policies or
estimates are critical. However, as the nature and scope of our business
operations mature, certain of our accounting policies and estimates may become
critical. You should understand that generally accepted accounting principles
require our management to make estimates and assumptions that affect the
amounts of assets and liabilities and disclosure of contingent assets and
liabilities at the date of our financial statements, as well as the amounts of
revenues and expenses during the periods covered by our financial statements.
The actual amounts of these items could differ materially from those estimates.
For example, we estimate the fair value of stock options and warrants issued to
nonemployees using an option valuation method that considers market indicators.

Results of Operations

Three Months Ended September 30, 2002 and 2001

Total Revenues.Revenues decreased 100% from $13,000 for the three months
ended September 30, 2001 to $0 for the three months ended September 30, 2002.
Our revenues from research material sales will fluctuate depending upon the
timing of purchases by BioWhittaker, Inc., our sole customer.

Cost of Research Material Sales.Cost of research material sales decreased
100% from $9,000 for the three months ended September 30, 2001 to $0 for the
three months ended September 30, 2002. This decrease was due to the reduced
sales activity.

Research and Development Expense.Research and development expense
increased 39% from $1,190,000 for the three months ended September 30, 2001 to
$1,657,000 for the three months ended September 30, 2002. This increase was
primarily due to increased costs associated with site initiation expenditures
related to our Phase III

10



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##### Table of Contents



clinical trials, research and development expenditures relating to
HuRx-Prostate, and our 50% share of certain research and development costs
initially incurred by Medarex under our collaboration agreement with Medarex.

General and Administrative Expense.General and administrative expense
increased 47% from $1,168,000 for the three months ended September 30, 2001 to
$1,721,000 for the three months ended September 30, 2002. The increase in costs
was primarily due to increased costs associated with our directors and officers
liability insurance and costs attributable to our being a public company, which
occurred in December 2001, and recognized severance and outplacement service
costs.

Depreciation and Amortization.Depreciation and amortization increased 26%
from $114,000 for the three months ended September 30, 2001 to $144,000 for the
three months ended September 30, 2002. This increase was primarily due to the
purchase of laboratory equipment during 2002 to support expanding clinical
activities.

Total Other Income (Expense), Net.Other income (expense), net, consists
primarily of interest expense and interest income. Interest expense decreased
95% from $163,000 for the three months ended September 30, 2001 to $8,000 for
the three months ended September 30, 2002. This decrease was primarily due to
the repayment and termination of our line of credit from Northwest Hospital
which occurred in December 2001. Interest income decreased 58% from $69,000 for
the three months ended September 30, 2001 compared to $29,000 for the three
months ended September 30, 2002. This decrease was primarily due to the decline
in market interest rates.

Nine Months Ended September 30, 2002 and 2001

Total Revenues.Revenues decreased 88% from $74,000 for the nine months
ended September 30, 2001 to $9,000 for the nine months ended September 30,
2002. Our revenues from research material sales will fluctuate depending upon
the timing of purchases by BioWhittaker, Inc., our sole customer.

Cost of Research Material Sales.Cost of research material sales decreased
86% from $49,000 for the nine months ended September 30, 2001 to $7,000 for the
nine months ended September 30, 2002. This decrease was due to the reduced
sales activity.

Research and Development Expense.Research and development expense
increased 51% from $3,470,000 for the nine months ended September 30, 2001 to
$5,253,000 for the nine months ended September 30, 2002. This increase was
primarily due to increased costs associated with site initiation expenditures
related to our Phase III clinical trials, research and development expenditures
relating to HuRx-Prostate, and our 50% share of certain research and
development costs initially incurred by Medarex under our collaboration
agreement with Medarex.

General and Administrative Expense.General and administrative expense
increased 62% from $3,395,000 for the nine months ended September 30, 2001 to
$5,486,000 for the nine months ended September 30, 2002. The increase in costs
was primarily due to increased costs associated with our directors and officers
liability insurance, costs attributable to our being a public company, which
occurred in December 2001, and recognized severance and outplacement service
costs.

Depreciation and Amortization.Depreciation and amortization increased 33%
from $337,000 for the nine months ended September 30, 2001 to $449,000 for the
nine months ended September 30, 2002. This increase was primarily due to the
purchase of laboratory equipment during 2002 to support expanding clinical
activities.

Total Other Income (Expense), Net.Other income (expense), net, consists
primarily of interest expense and interest income. Interest expense decreased
93% from $465,000 for the nine months ended September 30, 2001 to $31,000 for
the nine months ended September 30, 2002. This decrease was primarily due to
the repayment and termination of our line of credit from Northwest Hospital
which occurred in December 2001. Interest income decreased 5% from $149,000 for
the nine months ended September 30, 2001 compared to $141,000 for the nine
months ended September 30, 2002. This decrease was due to the decline in market
interest rates.

11



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Liquidity and Capital Resources

From inception through September 30, 2002, we have financed our operations
primarily through the public and private sale of securities, cash generated
from the sale of biomedical research products, equipment leases and borrowings
from stockholders. At September 30, 2002, we had cash and cash equivalents of
$4.0 million compared to $15.0 million at December 31, 2001.

Pursuant to the October 24, 2002
agreement, the Company received a $500,000 non-refundable payment.

We used $10.4 million in cash for operating activities during the nine
months ended September 30, 2002, compared to $6.7 million during the nine
months ended September 30, 2001. The change in cash used in operating
activities from 2001 to 2002 was primarily due to expanded operations including
expenditures related to three clinical trials in 2002 compared to a single
trial in 2001. We used $712,000 in cash for investing activities during the
nine months ended September 30, 2002 compared to $157,000 during the nine
months ended September 30, 2001. The change in cash used in investing
activities from 2001 to 2002 was primarily due to the purchase of property and
equipment necessary for the expansion of Company operations. For the nine
months ended September 30, 2002, we obtained $205,000 in cash from financing
activities compared to obtaining $11.4 million for the nine months ended
September 30, 2001. The primary reason for this difference was the $12.8
million of proceeds from the issuance of preferred stock during the second
quarter of 2001.

Refer to the Overview section of Item 2. Managements Discussion And
Analysis Of Financial Condition And Results Of Operations regarding our discussion of a possible restructuring as a pre-clinical antibody and
dendritic cell development company which would shift our research focus to
further develop diagnostic and therapeutic antibodies against our proprietary
cancer targets for potential use in new cancer products. If successful in our restructuring, we expect to continue refinement of our next generation system for cost effectively
producing high purity dendritic cells and dendritic cell precursors as a
platform for a new generation of cancer and infectious disease products.

The uncertainty surrounding our capitalization negatively affects our
business. We do not have committed external sources of funding and we may be
unable to obtain additional funds on acceptable terms, if at all. Even if the
October 24, 2002 agreement is consummated, we may not be able to exist as a
scaled-down company. If adequate funds are not available, we may be required
to, among other things:



| |  |  | obtain funds through arrangements with strategic partners or others that may require us to relinquish
rights to technologies or product candidates that we would otherwise seek to develop ourselves;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | license rights to technologies or product candidates on terms that are less favorable to us than might
otherwise be available;                                                                       
|
| |  |  | dispose of assets and no assurance can be given as to what value will be realized upon their liquidation; or                                                                                         
|
| |  |  | lose additional key personnel.                                                                                                                                                                       

FACTORS THAT MAY AFFECT RESULTS OF OPERATIONS AND FINANCIAL CONDITION

This section briefly discusses certain risks that should be considered by
stockholders and prospective investors in Northwest Biotherapeutics, Inc. You
should carefully consider the risks described below, together with all other
information included in this quarterly report on Form 10-Q and the information
incorporated into this report by reference. If any of the following risks
actually occur, our business, financial condition or operating results could be
materially harmed. In such case, the trading price of our common stock could
decline.

Our intellectual property rights may not be marketable.

12



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We may experience difficulty in finding buyers for any of our intellectual
property and have no commitments for the purchase of any of our intellectual
property rights, other than that certain conditional agreement, dated October 24, 2002, to sell the rights to certain of
our antigen targets to a third party. The other party to this agreement has an absolute right to cancel this agreement under certain circumstances.

If the October 24,
2002 agreement is not consummated we have determined
that we will most likely cease business operations by December 31, 2002.

We need to raise additional capital that may not be available, which would
adversely affect our operations.

None of our products are available for commercial sale and we are not
generating sufficient cash to fund our operations. We may seek
additional funds from public and private stock offerings, strategic
partnerships and licenses, borrowing under lease lines of credit or other
sources. We have no commitments for additional financing, other than
that certain conditional agreement, dated October 24, 2002, to purchase the rights to
certain antigen targets by a third party,  and we may experience
difficulty in raising additional capital on terms acceptable to us, or at all.
Any additional equity financing would likely be dilutive to stockholders, and
debt financing, if available, may include restrictive covenants. If we cannot
raise more money, we will have to further reduce our capital expenditures,
scale back our development of product candidates, further reduce our workforce
or license our product candidates to third parties for commercialization that
we would otherwise seek to commercialize ourselves.

We are in the early stage of development and have a history of net losses.

We are a development stage company and none of our primary product
candidates have received regulatory approval for commercial sale. Therefore, we
have a limited operating history upon which an investor may evaluate our
operations and future prospects. We have incurred net losses since inception,
including net losses applicable to common stockholders of approximately $17.3
million for the year ended December 31, 2001 and approximately $11.1 million
for the nine months ended September 30, 2002. As of September 30, 2002, we had
a deficit accumulated during the development stage of approximately $56.8
million. We would need to make substantial expenditures to further develop and
commercialize our product candidates. While we have devoted and expect to
continue to devote significant resources to the research and development of new
products, we may not be successful in developing products for commercial sale,
and we may never realize any benefits from such research and development
activities. Our ability to achieve and sustain profitability depends upon our
ability to successfully develop new and commercially viable products, which is
particularly difficult for us as our technologies and their commercial
viability are unproven. As a result of these factors, it is difficult to
evaluate our prospects, and our future success is more uncertain than if we had
a longer or more proven history of operations.

Our success partially depends on existing and future strategic partners.

The success of our business strategy partially depends upon our ability to
develop and maintain multiple strategic partnerships and to manage them
effectively. Therefore, our success depends partially upon the performance of
our strategic partners. Moreover, we cannot directly control the amount and
timing of resources that any of our existing or future strategic partners
devote to the research, development or marketing of our products. As a result,
those strategic partners:



| |  |  | may not commit sufficient resources to our programs or products;                                                                                
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | may not conduct their agreed activities on time, or at all, resulting in delay or termination
of the development of our products and technology;
|
| |  |  | may not perform their obligations as expected;                                                                                                  
|
| |  |  | may pursue product candidates or alternative technologies in preference to ours; or                                                             
|
| |  |  | may dispute the ownership of products or technology developed under our strategic partnerships.                                                 

13



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We may have disputes with our strategic partners, which could be costly
and time consuming. Our failure to successfully defend our rights could
seriously harm our business, financial condition and operating results.

We intend to continue to enter into strategic partnerships in the future.
However, we may be unable to successfully negotiate any additional strategic
partnerships and any of these relationships, if established, may not be
scientifically or commercially successful.

We also work with scientists and medical professionals at academic and
other institutions, including the University of California, Los Angeles, the
University of Iowa and Northwest Hospital, some of whom conduct research for us
or assist us in developing our research and development strategy. These
scientists and medical professionals are not our employees. They may have
commitments to, or contracts with, other businesses or institutions that limit
the amount of time they have available to work with us. We have little control
over these individuals. We can only expect them to devote to our projects the
amount of time required by our license, consulting and sponsored research
agreements. In addition, these individuals may have arrangements with other
companies to assist in developing technologies that may compete with ours. If
these individuals do not devote sufficient time and resources to our programs,
our business could be seriously harmed.

Our common stock has and may continue to experience extreme price and volume
fluctuations, which could lead to costly litigation for us and make an
investment in us less appealing.

On October 8, 2002, the Company received
notification from NASDAQ that its common stock failed to maintain a minimum $1.00 per share bid price for 30
consecutive trading days as required by NASDAQ rules. The Company has
90 calendar days, or to January 6, 2003, to meet the minimum $1.00 per share bid price
for 10 consecutive trading days to regain compliance. If not, it may
apply for SmallCap status or become delisted. If the Companys
securities are delisted, stockholders ability to obtain price quotations and buy and sell shares may be
materially impacted. It is possible that the common stock may be eligible for trading on the OTC bulletin board.

The market price of our common stock has ranged from a high of $5.08 per
share to a low of $0.10 per share between December 14, 2001, the date that our
common shares commenced trading, and October 31, 2002. The price may continue
to fluctuate substantially due to a variety of factors, including:



| |  |  | the amount of funds that we have available to pursue our business strategies;
| | - |  | -----------------------------------------------------------------------------
|
| |  |  | announcements concerning our competitors;                                    
|
| |  |  | development and introduction of new cancer therapies;                        
|
| |  |  | media reports and publications about cancer therapies;                       
|
| |  |  | new regulatory pronouncements and changes in regulatory guidelines;          
|
| |  |  | general and industry-specific economic conditions;                           
|
| |  |  | changes in financial estimates or recommendations by securities analysts; and
|
| |  |  | changes in accounting principles.                                            

The market prices of the securities of biotechnology companies,
particularly companies like ours without earnings and product revenues, have
been highly volatile and are likely to remain highly volatile in the future. In
some cases this volatility has been unrelated to the operating performance of
particular companies. In the past, securities class action litigation has often
been brought against companies that experience volatility in the market price
of their securities. Whether or not meritorious, litigation brought against us
could result in substantial costs, divert managements attention and resources
and harm our financial condition and results of operations.

Competition in our industry is intense and many of our competitors have
substantially greater resources than we have.

The biotechnology and biopharmaceutical industries are characterized by
rapidly advancing technologies, intense competition and a strong emphasis on
proprietary products. Several companies, such as Abgenix, Inc., Agensys,

14



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Inc., IDEC Pharmaceuticals Corporation and Genentech, Inc., are actively
involved in the research and development of monoclonal antibody-based cancer
therapies. Currently, at least three antibody-based products are approved for
commercial sale for cancer therapy. Genentech is also engaged in several Phase
III clinical trials for additional antibody-based therapeutics for a variety of
cancers, and several other companies are in early stage clinical trials for
such products. Many other third parties compete with us in developing
alternative therapies to treat cancer, including:



| |  |  | biopharmaceutical companies; 
| | - |  | -----------------------------
|
| |  |  | biotechnology companies;     
|
| |  |  | pharmaceutical companies;    
|
| |  |  | academic institutions; and   
|
| |  |  | other research organizations.

Many of our competitors have significantly greater financial resources and
expertise in research and development, manufacturing, pre-clinical testing and
sales and marketing than we do. In addition, many of these competitors have
become active in seeking patent protection and licensing arrangements in
anticipation of collecting royalties for use of technology they have developed.
Smaller or early-stage companies may also prove to be significant competitors,
particularly through collaborative arrangements with large and established
companies. These third parties compete with us in recruiting and retaining
qualified scientific and management personnel, as well as in acquiring
technologies complementary to our programs.

We expect that our ability to compete effectively will be dependent upon
our ability to:



| |  |  | maintain a proprietary position in our technologies and products;
| | - |  | -----------------------------------------------------------------
|
| |  |  | attract and retain key personnel; and                            
|
| |  |  | maintain existing or enter into new strategic partnerships.      

Our competitors may develop more effective or affordable products, or
achieve earlier patent protection or product marketing and sales than we may.
As a result, any products we develop may be rendered obsolete and
noncompetitive.

Our intellectual property rights may not provide meaningful commercial
protection for our products, which could enable third parties to use our
technology, or very similar technology, and could reduce our ability to compete
in the market.

We rely on patent, copyright, trade secret and trademark laws to limit the
ability of others to compete with us using the same or similar technology in
the United States and other countries. However, as described below, these laws
afford only limited protection and may not adequately protect our rights to the
extent necessary to sustain any competitive advantage we may have. The laws of
some foreign countries do not protect proprietary rights to the same extent as
the laws of the United States, and we may encounter significant problems in
protecting our proprietary rights in these countries.

We have four issued patents (one in the United States and three in foreign
jurisdictions) and 33 patent applications pending (10 in the United States and
23 in foreign jurisdictions) which cover the use of dendritic cells in DCVax as
well as targets for either DCVax or HuRx-based therapies. The issued patents
expire at dates from 2015 to 2017. In addition, we had a world-wide exclusive
license from Cytogen to use PSMA for the development, manufacture and sale of
DCVax-Prostate. The license expires upon the expiration of the last to expire
of the underlying patents, but not prior to November 2012.

The Company, due to its
cash conservation efforts and decision to terminate its dendritic
cell therapy program for prostate
cancer, is unable to comply with the Cytogen license requirement of using reasonable efforts to achieve certain
milestones in the development of commercial products. These license rights are being returned to Cytogen.

15



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We own, or have rights under licenses to a variety of issued patents and
pending patent applications. However, the patents on which we rely may be
challenged and invalidated, and our patent applications may not result in
issued patents. Moreover, our patents and patent applications may not be
sufficiently broad to prevent others from practicing our technologies or from
developing competing products. We also face the risk that others may
independently develop similar or alternative technologies or design around our
patented technologies.

We have taken security measures to protect our proprietary information,
especially proprietary information that is not covered by patents or patent
applications. These measures, however, may not provide adequate protection of
our trade secrets or other proprietary information. We seek to protect our
proprietary information by entering into confidentiality agreements with
employees, strategic partners and consultants. Nevertheless, employees,
strategic partners or consultants may still disclose our proprietary
information, and we may not be able to protect our trade secrets in a
meaningful way. If we lose any employees, we may not be able to prevent the
unauthorized disclosure or use of our technical knowledge or other trade
secrets by those former employees despite the existence of nondisclosure and
confidentiality agreements and other contractual restrictions to protect our
proprietary technology. In addition, others may independently develop
substantially equivalent proprietary information or techniques or otherwise
gain access to our trade secrets.

Our success will depend partly on our ability to operate without infringing or
misappropriating the proprietary rights of others.

Our future success will depend to a substantial degree upon our ability to
develop, manufacture, market and sell our products without infringing the
proprietary rights of third parties and without breaching any licenses we have
entered into regarding our product candidates. Numerous U.S. and foreign issued
patents and pending patent applications, which are owned by third parties,
exist in the general field of immunotherapy. In particular, we are aware of
other patents issued to third parties for monoclonal antibodies that bind to
prostate-specific membrane antigen, or PSMA, and patent applications of others
that may issue with similar claims. Our ability to market a product based on
the binding of antibodies to PSMA may depend on the actual invention date of
the subject matter of the issued patent, or the scope of claimed coverage of
the pending patent applications, both of which are unknown to us.

This risk is exacerbated by the fact that there are numerous issued and
pending patents in the biotechnology industry and the fact that the validity
and breadth of biotechnology patents involve complex legal and factual
questions for which important legal principles remain unresolved. Our
competitors may assert that our products and the methods we employ are covered
by U.S. or foreign patents held by them. In addition, because patent
applications can take many years to issue, there may be currently pending
applications, unknown to us, which may later result in issued patents that our
products may infringe. There could also be existing patents of which we are not
aware that one or more of our products may inadvertently infringe.

If we lose a patent infringement lawsuit, we could be prevented from
selling our products unless we can obtain a license to use technology or ideas
covered by such patent or are able to redesign our products to avoid
infringement. A license may not be available at all or on terms acceptable to
us, or we may not be able to redesign our products to avoid any infringement.
If we are not successful in obtaining a license or redesigning our products, we
may be unable to sell our products and our business could suffer.

Our rights to the use of technologies licensed to us by third parties are not
within our control, and without these technologies, our products and programs
may not be successful and our business could be harmed.

We rely on our license from Cytogen to use PSMA and may rely on other
licenses in the future to use various technologies that may be material to our
business. We rely upon our licensors to prevent infringement of the licensed
patents. Our rights to use these technologies and employ the inventions claimed
in the licensed patents are or may be subject to our licensors abiding by the
terms of those licenses and not terminating them.

Our license from Cytogen provided us with worldwide exclusive rights to
use PSMA for the development, manufacture and sale of DCVax-Prostate in
exchange for payments upon the achievement of certain milestones. The
Company, due to its cash conservation efforts and decision to terminate its
dendritic cell therapy program for prostate cancer, is unable to comply with
the Cytogen license requirement of using reasonable efforts to achieve certain
milestones in the development of commercial products. These license rights are
being returned to Cytogen.

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If we lose key management or scientific personnel or cannot recruit qualified
employees, our business could suffer.

With the exception of Mr. Wilds and Dr. Boynton we do not have any key
person life insurance on individuals. Our future success will also depend in
part on the continued service of our key scientific and management personnel
and our ability to identify, hire and retain additional personnel. We
experience intense competition for qualified personnel. We may be unable to
attract and retain the personnel necessary for the development of our business.
Moreover, our work force is located in the Seattle, Washington area, where
demand for personnel with the scientific and technical skills we seek is
extremely high and is likely to remain high. Because of this competition, our
compensation costs may increase significantly.

Our principal stockholders, executive officers and directors own a significant
percentage of our stock and, as a result, the trading price for our shares may
be depressed and these stockholders can take actions that may be adverse to
your interests.

Our executive officers and directors and entities affiliated with them, in
the aggregate, beneficially own approximately 21% of our common stock as of
September 30, 2002. This significant concentration of share ownership may
adversely affect the trading price for our common stock because investors often
perceive disadvantages in owning stock in companies with controlling
stockholders. These stockholders, acting together, will have the ability to
exert substantial influence over all matters requiring approval by our
stockholders, including the election and removal of directors and any proposed
merger, consolidation or sale of all or substantially all of our assets. In
addition, they could dictate the management of our business and affairs. This
concentration of ownership could have the effect of delaying, deferring or
preventing a change in control, or impeding a merger or consolidation, takeover
or other business combination that could be favorable to you.

Our incorporation documents, bylaws and stockholder rights plan may delay or
prevent a change in our management.

Our amended and restated certificate of incorporation, bylaws and
stockholder rights plan contain provisions that could delay or prevent a change
in our management team. Some of these provisions:



| |  |  | authorize the issuance of preferred stock that can be created and issued by the board of
directors without prior stockholder approval, commonly referred to as blank check preferred
stock, with rights senior to those of common stock;
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| |  |  | authorize our board of directors to issue dilutive shares of common stock upon certain events; and                                                                                                                                        
|
| |  |  | provide for a classified board of directors.                                                                                                                                                                                              

These provisions could allow our board of directors to affect your rights
as a stockholder since our board of directors can make it more difficult for
common stockholders to replace members of the board. Because our board of
directors is responsible for appointing the members of our management team,
these provisions could in turn affect any attempt to replace our current
management team.




Item 3. Quantitative And Qualitative Disclosures About Market Risk

Our exposure to market risk is presently limited to the interest rate
sensitivity of our cash and cash equivalents which is affected by changes in
the general level of U.S. interest rates. We are exposed to interest rate
changes primarily as a result of our investment activities. The primary
objective of our investment activities is to preserve principal while at the
same time maximizing the income we receive without significantly increasing
risk. To minimize risk, we maintain our cash and cash equivalents in
interest-bearing instruments, primarily money market funds. Our interest rate
risk management objective with respect to our borrowings is to limit the impact
of interest rate changes on earnings and cash flows. Due to the nature of our
cash and cash equivalents, we believe that we are not subject to any material
market risk exposure. We do not have any foreign currency or other derivative
financial instruments.




Item 4. Controls and Procedures

(a)  Evaluation of disclosure controls and procedures.

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Our
Chief Executive Officer and our Controller (Principal Financial and
Accounting Officer), after
evaluating the                 effectiveness of the Companys disclosure controls and
procedures (as defined in Exchange Act Rules 13a-14(c) and                 15d-14(c)) as of a
date (the Evaluation Date) within 90 days prior to the filing date of this
quarterly report, have concluded                 that, as of the Evaluation Date, our
disclosure controls and procedures were adequate to ensure that material
information                 relating to the registrant and its consolidated subsidiaries would
be made known to them by others within those entities.

(b)  Changes in internal controls.

To our knowledge, there were no significant changes in the Companys internal
controls or in other factors that could
                significantly affect internal controls
subsequent to the Evaluation Date.




PART II  OTHER INFORMATION




Item 2(D). Changes in
Securities and Use of Proceeds

The Registration Statement (SEC File No. 333-67350) for our initial public
offering, or IPO, was declared effective by the Securities and Exchange
Commission on December 14, 2001, covering an aggregate of 4,000,000 shares of
our common stock, and on December 19, 2001, we issued 4,000,000 shares of our
common stock at an initial public offering price of $5.00 per share.
Approximately $2.8 million of the aggregate $20,000,000 IPO proceeds was used
to pay underwriting discounts and commissions and offering expenses resulting
in net IPO proceeds of approximately $17.2 million. C.E. Unterberg, Towbin was
the managing underwriter of our IPO, and Fahnestock & Co., Inc. and Roth
Capital Partners, LLC were the co-managers. As of September 30, 2002, we had
approximately $4.0 million of these proceeds remaining which are invested in
money market accounts.




Item 6. Exhibits and Reports on Form 8-K

a) Exhibits:

|     |  |                                                                       
|---- |  | ----------------------------------------------------------------------
|99.1 |  | Certificate of Chief Executive Officer                                
|    
|    
|    
|    
|99.2 |  | Certificate of Controller (Principal Financial and Accounting Officer)

18



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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

|                         |  |                                |  |                                                                                    
|------------------------ |  | ------------------------------ |  | -----------------------------------------------------------------------------------
|                         |  | NORTHWEST BIOTHERAPEUTICS, INC
|                        
|Dated: November 14, 2002 |  | By:                            |  | /s/ DANIEL O.
WILDS                                                                
|                         |  |                                |  |                                                                                    
|                         |  |                                |  | Daniel O. Wilds
President and Chief Executive Officer
(Principal Executive Officer)
|                        
|Dated: November 14, 2002 |  | By:                            |  | /s/ LARRY L.
RICHARDS                                                              
|                         |  |                                |  |                                                                                    
|                         |  |                                |  | Larry L. Richards
Controller
(Principal Financial and Accounting Officer)          

19



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CERTIFICATIONS

I, Daniel O. Wilds, Chief Executive Officer of the Company, certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Northwest
Biotherapeutics;                                                                                                                                                                                                                                            
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                 
|   
|(4) |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                    



| | (a) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date) and;                                                                                                  
|
| | (c) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|(5) |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (a) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (b) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|(6) |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |                   |  |     |  |                                        
|----- |  | ----------------- |  | --- |  | ---------------------------------------
|Date: |  | November 14, 2002 |  |     |  |                                        
|     
|     
|     
|     
|      |  |                   |  | By: |  | /s/ DANIEL
O. WILDS                    
|      |  |                   |  |     |  |                                        
|      |  |                   |  |     |  | Daniel O. Wilds
Chief Executive Officer

20



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##### Table of Contents



CERTIFICATIONS

I, Larry L. Richards, Controller (Principal Financial and Accounting Officer)
of the Company, certify that:



|(1) |  | I have reviewed this quarterly report on Form 10-Q of Northwest
Biotherapeutics;                                                                                                                                                                                                                                            
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|   
|(2) |  | Based on my knowledge, this quarterly report does not contain any untrue
statement of material fact or omit to state a material fact necessary to
make the statements made, in light of the circumstances under which such
statements were made, not misleading with respect to the period covered by
this quarterly report;
|   
|(3) |  | Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all
material respects the financial condition, results of operations and cash
flows of the registrant as of, and for, the periods presented in this
quarterly report;                 
|   
|(4) |  | The registrants other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we
have:                                                                                                    



| | (d) |  | designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this quarterly report
is being prepared;
| | --- |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (e) |  | evaluated the effectiveness of the registrants disclosure controls
and procedures as of a date within 90 days prior to the filing date of
this quarterly report (the Evaluation Date) and;                                                                                                  
|
| | (f) |  | presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on our
evaluation as of the Evaluation Date;                                                                                                                        



|(5) |  | The registrants other certifying officer and I have disclosed, based on
our most recent evaluation, to the registrants auditors and the audit
committee of registrants board of directors (or persons performing the
equivalent functions):
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (c) |  | all significant deficiencies in the design or operation of internal
controls which could adversely affect the registrants ability to
record, process, summarize and report financial data and have
identified for the registrants auditors any material weaknesses in
internal controls; and
| | --- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|
| | (d) |  | any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrants
internal controls; and                                                                                                                                        



|(6) |  | The registrants other certifying officer and I have indicated in this
quarterly report whether or not there were significant changes in internal
controls or in other factors that could significantly affect internal
controls subsequent to the date of our most recent evaluation, including
any corrective actions with regard to significant deficiencies and
material weaknesses.
|--- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

|      |  |                   |  |     |  |                                                                          
|----- |  | ----------------- |  | --- |  | -------------------------------------------------------------------------
|Date: |  | November 14, 2002 |  |     |  |                                                                          
|     
|     
|     
|     
|      |  |                   |  | By: |  | /s/ LARRY L. RICHARDS                                                    
|      |  |                   |  |     |  |                                                                          
|      |  |                   |  |     |  | Larry L. Richards
Controller
(Principal Financial and
Accounting Officer)

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INDEX TO EXHIBITS

|        |  |                                                                       
|------- |  | ----------------------------------------------------------------------
|Exhibit |  |                                                                       
|Number  |  | Description                                                           
|        |  |                                                                       
|99.1    |  | Certificate of Chief Executive Officer                                
|       
|       
|       
|       
|99.2    |  | Certificate of Controller (Principal Financial and Accounting Officer)

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