##### Table of Contents



UNITED STATES SECURITIES AND EXCHANGE COMMISSION
 Washington, D.C. 20549
 
 FORM 10-Q
 
 þ
    
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the quarterly period ended September 30, 2007
 OR
 o
    
    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
    
    I.R.S. Employer Identification No. 94-3306718(State or other Jurisdiction of Incorporation or Organization)
 7600 Wisconsin Avenue, Suite 750
Bethesda, Maryland 20814    (240) 497-9024
 þ o
  o o þ
 o þ




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##### 



TABLE OF CONTENTS
 NORTHWEST BIOTHERAPEUTICS, INC.
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial Statements
Condensed Consolidated Balance Sheets as of December 31, 2006 and September 30, 2007 (unaudited)
    
    
    3Condensed Consolidated Statements of Operations (unaudited) for the three and nine months ended
September 30, 2006 and 2007 and the period from March 18, 1996 (inception) to September 30,
2007
    
    
    4Condensed Consolidated Statements of Cash Flows (unaudited) for the nine months ended September
30, 2006 and 2007 and the period from March 18, 1996 (inception) to September 30, 2007
    
    
    5Notes to Condensed Consolidated Financial Statements
    
    
    7Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    15Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    22Item 1A. Risk Factors
    
    
    23Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    34Item 3. Defaults Upon Senior Securities
    
    
    34Item 4. Submission of Matters to a Vote of Security Holders
    
    
    34Item 5. Other Information
    
    
    34Item 6. Exhibits
    
    
    35SIGNATURES
    
    
    36INDEX TO EXHIBITS
    
    
    37Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



Part I  Financial Information
 NORTHWEST BIOTHERAPEUTICS, INC.
 
 Condensed Consolidated Balance Sheets
 December 31,
    
    
    September 30,2006
    
    
    2007(Unaudited)AssetsCurrent assets:Cash
    
    $
    307
    
    
    $
    16,875Accounts receivable
    
    
    3
    
    
    
    Prepaid expenses and other current assets
    
    
    145
    
    
    
    440Total current assets
    
    
    455
    
    
    
    17,315Property and equipment:Laboratory equipment
    
    
    14
    
    
    
    29Office furniture and other equipment
    
    
    71
    
    
    
    8685
    
    
    
    115Less accumulated depreciation and amortization
    
    
    (70
    )
    
    
    (103
    )Property and equipment, net
    
    
    15
    
    
    
    12Restricted cash
    
    
    31
    
    
    
    Deposit and other non-current assets
    
    
    3
    
    
    
    Total assets
    
    $
    504
    
    
    $
    17,327Liabilities And Stockholders EquityCurrent liabilities:Note payable to related parties, net of discount
    
    $
    2,505
    
    
    $
    5,243Current portion of capital lease obligations
    
    
    2
    
    
    
    Accounts payable
    
    
    493
    
    
    
    192Accounts payable, related party
    
    
    2,852
    
    
    
    Accrued expenses
    
    
    301
    
    
    
    763Accrued expense, related party
    
    
    300
    
    
    
    563Total liabilities
    
    
    6,453
    
    
    
    6,761Stockholders equity:Preferred stock, $0.001 par value; 300,000,000 shares
authorized at December 31, 2006 and September 30, 2007:Series A preferred stock, 50,000,000 and zero shares
designated at December 31, 2006 and September 30, 2007,
respectively, and 32,500,000 and zero shares issued and
outstanding at December 31, 2006 and September 30, 2007,
respectively
    
    
    33
    
    
    
    Series A-1 preferred stock, 10,000,000 and zero shares
designated at December 31, 2006 and September 30, 2007,
respectively, and 4,816,863 and zero shares issued and
outstanding at December 31, 2006 and September 30, 2007,
respectively
    
    
    5
    
    
    
    Common stock, $0.001 par value; 800,000,000 shares
authorized at December 31, 2006 and September 30, 2007 and
4,349,419 and 42,346,088 shares issued and outstanding at
December 31, 2006 and September 30, 2007, respectively
    
    
    65
    
    
    
    42Additional paid-in capital
    
    
    78,033
    
    
    
    145,388Deficit accumulated during the development stage
    
    
    (84,085
    )
    
    
    (134,864
    )Total stockholders equity
    
    
    (5,949
    )
    
    
    10,566Total liabilities and stockholders equity
    
    $
    504
    
    
    $
    17,327
   3




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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
 
 Condensed Consolidated Statements of Operations
 Period fromMarch 18, 1996Three Months Ended
    
    
    Nine Months Ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,
    
    
    September 30,2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    2007Revenues:Research
material sales/license fees
    
    $
    80
    
    
    $
    10
    
    
    $
    80
    
    
    $
    10
    
    
    $
    540Contract research and development
from related parties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,128Research grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,061Total revenues
    
    
    80
    
    
    
    10
    
    
    
    80
    
    
    
    10
    
    
    
    2,729Operating expenses:Cost of research material sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382Research and development
    
    
    1,000
    
    
    
    1,873
    
    
    
    2,644
    
    
    
    5,342
    
    
    
    41,186General and administrative
    
    
    493
    
    
    
    1,697
    
    
    
    1,669
    
    
    
    3,643
    
    
    
    36,610Depreciation and amortization
    
    
    10
    
    
    
    2
    
    
    
    29
    
    
    
    18
    
    
    
    2,321Accrued loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Asset impairment loss
    
    
    
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    2,056Total operating expenses
    
    
    1,503
    
    
    
    3,572
    
    
    
    4,333
    
    
    
    9,003
    
    
    
    83,450Loss from operations
    
    
    (1,423
    )
    
    
    (3,562
    )
    
    
    (4,253
    )
    
    
    (8,993
    )
    
    
    (80,721
    )Other income (expense):Warrant valuation
    
    
    
    
    
    
    
    
    
    
    7,127
    
    
    
    
    
    
    
    6,759Gain on sale of intellectual property
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,656Interest expense
    
    
    (407
    )
    
    
    (697
    )
    
    
    (2,246
    )
    
    
    (5,561
    )
    
    
    (21,262
    )Interest income and other
    
    
    21
    
    
    
    350
    
    
    
    34
    
    
    
    738
    
    
    
    1,513Net income (loss)
    
    
    (1,809
    )
    
    
    (3,909
    )
    
    
    662
    
    
    
    (13,816
    )
    
    
    (90,055
    )Issuance of common stock in connection
with elimination of Series A and Series
A-1 preferred stock preferences
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (12,349
    )
    
    
    (12,349
    )Modification of Series A preferred
stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (2,306
    )
    
    
    (2,306
    )Modification of Series A-1 preferred
stock warrants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (16,393
    )
    
    
    (16,393
    )Series A preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (334
    )
    
    
    (334
    )Series A-1 preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (917
    )
    
    
    (917
    )Warrants issued on Series A and Series
A-1 preferred stock dividends
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,664
    )
    
    
    (4,664
    )Accretion of Series A preferred stock
mandatory redemption obligation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,872
    )Series A preferred stock redemption fee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Beneficial conversion feature of Series
D preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,274
    )Net income (loss) applicable to common
stockholders
    
    $
    (1,809
    )
    
    $
    (3,909
    )
    
    $
    662
    
    
    $
    (50,779
    )
    
    $
    (134,864
    )Net income/loss per share applicable to
common stockholders  basic
    
    $
    (0.42
    )
    
    $
    (0.09
    )
    
    $
    0.20
    
    
    $
    (2.76
    )Weighted average shares used in
computing basic net income/loss per
share
    
    
    4,349
    
    
    
    42,298
    
    
    
    3,297
    
    
    
    18,379Net income/loss per share applicable to
common stockholders  diluted
    
    $
    (0.42
    )
    
    $
    (0.09
    )
    
    $
    0.02
    
    
    $
    (2.76
    )Weighted average shares used in
computing diluted net income/loss per
share
    
    
    4,349
    
    
    
    42,298
    
    
    
    29,521
    
    
    
    18,379
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##### Table of Contents



Northwest Biotherapeutics, Inc.
 
 Condensed Consolidated Statements of Cash Flows
 Period fromMarch 18, 1996Nine Months Ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,2006
    
    
    2007
    
    
    2007Cash Flows from Operating Activities:Net Income (Loss)
    
    $
    662
    
    
    $
    (13,816
    )
    
    $
    (90,055
    )Reconciliation of net income (loss) to net cash used in operating activities:Depreciation and amortization
    
    
    29
    
    
    
    18
    
    
    
    2,321Amortization of deferred financing costs
    
    
    
    
    
    
    
    
    
    
    320Amortization debt discount
    
    
    1,801
    
    
    
    5,750
    
    
    
    17,996Accrued interest converted to preferred stock
    
    
    
    
    
    
    
    
    
    
    260Accreted interest on convertible promissory note
    
    
    284
    
    
    
    307
    
    
    
    1,428Stock-based compensation costs
    
    
    3
    
    
    
    4
    
    
    
    1,116Gain on sale of intellectual property and royalty rights
    
    
    
    
    
    
    
    
    
    
    (3,656
    )Loss (gain) on sale of property and equipment
    
    
    (16
    )
    
    
    
    
    
    
    273Warrant valuation
    
    
    (7,127
    )
    
    
    
    
    
    
    (6,759
    )Asset impairment loss
    
    
    
    
    
    
    
    
    
    
    2,056Loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    895Increase (decrease) in cash resulting from changes in assets and liabilities:Accounts receivable
    
    
    (53
    )
    
    
    3
    
    
    
    Prepaid expenses and other current assets
    
    
    82
    
    
    
    (261
    )
    
    
    60Accounts payable and accrued expenses
    
    
    (763
    )
    
    
    (2,429
    )
    
    
    1,914Accrued loss on sublease
    
    
    
    
    
    
    
    
    
    
    (265
    )Deferred rent
    
    
    
    
    
    
    
    
    
    
    420Net Cash used in Operating Activities
    
    
    (5,098
    )
    
    
    (10,424
    )
    
    
    (71,676
    )Cash Flows from Investing Activities:Purchase of property and equipment, net
    
    
    
    
    
    
    (15
    )
    
    
    (4,595
    )Proceeds from sale of property and equipment
    
    
    16
    
    
    
    
    
    
    
    250Proceeds from sale of intellectual property
    
    
    
    
    
    
    
    
    
    
    1,816Proceeds from sale of marketable securities
    
    
    
    
    
    
    
    
    
    
    2,000Refund of security deposit
    
    
    
    
    
    
    
    
    
    
    (3
    )Transfer of restricted cash
    
    
    
    
    
    
    
    
    
    
    (1,035
    )Net Cash provided by (used in) Investing Activities
    
    
    16
    
    
    
    (15
    )
    
    
    (1,567
    )Cash Flows from Financing Activities:Proceeds from issuance of note payable to stockholder
    
    
    
    
    
    
    2,600
    
    
    
    5,750Repayment of note payable to stockholder
    
    
    
    
    
    
    (225
    )
    
    
    (1,875
    )Proceeds from issuance of convertible promissory note and warrants, net of
issuance costs
    
    
    300
    
    
    
    
    
    
    
    13,099Borrowing under line of credit, Northwest Hospital
    
    
    
    
    
    
    
    
    
    
    2,834Repayment of line of credit, Northwest Hospital
    
    
    
    
    
    
    
    
    
    
    (2,834
    )Repayment of convertible promissory note
    
    
    (13
    )
    
    
    
    
    
    
    (119
    )Payment on capital lease obligations
    
    
    (8
    )
    
    
    (2
    )
    
    
    (323
    )Payments on note payable
    
    
    
    
    
    
    
    
    
    
    (420
    )Payment of Preferred Stock Dividends
    
    
    
    
    
    
    (1,252
    )
    
    
    (1,252
    )Proceeds from issuance Series A cumulative preferred stock, net
    
    
    
    
    
    
    
    
    
    
    28,708Proceeds from exercise of stock options and warrants
    
    
    7
    
    
    
    
    
    
    
    227Proceeds from issuance common stock, net
    
    
    5,084
    
    
    
    25,886
    
    
    
    48,343Mandatorily redeemable Series A preferred stock redemption fee
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Deferred financing costs
    
    
    
    
    
    
    
    
    
    
    (320
    )Net Cash provided by Financing Activities
    
    
    5,370
    
    
    
    27,007
    
    
    
    90,118Net increase in cash
    
    
    288
    
    
    
    16,568
    
    
    
    16,875Cash at beginning of period
    
    
    352
    
    
    
    307
    
    
    
    Cash at end of period
    
    $
    640
    
    
    $
    16,875
    
    
    $
    16,875
  5




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Period fromMarch 18, 1996Nine Months Ended
    
    
    (Inception) toSeptember 30,
    
    
    September 30,2006
    
    
    2007
    
    
    2007Supplemental disclosure of cash flow information  Cash paid during the period
for interest
    
    $
    58
    
    
    $
    8
    
    
    $
    1,404Supplemental schedule of non-cash financing activities:Issuance of common stock in connection with elimination of Series A and Series
A-1 preferred stock preferences
    
    
    
    
    
    
    12,349
    
    
    
    12,349Modification of Series A preferred stock warrants
    
    
    
    
    
    
    2,306
    
    
    
    2,306Modification of Series A-1 preferred stock warrants
    
    
    
    
    
    
    16,393
    
    
    
    16,393Warrants issued on Series A and Series A-1 preferred stock dividends
    
    
    
    
    
    
    4,664
    
    
    
    4,664Equipment acquired through capital leases
    
    
    
    
    
    
    
    
    
    
    285Common stock warrant liability
    
    
    6,523
    
    
    
    
    
    
    
    11,841Accretion of mandatorily redeemable Series A preferred stock redemption
obligation
    
    
    
    
    
    
    
    
    
    
    1,872Beneficial conversion feature of convertible promissory notes
    
    
    
    
    
    
    
    
    
    
    7,242Conversion of convertible promissory notes and accrued interest to Series D
preferred stock
    
    
    
    
    
    
    
    
    
    
    5,324Conversion of convertible promissory notes and accrued interest to
Series A-1 preferred stock
    
    
    7,707
    
    
    
    
    
    
    
    7,707Conversion of convertible promissory notes and accrued interest to common stock
    
    
    269
    
    
    
    
    
    
    
    269Issuance of Series C preferred stock warrants in connection with lease agreement
    
    
    
    
    
    
    
    
    
    
    43Issuance of common stock for license rights
    
    
    
    
    
    
    
    
    
    
    4Issuance of common stock and warrants to Medarex
    
    
    
    
    
    
    
    
    
    
    840Issuance of common stock to landlord
    
    
    
    
    
    
    
    
    
    
    35Deferred compensation on issuance of stock options and restricted stock grants
    
    
    
    
    
    
    
    
    
    
    759Cancellation of options and restricted stock
    
    
    
    
    
    
    
    
    
    
    849Stock subscription receivable
    
    
    
    
    
    
    
    
    
    
    491Financing of prepaid insurance through note payable
    
    
    
    
    
    
    
    
    
    
    480
   6




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##### Table of Contents



Northwest Biotherapeutics, Inc.
(A Development Stage Company)
 
 Notes to Condensed Consolidated Financial Statements
(unaudited)
 1. Basis of Presentation
   2. Summary of Significant Accounting Policies
  Cash
  Principles of Consolidation
  Foreign Currency Translation
  Recent Accounting Pronouncements
 Accounting for Uncertainty in Income Taxesan interpretation of FASB Statement No.
109, Accounting for Income Taxes
  7




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##### Table of Contents



Fair
Value Measurements
 The
Fair Value Option for Financial Assets and Financial Liabilities
 Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research
and Development Activities
 3. Stock-Based Compensation Plans
 Share-Based Payment
  Determining Fair Value Under SFAS No. 123(R)
 Valuation and Amortization Method.
 Expected Life
 Expected Volatility
 Risk-Free Interest Rate.
  8




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##### Table of Contents



Expected Dividend Yield.
 Expected Forfeitures.
    Stock Option Plans
   4. Liquidity
    (1)
    
    From November 14, 2005 through March 9, 2006, the Company issued three promissory
notes to Toucan Partners, pursuant to which Toucan Partners loaned the Company an
aggregate of $950,000. In April 2007, these notes were amended and restated to conform
to the 2007 Convertible Notes described in Note 6. Payment is due under the notes upon
written demand. Interest accrues at 10% per annum, compounded annually, on a 365-day
year basis. The principal amount of, and accrued interest on, these notes, as amended,
is convertible at Toucan Partners election into Common Stock on the same terms as the
2007 Convertible Notes described in Note 6.(2)
    
    From October 2006 through April 2007, Toucan Partners provided $3.15 million in
cash advances, which were converted into the 2007 Convertible Notes and 2007 Warrants in
April 2007.(3)
    
    The Company and Toucan Partners also entered into two new promissory notes to
fix the terms of two additional cash advances provided by Toucan Partners to the
Company on May 14, 2007 and May 25, 2007 in the aggregate amount of $725,000, and
issued warrants to purchase shares of the Companys capital stock to Toucan Partners
described in Note 6 in connection with each such note. These notes and warrants are on
the same terms as the 2007 Convertible Notes and
2007 Warrants and the proceeds of these notes enabled the Company to continue to operate
and advance programs while raising additional equity financing.
  9




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Conversion of Preferred Stock and Related Matters
        10




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Placement of Shares of Common Stock with Foreign Institutional Investors
   5. Net Income (Loss) Per Share Applicable to Common Stockholders
    Nine months endedSeptember 30,2007
    
    
    2006Common stock options
    
    
    51
    
    
    
    19Common stock warrants
    
    
    834
    
    
    
    38Preferred stock warrants
    
    
    19,424
    
    
    
    Warrants on preferred stock dividends
    
    
    2,612
    
    
    
    Convertible promissory notes
    
    
    8,739
    
    
    
    Convertible promissory note warrants
    
    
    8,739
    
    
    
    
  11




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6. Notes Payable
     12




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7. Related Party Transactions
 ® ®
    13




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##### Table of Contents



8. Contingencies
 Reduction in Authorized Number of Common and Preferred Shares
  Private Placement
    Legal Proceedings
 Soma Arbitration
      14




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Lonza Patent Infringement Claim
  Stockholder Class Action Lawsuit
  SEC Inquiry
  Management Warrants
   
 Item. 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
   15




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Overview
  ® ® ® ® ®
 ® ®
 ® ® ® ®
 ®
 ® ® ®
   16




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##### Table of Contents



Critical Accounting Policies and Estimates
    Results of Operations
      Three Months Ended September 30, 2006 and 2007
 Total Revenues.
  17




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##### Table of Contents



Cost of Research Material Sales.
 Research and Development Expense. ®
 General and Administrative Expense.
 Depreciation and Amortization.
 Total Other Income (Expense), Net.
 Nine Months Ended September 30, 2006 and 2007 .
 Total Revenues
 Cost of Research Material Sales.
 Research and Development Expense. ®
 General and Administrative Expense.
  18




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Depreciation and Amortization.
 Total Other Income (Expense), Net.
 Liquidity and Capital Resources
         ®
  19




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##### Table of Contents



® ® ®
 ®
  Sources of Cash
    Uses of Cash
    20




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##### Table of Contents



Item 3. Quantitative and Qualitative Disclosures About Market Risk
 Market Interest Rate Risk
  Foreign Currency Exchange Rate Risk
  
 Item 4. Controls and Procedures
 Controls and Procedures
  Evaluation of disclosure controls, procedures, and internal controls
  Material Weakness Identified
  (i)
    
    lack of independent directors on our audit committee;(ii)
    
    lack of an audit committee financial expert;(iii)
    
    insufficient personnel in our finance/accounting functions;(iv)
    
    insufficient segregation of duties; and(v)
    
    insufficient corporate governance policies.
   21




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Changes in Internal Controls
   
 Part II  Other Information
 
 Item 1. Legal Proceedings
 Soma Arbitration
      Lonza Patent Infringement Claim
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Stockholder Class Action Lawsuits
  SEC Inquiry
  Management Warrants
    
 Item 1A. Risk Factors
  We are likely to continue to incur substantial losses, and may never achieve profitability.
  Our auditors have issued a going concern audit opinion.
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As a company in the early stage of development with an unproven business strategy, our limited
history of operations makes an evaluation of our business and prospects difficult.
  We will need to raise additional capital, which may not be available.
  We may not be able to retain existing personnel.
  We may not be able to attract expert personnel.
  We must rely at present on a single relationship with a third-party contract manufacturer, which
will limit our ability to control the availability of our product candidates in the near-term.
 ® ® ® ® ®
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Our success partly depends on existing and future collaborators.
  ®
  We are involved in legal proceedings that could result in the payment of damages, which could be
substantial, or that could otherwise harm our business. In addition, future litigation could be
costly to defend or pursue and uncertain in its outcome.
 ®
  Clinical trials for our product candidates are expensive and time consuming and their outcome is
uncertain.
  We have limited experience in conducting and managing clinical trials.
 ®
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Our product candidates will require a different distribution model than conventional therapeutic
products.
  We lack sales and marketing experience and as a result may experience significant difficulties
commercializing our research product candidates.
   Competition in the biotechnology and biopharmaceutical industry is intense and most of our
competitors have substantially greater resources than us.
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Our intellectual property rights may not provide meaningful commercial protection for our
research products or product candidates, which could enable third parties to use our technology,
or very similar technology, and could reduce our ability to compete in the market.
  ®
    Our success will depend substantially on our ability to operate without infringing or
misappropriating the proprietary rights of others.
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We may not receive regulatory approvals for our product candidates or there may be a delay in
obtaining such approvals.
   Further trials and other costly and time-consuming assessments of the product may be required to
obtain or maintain regulatory approval.
  ®
 ® ® ® ®
 ® ®
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Regulatory approval may be withdrawn at any time.
  We may fail to comply with regulatory requirements.
  We may be subject to sanctions if we are determined to be promoting our investigational products
prior to regulatory approval or for unapproved uses.
  We may not obtain or maintain orphan drug status and the associated benefits, including marketing
exclusivity.
 ® ® ®
 New legislation may have an adverse effect on our business.
  The availability and amount of reimbursement for our product candidates and the manner in which
government and private payers may reimburse for our potential products is uncertain.
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We may not be granted permission to charge for the cost of our investigational product in our
pivotal Phase II clinical trial for DCVax®-Brain.
 ® ® ®
 DCVax® is our only technology in clinical development.
 ® ®
 We may be prevented from using the DCVax® name in Europe.
 ® ®
 Competing generic medicinal products may be approved.
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We may be exposed to potential product liability claims, and insurance against these claims may
not be available to us at a reasonable rate in the future, if at all.
  Our business could be adversely affected by animal rights activists.
  We use hazardous materials and must comply with environmental, health and safety laws and
regulations, which can be expensive and restrict how we do business.
   Toucan Capital and Toucan Partners beneficially own a majority of our shares of common stock and,
as a result, the trading price for the Common Stock may be depressed and these stockholders can
take actions that may be adverse to the interests of other investors.
  Our Certificate of Incorporation and Bylaws and stockholder rights plan may delay or prevent a
change in our management.
  
    
    authorize the issuance of preferred stock that can be created and issued by the Board
without prior stockholder approval, commonly referred to as blank check preferred stock,
with rights senior to those of the Common Stock;
    
    allow the Board to call special meetings of stockholders at any time but restrict the
stockholders from calling special meetings;
    
    authorize the Board to issue dilutive Common Stock upon certain events; and
    
    provide for a classified Board.
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There may not be an active, liquid trading market for our common stock.
  
    
    limited release of the market price of our securities;
    
    limited news coverage;
    
    limited interest by investors in our securities;
    
    volatility of our stock price due to low trading volume;
    
    increased difficulty in selling our securities in certain states due to blue sky
restrictions; and
    
    limited ability to issue additional securities or to secure additional financing.
 The resale, or the availability for resale, of the shares issued in the March 2006 PIPE Financing
could have a material adverse impact on the market price of our common stock.
  Because our common stock is subject to penny stock rules, the market for the common stock may
be limited.
  
    
    make a special written suitability determination for the purchaser;
    
    receive the purchasers written agreement to a transaction prior to sale;
    
    provide the purchaser with risk disclosure documents which identify certain risks
associated with investing in penny stocks and which describe the market for these penny
stocks as well as a purchasers legal remedies; and
    
    obtain a signed and dated acknowledgment from the purchaser demonstrating that the
purchaser has actually received the required risk disclosure document before a transaction
in a penny stock can be completed.
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The price of our Common Stock may be highly volatile
  The requirements of the Sarbanes-Oxley Act of 2002 and other U.S. securities laws reporting
requirements impose cost and operating challenges on us.
  Our management has identified significant internal control deficiencies, which management and our
independent auditor believe constitute material weaknesses.
  
    
    lack of sufficient number of independent directors for our audit committee;
    
    lack of an audit committee financial expert;
    
    insufficient personnel in our finance and accounting functions;
    
    insufficient segregation of duties; and
    
    insufficient corporate governance policies.
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3. Defaults upon Senior Securities
  
 Item 4. Submission of Matters to a Vote of Security Holders
  
 Item 5. Other Information
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Item 6. Exhibits
 3.1
    
    Seventh Amended and Restated Certificate of Incorporation as
amended. (3.1)(1)3.2
    
    Third Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.1)(2)3.3
    
    Amendment to the Seventh Amended and Restated Certificate of
Incorporation of Northwest Biotherapeutics, Inc. (3.2)(2)10.1
    
    Employment Agreement dated October 1, 2007 between
Anthony P. Deasey and Northwest Biotherapeutics, Inc. (3.2)(2)(3)*31.1
    
    Certification of President and Chief Executive Officer, Pursuant to Exchange Act Rules 13a-14(a) and
15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer (Principal Financial and Accounting Officer), Pursuant to
Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
of 2002.*32.1
    
    Certification of President and Chief Executive Officer, Pursuant to Section 906 of the Sarbanes-Oxley Act
of 2002.*32.2
    
    Certification of Chief Financial Officer (Principal Financial and Accounting Officer), Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to
the exhibit (3.1) shown in the preceding parentheses filed with the
Registrants registration statement Form S-1 (File No. 333-67350).(2)
    
    Incorporated by reference to
the exhibit (3.1) shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on May 21, 2007.(3)
    
    Incorporated by reference to
the exhibit (3.2)(2) shown in the preceding parentheses filed with the
Registrants Current Report of Form 8-K
on October 2, 2007*
    
    Filed herewith.  35




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SIGNATURES
  NORTHWEST BIOTHERAPEUTICS, INCDated: November 14, 2007
    
    By:
    
    /s/ Alton L. BoyntonAlton L. Boynton President and Chief Executive Officer(Principal Executive Officer)By:
    
    /s/ Anthony P. DeaseyAnthony P. DeaseyChief Financial Officer
(Principal Financial and Accounting Officer)
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NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
 
 EXHIBIT INDEX
 3.1
    
    Seventh Amended and Restated Certificate of Incorporation as amended. (3.1)(1)3.2
    
    Third Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.1)(2)3.3
    
    Amendment to the Seventh Amended and Restated Certificate of Incorporation
of Northwest Biotherapeutics, Inc. (3.2)(2)10.1
    
    Employment Agreement dated October 1, 2007 between Anthony P. Deasey and
Northwest Biotherapeutics, Inc (3.2)(2)(3)*31.1
    
    Certification of President and Chief Executive Officer, Pursuant to Exchange
Act Rules 13a-14(a) and 15d-14(a), as
Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*31.2
    
    Certification of Chief Financial Officer (Principal Financial and Accounting
Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.*32.1
    
    Certification of President and Chief Executive Officer, Pursuant to Section
906 of the Sarbanes-Oxley Act of 2002.*32.2
    
    Certification of Chief Financial Officer (Principal Financial and Accounting
Officer), Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
 
 (1)
    
    Incorporated by reference to
the exhibit (3.1) shown in the preceding parentheses filed with the
Registrants registration statement Form S-1 (File No. 333-67350).(2)
    
    Incorporated by reference to
the exhibit (3.1) shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 22, 2007.(3)
    
    Incorporated by reference to
the exhibit (3.2)(2) shown in the preceding parentheses filed with the
Registrants Current Report of Form 8-K
on October 2, 2007*
    
    Filed herewith.  37