##### 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 June 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.
 Incorporated under the laws
    
    I.R.S. Employer Identificationof the State of Delaware
    
    No. 94-3306718
 18701  120th Avenue NE, Suite 101
Bothell, Washington 98011
(425) 608-3000
 þ o
  Large accelerated filer o
    
    Accelerated filer o
    
    Non-accelerated filer þ
 o þ




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##### 



TABLE OF CONTENTS
 NORTHWEST BIOTHERAPEUTICS, INC.
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATIONItem 1. Financial StatementsCondensed Balance Sheets as of December 31, 2006 and June 30, 2007 (unaudited)
    
    
    3Condensed Statements of Operations (unaudited) for the three and six months ended June
30, 2006 and 2007 and the period from March 18, 1996 (inception) to June 30, 2007
    
    
    4Condensed Statements of Cash Flows (unaudited) for the six months ended June 30, 2006
and 2007 and the period from March 18, 1996 (inception) to June 30, 2007
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    16Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    21Item 4. Controls and Procedures
    
    
    21PART II  OTHER INFORMATIONItem 1. Legal Proceedings
    
    
    23Item 1A. Risk Factors
    
    
    24Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    35Item 3. Defaults Upon Senior Securities
    
    
    35Item 4. Submission of Matters to a Vote of Security Holders
    
    
    35Item 5. Other Information
    
    
    35Item 6. Exhibits
    
    
    36SIGNATURES
    
    
    37INDEX TO EXHIBITS
    
    
    38Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2
   2




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##### Table of Contents



Part I  Financial Information
 
 NORTHWEST BIOTHERAPEUTICS, INC.
 
 Condensed Balance Sheets
 December 31,
    
    
    June 30,2006
    
    
    2007(Unaudited)AssetsCurrent assets:Cash
    
    $
    307
    
    
    $
    25,393Accounts receivable
    
    
    3
    
    
    
    Prepaid expenses and other current assets
    
    
    145
    
    
    
    631Total current assets
    
    
    455
    
    
    
    26,024Property and equipment:Laboratory equipment
    
    
    14
    
    
    
    25Office furniture and other equipment
    
    
    71
    
    
    
    8685
    
    
    
    111Less accumulated depreciation and amortization
    
    
    (70
    )
    
    
    (102
    )Property and equipment, net
    
    
    15
    
    
    
    9Restricted cash
    
    
    31
    
    
    
    Deposit and other non-current assets
    
    
    3
    
    
    
    Total assets
    
    $
    504
    
    
    $
    26,033Liabilities And Stockholders EquityCurrent liabilities:Note payable to related parties, net of discount
    
    $
    2,505
    
    
    $
    5,119Current portion of capital lease obligations
    
    
    2
    
    
    
    Accounts payable
    
    
    493
    
    
    
    2,366Accounts payable, related party
    
    
    2,852
    
    
    
    1,923Accrued expenses
    
    
    301
    
    
    
    500Accrued expense, related party
    
    
    300
    
    
    
    863Total current liabilities
    
    
    6,453
    
    
    
    10,771Long-term liabilities:
    
    
    
    Total liabilities
    
    
    6,453
    
    
    
    10,771Stockholders equity:Preferred stock, $0.001 par value; 300,000,000 shares authorized
at December 31, 2006 and June 30, 2007Series A preferred stock, 50,000,000 and zero shares designated
at December 31, 2006 and June 30, 2007, respectively, and
32,500,000 and zero shares issued and outstanding at December
31, 2006 and June 30, 2007, respectively
    
    
    33
    
    
    
    Series A-1 preferred stock, 10,000,000 and zero shares
designated at December 31, 2006 and June 30, 2007, respectively,
and 4,816,863 and zero shares issued and outstanding at December
31, 2006 and June 30, 2007, respectively
    
    
    5
    
    
    
    Common stock, $0.001 par value; 800,000,000 shares authorized at
December 31, 2006 and June 30, 2007 and 4,349,419 and 42,011,088
shares issued and outstanding at December 31, 2006 and June 30,
2007, respectively
    
    
    65
    
    
    
    42Additional paid-in capital
    
    
    78,033
    
    
    
    146,245Deficit accumulated during the development stage
    
    
    (84,085
    )
    
    
    (130,955
    )Total stockholders equity
    
    
    (5,949
    )
    
    
    15,262Total liabilities and stockholders equity
    
    $
    504
    
    
    $
    26,033
   3




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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
 
 Condensed Statements of Operations
 Period fromThree Months Ended
    
    
    Six Months Ended
    
    
    March 18, 1996June 30,
    
    
    June 30,
    
    
    (inception) to2006
    
    
    2007
    
    
    2006
    
    
    2007
    
    
    June 30, 2007Revenues:Research material sales
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    530Contract research and development from
related parties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,128Research grants
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,061Total revenues
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,719Operating expenses:Cost of research material sales
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    382Research and development
    
    
    1,217
    
    
    
    2,158
    
    
    
    1,644
    
    
    
    3,469
    
    
    
    39,313General and administrative
    
    
    733
    
    
    
    1,445
    
    
    
    1,176
    
    
    
    1,946
    
    
    
    34,913Depreciation and amortization
    
    
    9
    
    
    
    6
    
    
    
    19
    
    
    
    16
    
    
    
    2,319Accrued loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Asset impairment loss
    
    
    7
    
    
    
    
    
    
    
    (9
    )
    
    
    
    
    
    
    2,056Total operating expenses
    
    
    1,966
    
    
    
    3,609
    
    
    
    2,830
    
    
    
    5,431
    
    
    
    79,878Loss from operations
    
    
    (1,966
    )
    
    
    (3,609
    )
    
    
    (2,830
    )
    
    
    (5,431
    )
    
    
    (77,159
    )Other income (expense):Warrant valuation
    
    
    9,240
    
    
    
    
    
    
    
    7,127
    
    
    
    
    
    
    
    6,759Gain on sale of intellectual property
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,656Interest expense
    
    
    (858
    )
    
    
    (4,733
    )
    
    
    (1,839
    )
    
    
    (4,864
    )
    
    
    (20,565
    )Interest income and other
    
    
    12
    
    
    
    387
    
    
    
    13
    
    
    
    388
    
    
    
    1,163Net income (loss)
    
    
    6,428
    
    
    
    (7,955
    )
    
    
    2,471
    
    
    
    (9,907
    )
    
    
    (86,146
    )Issuance of common stock in connection with
elimination of Series A and Series A-1 preferred
stock preferences
    
    
    
    
    
    
    (12,349
    )
    
    
    
    
    
    
    (12,349
    )
    
    
    (12,349
    )Modification of Series A preferred stock warrants
    
    
    
    
    
    
    (2,306
    )
    
    
    
    
    
    
    (2,306
    )
    
    
    (2,306
    )Modification of Series A-1 preferred stock warrants
    
    
    
    
    
    
    (16,393
    )
    
    
    
    
    
    
    (16,393
    )
    
    
    (16,393
    )Series A preferred stock dividends
    
    
    
    
    
    
    (334
    )
    
    
    
    
    
    
    (334
    )
    
    
    (334
    )Series A-1 preferred stock dividends
    
    
    
    
    
    
    (917
    )
    
    
    
    
    
    
    (917
    )
    
    
    (917
    )Warrants issued on Series A and Series A-1
preferred stock dividends
    
    
    
    
    
    
    (4,664
    )
    
    
    
    
    
    
    (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
    
    $
    6,428
    
    
    $
    (44,918
    )
    
    $
    2,471
    
    
    $
    (46,870
    )
    
    $
    (130,955
    )Net income/loss per share applicable to common
stockholders  basic
    
    $
    1.52
    
    
    $
    (5.56
    )
    
    $
    0.89
    
    
    $
    (7.53
    )Weighted average shares used in computing basic
net income/loss per share
    
    
    4,225
    
    
    
    8,074
    
    
    
    2,762
    
    
    
    6,222Net income/loss per share applicable to common
stockholders  diluted
    
    $
    0.39
    
    
    $
    (5.56
    )
    
    $
    0.15
    
    
    $
    (7.53
    )Weighted average shares used in computing diluted
net income/loss per share
    
    
    15,234
    
    
    
    8,074
    
    
    
    13,770
    
    
    
    6,222
   4




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##### Table of Contents



Northwest Biotherapeutics, Inc.
 
 Condensed Statements of Cash Flows
 Period fromSix Months Ended
    
    
    March 18, 1996June 30,
    
    
    (Inception) to2006
    
    
    2007
    
    
    June 30, 2007Cash Flows from Operating Activities:Net Income (Loss)
    
    $
    2,471
    
    
    $
    (9,907
    )
    
    $
    (86,146
    )Reconciliation of net income (loss) to net cash used in operating activities:Depreciation and amortization
    
    
    19
    
    
    
    16
    
    
    
    2,319Amortization of deferred financing costs
    
    
    
    
    
    
    
    
    
    
    320Amortization debt discount
    
    
    1,561
    
    
    
    5,253
    
    
    
    17,499Accrued interest converted to preferred stock
    
    
    
    
    
    
    
    
    
    
    260Accreted interest on convertible promissory note
    
    
    260
    
    
    
    183
    
    
    
    1,304Stock-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
    
    
    
    
    
    
    
    
    
    
    2,066Loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    895Increase (decrease) in cash resulting from changes in assets and liabilities:Accounts receivable
    
    
    17
    
    
    
    3
    
    
    
    Prepaid expenses and other current assets
    
    
    (7
    )
    
    
    (452
    )
    
    
    (131
    )Accounts payable and accrued expenses
    
    
    (455
    )
    
    
    1,706
    
    
    
    6,049Accrued loss on sublease
    
    
    
    
    
    
    
    
    
    
    (265
    )Deferred grant revenue
    
    
    
    
    
    
    
    
    
    
    Deferred rent
    
    
    
    
    
    
    
    
    
    
    410Net Cash used in Operating Activities
    
    
    (3,274
    )
    
    
    (3,194
    )
    
    
    (64,446
    )Cash Flows from Investing Activities:Purchase of property and equipment, net
    
    
    
    
    
    
    (11
    )
    
    
    (4,591
    )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
    
    
    
    (11
    )
    
    
    (1,563
    )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
    
    
    (7
    )
    
    
    (2
    )
    
    
    (323
    )Payments on note payable
    
    
    
    
    
    
    
    
    
    
    (420
    )Proceeds from issuance Series A cumulative preferred stock, net
    
    
    
    
    
    
    
    
    
    
    28,708Proceeds from exercise of stock options and warrants
    
    
    8
    
    
    
    
    
    
    
    227Proceeds from issuance common stock, net
    
    
    5,084
    
    
    
    25,918
    
    
    
    48,375Advance on funding commitment for common stock
    
    
    
    
    
    
    
    
    
    
    Mandatorily redeemable Series A preferred stock redemption fee
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Deferred financing costs
    
    
    
    
    
    
    
    
    
    
    (320
    )Net Cash provided by Financing Activities
    
    
    5,372
    
    
    
    28,291
    
    
    
    91,402Net increase in cash
    
    
    2,114
    
    
    
    25,086
    
    
    
    25,393Cash at beginning of period
    
    
    352
    
    
    
    307
    
    
    
    Cash at end of period
    
    $
    2,466
    
    
    $
    25,393
    
    
    $
    25,393
  5




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Period fromSix Months Ended
    
    
    March 18, 1996June 30,
    
    
    (Inception) to2006
    
    
    2007
    
    
    June 30, 2007Supplemental disclosure of cash flow information  Cash paid during the period
for interest
    
    $
    2
    
    
    $
    
    
    
    $
    1,396Supplemental 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
    
    
    
    16,393Series A preferred stock dividends
    
    
    
    
    
    
    334
    
    
    
    334Series A-1 preferred stock dividends
    
    
    
    
    
    
    917
    
    
    
    917Warrants 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
    
    
    64
    
    
    
    
    
    
    
    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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Northwest Biotherapeutics, Inc.
(A Development Stage Company)
 
 Notes to Condensed Financial Statements
(unaudited)
 1. Basis of Presentation
   2. Summary of significant accounting policies
  Cash
  Accounting for Income Taxes
  Financial Statement Restatement
   7




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Accounting for Nonrefundable Advance Payments
 Accounting for Nonrefundable Advance Payments for Goods or Services to be Used in Future Research
and Development Activities
 3. Stock-Based Compensation Plans
 ,
  Determining Fair Value Under SFAS No. 123(R)
 Valuation and Amortization Method.
 Expected Life
 Expected Volatility
 Risk-Free Interest Rate.
 Expected Dividend Yield.
 Expected Forfeitures.
     8




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##### Table of Contents



Stock Option Plans
   4. Liquidity
       Placement of Shares of Common Stock with Foreign Institutional Investors
   9




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Conversion of Preferred Stock and Related Matters
        10




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5. Net Income (Loss) Per Share Applicable to Common Stockholders
    June 30,2007
    
    
    2006Common stock options
    
    
    51
    
    
    
    19Common stock warrants
    
    
    1,425
    
    
    
    38Preferred stock warrants
    
    
    19,424
    
    
    
    Warrants on preferred stock dividends
    
    
    2,612
    
    
    
    Convertible promissory notes
    
    
    8,529
    
    
    
    Convertible promissory note warrants
    
    
    8,529
    
    
    
    
  11




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##### Table of Contents



6. Notes Payable
 Toucan Partners Loans
     12




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##### Table of Contents



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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##### Table of Contents



Lonza Patent Infringement Claim
  Stockholder Class Action Lawsuit
     Management Warrants
     15




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##### Table of Contents



9. Recent Accounting Pronouncements
 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
 
 Item. 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
  Overview
  ® ® ® ® ®
   16




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##### Table of Contents



®
 ®
  ® ® ®
   Critical Accounting Policies and Estimates
    Results of Operations
   17




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##### Table of Contents



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




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##### Table of Contents



Six Months Ended June 30, 2006 and 2007
 Total Revenues.
 Cost of Research Material Sales.
 Research and Development Expense. ®
 General and Administrative Expense.
 Depreciation and Amortization.
 Total Other Income (Expense), Net.
 Liquidity and Capital Resources
      19




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##### Table of Contents



® ® ®
 ®
  Sources of Cash
    20




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##### Table of Contents



Uses of Cash
   
 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
  (a) Evaluation of disclosure controls, procedures, and internal controls
   21




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##### Table of Contents



Material Weakness Identified
  (i)
    
    lack of independent directors for 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.
   Changes in Internal Controls
    22




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##### Table of Contents



Part II  Other Information
 
 Item 1. Legal Proceedings
 Soma Arbitration
      Lonza Patent Infringement Claim
 ®
 Stockholder Class Action Lawsuit
 Rosenblat, et al.
  SEC Inquiry
   23




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##### Table of Contents



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.
  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.
   24




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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.
 ® ® ® ® ®
  Our success partly depends on existing and future collaborators.
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®
  We may be subject to litigation that will be costly to defend or pursue and uncertain in its
outcome.
  Clinical trials for our product candidates are expensive and time consuming, their outcome is
uncertain and we have limited experience in managing them.
  We have limited experience in conducting and managing clinical trials.
 ®
 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.
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Competition in the biotechnology and biopharmaceutical industry is intense and most of our
competitors have substantially greater resources than us.
     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.
  ®
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Our success will depend substantially on our ability to operate without infringing or
misappropriating the proprietary rights of others.
     We may not receive regulatory approvals for our product candidates or there may be a delay in
obtaining such approvals.
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Further trials and other costly and time-consuming assessments of the product may be required to
obtain or maintain regulatory approval.
  ®
 ® ® ® ®
 ® ®
  Regulatory approval may be withdrawn at any time.
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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.
 ® ®
 We do not currently have a Swiss or European office for regulatory purposes.
  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.
  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 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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The lease of our headquarters expires December 31, 2007.
  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 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.
  
    
    must 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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Share price volatility and liquidity
  We are subject to certain requirements of the Sarbanes-Oxley Act of 2002 and other U.S.
securities laws reporting requirements.
  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
    
    Third Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.1)(5)3.2
    
    Amendment to the Seventh Amended and Restated Certificate of Incorporation of Northwest Biotherapeutics, Inc.
(3.2)(5)**10.1
    
    Northwest Biotherapeutics DCVax®-Brain Services Agreement with Cognate BioServices, Inc.
dated May 17, 2007. (10.1)(1)10.2
    
    Lease Extension between the Northwest Biotherapeutics, Inc. and the International Union of Operating Engineers
Local 302, dated May 31, 2007. (10.1)(2)10.3
    
    Form of Toucan Partners Note, dated as of June 1, 2007. (10.1)(3)10.4
    
    Form of Toucan Partners Warrant, dated as of June 1, 2007. (10.2)(3)10.5
    
    Amended and Restated Warrant to Purchase Series A Preferred Stock of the Company issued to
Toucan Capital Fund II, L.P., dated as of June 1, 2007. (10.3)(3)10.6
    
    Warrant to Purchase Series A-1 Preferred Stock of the Company issued to Toucan Capital Fund
II, L.P., dated as of June 1, 2007. (10.4)(3)10.7
    
    Warrant to Purchase Series A-1 Preferred Stock of the Company issued to Toucan Capital Fund
II, L.P., dated as of June 1, 2007. (10.5)(3)10.8
    
    Northwest Biotherapeutics, Inc. $225,000 Demand Note dated June 13, 2007. (10.1)(4)10.9
    
    Conversion Agreement dated June 15, 2007 and effective June 22, 2007 between Northwest Biotherapeutics, Inc. and
Toucan Capital Fund II, LLP. (10.1)(5)10.10
    
    Termination Agreement dated June 22, 2007 between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II,
LLP. (10.2)(5)10.11
    
    Second Amended and Restated Investor Rights Agreement dated June 22, 2007 between Northwest Biotherapeutics, Inc.
and Toucan Capital Fund II, LLP. (10.3)(5)10.12
    
    Nomad Agreement dated June 15, 2007 and effective June 22, 2007 between Northwest Biotherapeutics, Inc. and
Collins Stewart Europe Limited. (10.4)(5)10.13
    
    2007 Stock Option Plan. (10.5)(5)10.14
    
    Employment Agreement dated June 18, 2007 between Dr. Alton Boynton and Northwest Biotherapeutics, Inc. (10.6)(5)10.15
    
    Employment Agreement dated June 18, 2007 between Jim Johnston and Northwest Biotherapeutics, Inc. (10.7)(5)10.16
    
    Letter of Appointment for Linda L. Powers. (10.8)(5)10.17
    
    Letter of Appointment for R. Steve Harris. (10.9)(5)14.4
    
    Code of Ethics of Northwest Biotherapeutics, Inc. (14.1)(5)*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 shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on May 21, 2007.(2)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 4, 2007.(3)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 7, 2007.(4)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 18, 2007.(5)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 22, 2007.**
    
    Portions of this exhibit have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.*
    
    Filed herewith.
  36




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##### Table of Contents



SIGNATURES
  NORTHWEST BIOTHERAPEUTICS, INCDated: August 20, 2007
    By:
    /s/ Alton L. BoyntonAlton L. BoyntonPresident and Chief Executive Officer(Principal Executive Officer) By:
    /s/ Jim D. JohnstonJim D. JohnstonChief Financial Officer (Principal Financial Officer)  37




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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
 
 EXHIBIT INDEX
 3.1
    
    Third Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.1)(5)3.2
    
    Amendment to the Seventh Amended and Restated Certificate of Incorporation of Northwest Biotherapeutics, Inc.
(3.2)(5)**10.1
    
    Northwest Biotherapeutics DCVax®-Brain Services Agreement with Cognate BioServices, Inc.
dated May 17, 2007. (10.1)(1)10.2
    
    Lease Extension between the Northwest Biotherapeutics, Inc. and the International Union of Operating Engineers
Local 302, dated May 31, 2007. (10.1)(2)10.3
    
    Form of Toucan Partners Note, dated as of June 1, 2007. (10.1)(3)10.4
    
    Form of Toucan Partners Warrant, dated as of June 1, 2007. (10.2)(3)10.5
    
    Amended and Restated Warrant to Purchase Series A Preferred Stock of the Company issued to
Toucan Capital Fund II, L.P., dated as of June 1, 2007. (10.3)(3)10.6
    
    Warrant to Purchase Series A-1 Preferred Stock of the Company issued to Toucan Capital Fund
II, L.P., dated as of June 1, 2007. (10.4)(3)10.7
    
    Warrant to Purchase Series A-1 Preferred Stock of the Company issued to Toucan Capital Fund
II, L.P., dated as of June 1, 2007. (10.5)(3)10.8
    
    Northwest Biotherapeutics, Inc. $225,000 Demand Note dated June 13, 2007. (10.1)(4)10.9
    
    Conversion Agreement dated June 15, 2007 and effective June 22, 2007 between Northwest Biotherapeutics, Inc. and
Toucan Capital Fund II, LLP. (10.1)(5)10.10
    
    Termination Agreement dated June 22, 2007 between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II,
LLP. (10.2)(5)10.11
    
    Second Amended and Restated Investor Rights Agreement dated June 22, 2007 between Northwest Biotherapeutics, Inc.
and Toucan Capital Fund II, LLP. (10.3)(5)10.12
    
    Nomad Agreement dated June 15, 2007 and effective June 22, 2007 between Northwest Biotherapeutics, Inc. and
Collins Stewart Europe Limited. (10.4)(5)10.13
    
    2007 Stock Option Plan. (10.5)(5)10.14
    
    Employment Agreement dated June 18, 2007 between Dr. Alton Boynton and Northwest Biotherapeutics, Inc. (10.6)(5)10.15
    
    Employment Agreement dated June 18, 2007 between Jim Johnston and Northwest Biotherapeutics, Inc. (10.7)(5)10.16
    
    Letter of Appointment for Linda L. Powers. (10.8)(5)10.17
    
    Letter of Appointment for R. Steve Harris. (10.9)(5)14.4
    
    Code of Ethics of Northwest Biotherapeutics, Inc. (14.1)(5)*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 shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on May 21, 2007.(2)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 4, 2007.(3)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 7, 2007.(4)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 18, 2007.(5)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Current Report on Form 8-K filed on June 22, 2007.**
    
    Portions of this exhibit have been omitted and filed separately with the Securities and
Exchange Commission pursuant to a request for confidential treatment.*
    
    Filed herewith.
  38