##### Table of Contents



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, 2005
 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.
  DELAWARE
(State or Other Jurisdiction of
Incorporation or Organization)
    
    94-3306718
(I.R.S. Employer Identification
No.)
 
 
 þ £
 £ þ




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TABLE OF CONTENTS
 NORTHWEST BIOTHERAPEUTICS, INC.
 TABLE OF CONTENTS
 PagePART I  FINANCIAL INFORMATION
    
    
    3Item 1. Financial Statements (unaudited)Condensed Balance Sheets
    
    
    3Condensed Statements of Operations
    
    
    4Condensed Statements of Cash Flows
    
    
    5Notes to Condensed Financial Statements
    
    
    6Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
    
    
    11Item 3. Quantitative and Qualitative Disclosures About Market Risk
    
    
    24Item 4. Controls and Procedures
    
    
    24PART II  OTHER INFORMATION
    
    
    25Item 1. Legal Proceedings
    
    
    25Item 2. Defaults Upon Senior Securities
    
    
    25Item 3. Submission of Matters to a Vote of Security Holders
    
    
    25Item 4. Exhibits
    
    
    25SIGNATURES
    
    
    28INDEX TO EXHIBITS
    
    
    29EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2EXHIBIT 99.1
  2




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##### Table of Contents



Part I  Financial Information
 NORTHWEST BIOTHERAPEUTICS, INC .
 
 Balance Sheets
  December 31,
    
    June 30,2004
    
    2005AssetsCurrent assets:Cash
    
    $
    248
    
    
    $
    104Accounts receivable
    
    
    11
    
    
    
    52Accounts receivable, related party
    
    
    
    
    
    
    58Prepaid expenses and other current assets
    
    
    151
    
    
    
    91Total current assets
    
    
    410
    
    
    
    305Property and equipment:Leasehold improvements
    
    
    69
    
    
    
    69Laboratory equipment
    
    
    139
    
    
    
    139Office furniture and other equipment
    
    
    104
    
    
    
    104312
    
    
    
    312Less accumulated depreciation and amortization
    
    
    (194
    )
    
    
    (233
    )Property and equipment, net
    
    
    118
    
    
    
    79Restricted cash
    
    
    30
    
    
    
    30Total assets
    
    $
    558
    
    
    $
    414Liabilities And Stockholders EquityCurrent liabilities:Note payable to related parties, net of discount
    
    $
    3,226
    
    
    $
    4,861Current portion of capital lease obligations
    
    
    38
    
    
    
    23Accounts payable
    
    
    1,453
    
    
    
    312Accounts
payable  related party
    
    
    
    
    
    
    2,026Accrued expenses
    
    
    201
    
    
    
    99Accrued expense, tax liability
    
    
    494
    
    
    
    322Accrued expense, related party
    
    
    316
    
    
    
    462Deferred grant revenue
    
    
    35
    
    
    
    Total current liabilities
    
    
    5,763
    
    
    
    8,105Long-term liabilities:Capital lease obligations, net of current portion
    
    
    12
    
    
    
    5Total liabilities
    
    
    5,775
    
    
    
    8,110Stockholders equity:Preferred stock, $0.001 par value; 100,000,000 shares
authorized and 32,500,000 shares issued and outstanding at
June 30, 2005
    
    
    
    
    
    
    33Common stock, $0.001 par value; 300,000,000 shares
authorized and 19,028,779 and 19,078,048 shares issued and
outstanding at December 31, 2004 and June 30, 2005,
respectively
    
    
    19
    
    
    
    19Additional paid-in capital
    
    
    67,524
    
    
    
    70,173Deferred compensation
    
    
    (7
    )
    
    
    Deficit accumulated during the development stage
    
    
    (72,753
    )
    
    
    (77,921
    )Total stockholders equity
    
    
    (5,217
    )
    
    
    (7,696
    )Total liabilities and stockholders equity
    
    $
    558
    
    
    $
    414
  3




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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
 
 STATEMENTS OF OPERATIONS
 Period fromThree Months Ended
    
    Six Months Ended
    
    March 18, 1996June 30,
    
    June 30,
    
    (inception) to2004
    
    2005
    
    2004
    
    2005
    
    June 30, 2005Revenues:Research material sales
    
    $
    10
    
    
    $
    8
    
    
    $
    34
    
    
    $
    19
    
    
    $
    431Contract research and development
from related parties
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,128Research grants
    
    
    106
    
    
    
    
    
    
    
    209
    
    
    
    76
    
    
    
    1,051Total revenues
    
    
    116
    
    
    
    8
    
    
    
    243
    
    
    
    95
    
    
    
    2,610Operating expenses:Cost of research material sales
    
    
    6
    
    
    
    1
    
    
    
    31
    
    
    
    5
    
    
    
    375Research and development
    
    
    142
    
    
    
    1,293
    
    
    
    371
    
    
    
    2,608
    
    
    
    30,203General and administrative
    
    
    706
    
    
    
    454
    
    
    
    1,263
    
    
    
    920
    
    
    
    29,609Depreciation and amortization
    
    
    37
    
    
    
    15
    
    
    
    74
    
    
    
    39
    
    
    
    2,242Accrued loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Asset impairment loss
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,066Total operating expenses
    
    
    891
    
    
    
    1,763
    
    
    
    1,739
    
    
    
    3,572
    
    
    
    65,390Loss from operations
    
    
    (775
    )
    
    
    (1,755
    )
    
    
    (1,496
    )
    
    
    (3,477
    )
    
    
    (62,780
    )Other income (expense):Warrant valuation
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (368
    )Gain on sale of intellectual rights
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,656Interest expense
    
    
    (245
    )
    
    
    (884
    )
    
    
    (352
    )
    
    
    (1,693
    )
    
    
    (11,313
    )Interest income
    
    
    1
    
    
    
    1
    
    
    
    1
    
    
    
    2
    
    
    
    733Net loss
    
    
    (1,019
    )
    
    
    (2,638
    )
    
    
    (1,847
    )
    
    
    (5,168
    )
    
    
    (70,072
    )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 loss applicable to common stockholders
    
    $
    (1,019
    )
    
    $
    (2,638
    )
    
    $
    (1,847
    )
    
    $
    (5,168
    )
    
    $
    (77,918
    )Net loss per share applicable to common
stockholders  basic and diluted
    
    $
    (0.05
    )
    
    $
    (0.14
    )
    
    $
    (0.10
    )
    
    $
    (0.27
    )Weighted average shares used in computing
basic and diluted loss per share
    
    
    19,027
    
    
    
    19,078
    
    
    
    19,026
    
    
    
    19,057
 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) to2004
    
    2005
    
    June 30, 2005Cash Flows from Operating Activities:Net Loss
    
    $
    (1,847
    )
    
    $
    (5,168
    )
    
    $
    (70,072
    )Reconciliation of net loss to net cash used in operating activities:Depreciation and amortization
    
    
    74
    
    
    
    39
    
    
    
    2,241Amortization of deferred financing costs
    
    
    
    
    
    
    
    
    
    
    320Amortization debt discount
    
    
    319
    
    
    
    1,445
    
    
    
    8,795Accrued interest converted to preferred stock
    
    
    
    
    
    
    
    
    
    
    260Accreted interest on convertible promissory note
    
    
    26
    
    
    
    244
    
    
    
    438Stock-based compensation costs
    
    
    26
    
    
    
    6
    
    
    
    1,089Loss (gain) on sale and disposal of property and equipment
    
    
    
    
    
    
    
    
    
    
    475Gain on sale of intellectual property and royalty rights
    
    
    
    
    
    
    
    
    
    
    (3,656
    )Gain on sale of property and equipment
    
    
    (36
    )
    
    
    (81
    )
    
    
    (217
    )Warrant valuation
    
    
    
    
    
    
    
    
    
    
    368Asset impairment loss
    
    
    
    
    
    
    
    
    
    
    2,066Loss on facility sublease
    
    
    
    
    
    
    
    
    
    
    895Increase (decrease) in cash resulting from changes in assets and
liabilities:Accounts receivable
    
    
    1
    
    
    
    (99
    )
    
    
    (110
    )Prepaid expenses and other current assets
    
    
    38
    
    
    
    59
    
    
    
    374Accounts payable and accrued expenses
    
    
    237
    
    
    
    761
    
    
    
    3,623Accrued loss on sublease
    
    
    
    
    
    
    
    
    
    
    (266
    )Deferred grant revenue
    
    
    105
    
    
    
    (35
    )
    
    
    Deferred rent
    
    
    (7
    )
    
    
    
    
    
    
    410Net Cash used in Operating Activities
    
    
    (1,064
    )
    
    
    (2,829
    )
    
    
    (52,967
    )Cash Flows from Investing Activities:Purchase of property and equipment, net
    
    
    
    
    
    
    
    
    
    
    (4,537
    )Proceeds from sale of property and equipment
    
    
    36
    
    
    
    81
    
    
    
    217Proceeds from sale of intellectual property
    
    
    
    
    
    
    
    
    
    
    1,816Proceeds from sale of marketable securities
    
    
    
    
    
    
    
    
    
    
    2,000Transfer of restricted cash
    
    
    75
    
    
    
    
    
    
    
    (1,034
    )Net Cash provided by (used in) Investing Activities
    
    
    111
    
    
    
    81
    
    
    
    (1,538
    )Cash Flows from Financing Activities:Proceeds from issuance of note payable to stockholder
    
    
    
    
    
    
    
    
    
    
    1,650Repayment of note payable to stockholder
    
    
    
    
    
    
    
    
    
    
    (1,650
    )Proceeds from issuance of convertible promissory note and warrants,
net of issuance costs
    
    
    1,100
    
    
    
    1,400
    
    
    
    11,149Borrowing under line of credit, Northwest Hospital
    
    
    
    
    
    
    
    
    
    
    2,834Repayment of line of credit, Northwest Hospital
    
    
    
    
    
    
    
    
    
    
    (2,834
    )Repayment of convertible promissory note
    
    
    (52
    )
    
    
    (54
    )
    
    
    (106
    )Payment on capital lease obligations
    
    
    (21
    )
    
    
    (22
    )
    
    
    (295
    )Payments on note payable
    
    
    
    
    
    
    
    
    
    
    (420
    )Proceeds from issuance Series A cumulative preferred stock, net
    
    
    
    
    
    
    1,276
    
    
    
    28,708Proceeds from exercise of stock options and warrants
    
    
    
    
    
    
    4
    
    
    
    224Proceeds from issuance common stock, net
    
    
    
    
    
    
    
    
    
    
    17,369Mandatorily redeemable Series A preferred stock redemption fee
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Deferred financing costs
    
    
    
    
    
    
    
    
    
    
    (320
    )Net Cash provided by Financing Activities
    
    
    1,027
    
    
    
    2,604
    
    
    
    54,609Net increase (decrease) in cash and cash equivalents
    
    
    74
    
    
    
    (144
    )
    
    
    104Cash and cash equivalents at beginning of period
    
    
    255
    
    
    
    248
    
    
    
    Cash and cash equivalents at end of period
    
    $
    329
    
    
    $
    104
    
    
    $
    104Supplemental disclosure of cash flow informationCash paid during the period for interest
    
    $
    7
    
    
    $
    4
    
    
    $
    1,393Supplemental schedule of non-cash financing activitiesEquipment acquired through capital leases
    
    
    
    
    
    
    
    
    
    
    285Common stock warrant liability
    
    
    
    
    
    
    
    
    
    
    4,714Accretion of mandatorily redeemable Series A preferred stock redemption
obligation
    
    
    
    
    
    
    
    
    
    
    1,872Beneficial conversion feature of convertible promissory notes
    
    
    
    
    
    
    1,400
    
    
    
    5,193Conversion of convertible promissory notes and accrued interest to
Series D preferred stock
    
    
    
    
    
    
    
    
    
    
    5,324Issuance 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
    
    
    
    
    
    
    8
    
    
    
    760Cancellation of options and restricted stock
    
    
    
    
    
    
    
    
    
    
    849Stock subscription receivable
    
    
    
    
    
    
    
    
    
    
    480Financing of prepaid insurance through note payable
    
    
    
    
    
    
    
    
    
    
    420
  5




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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.
 
 Notes to Condensed Financial Statements
 1. Basis of Presentation
    Stock-Based Compensation
    6




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##### Table of Contents



Three months ended June 30,
    
    Six months ended June 30,(in thousands, except earnings per share)
    
    (in thousands, except earnings per share)2004
    
    2005
    
    2004
    
    2005Net loss applicable to common Stockholders As reported
    
    
    (1,019
    )
    
    
    (2,638
    )
    
    
    (1,847
    )
    
    
    (5,168
    )Add: Stock-based employee compensation expense
included in reported net loss, net
    
    
    7
    
    
    
    4
    
    
    
    26
    
    
    
    8Deduct: Stock-based employee compensation
determined under fair value based method for all
awards
    
    
    (67
    )
    
    
    (25
    )
    
    
    (152
    )
    
    
    (44
    )Pro forma
    
    
    (1,079
    )
    
    
    (2,659
    )
    
    
    (1,973
    )
    
    
    (5,204
    )Net loss per share-basic and diluted:As reported
    
    
    (0.05
    )
    
    
    (0.14
    )
    
    
    (0.10
    )
    
    
    (0.27
    )Pro forma
    
    
    (0.06
    )
    
    
    (0.14
    )
    
    
    (0.10
    )
    
    
    (0.27
    )
  Six months ended June 30, 2005Risk-free interest rate
    
    
    2.46
    %Expected life
    
    5.0 yearsExpected volatility
    
    
    439.19
    %Dividend yield
    
    
    0.00
    %
 2. Liquidity
    3. Net Loss Per Share Applicable to Common Stockholders
  7




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##### Table of Contents



4. Notes Payable to Related Parties
 Management Loans
  Name
    
    Title
    
    PrincipalAlton L. Boynton, Ph.D.
    
    President, Chief Scientific Officer, Chief Operating Officer and Secretary
    
    $
    183,000Marnix Bosch, Ph.D.
    
    Vice President of Vaccine Research and Development
    
    
    41,000Larry L. Richards
    
    Controller (Principal Financial and Accounting Officer)
    
    
    11,000Total
    
    $
    235,000
    8




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##### Table of Contents



Toucan Capital Loans
   Loan Date
    
    Principal(6)
    
    Due Date
    
    Accrued Interest(1)
    
    Convertible Shares
    
    Shares Warrant(In thousands)
    
    
    
    
    
    (In thousands)
    
    (In thousands)
    
    (In thousands)(2)(3)02/02/04
    
    $
    50
    
    
    
    11/01/05
    
    
    $
    7
    
    
    
    1,431
    
    
    
    3,000
    (4)03/01/04
    
    
    50
    
    
    
    11/01/05
    
    
    
    7
    
    
    
    1,421
    
    
    
    3,000
    (4)04/26/04
    
    
    500
    
    
    
    11/01/05
    
    
    
    60
    
    
    
    13,995
    
    
    
    30,000
    (4)06/11/04
    
    
    500
    
    
    
    11/01/05
    
    
    
    53
    
    
    
    13,822
    
    
    
    30,000
    (4)07/30/04
    
    
    2,000
    
    
    
    11/01/05
    
    
    
    184
    
    
    
    54,589
    
    
    
    20,000
    (5)10/22/04
    
    
    500
    
    
    
    11/01/05
    
    
    
    34
    
    
    
    13,360
    
    
    
    5,000
    (5)11/10/04
    
    
    500
    
    
    
    11/10/05
    
    
    
    32
    
    
    
    13,295
    
    
    
    5,000
    (5)12/27/04
    
    
    250
    
    
    
    12/27/05
    
    
    
    13
    
    
    
    6,567
    
    
    
    2,500
    (5)04/12/05
    
    
    450
    
    
    
    04/12/06
    
    
    
    10
    
    
    
    11,493
    
    
    
    4,500
    (5)05/13/05
    
    
    450
    
    
    
    05/13/06
    
    
    
    6
    
    
    
    11,398
    
    
    
    4,500
    (5)06/16/05
    
    
    500
    
    
    
    06/16/06
    
    
    
    2
    
    
    
    12,551
    
    
    
    5,000
    (5)Total
    
    $
    5,750
    
    
    
    
    
    
    $
    408
    
    
    
    153,922
    
    
    
    112,500
 
 (1)
    
    As of June 30, 2005. Interest accrues at 10% per annum based on a 365-day basis compounded annually from their respective original issuance dates.(2)
    
    The warrant shares are exercisable for shares of convertible preferred stock if the convertible preferred stock is approved and authorized and other investors
have purchased in cash a minimum of $15 million of such convertible preferred stock, on the terms and conditions set forth in the recapitalization agreement.
However, if, for any reason, such convertible preferred stock is not approved or authorized and/or if other investors have not purchased in cash a minimum of
$15 million of such convertible preferred stock, on the terms and conditions set forth in the recapitalization agreement, these warrants shall be exercisable
for any equity security and/or debt security and/or any combination thereof.(3)
    
    Exercise period is 7-years from the issuance date of the convertible note except for the February 2 and March 1, 2004 warrants which have an April 26 exercise
date.(4)
    
    Per share exercise price is $0.01(5)
    
    Per share exercise price is $0.04(6)
    
    The notes are secured by a first priority senior security interest in all of our assets. 9




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##### Table of Contents



5. Unregistered Sales of Equity Securities
 Toucan Capital Series A Cumulative Convertible Preferred Stock
  (i)
    
    is entitled to cumulative dividends at the rate of 10% per year;(ii)
    
    is entitled to a liquidation preference in the amount of its initial purchase
price plus all accrued and unpaid dividends (to the extent of legally available
funds);(iii)
    
    has a preference over the common stock with respect to dividends and distributions;(iv)
    
    is entitled to participate on an as-converted basis with the common stock on any
distributions after the payment of any preferential amounts to the series A stock;(v)
    
    votes on an as converted basis with the common stock on matters submitted to the common
stockholders for approval and as a separate class on certain other material matters; and(vi)
    
    is convertible into common stock on a one-for-one basis (subject to adjustment in the event of
stock dividends, stock splits, reverse stock splits, recapitalizations, etc.).
  Toucan Capital Series A Warrant
  6. Subsequent Events
  7. Contingency
   10




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##### Table of Contents



Item. 2. Managements Discussion and Analysis of Financial Condition and Result of Operations
  Overview
    Critical Accounting Policies and Estimates
   11




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##### Table of Contents



Results of Operations
   12




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##### Table of Contents



Three Months Ended June 30, 2004 and 2005
 Total Revenues.
 Cost of Research Material Sales.
 Research and Development Expense.
 General
and Administrative Expense.
 Depreciation and Amortization.
 Total Other Income (Expense), Net.
 Six Months Ended June 30, 2004 and 2005
 Total Revenues.
 Cost of Research Material Sales.
 Research and Development Expense.
 13




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##### Table of Contents



General
and Administrative Expense.
 Depreciation and Amortization.
 Total Other Income (Expense), Net.
 Liquidity and Capital Resources
   Aged Trade Payables
    
    (in thousands)Current:
    
    $
    36115 Days
    
    
    33330 Days
    
    
    4460 Days
    
    
    1,600Total
    
    
    2,338
    14




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##### Table of Contents



Sources of Cash
 Federal Grants
   Research Reagent Sales
  License Fees
  Management Loan
  15




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##### Table of Contents



Toucan Capital Loans
  Toucan Capital Series A Cumulative Convertible Preferred Stock
  Uses of Cash
    Factors That May Affect Results of Operations and Financial Condition
  16




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We will need to raise additional capital which may not be available.
   Aged Trade Payables
    
    (in thousands)Current:
    
    $
    36115 Days
    
    
    33330 Days
    
    
    4460 Days
    
    
    1,600Total
    
    
    2,338
  Our auditors have issued a going concern audit opinion.
  We expect to continue to incur substantial losses, and we may never achieve profitability.
  
    
    $12.8 million in 2002;
    
    $5.8 million in 2003;
    
    $8.6 million in 2004; and
    
    $5.1 million for the six months ended June 30, 2005.
  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.
  17




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
    
    $9,000 in 2002;
    
    $529,000 in 2003;
    
    $390,000 in 2004; and
    
    $95,000 for the six months ended June 30, 2005.
  
    
    the sale of research products to a single customer;
    
    contract research and development from related parties; and
    
    research grants.
  We have reduced business umbrella, auto, crime and fiduciary, and directors and officers
liability insurance coverage.
  We may not be able to retain or recruit personnel.
  Failure to obtain regulatory approval for one or more of our product candidates could
significantly harm our business.
   18




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Because we lack sales and marketing experience, we may experience significant difficulties
commercializing our research product candidates.
  Our success partially depends on existing and future partners.
   
    
    may not commit sufficient resources to our programs or product candidates;
    
    may not conduct their agreed activities on time, or at all, resulting in delay or
termination of the development of our product candidates and technology;
    
    may not perform their obligations as expected;
    
    may pursue products or alternative technologies in preference to ours; or
    
    may dispute the ownership of products or technology developed under our partnerships.
  19




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Competition in our industry is intense and most of our competitors have substantially greater
resources than we have.
  
    
    biopharmaceutical companies;
    
    biotechnology companies;
    
    pharmaceutical companies;
    
    academic institutions; and
    
    other research organizations.
   
    
    obtain additional funding;
    
    successfully complete clinical trials and obtain all requisite regulatory approvals;
    
    maintain a proprietary position in our technologies and products;
    
    attract and retain key personnel; and
    
    maintain existing or enter into new partnerships.
  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.
  20




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Our success will depend partly on our ability to operate without infringing or misappropriating the
proprietary rights of others.
     21




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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 owns the vast majority of our stock and, as a result, the trading price for our
shares may be depressed as they can take actions that may be adverse to your interests.
   There may not be an active, liquid trading market for our common stock.
  22




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Our common stock may experience extreme price and volume fluctuations, which could lead to costly
litigation for us and make an investment in us less appealing.
  
    
    announcements of technological innovations or new products by us or our competitors;
    
    development and introduction of new cancer therapies;
    
    media reports and publications about cancer therapies;
    
    announcements concerning our competitors or the biotechnology industry in general;
    
    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.
  Our incorporation documents, 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 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.
  Toucan Capital has the ability to control our company.
  23




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Our incorporation documents, 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 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.
  
 Item 3. Quantitative and Qualitative Disclosures About Market Risk
  
 Item 4. Controls and Procedures
    24




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plan. SEC
release #33-8545 extends the deadline for section 404 compliance for non-accelerated filers, such
as our company, to the first fiscal year ending on or after July 15, 2006.
  
 Part II  Other Information
 
 Item 1. Legal Proceedings
     
 Item 2. Defaults upon Senior Securities
  
 Item 3. Submission of Matters to a Vote of Security Holders
  
 Item 4. Exhibits
  3.1
    
    Sixth Amended and Restated Certificate of Incorporation. (3.1) (1)3.2
    
    Certificate of Designations, Preferences and Rights of Series A Cumulative Convertible Preferred
Stock. (3.1) (2)3.3
    
    Second Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.2) (2)10.1
    
    Amendment No. 6 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated May 13, 2005. (10.1) (1)10.2
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the principal
amount of $450,000 between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II, L.P. dated
May 13, 2005. (10.2) (1)10.3
    
    Warrant to purchase securities of the Company dated May 13, 2005 issued to Toucan Capital Fund II,
L.P. (10.3) (1)10.4
    
    Fourth Amendment to Amended and Restated Binding Term Sheet dated May 13, 2005. (10.4) (1)10.5
    
    Amendment No. 7 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated June 16, 2005. (10.1) (2)10.6
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the principal
amount of $500,000 between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II, L.P. dated
June 16, 2005. (10.2) (2)
 25




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10.7
    
    Warrant to purchase securities of the Company dated June 16, 2005 issued to Toucan Capital Fund II,
L.P. (10.3) (2)10.8
    
    Fifth Amendment to Amended and Restated Binding Term Sheet dated June 16, 2005. (10.4) (2)10.9
    
    Amendment No. 8 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.1) (3)10.10
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the principal
amount of $500,000 between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated
July 26, 2005. (10.2) (3)10.11
    
    Warrant to purchase securities of the Company dated July 26, 2005 issued to Toucan Capital Fund II,
L.P. (10.3) (3)10.12
    
    Sixth Amendment to Amended and Restated Binding Term Sheet, dated July 26, 2005. (10.4) (3)10.13
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $50,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.5) (3)10.14
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $50,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.6) (3)10.15
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $500,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.7) (3)10.16
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $500,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.8) (3)10.17
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $2,000,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.9) (3)10.18
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10% Convertible,
Secured Promissory Note in the principle amount of $500,000 between the Company and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.10) (3)10.19
    
    Form of Fourth Amendment To Convertible Secured Promissory Note between the Company and Holders of
the November 12, 2003 Convertible Secured Promissory Note, dated July 26, 2005. (10.11) (3)
 26




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31.1
    
    Certification of President (Principal 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 Controller (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 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Controller Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Employment Agreement between Northwest Biotherapeutics, Inc., and Paul Zeltzer, dated August 2, 2005.
 
 (1)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Form 8-K on May 18, 2005.(2)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Form 8-K on June 21, 2005.(3)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Form 8-K on August 1, 2005. 27




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SIGNATURES
  NORTHWEST BIOTHERAPEUTICS, INCDated: August 15, 2005
    By:
    /s/ Alton L. BoyntonAlton L. BoyntonPresident (Principal Executive Officer) Dated: August 15, 2005
    By:
    /s/ Larry L. RichardsLarry L. RichardsController (Principal Financial and
Accounting Officer) 28




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NORTHWEST BIOTHERAPEUTICS, INC.
  
 EXHIBIT INDEX
 ExhibitNumber
    
    Description3.1
    
    Sixth Amended and Restated Certificate of Incorporation. (3.1) (1)3.2
    
    Certificate of Designations, Preferences and Rights of Series A Cumulative Convertib
Preferred Stock. (3.1) (2)3.3
    
    Second Amended and Restated Bylaws of Northwest Biotherapeutics, Inc. (3.2) (2)10.1
    
    Amendment No. 6 to the Amended an 10.1 Amendment No. 6 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated May 13, 2005. (10.1) (1)10.2
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the
principal amount of $450,000 between Northwest Biotherapeutics, Inc. and Toucan Capital
Fund II, L.P. dated May 13, 2005. (10.2) (1)10.3
    
    Warrant to purchase securities of the Company dated May 13, 2005 issued to Toucan Capital
Fund II, L.P. (10.3) (1)10.4
    
    Fourth Amendment to Amended and Restated Binding Term Sheet dated May 13, 2005. (10.4) (1)10.5
    
    Amendment No. 7 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated June 16, 2005. (10.1) (2)10.6
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the
principal amount of $500,000 between Northwest Biotherapeutics, Inc. and Toucan Capital
Fund II, L.P. dated June 16, 2005. (10.2) (2)10.7
    
    Warrant to purchase securities of the Company dated June 16, 2005 issued to Toucan Capital
Fund II, L.P. (10.3) (2)10.8
    
    Fifth Amendment to Amended and Restated Binding Term Sheet dated June 16, 2005. (10.4) (2)10.9
    
    Amendment No. 8 to the Amended and Restated Recapitalization Agreement between Northwest
Biotherapeutics, Inc. and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.1) (3)10.10
    
    Loan Agreement, Security Agreement and 10% Convertible, Secured Promissory Note in the
principal amount of $500,000 between Northwest Biotherapeutics, Inc. and Toucan Capital
Fund II, L.P., dated July 26, 2005. (10.2) (3)10.11
    
    Warrant to purchase securities of the Company dated July 26, 2005 issued to Toucan Capital
Fund II, L.P. (10.3) (3)10.12
    
    Sixth Amendment to Amended and Restated Binding Term Sheet, dated July 26, 2005. (10.4) (3)10.13
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $50,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.5) (3)
 29




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ExhibitNumber
    
    Description10.14
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $50,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.6) (3)10.15
    
    Second Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $500,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.7) (3)10.16
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $500,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.8) (3)10.17
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $2,000,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.9) (3)10.18
    
    First Amendment To Amended And Restated Loan Agreement, Security Agreement and 10%
Convertible, Secured Promissory Note in the principle amount of $500,000 between the
Company and Toucan Capital Fund II, L.P., dated July 26, 2005. (10.10) (3)10.19
    
    Form of Fourth Amendment To Convertible Secured Promissory Note between the Company and
Holders of the November 12, 2003 Convertible Secured Promissory Note, dated July 26, 2005.
(10.11) (3)31.1
    
    Certification of President (Principal 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 Controller (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 Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.32.2
    
    Certification of Controller Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.99.1
    
    Employment Agreement between Northwest Biotherapeutics, Inc., and Paul Zeltzer, dated
August 2, 2005.
 
 (1)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the
Registrants Form 8-K on May 18, 2005.(2)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrats Form 8-K on June 21, 2005(3)
    
    Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrants Form 8-K on August 1, 2005. 30