##### Table of Contents



As filed with the Securities and Exchange Commission on
May 19, 2006


Registration
No. 333-








UNITED STATES SECURITIES AND EXCHANGE COMMISSION


Washington, D.C. 20549


Form S-1


REGISTRATION STATEMENT


UNDER


THE SECURITIES ACT OF 1933


Northwest Biotherapeutics, Inc.


(Exact name of registrant as specified in its charter)


|                                                                   |  |                                                              |  |                                            
|------------------------------------------------------------------ |  | ------------------------------------------------------------ |  | -------------------------------------------
|Delaware                                                           |  | 2834                                                         |  | 94-3306718                                 
|(State or other jurisdiction of
    incorporation or organization) |  | (Primary Standard Industrial
    Classification Code Number) |  | (I.R.S. Employer
    Identification Number)

18701
120th Avenue
N.E., Suite 101


Bothell, WA 98011


(425) 608-3000


(Address, including zip code, and telephone number, including
area code, of registrants principal executive offices)


Alton L. Boynton, Ph.D.


President, Chief Operating and Scientific Officer


18701
120th Avenue
N.E., Suite 101


Bothell, WA 98011


(425) 608-3000


(Name, address, including zip code, and telephone number,
including area code, of agent for service)


With copies to:


Jim D. Johnston, Esq.


Johnston Law Firm


11808 Northup Way


Suite W-190


Bellevue, WA 98005


(425) 890-2367


Approximate date of commencement of proposed sale to the
public:


þ


o


o


o


CALCULATION OF REGISTRATION FEE


|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             
|---------------------------------------- |  |  | ------------------- |  |  | ------------------ |  |  | ----------------- |  |  | ------------
|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             
|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             
|                                         |  |  |                     |  |  | Proposed Maximum   |  |  | Proposed Maximum  |  |  | Amount of   
|Title of Each Class to be                |  |  | Amount              |  |  | Offering           |  |  | Aggregate         |  |  | Registration
|Registered                               |  |  | to be Registered(1) |  |  | Price per Share(2) |  |  | Offering Price(2) |  |  | Fee         
|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             
|Common stock, par value $0.001 per share |  |  | 58,969,641          |  |  | 0.385              |  |  | $22,703,312       |  |  | $2,429.25   
|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             
|                                         |  |  |                     |  |  |                    |  |  |                   |  |  |             



|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Includes: (i) 39,949,982 shares of common stock held
    by the selling stockholders named within; and
    (ii) 19,019,659 shares of common stock issuable upon
    exercise of warrants held by certain selling stockholders named
    within. Pursuant to Rule 416 under the Securities Act of
    1933, as amended, such number of common stock registered hereby
    shall also include an indeterminate number of additional shares
    of common stock issuable upon exercise of the warrants, as such
    number may be adjusted as a result of stock splits, stock
    dividends and antidilution provisions in accordance with
    Rule 416.
|   
|(2) | Estimated solely for purposes of calculating the registration
    fee pursuant to Rule 457(c) and Rule 457(g) under the
    Securities Act of 1933, as amended, and based upon the average
    of the high and low sales prices reported for the common stock
    on the Over-The-Counter Bulletin Board on May 15, 2006.                                                                                                                                                                                                                                                                                                                            

The Registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the Registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a)
of the Securities Act of 1933, as amended, or until the
Registration Statement shall become effective on such date as
the Commission, acting pursuant to said Section 8(a), may
determine.










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##### Table of Contents



|The
information in this prospectus is not complete and may be
changed. These securities may not be sold until the registration
statement filed with the Securities and Exchange Commission is
effective. This prospectus is not an offer to sell nor does it
seek an offer to buy these securities in any jurisdiction where
the offer or sale is not
permitted.
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

SUBJECT TO
COMPLETION, DATED MAY 19, 2006


PROSPECTUS


58,969,641 Shares


Northwest Biotherapeutics,
Inc.


Common Stock


successors-in


Over-the




Investing in our common stock involves risks. See Risk
Factors beginning on page 5.


NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
SECURITIES COMMISSION HAS APPROVED OR DISAPPROVED OF THESE
SECURITIES OR DETERMINED IF THIS PROSPECTUS IS TRUTHFUL OR
COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.






---



##### 



TABLE OF CONTENTS







|                                                                                          |  |          |     | 
|----------------------------------------------------------------------------------------- |  | -------- | --- | 
|                                                                                          |  | Page No. |    
|                                                                                          |  |          |    
|TABLE OF CONTENTS                                                                         |  |          |     | 
|PROSPECTUS SUMMARY                                                                        |  |          | 1   | 
|THE OFFERING                                                                              |  |          | 2   | 
|SUMMARY FINANCIALS                                                                        |  |          | 3   | 
|RISK FACTORS                                                                              |  |          | 5   | 
|SPECIAL NOTE REGARDING FORWARD
    LOOKING STATEMENTS                                     |  |          | 13  | 
|USE OF PROCEEDS                                                                           |  |          | 14  | 
|MARKET FOR COMMON STOCK                                                                   |  |          | 14  | 
|SELECTED FINANCIAL DATA                                                                   |  |          | 15  | 
|MANAGEMENTS DISCUSSION AND
    ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS |  |          | 17  | 
|QUANTITATIVE AND QUALITATIVE DISCLOSURES
    ABOUT MARKET RISK                            |  |          | 34  | 
|BUSINESS                                                                                  |  |          | 35  | 
|PROPERTIES                                                                                |  |          | 47  | 
|LEGAL PROCEEDINGS                                                                         |  |          | 47  | 
|EXECUTIVE OFFICERS AND DIRECTORS                                                          |  |          | 49  | 
|COMPENSATION OF DIRECTORS AND EXECUTIVE
    OFFICERS                                      |  |          | 50  | 
|CERTAIN RELATIONSHIPS                                                                     |  |          | 54  | 
|SECURITY OWNERSHIP OF BENEFICIAL OWNERS
    AND SELLING STOCKHOLDERS                      |  |          | 57  | 
|DESCRIPTION OF CAPITAL STOCK                                                              |  |          | 62  | 
|SHARES ELIGIBLE FOR FUTURE SALE                                                           |  |          | 66  | 
|PLAN OF DISTRIBUTION                                                                      |  |          | 68  | 
|LEGAL MATTERS                                                                             |  |          | 69  | 
|EXPERTS                                                                                   |  |          | 69  | 
|WHERE YOU CAN FIND MORE
    INFORMATION                                                   |  |          | 70  | 
|INDEX TO FINANCIAL STATEMENTS                                                             |  |          | F-1 | 
|EXHIBIT 5.1                                                                              
|EXHIBIT 23.1                                                                             
|EXHIBIT 23.2                                                                             



You should rely only on the information contained in this
document or to which we have referred you. We have not
authorized anyone to provide you with information that is
different. This document may only be used where it is legal to
sell these securities. The information in this document may only
be accurate on the date of this document.






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##### Table of Contents



PROSPECTUS SUMMARY
 This summary highlights information contained elsewhere in
this prospectus. It does not contain all of the information that
you should consider before investing in our common stock. You
should read the entire prospectus carefully, including our
financial statements and notes thereto. You should read
Risk Factors beginning on page 5 for more
information about important risks that you should consider
before investing in our common stock.
 As used in this prospectus, unless the context otherwise
requires, the terms Northwest Biotherapeutics, the
Company, we, us, and
our refer to Northwest Biotherapeutics, Inc.
 NORTHWEST BIOTHERAPEUTICS, INC.
 General
  ® ® ®
 Recent Developments
  Other information


1



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##### Table of Contents



THE OFFERING
 Common stock offered by selling stockholders
    
    58,969,641 sharesCommon stock to be outstanding after this offering
    
    65,241,287 sharesUse of proceeds
    
    We intend to use the net proceeds that we receive from this
    offering, if any, for working capital and other general
    corporate purposes. We will not receive any of the proceeds from
    the sale of shares by the selling stockholders unless warrants
    are exercised for cash. See Use of Proceeds.Over-The-Counter Bulletin Board symbol
    
    NWBT.OB   
    an aggregate of 552,830 shares of common stock issuable
    upon exercise of options outstanding at May 15, 2006,
    granted under our 1998 Stock Option Plan, the 1999 Executive
    Stock Option Plan, the 2001 Stock Option Plan, the Employee
    Stock Purchase Plan and the 2001 Nonemployee Director Stock
    Incentive Plan, at a weighted average exercise price of
    $0.62 per share;
    an aggregate of 4,149,859 additional shares of common stock
    reserved for future grants under our 1998 Stock Option Plan, the
    1999 Executive Stock Option Plan, the 2001 Stock Option Plan,
    the Employee Stock Purchase Plan and the 2001 Nonemployee
    Director Stock Incentive Plan;
    an aggregate of 166,374,881 shares of common stock issuable
    upon exercise of warrants outstanding at May 15, 2006,
    including the 19,019,659 shares of common stock issuable
    upon exercise of warrants held by certain selling stockholders
    named in this prospectus;
    an aggregate of 225,174,520 shares of common stock issuable
    upon conversion of Series A and Series A-1 Preferred
    Stock outstanding at May 15, 2006; and
    an aggregate of 24,625,894 shares of common stock issuable
    upon conversion of convertible promissory notes outstanding at
    May 15, 2006.


2



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##### Table of Contents



Summary Financials
  Period fromMarch 18, 1996Year Ended
    
    Three Months Ended
    
    (Inception) toDecember 31,
    
    March 31,
    
    March 31,2003
    
    2004
    
    2005
    
    2005
    
    2006
    
    2006Statement of Operations Data:Total Revenues
    
    $
    529
    
    
    $
    390
    
    
    $
    124
    
    
    $
    87
    
    
    $
    
    
    
    $
    2,639Operating Costs and ExpensesCost of research material sales
    
    
    79
    
    
    
    40
    
    
    
    12
    
    
    
    2
    
    
    
    
    
    
    
    382Research and development
    
    
    1,624
    
    
    
    3,621
    
    
    
    4,469
    
    
    
    1,315
    
    
    
    427
    
    
    
    32,494General and administrative
    
    
    4,059
    
    
    
    2,845
    
    
    
    2,005
    
    
    
    464
    
    
    
    427
    
    
    
    31,121Depreciation and amortization
    
    
    207
    
    
    
    132
    
    
    
    63
    
    
    
    24
    
    
    
    10
    
    
    
    2,276Loss on facility sublease
    
    
    174
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    895Asset impairment loss
    
    
    904
    
    
    
    130
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,066Total operating costs and expenses
    
    
    7,047
    
    
    
    6,768
    
    
    
    6,549
    
    
    
    1,805
    
    
    
    864
    
    
    
    9,234Loss from operations
    
    
    (6,518
    )
    
    
    (6,378
    )
    
    
    (6,425
    )
    
    
    (1,718
    )
    
    
    (864
    )
    
    
    (66,595
    )Other Income (expense), netWarrant valuation
    
    
    
    
    
    
    (368
    )
    
    
    
    
    
    
    
    
    
    
    (2,113
    )
    
    
    (2,481
    )Gain on sale of intellectual property to Medarex
    
    
    816
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    3,656Interest expense
    
    
    (73
    )
    
    
    (1,765
    )
    
    
    (3,517
    )
    
    
    (809
    )
    
    
    (982
    )
    
    
    (14,119
    )Interest income
    
    
    23
    
    
    
    3
    
    
    
    5
    
    
    
    1
    
    
    
    1
    
    
    
    737Net loss
    
    
    (5,752
    )
    
    
    (8,508
    )
    
    
    (9,937
    )
    
    
    (2,526
    )
    
    
    (3,958
    )
    
    
    (78,802
    )Accretion of redemption value of mandatorily redeemable
    membership units and preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,872
    )Series A preferred stock redemption fee
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (1,700
    )Beneficial conversion feature of series D convertible
    preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (4,274
    )Net loss applicable to common stockholders
    
    $
    (5,752
    )
    
    $
    (8,508
    )
    
    $
    (9,937
    )
    
    $
    (2,526
    )
    
    $
    (3,958
    )
    
    $
    (86,648
    )Net loss per share applicable to common stockholders 
    basic and diluted
    
    $
    (0.30
    )
    
    $
    (0.45
    )
    
    $
    (0.52
    )
    
    $
    (0.13
    )
    
    $
    (0.21
    )Weighted average shares used in computering basic and diluted
    net loss per share
    
    
    18,908
    
    
    
    19,028
    
    
    
    19,068
    
    
    
    19,035
    
    
    
    19,230


3



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December 31,March 31,2003
    
    2004
    
    2005
    
    2006Balance Sheet Data:Cash
    
    $
    255
    
    
    $
    248
    
    
    $
    352
    
    
    $
    2,941Working capital (deficit)
    
    $
    (392
    )
    
    $
    (5,353
    )
    
    $
    (11,502
    )
    
    $
    (18,968
    )Total assets
    
    $
    871
    
    
    $
    558
    
    
    $
    631
    
    
    $
    3,162Long-term obligations, net of current portion and discounts
    
    $
    49
    
    
    $
    12
    
    
    $
    3
    
    
    $
    1Mandatorily redeemable convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Convertible preferred stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Total stockholders equity (deficit)
    
    $
    16
    
    
    $
    (5,217
    )
    
    $
    (11,418
    )
    
    $
    (18,893
    )


4



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RISK FACTORS


Our business, operations and financial condition are subject
to various risks. You should consider carefully the following
risk factors, in addition to the other information set forth in
this prospectus, before deciding to participate in the offering.
If any of these risks and uncertainties actually occur, our
business, financial condition or results of operations could be
materially and adversely affected, the value of our common stock
could decline, and you may lose all or part of your
investment.




| |                                                                          
| | -------------------------------------------------------------------------
| | We will need to raise additional capital, which may not be
    available.





| |                                                              
| | -------------------------------------------------------------
| | Our auditors have issued a going concern audit
    opinion.





| |                                                                                                                               
| | ------------------------------------------------------------------------------------------------------------------------------
| | We have reduced business umbrella, auto, crime and
    fiduciary, and directors and officers liability insurance
    coverage.



5



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| |                                                                                               
| | ----------------------------------------------------------------------------------------------
| | We expect to continue to incur substantial losses, and we
    may never achieve profitability.





| |   |                                                        
| | - | -------------------------------------------------------
| |  | $5.8 million in 2003;                                  
|
| |  | $8.5 million in 2004;                                  
|
| |  | $9.9 million in 2005; and                              
|
| |  | $4.0 million for the three months ended March 31, 2006.





| |                                                                                                                                                                                              
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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.





| |   |                                              
| | - | ---------------------------------------------
| |  | $529,000 in 2003;                            
|
| |  | $390,000 in 2004;                            
|
| |  | $124,000 in 2005; and                        
|
| |  | $0 for the three months ended March 31, 2006.





| |   |                                                            
| | - | -----------------------------------------------------------
| |  | the sale of research products to a single customer;        
|
| |  | contract research and development from related parties; and
|
| |  | research grants.                                           





| |                                                 
| | ------------------------------------------------
| | We may not be able to retain existing personnel.

15


6



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| |                                                                                                                                 
| | --------------------------------------------------------------------------------------------------------------------------------
| | We have no manufacturing capabilities, which could
    adversely impact our ability to commercialize our product
    candidates.





| |                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | 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
    collaborators.







| |   |                                                                                                                                                                   
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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 product candidates or alternative technologies in
    preference to ours; or                                                                           
|
| |  | may dispute the ownership of products or technology developed
    under our collaborations.                                                                       





7



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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 collaborations.                                     



8



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



9



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| |                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Toucan Capital and Toucan Partners beneficially own the
    vast majority of our stock and, as a result, the trading price
    for our shares may be depressed and these stockholders can take
    actions that may be adverse to your interests.

1-for-1




10



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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.                   



| |                                                                                                                                                                         
| | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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, and bylaws and stockholder
    rights plan may delay or prevent a change in our
    management.



11



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| |   |                                                                                                                                                                                                                                                       
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 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.                                                                                                                                                                                                          





| |                                                                                                                                                                             
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 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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SPECIAL NOTE REGARDING FORWARD LOOKING STATEMENTS






13



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USE OF PROCEEDS







MARKET FOR COMMON STOCK




|                              |                                       |      |   |      |     |  |   |      | 
|----------------------------- | ------------------------------------- | ---- | - | ---- | --- |  | - | ---- | 
|                              |                                       | High |   |      | Low | 
|                              |                                       |      |   |      |     | 
|Year Ending December 31, 2004 |                                       |      |   |      |     |  |   |     
|                              | First Quarter                         |      | $ | 0.28 |     |  | $ | 0.12 | 
|                              | Second Quarter                        |      | $ | 0.15 |     |  | $ | 0.02 | 
|                              | Third Quarter                         |      | $ | 0.09 |     |  | $ | 0.02 | 
|                              | Fourth Quarter                        |      | $ | 0.06 |     |  | $ | 0.03 | 
|Year Ending December 31, 2005 |                                       |      |   |      |     |  |   |     
|                              | First Quarter                         |      | $ | 0.70 |     |  | $ | 0.03 | 
|                              | Second Quarter                        |      | $ | 0.26 |     |  | $ | 0.16 | 
|                              | Third Quarter                         |      | $ | 0.22 |     |  | $ | 0.13 | 
|                              | Fourth Quarter                        |      | $ | 0.17 |     |  | $ | 0.09 | 
|Year Ending December 31, 2006 |                                       |      |   |      |     |  |   |     
|                              | First Quarter                         |      | $ | 0.69 |     |  | $ | 0.09 | 
|                              | Second Quarter (through May 15, 2006) |      | $ | 0.55 |     |  | $ | 0.37 | 





Dividend Policy




14



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##### Table of Contents






SELECTED FINANCIAL DATA




|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |        |        |        |   |        |        |      |       |         |         |         |  
|----------------------------- | ------------------------------------------------ | ------------------------------------------------------------------------------------------------ | ---------------------------------- | ------------ | --------------- | ------- | ----------- | -------------- | ------- | ------- | ---- | ------ | ------ | ------ | --- | ------ | ------ | ------ | --- | ------ | ------ | ------ | -------------- | ------ | ------ | ------ | - | ------ | ------ | ---- | ----- | ------- | ------- | ------- | -
|                              |                                                  |                                                                                                  |                                    | Three Months |                 |         | Period from |               
|                              |                                                  | Years Ended December 31,                                                                         |                                    |              | Ended March 31, |         |             | March 18, 1996 |        
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             | (Inception) to |        
|                              |                                                  | 2001                                                                                             |                                    |              | 2002            |         |             | 2003           |         |         | 2004 |        |        | 2005   |     |        | 2005   |        |     | 2006   |        |        | March 31, 2006 |       
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  | (In thousands, except per share data)                                                            |                                   
|Statement of Operations Data: |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |        |        |        |   |        |        |      |       |        
|Total Revenues                |                                                  | $                                                                                                | 129                                |              |                 | $       | 9           |                |         | $       | 529  |        |        | $      | 390 |        |        | $      | 124 |        |        | $      | 87             |        |        | $      |  |        |        | $    | 2,639 |        
|Operating Costs and Expenses  |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |        |        |        |   |        |        |      |       |        
|                              | Cost of research material sales                  |                                                                                                  |                                    | 67           |                 |         |             | 7              |         |         |      | 79     |        |        |     | 40     |        |        |     | 12     |        |        |                | 2      |        |        |   |       |        |      |       | 382     |        
|                              | Research and development                         |                                                                                                  |                                    | 4,907        |                 |         |             | 5,956          |         |         |      | 1,624  |        |        |     | 3,621  |        |        |     | 4,469  |        |        |                | 1,315  |        |        |   | 427    |        |      |       | 32,494  |        
|                              | General and administrative                       |                                                                                                  |                                    | 4,759        |                 |         |             | 7,463          |         |         |      | 4,059  |        |        |     | 2,845  |        |        |     | 2,005  |        |        |                | 464    |        |        |   | 427    |        |      |       | 31,121  |        
|                              | Depreciation and amortization                    |                                                                                                  |                                    | 467          |                 |         |             | 593            |         |         |      | 207    |        |        |     | 132    |        |        |     | 63     |        |        |                | 24     |        |        |   | 10     |        |      |       | 2,276   |        
|                              | Loss on facility sublease                        |                                                                                                  |                                    |             |                 |         |             | 721            |         |         |      | 174    |        |        |     |       |        |        |     |       |        |        |                |       |        |        |   |       |        |      |       | 895     |        
|                              | Asset impairment loss                            |                                                                                                  |                                    |             |                 |         |             | 1,032          |         |         |      | 904    |        |        |     | 130    |        |        |     |       |        |        |                |       |        |        |   |       |        |      |       | 2,066   |        
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  |                                                                                                  | Total operating costs and expenses |              |                 | 10,200  |             |                |         | 15,772  |      |        |        | 7,047  |     |        |        | 6,768  |     |        |        | 6,549  |                |        |        | 1,805  |   |        |        | 864  |       |         |         | 9,234   |  
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  |                                                                                                  | Loss from operations               |              |                 | (10,071 | )           |                |         | (15,763 | )    |        |        | (6,518 | )   |        |        | (6,378 | )   |        |        | (6,425 | )              |        |        | (1,718 | ) |        |        | (864 | )     |         |         | (66,595 | )
|Other Income (expense), net   |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |        |        |        |   |        |        |      |       |        
|                              | Warrant valuation                                |                                                                                                  |                                    |             |                 |         |             |               |         |         |      |       |        |        |     | (368   | )      |        |     |       |        |        |                |       |        |        |   | (2,113 | )      |      |       | (2,481  | )      
|                              | Gain on sale of intellectual property to Medarex |                                                                                                  |                                    |             |                 |         |             | 2,840          |         |         |      | 816    |        |        |     |       |        |        |     |       |        |        |                |       |        |        |   |       |        |      |       | 3,656   |        
|                              | Interest expense                                 |                                                                                                  |                                    | (1,062       | )               |         |             | (38            | )       |         |      | (73    | )      |        |     | (1,765 | )      |        |     | (3,517 | )      |        |                | (809   | )      |        |   | (982   | )      |      |       | (14,119 | )      
|                              | Interest income                                  |                                                                                                  |                                    | 193          |                 |         |             | 157            |         |         |      | 23     |        |        |     | 3      |        |        |     | 5      |        |        |                | 1      |        |        |   | 1      |        |      |       | 737     |        
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              | Net loss                                         |                                                                                                  |                                    | (10,940      | )               |         |             | (12,804        | )       |         |      | (5,752 | )      |        |     | (8,508 | )      |        |     | (9,937 | )      |        |                | (2,526 | )      |        |   | (3,958 | )      |      |       | (78,802 | )      
|                              |                                                  | Accretion of redemption value of mandatorily redeemable
    membership units and preferred stock |                                    |              | (379            | )       |             |                |        |         |      |        |       |        |     |        |       |        |     |        |       |        |                |        |       |        |   |        |       |      |       |         | (1,872  | )      
|                              |                                                  | Series A preferred stock redemption fee                                                          |                                    |              | (1,700          | )       |             |                |        |         |      |        |       |        |     |        |       |        |     |        |       |        |                |        |       |        |   |        |       |      |       |         | (1,700  | )      
|                              |                                                  | Beneficial conversion feature of series D convertible
    preferred stock                        |                                    |              | (4,274          | )       |             |                |        |         |      |        |       |        |     |        |       |        |     |        |       |        |                |        |       |        |   |        |       |      |       |         | (4,274  | )      
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  | Net loss applicable to common stockholders                                                       |                                    | $            | (17,293         | )       |             | $              | (12,804 | )       |      | $      | (5,752 | )      |     | $      | (8,508 | )      |     | $      | (9,937 | )      |                | $      | (2,526 | )      |   | $      | (3,958 | )    |       | $       | (86,648 | )      
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  | Net loss per share applicable to common Stockholders 
    basic and diluted                     |                                    | $            | (6.57           | )       |             | $              | (0.76   | )       |      | $      | (0.30  | )      |     | $      | (0.45  | )      |     | $      | (0.52  | )      |                | $      | (0.13  | )      |   | $      | (0.21  | )    |       |         |         |        
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       
|                              |                                                  | Weighted average shares used in computering basic and diluted
    net loss per share             |                                    |              | 2,631           |         |             |                | 16,911  |         |      |        | 18,908 |        |     |        | 19,028 |        |     |        | 19,068 |        |                |        | 19,035 |        |   |        | 19,230 |      |       |         |         |        
|                              |                                                  |                                                                                                  |                                    |              |                 |         |             |                |         |         |      |        |        |        |     |        |        |        |     |        |        |        |                |       

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|                    |                                                             |              |   |        |           |                |   |       |  |  |      |      |   |      |   |        |      |  |   |         |   |  |   |         |  
|------------------- | ----------------------------------------------------------- | ------------ | - | ------ | --------- | -------------- | - | ----- |  |  | ---- | ---- | - | ---- | - | ------ | ---- |  | - | ------- | - |  | - | ------- | -
|                    |                                                             | December 31, |   |        |          
|                    |                                                             |              |   |        | March 31, |               
|                    |                                                             | 2001         |   |        | 2002      |                |   | 2003  |  |  | 2004 |      |   | 2005 |   |        | 2006 | 
|                    |                                                             |              |   |        |           |                |   |       |  |  |      |      |   |      |   |        |      | 
|                    |                                                             |              |   |        |           | (In thousands) |   |       |  |  |     
|Balance Sheet Data: |                                                             |              |   |        |           |                |   |       |  |  |      |      |   |      |   |        |      |  |   |         |   |  |   |        
|                    | Cash                                                        |              | $ | 14,966 |           |                | $ | 2,539 |  |  | $    | 255  |   |      | $ | 248    |      |  | $ | 352     |   |  | $ | 2,941   |  
|                    | Working capital (deficit)                                   |              |   | 13,501 |           |                |   | 3,466 |  |  |      | (392 | ) |      |   | (5,353 | )    |  |   | (11,502 | ) |  |   | (18,968 | )
|                    | Total assets                                                |              |   | 19,476 |           |                |   | 7,572 |  |  |      | 871  |   |      |   | 558    |      |  |   | 631     |   |  |   | 3,162   |  
|                    | Long-term obligations, net of current portion and discounts |              |   | 123    |           |                |   | 378   |  |  |      | 49   |   |      |   | 12     |      |  |   | 3       |   |  |   | 1       |  
|                    | Mandatorily redeemable convertible preferred stock          |              |   |       |           |                |   |      |  |  |      |     |   |      |   |       |      |  |   |        |   |  |   |        |  
|                    | Convertible preferred stock                                 |              |   |       |           |                |   |      |  |  |      |     |   |      |   |       |      |  |   |        |   |  |   |        |  
|                    | Total stockholders equity (deficit)                        |              |   | 16,935 |           |                |   | 4,876 |  |  |      | 16   |   |      |   | (5,217 | )    |  |   | (11,418 | ) |  |   | (18,893 | )

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MANAGEMENTS DISCUSSION AND ANALYSIS OF


FINANCIAL CONDITION AND RESULTS OF OPERATIONS


The following discussion should be read in conjunction with,
and is qualified in its entirety by reference to, our
consolidated financial statements and the related notes included
elsewhere in this prospectus. The discussions in this section
contain forward-looking statements that involve risks and
uncertainties, and actual results could differ materially from
those discussed below. See Risk Factors and
Special Note Regarding Forward-Looking
Statements for a discussion of these risks and
uncertainties.


Overview






A-1


Going Concern




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Recapitalization










| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the issuance of a series of convertible promissory notes to
    Toucan Capital in aggregate principal amount of approximately
    $6.75 million (and associated warrants to purchase an
    aggregate of 122.5 million shares of capital stock at
    exercise prices ranging from 0.01 to $0.04 per share) from
    February 2004 through September 2005. These notes accrued
    interest at 10% per annum from the respective issuance
    dates of the notes;
|
| |  | the issuance of a convertible promissory note to Toucan
    Partners, in principal amount of $400,000 (and an associated
    warrant to purchase an aggregate of 4 million shares of
    capital stock at an exercise price of $0.04 per share) in
    November 2005. This note accrues interest at 10% per annum
    from the issuance date of the note;                                                                                                        
|
| |  | the issuance of a series of non-convertible promissory notes to
    Toucan Partners, in the aggregate principal amount of $550,000.
    These notes accrue interest at 10% per annum from the
    respective issuance dates of the notes;                                                                                                                                                                                                                        
|
| |  | the sale of Series A Preferred Stock to Toucan Capital for
    aggregate gross proceeds of approximately $1.3 million (and
    an associated warrant to purchase an aggregate of
    13 million shares of Series A Preferred Stock at an
    exercise price of $0.04 per share) in January 2005; and                                                                                                                                                             
|
| |  | the sale of approximately 39.5 million shares of common
    stock (and accompanying warrants to purchase an aggregate of
    approximately 19.7 shares of common stock at an exercise
    price of $0.14 per share) to certain accredited investors
    in the PIPE Financing for aggregate gross proceeds of
    approximately $5.5 million in April 2006.                                                                                                      

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1-for-1








| |   |                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an aggregate of 32.5 million shares of Series A
    Preferred Stock (convertible into an aggregate of
    32.5 million shares of common stock as of May 15,
    2006);                               
|
| |  | an aggregate of approximately 4.82 million shares of
    Series A-1 Preferred Stock (convertible into an aggregate
    of approximately 192.7 million shares of common stock as of
    May 15, 2006);
|
| |  | warrants to purchase an aggregate of 66 million shares of
    capital stock at an exercise price of $0.01 per share;                                                                                 
|
| |  | warrants to purchase an aggregate of 56.5 million shares of
    capital stock at an exercise price of $0.04 per
    share; and                                                                       
|
| |  | warrants to purchase an aggregate of 13 million shares of
    Series A Preferred Stock at an exercise price of
    $0.04 per share.                                                                  





| |   |                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | convertible promissory notes in aggregate principal amount of
    $950,000, with accrued interest thereon of approximately $35,000
    as of May 15, 2006 (with such notes convertible as of
    May 15, 2006 into an aggregate of approximately
    24.6 million shares of capital stock at a conversion price
    of $0.04 per share); and
|
| |  | warrants to purchase an aggregate of 9.5 million shares of
    capital stock at an exercise price of $0.04 per share.                                                                                                                                                                                                                       







| |   |                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------
| |  | an aggregate of approximately 39.9 million shares of common
    stock; and                                                             
|
| |  | warrants to purchase an aggregate of approximately
    19.0 million shares of common stock at an exercise price of
    $0.14 per share.



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Series A Cumulative Convertible Preferred Stock and
Series A-1 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, and is on a
    pari passu basis with the Series A-1 Preferred 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 Preferred Stock
    and the Series A-1 Preferred Stock;  
|
| | (v) votes on an as converted basis with the common stock
    and the Series A-1 Preferred 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




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##### Table of Contents



Toucan Partners Notes




|         |       |                |     |     |          |  |          |               |  |  |     |  | 
|-------- | ----- | -------------- | --- | --- | -------- |  | -------- | ------------- |  |  | --- |  | 
|Date     |       | Loan Principal |     |     | Due Date |  |          | Interest Rate | 
|         |       |                |     |     |          |  |          |               | 
|         |       | (In thousands) |     |     |          |  |         
|11/14/05 |       | $              | 400 |     |          |  | 11/14/06 |               |  |  | 10% | 
|12/30/05 |       |                | 250 |     |          |  | 12/30/06 |               |  |  | 10% | 
|03/09/06 |       |                | 300 |     |          |  | 03/09/07 |               |  |  | 10% | 
|         |       |                |     |     |          |  |          |               | 
|         | Total |                | $   | 950 |          |  |          |               |  |  |     |  | 
|         |       |                |     |     |          |  |          |               | 

365-day


Bridge Warrants




| |               
| | --------------
| | Toucan Capital



|              |  |                   |         |    
|------------- |  | ----------------- | ------- | ---
|Issuance Date |  | Warrant Shares(1) |        
|              |  |                   |        
|              |  | (In thousands)    |        
|04/26/04      |  |                   | 36,000  | (2)
|06/11/04      |  |                   | 30,000  | (2)
|07/30/04      |  |                   | 20,000  | (3)
|10/22/04      |  |                   | 5,000   | (3)
|11/10/04      |  |                   | 5,000   | (3)
|12/27/04      |  |                   | 2,500   | (3)
|04/12/05      |  |                   | 4,500   | (3)
|05/13/05      |  |                   | 4,500   | (3)
|06/16/05      |  |                   | 5,000   | (3)
|07/26/05      |  |                   | 5,000   | (3)
|09/07/05      |  |                   | 5,000   | (3)
|              |  |                   |        
|Total         |  |                   | 122,500 |    
|              |  |                   |        






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These warrants have a seven year exercise period from their
    respective issuance dates. The foregoing warrants are
    exercisable for shares of convertible preferred stock if 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, 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. As
    a result, these warrants are currently exercisable at the
    holders election, for shares of common stock or
    Series A Preferred Stock, or Series A-1 Preferred
    Stock.
|   
|(2) | Per share exercise price is $0.01 for common stock or
    Series A Preferred Stock or $0.40 per share for
    Series A-1 Preferred Stock.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              

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|    |                                                                                                                                          
|--- | -----------------------------------------------------------------------------------------------------------------------------------------
|(3) | Per share exercise price is $0.04 for common stock or
    Series A Preferred Stock or $1.60 per share for
    Series A-1 Preferred Stock.



| |                
| | ---------------
| | Toucan Partners



|              |  |                   |       | 
|------------- |  | ----------------- | ----- | 
|Issuance Date |  | Shares            |      
|              |  |                   |      
|              |  | (In thousands)(1) |      
|11/14/05      |  |                   | 4,000 | 
|04/17/06      |  |                   | 5,500 | 
|              |  |                   |      
|Total         |  |                   | 9,500 | 
|              |  |                   |      






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | These warrants have a seven year exercise period from their
    respective issuance dates. The foregoing warrants are
    exercisable for shares of convertible preferred stock if other
    investors have purchased in cash a minimum of $15 million
    of such convertible preferred stock, on the terms and conditions
    set forth in our recapitalization agreement. However, 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. As
    a result, these warrants are currently exercisable at the
    holders election, for shares of common stock or
    Series A Preferred Stock, or Series A-1 Preferred
    Stock. Per share exercise price is $0.04 for common stock or
    Series A Preferred Stock or $1.60 per share for
    Series A-1 Preferred Stock.

Results of Operations












Critical Accounting Policies and Estimates




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| |                           
| | --------------------------
| | Restructuring liabilities.



94-3,


Accounting for Costs Associated with Exit or
Disposal Activities 94-3




| |                                
| | -------------------------------
| | Impairment of Long-Lived Assets







| |                         
| | ------------------------
| | Stock-Based Compensation



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| |                    
| | -------------------
| | Revenue recognition





Results of Operations




| |                 
| | ----------------
| | Operating costs:





| |                          
| | -------------------------
| | Research and development:



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®


®




| |                            
| | ---------------------------
| | General and administrative:



Three Months Ended March 31, 2005 and 2006


Total Revenues.


Cost of Research Material Sales.


Research and Development Expense.


General and Administrative Expense.


Depreciation and Amortization.


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Total Other Income (Expense), Net.


Warrant valuation.


Year Ended December 31, 2004 Compared to the Year Ended
December 31, 2005


Total Revenues.


Cost of Research Material Sales.


Research and Development Expense.


General and Administrative Expense.


Depreciation and Amortization. proof-of


Asset Impairment Loss.


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Total Other Income (Expense), Net.


Warrant valuation.


Year Ended December 31, 2003 Compared to the Year Ended
December 31, 2004


Total Revenues.


Cost of Research Material Sales.


Research and Development Expense.


General and Administrative Expense.


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Depreciation and Amortization.


Loss on Facility Sublease and Lease Cancellation.


Asset Impairment Loss.


Total Other Income (Expense), Net.


Warrant valuation.


Gain on Sale of Intellectual Property.


Liquidity and Capital Resources




| |                   
| | ------------------
| | General Discussion



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Sources of Cash




| |               
| | --------------
| | Federal Grants







| |                       
| | ----------------------
| | Research Reagent Sales





| |             
| | ------------
| | License Fees



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| |                 
| | ----------------
| | Management Loans







| |                     
| | --------------------
| | Toucan Capital Loans





| |                                                                   
| | ------------------------------------------------------------------
| | Toucan Capital Series A Cumulative Convertible
    Preferred Stock





| |                      
| | ---------------------
| | Toucan Partners Loans

365-day




| |               
| | --------------
| | PIPE Financing



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| |             
| | ------------
| | Uses of Cash



®










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Overview of Contractual Obligations








Tabular Disclosure of Contractual Obligations


As of March 31, 2005


|                                    |       |                |       |                        |        |   |       |           |           |   |           |   |         |   |   |   |  |   |   |   | 
|----------------------------------- | ----- | -------------- | ----- | ---------------------- | ------ | - | ----- | --------- | --------- | - | --------- | - | ------- | - | - | - |  | - | - | - | 
|                                    |       |                |       | Payments Due by Period
|                                    |       |                |       |                       
|                                    |       |                |       | Less Than              |        |   |       |           | More Than
|Contractual Obligation              |       | Total          |       |                        | 1 Year |   |       | 1-3 Years |           |   | 3-5 Years |   | 5 Years
|                                    |       |                |       |                        |        |   |       |           |           |   |           |   |        
|                                    |       | (In thousands)
|Loans(1)                            |       | $              | 7,700 |                        |        | $ | 7,700 |           |           | $ |          |   |         | $ |  |   |  | $ |  |  
|Contract Manufacturing Agreement(2) |       |                | 2,873 |                        |        |   | 2,873 |           |           |   |          |   |         |   |  |   |  |   |  |  
|Capital Lease Obligations           |       |                | 8     |                        |        |   | 7     |           |           |   | 1         |   |         |   |  |   |  |   |  |  
|Operating Lease Obligations         |       |                | 219   |                        |        |   | 219   |           |           |   |          |   |         |   |  |   |  |   |  |  
|                                    |       |                |       |                        |        |   |       |           |           |   |           |   |         |   |  
|                                    | Total |                | $     | 10,800                 |        |   | $     | 10,799    |           |   | $         | 1 |         |   | $ |  |  |   | $ |  | 
|                                    |       |                |       |                        |        |   |       |           |           |   |           |   |         |   |  






|    |                                                                                                                                                                                                                                                                                                                                                                                                                     
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | An aggregate of $6.75 million of these loans represents
    amounts payable to Toucan Capital pursuant to a series of
    convertible promissory notes which, subsequent to March 31,
    2006, have been converted into shares of Series A-1
    Preferred Stock. The remaining $950,000 of these loans
    represents amounts payable to Toucan Partners pursuant to a
    series of convertible promissory notes.
|   
|(2) | On July 30, 2004, we entered an agreement with Cognate
    Therapeutics, Inc. The agreement includes a penalty of
    $2 million if cancelled after one year as well as payment
    for all services performed in winding down any ongoing
    activities.                                                                                                                                                          



Recent Accounting Pronouncements




33



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##### Table of Contents












QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK




34



---



##### Table of Contents






BUSINESS


Overview




® ® ®


Industry Background




| |                                         
| | ----------------------------------------
| | Incidence of Cancer in the United States



|               |  |           |         |  |        |  |         | 
|-------------- |  | --------- | ------- |  | ------ |  | ------- | 
|Type of Cancer |  | New Cases |         |  | Deaths | 
|               |  |           |         |  |        | 
|Breast         |  |           | 211,240 |  |        |  | 40,410  | 
|Prostate       |  |           | 232,090 |  |        |  | 30,350  | 
|Colorectal     |  |           | 145,290 |  |        |  | 56,290  | 
|Lung           |  |           | 172,570 |  |        |  | 163,510 | 
|Kidney         |  |           | 36,160  |  |        |  | 12,660  | 
|Melanoma       |  |           | 59,580  |  |        |  | 7,770   | 
|Brain          |  |           | 17,000  |  |        |  | 12,760  | 

Cancer






35



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##### Table of Contents



The Human Immune System














| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Step 1. Dendritic cells ingest cancer antigens, break
    them into small fragments and display them on their outer cell
    surfaces.                                        
|
| |  | Step 2. Dendritic cells bearing these cancer antigen
    fragments bind to and activate naive T cells, which become
    disease-specific Helper T and Killer T cells.         
|
| |  | Step 3. The activated Helper T cells produce factors that
    greatly enhance the cell division of Killer T cells and mature
    their cancer-killing properties.             
|
| |  | Step 4. Cancer cells and their cancer-associated antigens
    are also recognized by antibody-producing B cells.                                                              
|
| |  | Step 5. The activated Helper T cells produce factors that
    greatly enhance antibody production by B cells that in turn are
    specific for the cancer-associated antigens.
|
| |  | Step 6. The Killer T cells and antibodies, acting alone
    or in combination, destroy cancer cells.                                                                          

Limitations of Current Cancer Therapies




| |                                      
| | -------------------------------------
| | Traditional Cancer Therapy Approaches





| |   |                                                                                                                                                                                                                                                                                                                                                                                                  
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Surgery. Surgery may be used to remove cancer cells, but
    not all cancer cells can be removed surgically. Surgery may also
    result in significant adverse side effects such as collateral
    damage to healthy tissue, bleeding and infection.                                                                                                                                            
|
| |  | Radiation Therapy. Radiation therapy may be used to treat
    cancers but it can cause significant damage to healthy tissue
    surrounding the targeted cancer cells. Recurrent cancers may not
    be treatable with further radiation therapy. Radiation therapy
    may also cause additional significant adverse side effects such
    as burns to treated skin, organ damage and hair loss.

36



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| |   |                                                                                                                                                                                                                                                                                                                                                            
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Chemotherapy. Chemotherapy may be used to treat cancer,
    but involves the use of toxic chemical agents. These toxic
    chemical agents affect both healthy and diseased cells and may
    cause additional significant adverse side effects such as hair
    loss, immune suppression, nausea and diarrhea.                                            
|
| |  | Hormone Therapy. Hormone therapy may be used to treat
    cancer, but involves the use of substances that chemically
    inhibit the production of growth and reproductive hormones and
    is also limited in effectiveness. Hormone therapy may cause
    significant adverse side effects such as bone loss, hot flashes,
    impotence and blood clots.

Current Cancer Immunotherapy Approaches






| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Antibody-Based Therapies. Currently approved
    antibody-based cancer therapies have improved survival rates
    with reduced side effects when compared with traditional
    therapies. However, these antibody-based therapies can elicit an
    immune response against themselves because they contain mouse
    proteins or fragments of such proteins. This can limit their
    effectiveness and potentially cause toxic side effects.                                         
|
| |  | Immune-Modulating Agents. Currently approved
    immune-modulating agents, such as IL-2,
    GM-CSF and
    alpha-interferon, are known to have some ability to enhance the
    immune system and control cancer growth. However, these
    therapies involve delivery of the immune modulating agent
    through the blood system and therefore cannot be directed
    exclusively to cancer cells. This lack of selectivity may result
    in significant toxicity to healthy tissue.

Our Approaches


® ®


DCVax®


® ®




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Activates The Natural Immune System. Our
    DCVax®
    product candidates are designed to elicit a natural immune
    response. We believe that our pre-clinical and clinical trials
    have demonstrated that our
    DCVax®
    product candidates can train a patients own Killer T cells
    to seek and destroy specifically targeted cancer cells. Our
    clinical trials have also shown that
    DCVax®-Prostate
    stimulates the body to produce antibodies and T cells that bind
    to cancer-associated antigens and potentially destroy cancer
    cells marked by these antigens.
|
| |  | Multiple Cancer Targets. If we secure the necessary
    funding, we intend to apply our
    DCVax®
    platform to treat a wide variety of cancers. The
    DCVax®
    platform affords the flexibility to target many different forms
    of cancer through the pairing of dendritic cells with
    cancer-associated antigens, fragments of cancer-associated
    antigens or deactivated whole cancer cells as well as possible
    direct intra-tumoral injection of partially mature dendritic
    cells.                                                                                       

37



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | No Significant Adverse Side Effects Or Toxicity. Our
    initial
    DCVax®-Prostate
    Phase I/ II clinical trial has shown mild injection
    site reactions, which were typical and fully anticipated, but no
    significant adverse side effects in over 110 clinically
    administered injections. We believe that we minimize the
    potential for toxicity by using the patients own cells to
    create our
    DCVax®
    product candidates. Additionally, because our
    DCVax®
    products are designed to target the cancer-associated antigens
    in the patient, we believe they minimize collateral damage to
    healthy cells.                                                                                                                                             
|
| |  | Rapid Pre-Clinical Development. We believe that our
    DCVax®
    technology, which was observed to be well tolerated in a
    Phase I/ II clinical trial for prostate cancer, and
    two Phase I clinical trials for brain cancer, will enable
    us to rapidly move new potential products into clinical trials
    within six to nine months of concept, subject to FDA approval
    and the availability of adequate resources. New
    DCVax®
    product candidates simply require the identification of
    cancer-associated antigens, fragments of cancer-associated
    antigens or whole cancer cells added to partially mature
    dendritic cells prior to injection into patients or potentially
    the direct injection of partially mature dendritic cells into
    solid tumors.
|
| |  | Ease Of Administration. We initially collect a sample of
    a patients white blood cells in a single standard
    outpatient procedure called leukapheresis. After
    patient-specific manufacturing and quality control testing, each
    small dose of a
    DCVax®
    product candidate is administered by a simple intradermal
    injection in an outpatient setting, or by a direct injection of
    partially mature dendritic cell into a solid tumor.                                                                                                                                                                                                                                                                                                                                   
|
| |  | Complementary With Other Treatments. Our
    DCVax®
    product candidates are designed to stimulate the patients
    own immune system to safely target cancer cells. Consequently,
    we believe these products may be used as an adjuvant to
    traditional therapies such as chemotherapy, radiation therapy,
    hormone therapy and surgery.                                                                                                                                                                                                                                                                                                                                                                                                                                                

Therapeutic Antibody








| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Fully Human Antibodies. Current monoclonal antibody-based
    therapies contain mouse proteins or fragments of such proteins.
    Consequently, these therapies have the potential to elicit
    unwanted immune responses against the mouse proteins or protein
    fragments. Our first therapeutic antibody product candidate,
    which was co-developed with and acquired by Medarex, is based on
    monoclonal antibodies that are fully human, and thus do not
    contain any mouse proteins. As a result, we expect these
    products to exhibit a favorable safety profile and minimal, if
    any, unwanted immune response against the antibody-based therapy
    itself.
|
| |  | Rapid Pre-Clinical Development. We believe that, subject
    to FDA approval and the availability of adequate resources, we
    could progress from antigen discovery to clinical trials for
    each new therapeutic antibody product candidate in less than two
    years.                                                                                                                                                                                                                                                                                                                                                                                                           
|
| |  | Cancer Specificity. Our proprietary antigens are
    significantly over-expressed in cancer cells. Our antibodies
    bind to these targeted cancer-associated antigens and
    potentially destroy cancer cells marked by these antigens. To
    date, we have identified three clinically validated antigens
    associated with twelve different cancers. Certain rights to
    three of our antigen targets have been acquired by Medarex.                                                                                                                                                                                                                                         

38



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Multiple Therapeutic Applications. We believe that
    therapeutic antibodies may be used as stand-alone products that
    bind to cancer-associated antigens and potentially destroy
    cancer cells marked by these antigens. Therapeutic antibodies
    may also enable the targeted delivery of existing therapies such
    as radiation and cytotoxic agents. The inherent toxic effects of
    cytotoxic agents and radioactive materials on normal tissue
    could be minimized by coupling these agents to antibodies that
    have a high degree of specificity to cancer cells.
|
| |  | Commercialization. Based on our experience with the
    manufacturing of therapeutic antibodies, we believe the
    manufacturing of these antibodies can be scaled to meet market
    demand. Antibody-based products are typically characterized by
    an inherent stability, resulting in a commercially acceptable
    shelf-life.                                                                                                                                                                                                                                                    
|
| |  | Complementary With Other Treatments. We believe that our
    therapeutic antibody product candidates may be suitable for use
    alone or in combination with currently approved therapies due to
    their complementary cell-killing properties.                                                                                                                                                                                                                                                                                                                                         



Our Clinical and Preclinical Development Programs


®


®




39



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##### Table of Contents





|                              |  |                                                              |  |                                                                                                          
|----------------------------- |  | ------------------------------------------------------------ |  | ---------------------------------------------------------------------------------------------------------
|Product Candidate             |  | Target Indications                                           |  | Status(1)                                                                                                
|                              |  |                                                              |  |                                                                                                          
|DCVax®
    Platform           |  |                                                              |  |                                                                                                          
|DCVax®-Prostate               |  | Prostate Cancer                                              |  | Phase III Clinical Trial cleared FDA For non-metastatic
    hormone independent prostate cancer          
|DCVax®-Brain                  |  | Glioblastoma multiforme                                      |  | Phase II Clinical Trial cleared FDA For Glioblastoma
    multiforme Orphan Drug designation granted 12/02
|DCVax®-Lung                   |  | Non-small cell lung cancer                                   |  | Phase I  Clinical Trial cleared FDA for
    non-small cell lung cancer                                  
|DCVax®-Direct                 |  | Head and Neck Cancer, Non-small cell lung, brain cancers     |  | Pre-clinical                                                                                             
|Therapeutic Antibody Platform |  |                                                              |  |                                                                                                          
|CXCR4 Antibody                |  | Breast cancer
    Glioblastoma
    Colon cancer
    Melanoma |  | Pre-clinical
    Pre-clinical
    Pre-clinical
    Pre-clinical                                          






|    |                                                                                                                                                                                                                                                    
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | Pre-clinical means that a product candidate is undergoing
    efficacy and safety evaluation in disease models in preparation
    for human clinical trials. Phase I-III clinical trials
    denote safety and efficacy tests in humans as follows:



| |                                                           
| | ----------------------------------------------------------
| | Phase I: Evaluation of safety and dosing.                 
| | Phase II: Evaluation of safety and efficacy.              
| | Phase III: Larger scale evaluation of safety and efficacy.

Our
DCVax® Platform


® ® ® ® ®




| |   |                                                                                                                                                                                                                                                                                                                  
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Collection. A sample of a patients white blood
    cells is collected in a single and simple outpatient procedure
    called leukapheresis.                                                                                                                                                                     
|
| |  | Isolation of Precursors. These cells are sent to our
    manufacturing facility, where dendritic cell precursors are
    isolated from the patients white blood cells.                                                                                                                                          
|
| |  | Transformation by Growth Factors. Dendritic cell
    precursors are transformed in a manner that mimics the natural
    process in a healthy persons body, through the application
    of specific growth factors, into highly pure populations of
    immature dendritic cells during a six-day culture period.
|
| |  | Maturation. Immature dendritic cells are exposed to a
    proprietary maturation factor or maturation method in order to
    maximize Helper T cell, Killer T cell, and B cell activation.                                                                                                                       
|
| |  | Harvest for
    DCVax®-Direct.
    These dendritic cells can be harvested for
    DCVax®-Direct
    and separated into single-use
    DCVax®
    administration vials, frozen and stored for the quality control
    sequence without the antigen display step.                                                  

40



---



##### Table of Contents





| |   |                                                                                                                                                                                                                                                                                                                           
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Antigen Display. Cancer-associated antigens, fragments of
    cancer-associated antigens or deactivated whole cancer cells are
    added to, ingested, and processed by the maturing dendritic
    cells, causing the dendritic cells to display fragments of
    cancer-associated antigens on their outer cell surfaces.
|
| |  | Harvest. These dendritic cells are harvested and
    separated into single-use
    DCVax®
    administration vials, frozen and stored.                                                                                                                                                                                    
|
| |  | Quality Control. Each
    DCVax®
    product lot undergoes rigorous quality control testing,
    including 14-day
    sterility testing for bacterial and mycoplasma contamination,
    and potency testing prior to shipment to the administration site
    for injection.                                               

®


DCVax® Product Candidates




| |                
| | ---------------
| | DCVax®-Prostate

® ® ®


® ® ®


®


Target Market. ®


Current Treatments. standard-of


41



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##### Table of Contents



®




| |             
| | ------------
| | DCVax®-Brain

® ® ®


® ± ±


Target Market. ® ®


Current Treatments. ®


42



---



##### Table of Contents





| |            
| | -----------
| | DCVax®-Lung

® ® ®


Target Market. ® ®


Current Treatments.




| |              
| | -------------
| | DCVax®-Direct

® ®


Our Therapeutic Antibody Platform






| |   |                                                                                                                                                                                                                                                                                                                                                                                            
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | Identification. We identify, validate and select a
    potentially useful cancer-associated antigen for our therapeutic
    antibody platform.                                                                                                                                                                                                                                             
|
| |  | Immunization. This cancer-associated antigen is used to
    immunize non-transgenic or transgenic mice. These mice create B
    cells, which produce non-human or fully human cancer-associated
    antigen-specific antibodies.                                                                                                                                                           
|
| |  | Selection And Culturing. From the B cells created during
    immunization, we select single antibody-producing cells, which
    we then culture to large quantities. These cells produce
    identical antibodies with high specificity to the targeted
    cancer-associated antigen.                                                                                                     
|
| |  | Analysis And Evaluation. These non-human or fully human
    monoclonal antibodies are analyzed for specificity to the
    cancer-associated antigen, ability to bind to live cancer cells
    with high affinity and ability to kill those cells. In addition,
    the antibody-producing cells are evaluated for their ability to
    generate high quantities of the selected antibodies.
|
| |  | Humanization. The non-human antibody with the most
    favorable properties can then be humanized, or stripped of its
    mouse characteristics.                                                                                                                                                                                                                                           
|
| |  | Manufacturing. Our therapeutic humanized or fully human
    monoclonal antibodies are then manufactured for clinical trials
    under FDA guidelines.                                                                                                                                                                                                                                      



43



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##### Table of Contents





Therapeutic Antibody Product Candidates


Lung, Breast, Brain, Colon,
Melanoma, and Prostate, and Other Cancers






| |              
| | -------------
| | Manufacturing





| |          
| | ---------
| | Marketing





| |                      
| | ---------------------
| | Intellectual Property

®






44



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##### Table of Contents









| |            
| | -----------
| | Competition

®




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







| |   |                                                                                                             
| | - | ------------------------------------------------------------------------------------------------------------
| |  | secure the necessary funding to continue our development efforts
    with respect to our product candidates;
|
| |  | 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.                                                           

45



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##### Table of Contents





| |                        
| | -----------------------
| | Governmental Regulation











46



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##### Table of Contents













| |          
| | ---------
| | Employees






PROPERTIES







LEGAL PROCEEDINGS


Soma Arbitration




47



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##### Table of Contents

















48



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##### Table of Contents






EXECUTIVE OFFICERS AND DIRECTORS




|                        |  |     |    |  |          |                                                                                         
|----------------------- |  | --- | -- |  | -------- | ----------------------------------------------------------------------------------------
|Name                    |  | Age |    |  | Position
|                        |  |     |    |  |         
|Alton L. Boynton, Ph.D. |  |     | 61 |  |          | President, Chief Scientific Officer, Chief Operating Officer,
    Secretary and Director
|Marnix L. Bosch, Ph.D.  |  |     | 47 |  |          | Vice President of Vaccine Research and Development                                      

Alton L. Boynton, Ph.D.


Marnix L. Bosch, Ph.D.


Board of Directors




Information on Committees of the Board of Directors and
Meetings






49



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##### Table of Contents








COMPENSATION OF DIRECTORS AND EXECUTIVE OFFICERS




|                            |                                        |        |      |              |        |   |           |              |  |  |               |   |  |                 |   |         |  |   |        |         |    
|--------------------------- | -------------------------------------- | ------ | ---- | ------------ | ------ | - | --------- | ------------ |  |  | ------------- | - |  | --------------- | - | ------- |  | - | ------ | ------- | ---
|                            |                                        |        |      | Annual       |        |   |           |              | 
|                            |                                        |        |      | Compensation |        |   | Long-Term |              |  | 
|                            |                                        | Fiscal |      |              |        |   |           | Compensation |  |  | All Other     |  
|Name and Principal Position |                                        | Year   |      |              | Salary |   |           | Bonus        |  |  | Option Grants |   |  | Compensation(1) |  
|                            |                                        |        |      |              |        |   |           |              |  |  |               |   |  |                 |  
|Alton L. Boynton, Ph.D.     |                                        |        | 2005 |              |        | $ | 331,261   |              |  |  |              |   |  |                 |  |         |  | $ | 17,814 |        
|                            | President, Chief Operating Officer,    |        |      | 2004         |        |   | $         | 332,534      |  |  |               |  |  |                 |   |        |  |   | $      | 19,977  |    
|                            | Chief Scientific Officer and Secretary |        |      | 2003         |        |   | $         | 288,967      |  |  |               |  |  |                 |   | 100,000 |  |   | $      | 294,909 | (2)
|Marnix L. Bosch, Ph.D.      |                                        |        | 2005 |              |        | $ | 169,603   |              |  |  |              |   |  |                 |  |         |  | $ | 18,396 |        
|                            | Vice President of Vaccine Research     |        |      | 2004         |        |   | $         | 169,602      |  |  |               |  |  |                 |   |        |  |   | $      | 18,396  |    
|                            | and Development                        |        |      | 2003         |        |   | $         | 159,710      |  |  |               |  |  |                 |   | 130,000 |  |   | $      | 32,872  | (3)
|Paul M. Zeltzer, M.D.       |                                        |        | 2005 |              |        | $ | 77,543    |              |  |  |              |   |  |                 |  |         |  | $ | 15,973 | (4)    
|                            | Former Medical Director                |        |      | 2004         |        |   |           |             |  |  |               |  |  |                 |   |        |  |   |        |        |    
|                            |                                        |        |      | 2003         |        |   |           |             |  |  |               |  |  |                 |   |        |  |   |        |        |    
|Larry L. Richards           |                                        |        | 2005 |              |        | $ | 121,909   |              |  |  |              |   |  |                 |  |         |  | $ | 15,068 |        
|                            | Former Controller(5)                   |        |      | 2004         |        |   | $         | 121,116      |  |  |               |  |  |                 |   |        |  |   | $      | 14,815  |    
|                            |                                        |        |      | 2003         |        |   | $         | 119,572      |  |  |               |  |  |                 |   | 110,000 |  |   | $      | 26,331  | (6)






|    |                                                                                                                                                                                                                                                                                                                                                                              
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | All Other Compensation for each of the years in the three-year
    period ended December 31, 2005 consists of Company paid
    premiums on term life insurance coverage up to 1.5 times the
    employees annual salary, earned but unpaid accrued
    vacation payments, matching contribution on 401(k) up to a
    maximum of $3,000, and employer paid medical benefits.
|   
|(2) | Includes $281,572 in exchange for terminating the severance
    provision in Dr. Boyntons employment agreement. The
    after tax portion of the severance of $183,000 was invested in
    our November 13, 2003 Secured Convertible Note and Warrants
    financing.                                                                                                       
|   
|(3) | Includes $19,570 in exchange for terminating the severance
    provision in Dr. Boschs employment arrangement. The
    after tax portion of the severance of $16,000 was invested in
    our November 13, 2003 Secured Convertible Note and Warrants
    financing.                                                                                                         
|   
|(4) | Dr. Zeltzer was hired on August 1, 2005 and his
    employment was terminated effective April 28, 2006. His
    annual salary was $200,000 on a full-time basis.                                                                                                                                                                                                             
|   
|(5) | We accepted Mr. Richards resignation on March 9,
    2006.                                                                                                                                                                                                                                                                                                                  
|   
|(6) | Includes $14,066 in exchange for terminating the severance
    provision in Mr. Richards employment arrangement.                                                                                                                                                                                                                                                            

Option Grants in the 2005 Fiscal Year




50



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##### Table of Contents



Aggregated Option Exercises in Fiscal Year Ended
December 31, 2005 and Fiscal Year End Option Values


In-the in-the


|                        |  |             |   |  |          |                        |                 |             |                          |                    |               |  |  |             |        |  |               |   |     |  |  |   |     | 
|----------------------- |  | ----------- | - |  | -------- | ---------------------- | --------------- | ----------- | ------------------------ | ------------------ | ------------- |  |  | ----------- | ------ |  | ------------- | - | --- |  |  | - | --- | 
|                        |  |             |   |  |          | Number of Securities   |                 |             |                         
|                        |  |             |   |  |          | Underlying Unexercised |                 |             | Value of Unexercised In- |                   
|                        |  |             |   |  |          | Options at             |                 |             | The-Money Options at     |                   
|                        |  | Shares      |   |  |          |                        | Fiscal Year End |             |                          | Fiscal Year End(a) |              
|                        |  | Acquired on |   |  | Value    |                        |                 |             |                          |                    |               | 
|Name                    |  | Exercise    |   |  | Realized |                        |                 | Exercisable |                          |                    | Unexercisable |  |  | Exercisable |        |  | Unexercisable |  
|                        |  |             |   |  |          |                        |                 |             |                          |                    |               |  |  |             |        |  |               |  
|Alton L. Boynton, Ph.D. |  |             |  |  |          |                        |                |             |                          |                    | 338,955       |  |  |             | 5,555  |  |               | $ | 944 |  |  | $ | 56  | 
|Marnix L. Bosch, Ph.D.  |  |             |  |  |          |                        |                |             |                          |                    | 112,654       |  |  |             | 54,846 |  |               | $ | 354 |  |  | $ | 146 | 
|Paul M. Zeltzer, M.D.   |  |             |  |  |          |                        |                |             |                          |                    |              |  |  |             |       |  |               |   |    |  |  |   |    | 
|Larry L. Richards       |  |             |  |  |          |                        |                |             |                          |                    | 81,143        |  |  |             | 48,857 |  |               | $ | 212 |  |  | $ | 88  | 






|    |                                                                         
|--- | ------------------------------------------------------------------------
|(a) | The market value of our common stock at December 31, 2005
    was $0.10.

Equity Compensation Plans




|                                                           |  |                      |         |  |                     |   |                      |                     |  |  |           | 
|---------------------------------------------------------- |  | -------------------- | ------- |  | ------------------- | - | -------------------- | ------------------- |  |  | --------- | 
|                                                           |  | Number of Securities |         |  |                     |   | Number of Securities |                    
|                                                           |  | to be Issued         |         |  | Weighted-Average    |   |                      | Remaining Available | 
|                                                           |  | Upon Exercise of     |         |  | Exercise Price of   |   |                      | for Future Issuance | 
|                                                           |  | Outstanding Options  |         |  | Outstanding Options |   |                      | Under Equity        | 
|Plan Category                                              |  | and Other Rights     |         |  | and Other Rights    |   |                      | Compensation Plans  | 
|                                                           |  |                      |         |  |                     |   |                      |                     | 
|Equity compensation plans approved by our stockholders(a)  |  |                      | 743,111 |  |                     | $ | 0.60                 |                     |  |  | 3,959,579 | 
|Equity compensation plans not approved by our stockholders |  |                      |        |  |                     |   |                     |                     |  |  |          | 
|                                                           |  |                      |         |  |                     |   |                      |                     | 
|Total                                                      |  |                      | 743,111 |  |                     | $ | 0.60                 |                     |  |  | 3,959,579 | 






|    |                                                                                                                                                                                                                          
|--- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(a) | These plans consist of our 1998 Stock Option Plan, the 1999
    Executive Stock Option Plan, the 2001 Stock Option Plan, the
    Employee Stock Purchase Plan and the 2001 Nonemployee Director
    Stock Incentive Plan.

1998 Stock Option Plan




51



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1999 Executive Stock Option Plan








2001 Stock Option Plan




52



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##### Table of Contents









2001 Nonemployee Director Stock Incentive Plan






Employee Stock Purchase Plan








53



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##### Table of Contents



Compensation Committee Interlocks and Insider
Participation


S-K


Employment Agreements







CERTAIN RELATIONSHIPS


Recapitalization






|               |  |           |         |          |             |   |      |               |  |          |           |   |            |          |            |          |       |  |           |  |  |   |      | 
|-------------- |  | --------- | ------- | -------- | ----------- | - | ---- | ------------- |  | -------- | --------- | - | ---------- | -------- | ---------- | -------- | ----- |  | --------- |  |  | - | ---- | 
|               |  |           |         | Original |             |   |      |               |  |          | Shares    |   |            | Original |           
|               |  | Principal |         |          | Conversion  |   |      |               |  | Original |           |   | Underlying |          |            | Exercise |      
|Lender         |  | Amount    |         |          | Price/Share |   |      | Interest Rate |  |          | Maturity  |   |            | Warrants |            |          | Price | 
|               |  |           |         |          |             |   |      |               |  |          |           |   |            |          |            |          |       | 
|Alton Boynton  |  | $         | 183,000 |          |             | $ | 0.18 |               |  |          | Prime + 2 | % |            |          | 11/12/2004 |          |       |  | 2,033,333 |  |  | $ | 0.18 | 
|Eric Holmes    |  | $         | 50,000  |          |             | $ | 0.18 |               |  |          | Prime + 2 | % |            |          | 11/12/2004 |          |       |  | 555,555   |  |  | $ | 0.18 | 
|Dan Wilds      |  | $         | 50,000  |          |             | $ | 0.18 |               |  |          | Prime + 2 | % |            |          | 11/12/2004 |          |       |  | 555,555   |  |  | $ | 0.18 | 
|Marnix Bosch   |  | $         | 41,000  |          |             | $ | 0.18 |               |  |          | Prime + 2 | % |            |          | 11/12/2004 |          |       |  | 455,555   |  |  | $ | 0.18 | 
|Larry Richards |  | $         | 11,000  |          |             | $ | 0.18 |               |  |          | Prime + 2 | % |            |          | 11/12/2004 |          |       |  | 122,222   |  |  | $ | 0.18 | 
|               |  |           |         |          |             |   |      |               |  |          |           |   |            |          |            |          |       | 
|Total          |  | $         | 335,000 |          |             |   |      |               |  |          |           |   |            |          |            |          |       |  | 3,722,220 |  |  |   |      | 
|               |  |           |         |          |             |   |      |               |  |          |           |   |            |          |            |          |       | 



54



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| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the issuance of a series of convertible promissory notes to
    Toucan Capital, a venture capital fund, in aggregate principal
    amount of approximately $6.75 million (and associated
    warrants) from February 2004 through September 2005. The first
    $1.1 million of the $6.75 million carried 300% warrant
    coverage and thereafter the notes carried 100% warrant coverage.
    The notes accrued interest at 10% per annum from the
    respective original issuance dates of the notes;
|
| |  | the issuance of a convertible promissory note to Toucan
    Partners, an affiliate of Toucan Capital, in principal amount of
    $400,000 (and an associated warrant) in November 2005. This note
    accrues interest at 10% per annum from its original
    issuance dates. This note carried warrant coverage of 100%;                                                                                                                                                                                
|
| |  | the issuance of a series of non-convertible promissory notes to
    Toucan Partners, in an aggregate principal amount of
    approximately $550,000 from December 2005 through March 2006.
    These notes accrue interest at 10% per annum from the
    respective original issuance dates of the notes;                                                                                                                                                                                                
|
| |  | the sale of Series A Preferred Stock to Toucan Capital for
    aggregate gross proceeds of approximately $1.3 million (and
    an associated warrant to purchase an aggregate of
    13 million shares of Series A Preferred Stock at an
    exercise price of $0.04 per share) in January 2005; and                                                                                                                                                                                                     
|
| |  | the sale of approximately 39.5 million shares of common
    stock (and accompanying warrants to purchase an aggregate of
    approximately 19.7 million shares of common stock at an
    exercise price of $0.14 per share) to certain accredited
    investors for aggregate proceeds of approximately
    $5.5 million in April 2006 in our PIPE Financing.                                                                                                                                            

1-for-1








| |   |                                                                                                                                                                         
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an aggregate of 32.5 million shares of Series A
    Preferred Stock (convertible into an aggregate of
    32.5 million shares of common stock as of April 17,
    2006);

55



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| |   |                                                                                                                                                                              
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | an aggregate of approximately 4.8 million shares of
    Series A-1 Preferred Stock (convertible into an aggregate
    of approximately 192.7 million shares of common stock);
|
| |  | warrants to purchase an aggregate of 66 million shares of
    capital stock at an exercise price of $0.01 per share;                                                         
|
| |  | warrants to purchase an aggregate of 56.5 million shares of
    capital stock at an exercise price of $0.04 per
    share; and                                               
|
| |  | warrants to purchase an aggregate of 13 million shares of
    Series A Preferred Stock at an exercise price of
    $0.04 per share.                                          





| |   |                                                                                                                                                                                                                                                                                                                                             
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | convertible promissory notes in aggregate principal amount of
    $950,000, with accrued interest thereon of approximately $35,000
    as of May 15, 2006 (with such notes convertible as of
    May 15, 2006 into an aggregate of approximately
    24.6 million shares of capital stock at a conversion price
    of $0.04 per share); and
|
| |  | warrants to purchase an aggregate of 9.5 million shares of
    capital stock at an exercise price of $0.04 per share.                                                                                                                                                                                                                       





-converted-to


Cognate Therapeutics


®


56



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##### Table of Contents






SECURITY OWNERSHIP OF BENEFICIAL OWNERS AND SELLING
STOCKHOLDERS


Background








| |   |                                                                                                                        
| | - | -----------------------------------------------------------------------------------------------------------------------
| |  | each person, or group of affiliated persons, who is known by us
    to own beneficially 5% or more of our common stock;
|
| |  | our current director;                                                                                                  
|
| |  | each of our named executive officers;                                                                                  
|
| |  | our current director and all of our executive officers as a
    group; and                                             
|
| |  | in the second table, each selling stockholder.                                                                         





57



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|                       |                                                               |                        |  |             |            |  |  |      |  
|---------------------- | ------------------------------------------------------------- | ---------------------- |  | ----------- | ---------- |  |  | ---- | -
|                       |                                                               | Shares of Common Stock | 
|                       |                                                               | Beneficially Owned(1)  | 
|                       |                                                               |                        | 
|Beneficial Owner       |                                                               | Number                 |  |             | Percentage | 
|                       |                                                               |                        |  |             |            | 
|Officers and Directors |                                                               |                        |  |             |            |  |  |     
|                       | Alton L. Boynton, Ph.D.(2)                                    |                        |  | 4,886,800   |            |  |  | 7.0  | %
|                       | Marnix L. Bosch, Ph.D.(3)                                     |                        |  | 1,110,607   |            |  |  | 1.7  | %
|                       | Paul Zeltzer, M.D.                                            |                        |  |            |            |  |  | *    |  
|                       | Larry Richards(4)                                             |                        |  | 175,832     |            |  |  | *    |  
|                       | All executive officers and directors as a group(3 persons)(5) |                        |  | 5,997,407   |            |  |  | 8.4  | %
|5% Security Holders    |                                                               |                        |  |             |            |  |  |     
|                       | Entities associated with Toucan Capital Fund II, L.P.(6)      |                        |  | 394,800,414 |            |  |  | 85.8 | %
|                       | C.E. Unterberg Towbin Capital Partners I LP(7)                |                        |  | 5,362,500   |            |  |  | 8.0  | %
|                       | Iroquois Masterfund Ltd(8)                                    |                        |  | 5,357,143   |            |  |  | 8.0  | %
|                       | Southridge Partners LP(9)                                     |                        |  | 4,553,571   |            |  |  | 6.8  | %
|                       | Northwood Capital Partners, LP(10)                            |                        |  | 3,750,000   |            |  |  | 5.6  | %
|                       | Medarex, Inc.(11)                                             |                        |  | 3,600,000   |            |  |  | 5.2  | %






| |   |             
| | - | ------------
| | * | less than 1%



| |     |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Percentage represents beneficial ownership percentage of common
    stock calculated in accordance with SEC rules and does not
    equate to voting percentages. Because the Series A
    Preferred Stock and Series A-1 Preferred Stock vote
    together with the common stock on substantially all matters,
    actual voting percentage represented by the shares of common
    stock beneficially owned by certain stockholders is lower than
    the percentages reflected in the table (as noted in
    footnotes 2, 3, 4, 5, 7, 8, 9, 10 and 11 below).
|
| | (2) | Includes 4,542,290 shares of common stock held by
    Dr. Boynton and 344,510 shares of common stock
    issuable upon exercise of options that are exercisable within
    60 days of May 15, 2006. Represents voting percentage
    of approximately 1.6%.                                                                                                                                                                                                                                                                                                    
|
| | (3) | Includes 981,442 shares of common stock held by
    Dr. Bosch and 129,165 shares of common stock issuable
    upon exercise of options that are exercisable within
    60 days of May 15, 2006. Represents voting percentage
    of less than 1%.                                                                                                                                                                                                                                                                                                              
|
| | (4) | Includes 175,832 shares of common stock held. Represents
    voting percentage of less than 1%.                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|
| | (5) | Includes 5,523,732 shares of common stock held by the
    officers and directors and 473,675 shares issuable upon
    exercise of options that are exercisable within 60 days of
    May 15, 2006. Represents voting percentage of approximately
    1.9%.                                                                                                                                                                                                                                                                                                     
|
| | (6) | Includes (i) 225,174,520 shares of common stock
    issuable upon conversion of preferred stock held by Toucan
    Capital; (ii) 135,500,000 shares of common stock
    currently issuable upon exercise of warrants held by Toucan
    Capital; (iii) 24,625,894 shares of common stock
    issuable upon conversion of promissory notes held by Toucan
    Partners, LLC (Toucan Partners); and
    (iv) 9,500,000 shares issuable upon exercise of
    warrants held by Toucan Partners.                                                                  
|
| | (7) | Includes 1,787,500 shares of common stock currently
    issuable upon exercise of warrants. Represents voting percentage
    of approximately 1.8%.                                                                                                                                                                                                                                                                                                                                                                                                            

58



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| |     |                                                                                                                                                    
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------
| | (8) | Includes 1,785,714 shares of common stock currently
    issuable upon exercise of warrants. Represents voting percentage
    of approximately 1.8%.
|
| | (9) | Includes 1,517,857 shares of common stock currently
    issuable upon exercise of warrants. Represents voting percentage
    of approximately 1.6%.



|     |                                                                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Includes 1,250,000 shares of common stock currently
    issuable upon exercise of warrants. Represents voting percentage
    of approximately 1.3%.                                                                    
|    
|(11) | Includes 800,000 shares of common stock currently issuable
    upon exercise of warrants. Based on a Form 3 and
    Schedule 13G filed by Medarex with the SEC. Represents
    voting percentage of approximately 1.2%.

|                       |                                                       |                        |  |           |            |  |                        |                       |   |  |        |           |  |            |  |   |  |  |  |   | 
|---------------------- | ----------------------------------------------------- | ---------------------- |  | --------- | ---------- |  | ---------------------- | --------------------- | - |  | ------ | --------- |  | ---------- |  | - |  |  |  | - | 
|                       |                                                       | Shares of Common Stock |  |           |            |  | Shares of Common Stock |                      
|                       |                                                       | Beneficially Owned     |  |           |            |  | Beneficially Owned     |                      
|                       |                                                       | Before the Offering(1) |  |           | Shares     |  |                        | After the Offering(3) |  
|                       |                                                       |                        |  |           | Being      |  |                        |                       |  
|Beneficial Owner       |                                                       | Number                 |  |           | Percentage |  |                        | Offered(2)            |   |  | Number |           |  | Percentage | 
|                       |                                                       |                        |  |           |            |  |                        |                       |   |  |        |           |  |            | 
|Officers and Directors |                                                       |                        |  |           |            |  |                        |                       |   |  |        |           |  |            |  |   |  |  |  |  
|                       | Bluegrass Growth Fund, L.P.(4)                        |                        |  | 2,678,571 |            |  |                        | 4.1                   | % |  |        | 2,678,571 |  |            |  | 0 |  |  |  | * | 
|                       | Andrew M. Blum(5)                                     |                        |  | 53,625    |            |  |                        | *                     |   |  |        | 53,625    |  |            |  | 0 |  |  |  | * | 
|                       | Bristol Investment Fund, Ltd(6)                       |                        |  | 1,607,143 |            |  |                        | 2.4                   | % |  |        | 1,607,143 |  |            |  | 0 |  |  |  | * | 
|                       | C.E. Unterberg Towbin Capital Partners I LP(7)        |                        |  | 5,362,500 |            |  |                        | 8.0                   | % |  |        | 5,362,500 |  |            |  | 0 |  |  |  | * | 
|                       | Jason L. DiPaola(8)                                   |                        |  | 214,500   |            |  |                        | *                     |   |  |        | 214,500   |  |            |  | 0 |  |  |  | * | 
|                       | Cranshire Capital, LP(9)                              |                        |  | 2,678,571 |            |  |                        | 4.1                   | % |  |        | 2,678,571 |  |            |  | 0 |  |  |  | * | 
|                       | Ellis International Limited(10)                       |                        |  | 2,678,571 |            |  |                        | 4.1                   | % |  |        | 2,678,571 |  |            |  | 0 |  |  |  | * | 
|                       | Jeffrey M. Gallups(11)                                |                        |  | 300,000   |            |  |                        | *                     |   |  |        | 300,000   |  |            |  | 0 |  |  |  | * | 
|                       | John H. Gutfreund(12)                                 |                        |  | 536,250   |            |  |                        | *                     |   |  |        | 536,250   |  |            |  | 0 |  |  |  | * | 
|                       | Smithfield Fiduciary LLC(13)                          |                        |  | 2,678,571 |            |  |                        | 4.1                   | % |  |        | 2,678,571 |  |            |  | 0 |  |  |  | * | 
|                       | Iroquois Masterfund Ltd(14)                           |                        |  | 5,357,143 |            |  |                        | 8.0                   | % |  |        | 5,357,143 |  |            |  | 0 |  |  |  | * | 
|                       | Comtech Global Investment Ltd(15)                     |                        |  | 1,500,000 |            |  |                        | 2.3                   | % |  |        | 1,500,000 |  |            |  | 0 |  |  |  | * | 
|                       | Alpha Capital AG(16)                                  |                        |  | 1,607,142 |            |  |                        | 2.4                   | % |  |        | 1,607,142 |  |            |  | 0 |  |  |  | * | 
|                       | Little Gem Life Sciences Fund LLC(17)                 |                        |  | 1,071,429 |            |  |                        | 1.6                   | % |  |        | 1,071,429 |  |            |  | 0 |  |  |  | * | 
|                       | Monarch Capital Fund Ltd                              |                        |  | 1,910,662 |            |  |                        | 2.9                   | % |  |        | 1,910,662 |  |            |  | 0 |  |  |  | * | 
|                       | Hope Ni(18)                                           |                        |  | 300,000   |            |  |                        | *                     |   |  |        | 300,000   |  |            |  | 0 |  |  |  | * | 
|                       | Nite Capital LP(19)                                   |                        |  | 2,678,571 |            |  |                        | 4.1                   | % |  |        | 2,678,571 |  |            |  | 0 |  |  |  | * | 
|                       | Northwood Capital Partners, LP(20)                    |                        |  | 3,750,000 |            |  |                        | 5.6                   | % |  |        | 3,750,000 |  |            |  | 0 |  |  |  | * | 
|                       | Cabernet Partners, LP(21)                             |                        |  | 1,500,000 |            |  |                        | 2.3                   | % |  |        | 1,500,000 |  |            |  | 0 |  |  |  | * | 
|                       | Chardonnay Partners, LP(22)                           |                        |  | 900,000   |            |  |                        | 1.4                   | % |  |        | 900,000   |  |            |  | 0 |  |  |  | * | 
|                       | Robert A. Berlacher(23)                               |                        |  | 600,000   |            |  |                        | *                     |   |  |        | 600,000   |  |            |  | 0 |  |  |  | * | 
|                       | Insignia Partners, LP(24)                             |                        |  | 2,250,000 |            |  |                        | 3.4                   | % |  |        | 2,250,000 |  |            |  | 0 |  |  |  | * | 
|                       | Joseph Reda(25)                                       |                        |  | 375,000   |            |  |                        | *                     |   |  |        | 375,000   |  |            |  | 0 |  |  |  | * | 
|                       | Southridge Partners LP(26)                            |                        |  | 4,553,571 |            |  |                        | 6.8                   | % |  |        | 4,553,571 |  |            |  | 0 |  |  |  | * | 
|                       | Southshore Capital Fund Ltd(27)                       |                        |  | 803,571   |            |  |                        | 1.2                   | % |  |        | 803,571   |  |            |  | 0 |  |  |  | * | 
|                       | Stoc*Doc Partners, L.P.(28)                           |                        |  | 300,000   |            |  |                        | *                     |   |  |        | 300,000   |  |            |  | 0 |  |  |  | * | 
|                       | Ellen U Celli Emily U Satloff TTEE T.I. Unterberg(29) |                        |  | 536,250   |            |  |                        | *                     |   |  |        | 536,250   |  |            |  | 0 |  |  |  | * | 
|                       | Declaration of Trust by Thomas I. Unterberg(30)       |                        |  | 1,072,500 |            |  |                        | 1.6                   | % |  |        | 1,072,500 |  |            |  | 0 |  |  |  | * | 
|                       | Thomas I. Unterberg(31)                               |                        |  | 2,145,000 |            |  |                        | 3.3                   | % |  |        | 2,145,000 |  |            |  | 0 |  |  |  | * | 

59



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|                                                                              |  |                        |           |  |            |  |                        |                       |  |  |           |  |  |            |   |  |  |  |   | 
|----------------------------------------------------------------------------- |  | ---------------------- | --------- |  | ---------- |  | ---------------------- | --------------------- |  |  | --------- |  |  | ---------- | - |  |  |  | - | 
|                                                                              |  | Shares of Common Stock |           |  |            |  | Shares of Common Stock |                      
|                                                                              |  | Beneficially Owned     |           |  |            |  | Beneficially Owned     |                      
|                                                                              |  | Before the Offering(1) |           |  | Shares     |  |                        | After the Offering(3) | 
|                                                                              |  |                        |           |  | Being      |  |                        |                       | 
|Beneficial Owner                                                              |  | Number                 |           |  | Percentage |  |                        | Offered(2)            |  |  | Number    |  |  | Percentage |  
|                                                                              |  |                        |           |  |            |  |                        |                       |  |  |           |  |  |            |  
|Thomas I. Unterberg TTEE Ellen U. Celli Family Trust /25/93(32)               |  |                        | 1,072,500 |  |            |  | 1.6                    | %                     |  |  | 1,072,500 |  |  |            | 0 |  |  |  | * | 
|Ellen U. Celli(33)                                                            |  |                        | 1,072,500 |  |            |  | 1.6                    | %                     |  |  | 1,072,500 |  |  |            | 0 |  |  |  | * | 
|Emily Satloff(34)                                                             |  |                        | 536,250   |  |            |  | *                      |                       |  |  | 536,250   |  |  |            | 0 |  |  |  | * | 
|Marjorie & Clarence Unterberg Foundation(35)                                  |  |                        | 1,608,000 |  |            |  | 2.4                    | %                     |  |  | 1,608,000 |  |  |            | 0 |  |  |  | * | 
|NFS/ FINTC IRA FBO Thomas I. Unterberg(36)                                    |  |                        | 1,072,500 |  |            |  | 1.6                    | %                     |  |  | 1,072,500 |  |  |            | 0 |  |  |  | * | 
|Thomas I. Unterberg TTEE. Emily U. Satloff Family Trust U/
    A 03/25/93(37) |  |                        | 1,072,500 |  |            |  | 1.6                    | %                     |  |  | 1,072,500 |  |  |            | 0 |  |  |  | * | 
|Ann Unterberg(38)                                                             |  |                        | 536,250   |  |            |  | *                      |                       |  |  | 536,250   |  |  |            | 0 |  |  |  | * | 






| |   |             
| | - | ------------
| | * | Less than 1%



| |     |                                                                                                                                                                                                                                                                                                                                         
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Calculated based on
    Rule 13d-3(d)(i).
    In calculating this amount for each selling stockholder, we
    treated as outstanding the number of shares of common stock
    issuable upon exercise for cash of that selling
    stockholders warrants but we did not assume exercise of
    any other selling stockholders warrants.
|
| | (2) | In calculating this amount for each selling stockholder, we
    included the number of shares of common stock issuable upon
    exercise for cash of that selling stockholders warrants.                                                                                                                                               
|
| | (3) | Assumes sale of all shares offered by the selling stockholder.                                                                                                                                                                                                                                                                          
|
| | (4) | Includes 892,857 shares of common stock currently issuable
    upon exercise of warrants.                                                                                                                                                                                                                                               
|
| | (5) | Includes 17,875 shares of common stock currently issuable
    upon exercise of warrants.                                                                                                                                                                                                                                                
|
| | (6) | Includes 535,714 shares of common stock currently issuable
    upon exercise of warrants.                                                                                                                                                                                                                                               
|
| | (7) | Includes 1,787,500 shares of common stock currently
    issuable upon exercise of warrants.                                                                                                                                                                                                                                             
|
| | (8) | Includes 71,500 shares of common stock currently issuable
    upon exercise of warrants.                                                                                                                                                                                                                                                
|
| | (9) | Includes 892,857 shares of common stock currently issuable
    upon exercise of warrants.                                                                                                                                                                                                                                               



|     |                                                                                            
|---- | -------------------------------------------------------------------------------------------
|(10) | Includes 892,857 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(11) | Includes 100,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(12) | Includes 178,750 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(13) | Includes 892,857 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(14) | Includes 1,785,714 shares of common stock currently
    issuable upon exercise of warrants.
|    
|(15) | Includes 500,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(16) | Includes 535,714 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(17) | Includes 357,143 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(18) | Includes 100,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(19) | Includes 892,857 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(20) | Includes 1,250,000 shares of common stock currently
    issuable upon exercise of warrants.
|    
|(21) | Includes 500,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(22) | Includes 300,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(23) | Includes 200,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(24) | Includes 750,000 shares of common stock currently issuable
    upon exercise of warrants.  

60



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|     |                                                                                            
|---- | -------------------------------------------------------------------------------------------
|(25) | Includes 125,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(26) | Includes 1,517,857 shares of common stock currently
    issuable upon exercise of warrants.
|    
|(27) | Includes 267,857 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(28) | Includes 100,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(29) | Includes 178,750 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(30) | Includes 357,500 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(31) | Includes 715,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(32) | Includes 357,500 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(33) | Includes 357,500 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(34) | Includes 178,750 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(35) | Includes 536,000 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(36) | Includes 357,500 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(37) | Includes 357,500 shares of common stock currently issuable
    upon exercise of warrants.  
|    
|(38) | Includes 178,750 shares of common stock currently issuable
    upon exercise of warrants.  

61



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DESCRIPTION OF CAPITAL STOCK








| |   |                                                                                                          
| | - | ---------------------------------------------------------------------------------------------------------
| |  | 185,394,540 shares of common stock for issuance upon
    exercise of outstanding warrants,               
|
| |  | 24,625,894 shares of common stock for issuance upon
    conversion of our convertible promissory notes,  
|
| |  | 32,500,000 shares of common stock for issuance upon
    conversion of our Series A Stock,                
|
| |  | 192,267,520 shares of common stock for issuance upon
    conversion of our Series A-1 Stock,             
|
| |  | 383,246 shares of common stock for issuance under our 1998
    Stock Option Plan,                        
|
| |  | 586,166 shares of common stock for issuance under our 1999
    Executive Stock Option Plan,              
|
| |  | 2,906,551 shares of common stock for issuance under our
    2001 Stock Option Plan,                      
|
| |  | 182,500 shares of common stock for issuance under our 2001
    Nonemployee Director Stock Incentive Plan,
|
| |  | 158,600 shares of common stock for issuance under our
    Employment Agreement Plan, and                 
|
| |  | 485,626 shares of common stock for issuance under our
    Employee Stock Purchase Plan.                  



Common Stock


Voting Rights.


Dividends.


Rights upon Liquidation, Dissolution or Winding Up.


62



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Other Rights.


Series A Cumulative Convertible Preferred Stock and
Series A-1 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, and is on a
    pari passu basis with the Series A-1 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 and the
    Series A-1 Stock;            
|
| | (v) votes on an as converted basis with the common stock
    and the Series A-1 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.).                               





Registration Rights






| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Demand Registration Rights. The holders of 20% or more of
    the registrable securities, or their transferees, may require us
    on not more than two occasions in a twelve month period
    (exclusive of registration on
    Form S-3), to file
    a registration statement under the Securities Act with respect
    to their shares of common stock, provided that the anticipated
    aggregate offering price to the public of at least
    $2.0 million. These registration rights are subject to
    specified conditions and limitations. Under the terms of the
    registration pursuant to which these rights are granted, we will
    be required to register for resale these shares if we receive a
    written request from holders of at least a majority of all such
    shares then outstanding.
|
| | Piggyback Registration Rights. If we propose to register
    any of our securities under the Securities Act either for our
    own account or for the account of other stockholders, the
    holders of the                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           

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| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | registrable securities will be entitled to notice of the
    registration and will be entitled to include their shares of
    common stock in the registration statement. These registration
    rights are subject to specified conditions and limitations,
    including the right of the underwriters to limit the number of
    shares included in any such registration under some
    circumstances and the right of the holders to include their
    shares in the registration statement before we can include
    shares that we propose to sell. The holders of these shares have
    waived their right to have their shares included in this
    offering.                                                                                                                                                                                                                                                               
|
| | Registration on
    Form S-3. The
    holders of the registrable securities are entitled, upon written
    request from holders of registrable securities, to have such
    shares registered by us on a
    Form S-3
    registration statement at our expense provided that such
    requested registration has an anticipated aggregate offering
    price to the public of at least $1.0 million. These
    registration rights are subject to specified conditions and
    limitations.                                                                                                                                                                                                                                                                                                                                                                                                                                         
|
| | Expenses of Registration. We will pay all expenses
    relating to any demand, piggyback or
    Form S-3
    registrations, other than underwriting discounts and commissions.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|
| | Expiration of Registration Rights. The rights granted to
    a holder under the investor rights agreement will terminate upon
    (A) any consolidation or merger of Northwest
    Biotherapeutics with or into any other corporation or other
    entity or person, or any other corporate reorganization, other
    than any such consolidation, merger or reorganization in which
    our stockholders immediately prior to such consolidation, merger
    or reorganization, continue to hold at least a majority of the
    voting power of the surviving entity in substantially the same
    proportions (or, if the surviving entity is a wholly owned
    subsidiary, its parent) immediately after such consolidation,
    merger or reorganization; or (B) any transaction or series
    of related transactions to which we are a party in which in
    excess of fifty percent (50%) of our voting power is transferred.

Certain Provisions of Delaware Law and Our Certificate of
Incorporation and Bylaws




Special Meetings of Stockholders.


Stockholder action by written consent.


64



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Number of Directors; Filling Vacancies.


Classification of Directors.


Amendments to Bylaws.


Section 203 of the DGCL.




| |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | prior to such time our board of directors approved either the
    business combination or the transaction which resulted in the
    stockholder becoming an interested stockholder;                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
|
| |  | upon consummation of the transaction which resulted in the
    stockholder becoming an interested stockholder, the interested
    stockholder owned at least 85% of our voting stock outstanding
    at the time the transaction commenced, excluding for purposes of
    determining the voting stock outstanding (but not the
    outstanding voting stock owned by the interested stockholder)
    those shares owned (i) by persons who are directors and
    also officers and (ii) employee stock plans in which
    employee participants do not have the right to determine
    confidentially whether shares held subject to the plan will be
    tendered in a tender or exchange offer; or
|
| |  | at or subsequent to such time the business combination is
    approved by the board of directors and authorized at an annual
    or special meeting of stockholders, and not by written consent,
    by the affirmative vote of at least
    662/3% of the outstanding voting stock which is not owned by
    the interested stockholder.                                                                                                                                                                                                                                                                                                                                                            





| |   |                                                                                                                                                                               
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any sale, transfer, pledge or other disposition of 10% or more
    of the assets of the corporation involving the interested
    stockholder;                                 
|
| |  | subject to some exceptions, any transaction that results in the
    issuance or transfer by the corporation of any stock of the
    corporation to the interested stockholder;

65



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| |   |                                                                                                                                                                                                                            
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | any transaction involving the corporation that has the effect of
    increasing the proportionate share of the stock of any class or
    series of the corporation beneficially owned by the interested
    stockholder; or
|
| |  | the receipt by the interested stockholder of the benefit of any
    loans, advances, guarantees, pledges or other financial benefits
    provided by or through the corporation.                                           



Transfer Agent







SHARES ELIGIBLE FOR FUTURE SALE






Rule 144






| |   |                                                                                                                                                                                                               
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | 1% of the number of shares of our common stock then outstanding,
    which equals approximately 652.000 shares based on the
    number of shares of common stock outstanding as of May 15,
    2006; or       
|
| |  | the average weekly trading volume of our common stock on the
    Over-The-Counter Bulletin Board during the four calendar
    weeks preceding the filing of a notice on Form 144 with
    respect to the sale.



Rule 144(k)




66



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Rule 701




Registration Rights




Stock Options


lock-up


67



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PLAN OF DISTRIBUTION


successors-in






| |   |                                                                                                                                                                                         
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | ordinary brokerage transactions and transactions in which the
    broker-dealer solicits purchasers;                                                                                    
|
| |  | block trades in which the broker-dealer will attempt to sell the
    shares as agent, but may position and resell a portion of the
    block as principal to facilitate the transaction;
|
| |  | purchases by a broker-dealer as principal and resale by the
    broker-dealer for its account;                                                                                          
|
| |  | an exchange distribution in accordance with the rules of the
    applicable exchange;                                                                                                   
|
| |  | privately negotiated transactions;                                                                                                                                                      
|
| |  | short sales effected after the date the registration statement
    of which this prospectus is a part is declared effective by the
    SEC;                                             
|
| |  | through the writing or settlement of options or other hedging
    transactions, whether through an options exchange or otherwise;                                                       
|
| |  | broker-dealers may agree with the selling stockholders to sell a
    specified number of such shares at a stipulated price per share;                                                   
|
| |  | a combination of any such methods of sale; and                                                                                                                                          
|
| |  | any other method permitted pursuant to applicable law.                                                                                                                                  





68



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LEGAL MATTERS







EXPERTS




69



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##### Table of Contents














WHERE YOU CAN FIND MORE INFORMATION


S-1,


1-800-SEC-0330.


70



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INDEX TO FINANCIAL STATEMENTS


|                                                                                                                                                             |                                                                                                                                                                                |      |      |     | 
|------------------------------------------------------------------------------------------------------------------------------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ | ---- | ---- | --- | 
|                                                                                                                                                             |                                                                                                                                                                                | Page |     
|                                                                                                                                                             |                                                                                                                                                                                |      |     
|I  FINANCIAL INFORMATION                                                                                                                                    |                                                                                                                                                                                |      |      |    
|Financial Statements (unaudited)                                                                                                                             |                                                                                                                                                                                |      |      |    
|                                                                                                                                                             | Condensed Balance Sheets
    (unaudited) as of December 31, 2005 and March 31,
    2006                                                                                        |      |      | F-2 | 
|                                                                                                                                                             | Condensed Statements of Operations
    (unaudited) for the three months ended March 31, 2005
    and 2006 and the period from March 18, 1996
    (inception) to March 31, 2006 |      |      | F-3 | 
|                                                                                                                                                             | Condensed Statements of Cash Flows
    (unaudited) for the three months ended March 31, 2005
    and 2006 and the period from March 18, 1996
    (inception) to March 31, 2006 |      |      | F-4 | 
|                                                                                                                                                             | Notes to Condensed Financial Statements                                                                                                                                        |      |      | F-5 | 
|II  FINANCIAL STATEMENTS                                                                                                                                    |                                                                                                                                                                                |      |      |    
|Report of Peterson Sullivan, PLLC,
    Independent Registered Public Accounting Firm                                                                         |                                                                                                                                                                                |      | F-14 |    
|Report of KPMG LLP, Independent Registered
    Public Accounting Firm                                                                                        |                                                                                                                                                                                |      | F-15 |    
|Balance Sheets as of December 31, 2004
    and 2005                                                                                                          |                                                                                                                                                                                |      | F-16 |    
|Statements of Operations for each of the
    three years ended December 31, 2005 and the period from
    March 18, 1996 (inception) to December 31,
    2005 |                                                                                                                                                                                |      | F-17 |    
|Statement of Stockholders Equity
    (Deficit) and Comprehensive Loss                                                                                       |                                                                                                                                                                                |      | F-18 |    
|Statement of Cash Flows for each of the
    three years ended December 31, 2005 and the period from
    March 18, 1996 (inception) to December 31,
    2005  |                                                                                                                                                                                |      | F-22 |    
|Notes to Financial Statements                                                                                                                                |                                                                                                                                                                                |      | F-24 |    

F-1



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





Balance Sheets


|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |         |    |         |       | 
|------------------------------------ | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------- | ------------------------------------------ | --------- | ------- | --- | ------- | -- | ------- | ----- | 
|                                     |                                                                                                                                                                                             | December 31,                         |                            |                                            | March 31, |        
|                                     |                                                                                                                                                                                             | 2005                                 |                            |                                            | 2006      |        
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             | (Unaudited)                          |                           
|                                     |                                                                                                                                                                                             | (In thousands)                       |                           
|ASSETS                              
|Current assets:                      |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |        
|                                     | Cash                                                                                                                                                                                        |                                      | $                          | 352                                        |           |         | $   | 2,941   |   
|                                     | Accounts receivable                                                                                                                                                                         |                                      |                            | 17                                         |           |         |     |        |   
|                                     | Accounts receivable, related party                                                                                                                                                          |                                      |                            | 58                                         |           |         |     | 58      |   
|                                     | Prepaid expenses and other current assets                                                                                                                                                   |                                      |                            | 117                                        |           |         |     | 86      |   
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | Total current assets       |                                            |           | 544     |     |         |    | 3,085   |      
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|Property and equipment:              |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |        
|                                     | Laboratory equipment                                                                                                                                                                        |                                      |                            | 100                                        |           |         |     | 100     |   
|                                     | Office furniture and other equipment                                                                                                                                                        |                                      |                            | 96                                         |           |         |     | 96      |   
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | 196                        |                                            |           |         | 196 |        
|                                     | Less accumulated depreciation and amortization                                                                                                                                              |                                      |                            | (143                                       | )         |         |     | (153    | ) 
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             | Property and equipment, net          |                            |                                            | 53        |         |     |         | 43 |        
|                                     |                                                                                                                                                                                             | Restricted cash                      |                            |                                            | 31        |         |     |         | 31 |        
|                                     |                                                                                                                                                                                             | Deposit and other non-current assets |                            |                                            | 3         |         |     |         | 3  |        
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | Total assets               |                                            | $         | 631     |     |         | $  | 3,162   |      
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities:                 |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |        
|                                     | Note payable to related parties, net of discount                                                                                                                                            |                                      | $                          | 6,683                                      |           |         | $   | 7,641   |   
|                                     | Current portion of capital lease obligations                                                                                                                                                |                                      |                            | 10                                         |           |         |     | 7       |   
|                                     | Accounts payable                                                                                                                                                                            |                                      |                            | 443                                        |           |         |     | 375     |   
|                                     | Accounts payable, related party                                                                                                                                                             |                                      |                            | 3,353                                      |           |         |     | 3,572   |   
|                                     | Accrued expenses                                                                                                                                                                            |                                      |                            | 117                                        |           |         |     | 180     |   
|                                     | Accrued expense, tax liability                                                                                                                                                              |                                      |                            | 336                                        |           |         |     | 343     |   
|                                     | Accrued expense, related party                                                                                                                                                              |                                      |                            | 500                                        |           |         |     | 500     |   
|                                     | Common stock warrant liability                                                                                                                                                              |                                      |                            | 604                                        |           |         |     | 9,436   |   
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | Total current liabilities  |                                            |           | 12,046  |     |         |    | 22,054  |      
|Long-term liabilities:               |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |        
|                                     | Capital lease obligations, net of current portion                                                                                                                                           |                                      |                            | 3                                          |           |         |     | 1       |   
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | Total liabilities          |                                            |           | 12,049  |     |         |    | 22,055  |      
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|Stockholders equity:                |                                                                                                                                                                                             |                                      |                            |                                            |           |         |     |        
|                                     | Preferred stock, $0.001 par value; 100,000,000 shares
    authorized and 32,500,000 shares issued and outstanding at
    December 31, 2005 and March 31, 2006                               |                                      |                            | 33                                         |           |         |     | 33      |   
|                                     | Common stock, $0.001 par value; 300,000,000 shares
    authorized and 19,078,047 and 22,427,751 shares issued and
    outstanding at December 31, 2005 and March 31, 2006,
    respectively |                                      |                            | 19                                         |           |         |     | 22      |   
|                                     | Additional paid-in capital                                                                                                                                                                  |                                      |                            | 71,220                                     |           |         |     | 67,700  |   
|                                     | Deficit accumulated during the development stage                                                                                                                                            |                                      |                            | (82,690                                    | )         |         |     | (86,648 | ) 
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      | Total stockholders equity |                                            |           | (11,418 | )   |         |    | (18,893 | )    
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        
|                                     |                                                                                                                                                                                             |                                      |                            | Total liabilities and stockholders equity |           | $       | 631 |         |    | $       | 3,162 | 
|                                     |                                                                                                                                                                                             |                                      |                            |                                            |           |        



F-2



---



##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





Statements of Operations


|                                                                                              |                                                        |                                       |        |       |                |   |        |                |      |   |         |         |         |  
|--------------------------------------------------------------------------------------------- | ------------------------------------------------------ | ------------------------------------- | ------ | ----- | -------------- | - | ------ | -------------- | ---- | - | ------- | ------- | ------- | -
|                                                                                              |                                                        | Three Months Ended                    |        |       | Period from    |  
|                                                                                              |                                                        | March 31,                             |        |       | March 18, 1996 |  
|                                                                                              |                                                        |                                       |        |       | (Inception) to |  
|                                                                                              |                                                        | 2005                                  |        |       | 2006           |   |        | March 31, 2006 |     
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|                                                                                              |                                                        | (Unaudited)                           |       
|                                                                                              |                                                        | (In thousands, except per share data) |       
|Revenues:                                                                                     |                                                        |                                       |        |       |                |   |        |                |      |   |         |        
|                                                                                              | Research material sales                                |                                       | $      | 11    |                |   | $      |               |      |   | $       | 450     |        
|                                                                                              | Contract research and development from related parties |                                       |        |      |                |   |        |               |      |   |         | 1,128   |        
|                                                                                              | Research grants                                        |                                       |        | 76    |                |   |        |               |      |   |         | 1,061   |        
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|                                                                                              |                                                        | Total revenues                        |        |       | 87             |   |        |                |     |   |         |         | 2,639   |  
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|Operating expenses:                                                                           |                                                        |                                       |        |       |                |   |        |                |      |   |         |        
|                                                                                              | Cost of research material sales                        |                                       |        | 2     |                |   |        |               |      |   |         | 382     |        
|                                                                                              | Research and development                               |                                       |        | 1,315 |                |   |        | 427            |      |   |         | 32,494  |        
|                                                                                              | General and administrative                             |                                       |        | 464   |                |   |        | 427            |      |   |         | 31,121  |        
|                                                                                              | Depreciation and amortization                          |                                       |        | 24    |                |   |        | 10             |      |   |         | 2,276   |        
|                                                                                              | Loss on facility sublease and lease cancellation       |                                       |        |      |                |   |        |               |      |   |         | 895     |        
|                                                                                              | Asset impairment loss, gain/loss on sale of equipment  |                                       |        |      |                |   |        |               |      |   |         | 2,066   |        
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|                                                                                              |                                                        | Total operating expenses              |        |       | 1,805          |   |        |                | 864  |   |         |         | 69,234  |  
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|                                                                                              |                                                        | Loss from operations                  |        |       | (1,718         | ) |        |                | (864 | ) |         |         | (66,595 | )
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|Other income (expense):                                                                       |                                                        |                                       |        |       |                |   |        |                |      |   |         |        
|                                                                                              | Warrant valuation                                      |                                       |        |      |                |   |        | (2,113         | )    |   |         | (2,481  | )      
|                                                                                              | Gain on sale of royalty rights                         |                                       |        |      |                |   |        |               |      |   |         | 3,656   |        
|                                                                                              | Interest expense                                       |                                       |        | (809  | )              |   |        | (982           | )    |   |         | (14,119 | )      
|                                                                                              | Interest income                                        |                                       |        | 1     |                |   |        | 1              |      |   |         | 737     |        
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|Net loss                                                                                      |                                                        |                                       | (2,526 | )     |                |   | (3,958 | )              |      |   | (78,802 | )      
|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                                                    |                                                        | $                                     | (2,526 | )     |                | $ | (3,958 | )              |      | $ | (86,648 | )      
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|Net loss per share applicable to common stockholders 
    basic and diluted                  |                                                        | $                                     | (0.13  | )     |                | $ | (0.21  | )              |      |   |         |        
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     
|Weighted average shares used in computing basic and diluted loss
    per share (in thousands) |                                                        |                                       | 19,035 |       |                |   | 19,230 |                |      |   |         |        
|                                                                                              |                                                        |                                       |        |       |                |   |        |                |     



F-3



---



##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)





Condensed Statements of Cash Flows


|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |        |        |         |  
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | -------------------------------------------------------- | --------------------------------------------------- | ----- | -------------- | ------ | ------ | -------------- | ----- | ----- | ------- | ------ | ------ | ------- | -
|                                                                                                     |                                                                                               | Three Months                                             |                                                     |       | Period from    |       
|                                                                                                     |                                                                                               | Ended March 31,                                          |                                                     |       | March 18, 1996 |       
|                                                                                                     |                                                                                               |                                                          |                                                     |       | (Inception) to |       
|                                                                                                     |                                                                                               | 2005                                                     |                                                     |       | 2006           |        |        | March 31, 2006 |      
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|                                                                                                     |                                                                                               | (Unaudited)                                              |                                                    
|                                                                                                     |                                                                                               | (In thousands)                                           |                                                    
|Cash Flows from Operating Activities:                                                                |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |       
|Net Loss                                                                                             |                                                                                               | $                                                        | (2,526                                              | )     |                | $      | (3,958 | )              |       | $     | (78,802 | )     
|                                                                                                     | Reconciliation of net loss to net cash used in operating
    activities:                      |                                                          |                                                     |       |                |        |        |                |       |       |         |        |       
|                                                                                                     |                                                                                               | Depreciation and amortization                            |                                                     |       | 24             |        |        |                | 10    |       |         |        | 2,276  |        
|                                                                                                     |                                                                                               | Amortization of deferred financing costs                 |                                                     |       |               |        |        |                |      |       |         |        | 320    |        
|                                                                                                     |                                                                                               | Amortization debt discount                               |                                                     |       | 695            |        |        |                | 771   |       |         |        | 11,029 |        
|                                                                                                     |                                                                                               | Accrued interest converted to preferred stock            |                                                     |       |               |        |        |                |      |       |         |        | 260    |        
|                                                                                                     |                                                                                               | Accreted interest on convertible promissory note         |                                                     |       | 112            |        |        |                | 201   |       |         |        | 998    |        
|                                                                                                     |                                                                                               | Stock-based compensation costs                           |                                                     |       | 4              |        |        |                | 2     |       |         |        | 1,095  |        
|                                                                                                     |                                                                                               | Gain on sale of intellectual property and royalty rights |                                                     |       |               |        |        |                |      |       |         |        | (3,656 | )      
|                                                                                                     |                                                                                               | Gain on sale of property and equipment                   |                                                     |       | (81            | )      |        |                | (16   | )     |         |        | 267    |        
|                                                                                                     |                                                                                               | Warrant valuation                                        |                                                     |       |               |        |        |                | 2,113 |       |         |        | 2,481  |        
|                                                                                                     |                                                                                               | Asset impairment loss                                    |                                                     |       |               |        |        |                |      |       |         |        | 2,066  |        
|                                                                                                     |                                                                                               | Loss on facility sublease                                |                                                     |       |               |        |        |                |      |       |         |        | 895    |        
|Increase (decrease) in cash resulting from changes in assets
    and liabilities:                    |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |       
|                                                                                                     |                                                                                               | Accounts receivable                                      |                                                     |       | (86            | )      |        |                | 17    |       |         |        | (58    | )      
|                                                                                                     |                                                                                               | Prepaid expenses and other current assets                |                                                     |       | 63             |        |        |                | 31    |       |         |        | 380    |        
|                                                                                                     |                                                                                               | Accounts payable and accrued expenses                    |                                                     |       | 341            |        |        |                | 220   |       |         |        | 5,373  |        
|                                                                                                     |                                                                                               | Accrued loss on sublease                                 |                                                     |       |               |        |        |                |      |       |         |        | (265   | )      
|                                                                                                     |                                                                                               | Deferred grant revenue                                   |                                                     |       | (35            | )      |        |                |      |       |         |        |       |        
|                                                                                                     |                                                                                               | Deferred rent                                            |                                                     |       |               |        |        |                |      |       |         |        | 410    |        
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|                                                                                                     |                                                                                               |                                                          | Net Cash used in Operating Activities               |       |                | (1,489 | )      |                |       | (609  | )       |        |        | (54,931 | )
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Cash Flows from Investing Activities:                                                                |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |       
|                                                                                                     | Purchase of property and equipment, net                                                       |                                                          |                                                     |      |                |        |        |               |       |       |         | (4,580 | )     
|                                                                                                     | Proceeds from sale of property and equipment                                                  |                                                          |                                                     | 81    |                |        |        | 16             |       |       |         | 249    |       
|                                                                                                     | Proceeds from sale of intellectual property                                                   |                                                          |                                                     |      |                |        |        |               |       |       |         | 1,816  |       
|                                                                                                     | Proceeds from sale of marketable securities                                                   |                                                          |                                                     |      |                |        |        |               |       |       |         | 2,000  |       
|                                                                                                     | Refund of security deposit                                                                    |                                                          |                                                     |      |                |        |        |               |       |       |         | (3     | )     
|                                                                                                     | Transfer of restricted cash                                                                   |                                                          |                                                     |      |                |        |        |               |       |       |         | (1,035 | )     
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|                                                                                                     |                                                                                               |                                                          | Net Cash provided by (used in) Investing Activities |       |                | 81     |        |                |       | 16    |         |        |        | (1,553  | )
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Cash Flows from Financing Activities:                                                                |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |       
|                                                                                                     | Proceeds from issuance of note payable to stockholder                                         |                                                          |                                                     |      |                |        |        |               |       |       |         | 1,650  |       
|                                                                                                     | Repayment of note payable to stockholder                                                      |                                                          |                                                     |      |                |        |        |               |       |       |         | (1,650 | )     
|                                                                                                     | Proceeds from issuance of convertible promissory note and
    warrants, net of issuance costs |                                                          |                                                     |      |                |        |        | 300            |       |       |         | 13,099 |       
|                                                                                                     | Borrowing under line of credit, Northwest Hospital                                            |                                                          |                                                     |      |                |        |        |               |       |       |         | 2,834  |       
|                                                                                                     | Repayment of line of credit, Northwest Hospital                                               |                                                          |                                                     |      |                |        |        |               |       |       |         | (2,834 | )     
|                                                                                                     | Repayment of convertible promissory note                                                      |                                                          |                                                     | (55   | )              |        |        | (13            | )     |       |         | (119   | )     
|                                                                                                     | Payment on capital lease obligations                                                          |                                                          |                                                     | (11   | )              |        |        | (5             | )     |       |         | (316   | )     
|                                                                                                     | Payments on note payable                                                                      |                                                          |                                                     |      |                |        |        |               |       |       |         | (420   | )     
|                                                                                                     | Proceeds from issuance Series A cumulative preferred stock,
    net                           |                                                          |                                                     | 1,276 |                |        |        |               |       |       |         | 28,708 |       
|                                                                                                     | Proceeds from exercise of stock options and warrants                                          |                                                          |                                                     | 2     |                |        |        |               |       |       |         | 220    |       
|                                                                                                     | Proceeds from issuance common stock, net                                                      |                                                          |                                                     |      |                |        |        |               |       |       |         | 17,373 |       
|                                                                                                     | Advance on funding commitment for common stock                                                |                                                          |                                                     |      |                |        |        | 2,900          |       |       |         | 2,900  |       
|                                                                                                     | Mandatorily redeemable Series A preferred stock redemption
    fee                            |                                                          |                                                     |      |                |        |        |               |       |       |         | (1,700 | )     
|                                                                                                     | Deferred financing costs                                                                      |                                                          |                                                     |      |                |        |        |               |       |       |         | (320   | )     
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|                                                                                                     |                                                                                               |                                                          | Net Cash (used in) provided by Financing Activities |       |                | 1,212  |        |                |       | 3,182 |         |        |        | 59,425  |  
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Net increase (decrease) in cash and cash equivalents                                                 |                                                                                               |                                                          | (196                                                | )     |                |        | 2,589  |                |       |       | 2,941   |       
|Cash and cash equivalents at beginning of period                                                     |                                                                                               |                                                          | 248                                                 |       |                |        | 352    |                |       |       |        |       
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Cash and cash equivalents at end of period                                                           |                                                                                               | $                                                        | 52                                                  |       |                | $      | 2,941  |                |       | $     | 2,941   |       
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Supplemental disclosure of cash flow information                                                    |                                                                                               |                                                          |                                                     |       |                |        |        |                |       |       |         |       
|                                                                                                     | Cash paid during the period for interest                                                      |                                                          | $                                                   | 2     |                |        | $      | 2              |       |       | $       | 1,398  |       
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      
|Supplemental schedule of non-cash financing activities Equipment
    acquired through capital leases |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 285     |       
|Common stock warrant liability                                                                       |                                                                                               |                                                          |                                                    |       |                |        | 6,719  |                |       |       | 12,037  |       
|Accretion of mandatorily redeemable Series A preferred
    stock redemption obligation               |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 1,872   |       
|Beneficial conversion feature of convertible promissory notes                                        |                                                                                               |                                                          |                                                    |       |                |        | 64     |                |       |       | 6,906   |       
|Conversion of convertible promissory notes and accrued interest
    to Series D preferred stock      |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 5,324   |       
|Issuance of Series C preferred stock warrants in connection
    with lease agreement                 |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 43      |       
|Issuance of common stock for license rights                                                          |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 4       |       
|Issuance of common stock and warrants to Medarex                                                     |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 840     |       
|Issuance of common stock to landlord                                                                 |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 35      |       
|Deferred compensation on issuance of stock options and
    restricted stock grants                   |                                                                                               |                                                          | 4                                                   |       |                |        |       |                |       |       | 759     |       
|Cancellation of options and restricted stock                                                         |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 849     |       
|Stock subscription receivable                                                                        |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 480     |       
|Financing of prepaid insurance through note payable                                                  |                                                                                               |                                                          |                                                    |       |                |        |       |                |       |       | 491     |       
|                                                                                                     |                                                                                               |                                                          |                                                     |       |                |        |        |                |      



F-4



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)





Notes to Condensed Financial Statements


(unaudited)




|   |                      
|-- | ---------------------
|1. | Basis of Presentation

10-K






|   |                                           
|-- | ------------------------------------------
|2. | Summary of significant accounting policies

10-K




| |                         
| | ------------------------
| | Stock-based Compensation







|   |                               
|-- | ------------------------------
|3. | Stock-Based Compensation Plans



F-5



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)








| |                                         
| | ----------------------------------------
| | Determining Fair Value Under SFAS 123(R)

Valuation and Amortization Method.


Expected Life.


Expected Volatility.


Risk-Free Interest Rate.


Expected Dividend Yield.


Expected Forfeitures.








| |                                                    
| | ---------------------------------------------------
| | Pro Forma Information Under SFAS 123 and
    APB 25



F-6



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)




|                                                       |                                                                                                       |                 |   |        |  
|------------------------------------------------------ | ----------------------------------------------------------------------------------------------------- | --------------- | - | ------ | -
|                                                       |                                                                                                       | Three Months    |  
|                                                       |                                                                                                       | Ended March 31, |  
|                                                       |                                                                                                       | 2005            |  
|                                                       |                                                                                                       |                 |  
|Net loss applicable to common stockholders as reported |                                                                                                       |                 |   |       
|                                                       | As reported                                                                                           |                 | $ | (2,526 | )
|                                                       | Add: Stock-based employee compensation expense included in
    reported net loss, net                 |                 |   | 4      |  
|                                                       | Deduct: Stock-based employee compensation determined under fair
    value based method for all awards |                 |   | (24    | )
|                                                       |                                                                                                       |                 |  
|                                                       | Pro forma                                                                                             |                 | $ | (2,546 | )
|                                                       |                                                                                                       |                 |  
|Net loss per share-basic and diluted:                  |                                                                                                       |                 |   |       
|                                                       | As reported                                                                                           |                 | $ | (0.13  | )
|                                                       | Pro forma                                                                                             |                 | $ | (0.13  | )





|   |          
|-- | ---------
|4. | Liquidity





A-1


F-7



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)






10-K,




|   |                                                     
|-- | ----------------------------------------------------
|5. | Net Loss Per Share Applicable to Common Stockholders





|   |              
|-- | -------------
|6. | Notes Payable



| |                 
| | ----------------
| | Management Loans





F-8



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)






| |                     
| | --------------------
| | Toucan Capital Loans











F-9



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)




| |                      
| | ---------------------
| | Toucan Partners Loans



|           |  |                |     |  |          |          |            |         |                |  |           |                |  |           |        |  |  |  |       |    
|---------- |  | -------------- | --- |  | -------- | -------- | ---------- | ------- | -------------- |  | --------- | -------------- |  | --------- | ------ |  |  |  | ----- | ---
|           |  |                |     |  |          | Interest |            |         | Conversion     |  |           | Warrant        | 
|Loan Date  |  | Principal(1)   |     |  | Due Date |          |            | Rate(2) |                |  | Shares(3) |                |  | Shares(3) |       
|           |  |                |     |  |          |          |            |         |                |  |           |                |  |           |       
|           |  | (In thousands) |     |  |          |          |            |         | (In thousands) |  |           | (In thousands) | 
|11/14/2005 |  | $              | 400 |  |          |          | 11/14/2006 |         |                |  | 10        | %              |  |           | 10,391 |  |  |  | 4,000 | (4)
|12/30/2005 |  |                | 250 |  |          |          | 12/30/2006 |         |                |  | 10        | %              |  |           | 6,402  |  |  |  | 2,500 | (5)
|03/09/2006 |  |                | 300 |  |          |          | 03/09/2007 |         |                |  | 10        | %              |  |           | 7,545  |  |  |  | 3,000 | (5)
|           |  |                |     |  |          |          |            |         |                |  |           |                |  |           |       
|Total      |  | $              | 950 |  |          |          |            |         |                |  |           |                |  |           | 24,338 |  |  |  | 9,500 |    
|           |  |                |     |  |          |          |            |         |                |  |           |                |  |           |       






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The notes are secured by a first priority senior security
    interest in all of the Companys assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|   
|(2) | Interest accrues at 10% per annum, based on a
    365-day basis
    compounded annually from the respective original issuance dates
    of the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(3) | The notes are convertible into, and the warrants 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 notes shall be convertible
    into, and the warrants shall be exercisable for, any equity
    security and/or debt security and/or any combination thereof.
|   
|(4) | Exercise period is 7 years from the issuance date of the
    note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(5) | Exercise period is 7 years from April 17, 2006 (the
    issuance date of the warrant).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        





|   |                                                                                                  
|-- | -------------------------------------------------------------------------------------------------
|7. | Liability for Potentially Dilutive Securities in Excess of
    Authorized Number of Common Shares

00-19,


F-10



---



##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)








|   |                  
|-- | -----------------
|8. | Private Placement







F-11



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##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)






|   |            
|-- | -----------
|9. | Contingency

















| |                     
| | --------------------
| | Sales Tax Assessment



F-12



---



##### Table of Contents



Northwest Biotherapeutics, Inc.


(A Development Stage Company)


Notes to Condensed Financial
Statements  (Continued)






|    |            
|--- | -----------
|10. | Commitments





|    |                                 
|--- | --------------------------------
|11. | Recent Accounting Pronouncements









F-13



---



##### Table of Contents









REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING
FIRM























F-14



---



##### Table of Contents






Report of Independent Registered Public Accounting Firm














KPMG LLP






F-15



---



##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





BALANCE SHEETS


|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |         |    |         |     | 
|------------------------------------ | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------- | ------------------------------------ | -------------------------- | ------------------------------------------ | ------------ | ------ | --- | ------- | -- | ------- | --- | 
|                                     |                                                                                                                                                                               | December 31,                         |                            |                                            | December 31, |       
|                                     |                                                                                                                                                                               | 2004                                 |                            |                                            | 2005         |       
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               | (In thousands)                       |                           
|ASSETS                              
|Current assets:                      |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |        
|                                     | Cash                                                                                                                                                                          |                                      | $                          | 248                                        |              |        | $   | 352     |   
|                                     | Accounts receivable                                                                                                                                                           |                                      |                            | 11                                         |              |        |     | 17      |   
|                                     | Accounts receivable, related party                                                                                                                                            |                                      |                            |                                           |              |        |     | 58      |   
|                                     | Prepaid expenses and other current assets                                                                                                                                     |                                      |                            | 151                                        |              |        |     | 117     |   
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      |                            | Total current assets                       |              |        | 410 |         |    |         | 544 | 
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|Property and equipment:              |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |        
|                                     | Leasehold improvements                                                                                                                                                        |                                      |                            | 69                                         |              |        |     |        |   
|                                     | Laboratory equipment                                                                                                                                                          |                                      |                            | 139                                        |              |        |     | 100     |   
|                                     | Office furniture and other equipment                                                                                                                                          |                                      |                            | 104                                        |              |        |     | 96      |   
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      | 312                        |                                            |              |        | 196 |        
|                                     | Less accumulated depreciation and amortization                                                                                                                                |                                      |                            | (194                                       | )            |        |     | (143    | ) 
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               | Property and equipment, net          |                            |                                            | 118          |        |     |         | 53 |        
|                                     |                                                                                                                                                                               | Restricted cash                      |                            |                                            | 30           |        |     |         | 31 |        
|                                     |                                                                                                                                                                               | Deposit and other non-current assets |                            |                                            |             |        |     |         | 3  |        
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      |                            | Total assets                               |              | $      | 558 |         |    | $       | 631 | 
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                    
|LIABILITIES AND STOCKHOLDERS EQUITY
|Current liabilities:                 |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |        
|                                     | Note payable to related parties, net                                                                                                                                          |                                      | $                          | 3,226                                      |              |        | $   | 6,683   |   
|                                     | Current portion of capital lease obligations                                                                                                                                  |                                      |                            | 38                                         |              |        |     | 10      |   
|                                     | Accounts payable                                                                                                                                                              |                                      |                            | 469                                        |              |        |     | 443     |   
|                                     | Accounts payable, related party                                                                                                                                               |                                      |                            | 984                                        |              |        |     | 3,353   |   
|                                     | Accrued expenses                                                                                                                                                              |                                      |                            | 201                                        |              |        |     | 117     |   
|                                     | Accrued expense, tax liability                                                                                                                                                |                                      |                            | 494                                        |              |        |     | 336     |   
|                                     | Accrued expense, related party                                                                                                                                                |                                      |                            | 316                                        |              |        |     | 500     |   
|                                     | Common stock warrant liability                                                                                                                                                |                                      |                            |                                           |              |        |     | 604     |   
|                                     | Deferred grant revenue                                                                                                                                                        |                                      |                            | 35                                         |              |        |     |        |   
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      | Total current liabilities  |                                            |              | 5,763  |     |         |    | 12,046  |    
|Long-term liabilities:               |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |        
|                                     | Capital lease obligations, net of current portion                                                                                                                             |                                      |                            | 12                                         |              |        |     | 3       |   
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      | Total liabilities          |                                            |              | 5,775  |     |         |    | 12,049  |    
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|Stockholders equity:                |                                                                                                                                                                               |                                      |                            |                                            |              |        |     |        
|                                     | Preferred stock, $0.001 par value; 100,000,000 shares
    authorized and zero and 32,500,000 shares issued and
    outstanding at December 31, 2004 and 2005                  |                                      |                            |                                           |              |        |     | 33      |   
|                                     | Common 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 2005, respectively |                                      |                            | 19                                         |              |        |     | 19      |   
|                                     | Additional paid-in capital                                                                                                                                                    |                                      |                            | 67,524                                     |              |        |     | 71,220  |   
|                                     | Deferred compensation                                                                                                                                                         |                                      |                            | (7                                         | )            |        |     |        |   
|                                     | Deficit accumulated during the development stage                                                                                                                              |                                      |                            | (72,753                                    | )            |        |     | (82,690 | ) 
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      | Total stockholders equity |                                            |              | (5,217 | )   |         |    | (11,418 | )  
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       
|                                     |                                                                                                                                                                               |                                      |                            | Total liabilities and stockholders equity |              | $      | 558 |         |    | $       | 631 | 
|                                     |                                                                                                                                                                               |                                      |                            |                                            |              |       



F-16



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





STATEMENTS OF OPERATIONS


|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |        |        |   |         |         |         |  
|------------------------------------------------------------------------------ | ------------------------------------------------------ | ---------------------------------- | ------ | -------------- | -------------- | - | ------ | ----------- | ------ | - | ------ | ------ | ------ | - | ------- | ------- | ------- | -
|                                                                               |                                                        |                                    |        |                |                |   |        | Period from |       
|                                                                               |                                                        |                                    |        | March 18, 1996 |               
|                                                                               |                                                        | Years Ended December 31,           |        |                | (Inception) to |  
|                                                                               |                                                        |                                    |        |                | December 31,   |  
|                                                                               |                                                        | 2003                               |        |                | 2004           |   |        | 2005        |        |   | 2005   |       
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|                                                                               |                                                        | (In thousands except per share     |        |                |               
|                                                                               |                                                        | data)                              |        |                |               
|Revenues:                                                                      |                                                        |                                    |        |                |                |   |        |             |        |   |        |        |        |   |         |        
|                                                                               | Research materials sales                               |                                    | $      | 24             |                |   | $      | 52          |        |   | $      | 38     |        |   | $       | 450     |        
|                                                                               | Contract research and development from related parties |                                    |        |               |                |   |        |            |        |   |        |       |        |   |         | 1,128   |        
|                                                                               | Research grants and other                              |                                    |        | 505            |                |   |        | 338         |        |   |        | 86     |        |   |         | 1,061   |        
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|                                                                               |                                                        | Total revenues                     |        |                | 529            |   |        |             | 390    |   |        |        | 124    |   |         |         | 2,639   |  
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|Operating costs and expenses:                                                  |                                                        |                                    |        |                |                |   |        |             |        |   |        |        |        |   |         |        
|                                                                               | Cost of research material sales                        |                                    |        | 79             |                |   |        | 40          |        |   |        | 12     |        |   |         | 382     |        
|                                                                               | Research and development                               |                                    |        | 1,624          |                |   |        | 3,621       |        |   |        | 4,469  |        |   |         | 32,067  |        
|                                                                               | General and administrative                             |                                    |        | 4,059          |                |   |        | 2,845       |        |   |        | 2,005  |        |   |         | 30,694  |        
|                                                                               | Depreciation and amortization                          |                                    |        | 207            |                |   |        | 132         |        |   |        | 63     |        |   |         | 2,266   |        
|                                                                               | Loss on facility sublease                              |                                    |        | 174            |                |   |        |            |        |   |        |       |        |   |         | 895     |        
|                                                                               | Asset impairment loss                                  |                                    |        | 904            |                |   |        | 130         |        |   |        |       |        |   |         | 2,066   |        
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|                                                                               |                                                        | Total operating costs and expenses |        |                | 7,047          |   |        |             | 6,768  |   |        |        | 6,549  |   |         |         | 68,370  |  
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|Loss from operations                                                           |                                                        |                                    | (6,518 | )              |                |   | (6,378 | )           |        |   | (6,425 | )      |        |   | (65,731 | )      
|Other income (expense):                                                        |                                                        |                                    |        |                |                |   |        |             |        |   |        |        |        |   |         |        
|                                                                               | Warrant valuation                                      |                                    |        |               |                |   |        | (368        | )      |   |        |       |        |   |         | (368    | )      
|                                                                               | Gain on sale of intellectual property to Medarex       |                                    |        | 816            |                |   |        |            |        |   |        |       |        |   |         | 3,656   |        
|                                                                               | Interest expense                                       |                                    |        | (73            | )              |   |        | (1,765      | )      |   |        | (3,517 | )      |   |         | (13,137 | )      
|                                                                               | Interest income                                        |                                    |        | 23             |                |   |        | 3           |        |   |        | 5      |        |   |         | 736     |        
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|                                                                               |                                                        | Net loss                           |        |                | (5,752         | ) |        |             | (8,508 | ) |        |        | (9,937 | ) |         |         | (74,844 | )
|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                                     |                                                        | $                                  | (5,752 | )              |                | $ | (8,508 | )           |        | $ | (9,937 | )      |        | $ | (82,690 | )      
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|Net loss per share applicable to common stockholders 
    basic and diluted   |                                                        | $                                  | (0.30  | )              |                | $ | (0.45  | )           |        | $ | (0.52  | )      |        |   |         |        
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       
|Weighted average shares used in computing basic and diluted loss
    per share |                                                        |                                    | 18,908 |                |                |   | 19,028 |             |        |   | 19,068 |        |        |   |         |        
|                                                                               |                                                        |                                    |        |                |                |   |        |             |        |   |        |       



F-17



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND
COMPREHENSIVE LOSS


|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |   |  |  |   |         |   |  |   |         |  
|----------------------------------------------------------------------------------------------------------- |  | -------------- | ----- | - | --------------- | - | - | ---------- |  | ----------- | -------- |  | ----------- | ------- | - | ------------- | ------------ | - | ----- |  |  | ---------------- | - |  |  | - | ------- | - |  | - | ------- | -
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             | Deficit |   |               |             
|                                                                                                            |  |                |       |   |                 |   |   |            |  | Accumulated |          |  |            
|                                                                                                            |  | Common Stock   |       |   | Preferred Stock |   |   | Additional |  |             |          |  | During the  |         |   | Total         |             
|                                                                                                            |  |                |       |   |                 |   |   | Paid-In    |  |             | Deferred |  | Development |         |   | Stockholders |             
|                                                                                                            |  | Shares         |       |   | Amount          |   |   | Shares     |  |             | Amount   |  |             | Capital |   |               | Compensation |   | Stage |  |  | Equity (Deficit) |  
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |  
|                                                                                                            |  | (In thousands) |      
|Balances at March 18, 1996                                                                                  |  |                |      |   |                 | $ |  |            |  |             |         |  |             |         |  |               |              | $ |      |  |  | $                |  |  |  | $ |        |   |  | $ |        |  
|Accretion of membership units mandatory redemption obligation                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (106    | ) |  |   | (106    | )
|Comprehensive loss  net loss                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (1,233  | ) |  |   | (1,233  | )
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |   | 
|Balances at December 31, 1996                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (1,339  | ) |  |   | (1,339  | )
|Accretion of membership units mandatory redemption obligation                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (275    | ) |  |   | (275    | )
|Comprehensive loss  net loss                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (2,560  | ) |  |   | (2,560  | )
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |   | 
|Balances at December 31, 1997                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |   |               |              |   |      |  |  |                  |  |  |  |   | (4,174  | ) |  |   | (4,174  | )
|Conversion of membership units to common stock                                                              |  |                | 2,203 |   |                 |   | 2 |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (2      | ) |  |   |        |  
|Accretion of Series A preferred stock mandatory redemption
    obligation                                   |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (329    | ) |  |   | (329    | )
|Comprehensive loss  net loss                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (4,719  | ) |  |   | (4,719  | )
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |   | 
|Balances at December 31, 1998                                                                               |  |                | 2,203 |   |                 |   | 2 |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (9,224  | ) |  |   | (9,222  | )
|Issuance of Series C preferred stock warrants for services
    related to sale of Series C preferred shares |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 394   |  |  |                  |  |  |  |   |        |   |  |   | 394     |  
|Accretion of Series A preferred stock mandatory redemption
    obligation                                   |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (354    | ) |  |   | (354    | )
|Comprehensive loss  net loss                                                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   | (5,609  | ) |  |   | (5,609  | )
|                                                                                                            |  |                |       |   |                 |   |   |            |  |             |          |  |             |         |   |               |              |   |       |  |  |                  |   | 
|Balances at December 31, 1999                                                                               |  |                | 2,203 |   |                 |   | 2 |            |  |             |         |  |             |         |  |               |              |   | 394   |  |  |                  |  |  |  |   | (15,187 | ) |  |   | (14,791 | )
|Issuance of Series C preferred stock warrants in connection
    with lease agreement                        |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 43    |  |  |                  |  |  |  |   |        |   |  |   | 43      |  
|Exercise of stock options for cash                                                                          |  |                | 2     |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 1     |  |  |                  |  |  |  |   |        |   |  |   | 1       |  
|Issuance of common stock at $0.85 per share for license
    rights                                          |  |                | 5     |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 4     |  |  |                  |  |  |  |   |        |   |  |   | 4       |  
|Issuance of Series D preferred stock warrants in
    convertible promissory note offering                   |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 4,039 |  |  |                  |  |  |  |   |        |   |  |   | 4,039   |  
|Beneficial conversion feature of convertible promissory notes                                               |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 1,026 |  |  |                  |  |  |  |   |        |   |  |   | 1,026   |  
|Issuance of Series D preferred stock warrants for services
    related to sale of Series D preferred shares |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 368   |  |  |                  |  |  |  |   |        |   |  |   | 368     |  
|Issuance of common stock warrants in conjunction with issuance
    of promissory note                       |  |                |      |   |                 |   |  |            |  |             |         |  |             |         |  |               |              |   | 3     |  |  |                  |  |  |  |   |        |   |  |   | 3       |  
|Cancellation of common stock                                                                                |  |                | (275  | ) |                 |   |  |            |  |             |         |  |             |         |  |               |              |   |      |  |  |                  |  |  |  |   |        |   |  |   |        |  

F-18



---



##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)


STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND


COMPREHENSIVE LOSS  (Continued)


|                                                                                                                 |  |                |        |  |                 |  |    |            |  |             |          |  |            |             |   |       |               |  |        |       |  |  |                  |   |  |  |         |   |  |  |         |  
|---------------------------------------------------------------------------------------------------------------- |  | -------------- | ------ |  | --------------- |  | -- | ---------- |  | ----------- | -------- |  | ---------- | ----------- | - | ----- | ------------- |  | ------ | ----- |  |  | ---------------- | - |  |  | ------- | - |  |  | ------- | -
|                                                                                                                 |  |                |        |  |                 |  |    |            |  |             |          |  |            | Deficit     |   |       |              
|                                                                                                                 |  |                |        |  |                 |  |    |            |  | Accumulated |          |  |           
|                                                                                                                 |  | Common Stock   |        |  | Preferred Stock |  |    | Additional |  |             |          |  | During the |             |   | Total |              
|                                                                                                                 |  |                |        |  |                 |  |    | Paid-In    |  |             | Deferred |  |            | Development |   |       | Stockholders | 
|                                                                                                                 |  | Shares         |        |  | Amount          |  |    | Shares     |  |             | Amount   |  |            | Capital     |   |       | Compensation  |  |        | Stage |  |  | Equity (Deficit) |  
|                                                                                                                 |  |                |        |  |                 |  |    |            |  |             |          |  |            |             |   |       |               |  |        |       |  |  |                  |  
|                                                                                                                 |  | (In thousands) |       
|Accretion of Series A preferred stock mandatory redemption
    obligation                                        |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  |                 |   |  |  | (430    | ) |  |  | (430    | )
|Comprehensive loss  net loss                                                                                    |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  |                 |   |  |  | (12,779 | ) |  |  | (12,779 | )
|                                                                                                                 |  |                |        |  |                 |  |    |            |  |             |          |  |            |             |   |       |               |  |        |       |  |  |                  |  
|Balances at December 31, 2000                                                                                    |  |                | 1,935  |  |                 |  | 2  |            |  |             |         |  |            |             |  |       |               |  | 5,878  |       |  |  |                 |   |  |  | (28,396 | ) |  |  | (22,516 | )
|Issuance of Series D preferred stock warrants in
    conjunction with refinancing of note payable to stockholder |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 225    |       |  |  |                 |   |  |  |        |   |  |  | 225     |  
|Beneficial conversion feature of convertible promissory note                                                     |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 456    |       |  |  |                 |   |  |  |        |   |  |  | 456     |  
|Beneficial conversion feature of Series D preferred stock                                                        |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 4,274  |       |  |  |                 |   |  |  | (4,274  | ) |  |  |        |  
|Issuance of Series D preferred stock warrants for services
    related to the sale of Series D preferred shares  |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 2,287  |       |  |  |                 |   |  |  |        |   |  |  | 2,287   |  
|Exercises of stock options and warrants for cash                                                                 |  |                | 1,158  |  |                 |  | 1  |            |  |             |         |  |            |             |  |       |               |  | 407    |       |  |  |                 |   |  |  |        |   |  |  | 408     |  
|Issuance of common stock in initial public offering for cash,
    net of offering costs of $2,845                |  |                | 4,000  |  |                 |  | 4  |            |  |             |         |  |            |             |  |       |               |  | 17,151 |       |  |  |                 |   |  |  |        |   |  |  | 17,155  |  
|Conversion of preferred stock into common stock                                                                  |  |                | 9,776  |  |                 |  | 10 |            |  |             |         |  |            |             |  |       |               |  | 31,569 |       |  |  |                 |   |  |  |        |   |  |  | 31,579  |  
|Series A preferred stock redemption fee                                                                          |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  |                 |   |  |  | (1,700  | ) |  |  | (1,700  | )
|Issuance of stock options to nonemployees for services                                                           |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 45     |       |  |  |                 |   |  |  |        |   |  |  | 45      |  
|Deferred compensation related to employee stock options                                                          |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 1,330  |       |  |  | (1,330           | ) |  |  |        |   |  |  |        |  
|Amortization of deferred compensation                                                                            |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  | 314              |   |  |  |        |   |  |  | 314     |  
|Accretion of Series A preferred stock mandatory redemption
    obligation                                        |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  |                 |   |  |  | (379    | ) |  |  | (379    | )
|Comprehensive loss  net loss                                                                                    |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  |       |       |  |  |                 |   |  |  | (10,940 | ) |  |  | (10,940 | )
|                                                                                                                 |  |                |        |  |                 |  |    |            |  |             |          |  |            |             |   |       |               |  |        |       |  |  |                  |  
|Balances at December 31, 2001                                                                                    |  |                | 16,869 |  |                 |  | 17 |            |  |             |         |  |            |             |  |       |               |  | 63,622 |       |  |  | (1,016           | ) |  |  | (45,689 | ) |  |  | 16,934  |  
|Issuance of unregistered common stock                                                                            |  |                | 1,000  |  |                 |  | 1  |            |  |             |         |  |            |             |  |       |               |  | 199    |       |  |  |                 |   |  |  |        |   |  |  | 200     |  
|Issuance of common stock, Employee Stock Purchase Plan                                                           |  |                | 9      |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 6      |       |  |  |                 |   |  |  |        |   |  |  | 6       |  
|Issuance of common stock warrants to Medarex                                                                     |  |                |       |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 80     |       |  |  |                 |   |  |  |        |   |  |  | 80      |  
|Issuance of restricted stock to nonemployees                                                                     |  |                | 8      |  |                 |  |   |            |  |             |         |  |            |             |  |       |               |  | 34     |       |  |  |                 |   |  |  |        |   |  |  | 34      |  

F-19



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)


STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND


COMPREHENSIVE LOSS  (Continued)


|                                                                  |  |                |        |   |                 |   |    |            |  |             |          |  |            |             |   |       |               |   |        |       |  |   |                  |   |  |   |         |   |  |   |         |  
|----------------------------------------------------------------- |  | -------------- | ------ | - | --------------- | - | -- | ---------- |  | ----------- | -------- |  | ---------- | ----------- | - | ----- | ------------- | - | ------ | ----- |  | - | ---------------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                  |  |                |        |   |                 |   |    |            |  |             |          |  |            | Deficit     |   |       |              
|                                                                  |  |                |        |   |                 |   |    |            |  | Accumulated |          |  |           
|                                                                  |  | Common Stock   |        |   | Preferred Stock |   |    | Additional |  |             |          |  | During the |             |   | Total |              
|                                                                  |  |                |        |   |                 |   |    | Paid-In    |  |             | Deferred |  |            | Development |   |       | Stockholders |  
|                                                                  |  | Shares         |        |   | Amount          |   |    | Shares     |  |             | Amount   |  |            | Capital     |   |       | Compensation  |   |        | Stage |  |   | Equity (Deficit) |  
|                                                                  |  |                |        |   |                 |   |    |            |  |             |          |  |            |             |   |       |               |   |        |       |  |   |                  |  
|                                                                  |  | (In thousands) |       
|Issuance of stock options to nonemployees for service             |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 57     |       |  |   |                 |   |  |   |        |   |  |   | 57      |  
|Issuance of stock options to employees                            |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 22     |       |  |   | (22              | ) |  |   |        |   |  |   |        |  
|Cancellation of employee stock options                            |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | (301   | )     |  |   | 301              |   |  |   |        |   |  |   |        |  
|Exercise of stock options and warrants for cash                   |  |                | 32     |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 18     |       |  |   |                 |   |  |   |        |   |  |   | 18      |  
|Deferred compensation related to employee restricted stock option |  |                | 99     |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 449    |       |  |   | (449             | ) |  |   |         |   |  |   |        |  
|Cancellation of employee restricted stock grants                  |  |                | (87    | ) |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | (392   | )     |  |   | 392              |   |  |   |        |   |  |   |        |  
|Amortization of deferred compensation, net                        |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   | 350              |   |  |   |        |   |  |   | 350     |  
|Comprehensive loss  net loss                                     |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   |                 |   |  |   | (12,804 | ) |  |   | (12,804 | )
|                                                                  |  |                |        |   |                 |   |    |            |  |             |          |  |            |             |   |       |               |   |        |       |  |   |                  |  
|Balances at December 31, 2002                                     |  |                | 17,930 |   |                 |   | 18 |            |  |             |         |  |            |             |  |       |               |   | 63,794 |       |  |   | (444             | ) |  |   | (58,493 | ) |  |   | 4,875   |  
|Issuance of unregistered common stock to Medarex                  |  |                | 1,000  |   |                 |   | 1  |            |  |             |         |  |            |             |  |       |               |   | 199    |       |  |   |                 |   |  |   |        |   |  |   | 200     |  
|Issuance of unregistered common stock to Nexus                    |  |                | 90     |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 35     |       |  |   |                 |   |  |   |        |   |  |   | 35      |  
|Issuance of common stock warrants to Medarex                      |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 80     |       |  |   |                 |   |  |   |        |   |  |   | 80      |  
|Issuance of warrants with convertible promissory note             |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 221    |       |  |   |                 |   |  |   |        |   |  |   | 221     |  
|Beneficial conversion feature of convertible promissory note      |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 114    |       |  |   |                 |   |  |   |        |   |  |   | 114     |  
|Issuance of common stock, Employee Stock Purchase Plan            |  |                | 4      |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   |                 |   |  |   |        |   |  |   |        |  
|Exercise of stock options and warrants for cash                   |  |                | 8      |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   |                 |   |  |   |        |   |  |   |        |  
|Cancellation of employee restricted stock grants                  |  |                | (4     | ) |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | (20    | )     |  |   | 20               |   |  |   |        |   |  |   |        |  
|Cancellation of employee stock options                            |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | (131   | )     |  |   | 131              |   |  |   |        |   |  |   |        |  
|Amortization of deferred compensation, net                        |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   | 240              |   |  |   |        |   |  |   | 240     |  
|Non-employee stock compensation                                   |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 2      |       |  |   |                 |   |  |   |        |   |  |   | 2       |  
|Comprehensive loss  net loss                                     |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   |                 |   |  |   | (5,752  | ) |  |   | (5,752  | )
|                                                                  |  |                |        |   |                 |   |    |            |  |             |          |  |            |             |   |       |               |   |        |       |  |   |                  |  
|Balances at December 31, 2003                                     |  |                | 19,028 |   |                 | $ | 19 |            |  |             |         |  |            |             |  |       |               | $ | 64,294 |       |  | $ | (53              | ) |  | $ | (64,245 | ) |  | $ | 15      |  
|Issuance of warrants with convertible promissory note             |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 1,711  |       |  |   |                 |   |  |   |        |   |  |   | 1,711   |  
|Beneficial conversion feature of convertible promissory note      |  |                |       |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   | 1,156  |       |  |   |                 |   |  |   |        |   |  |   | 1,156   |  
|Issuance of common stock, Employee Stock Purchase Plan            |  |                | 1      |   |                 |   |   |            |  |             |         |  |            |             |  |       |               |   |       |       |  |   |                 |   |  |   |        |   |  |   |        |  

F-20



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)


STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND


COMPREHENSIVE LOSS  (Continued)


|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            |             |    |       |               |   |        |       |  |   |                  |   |  |   |         |   |  |   |         |  
|------------------------------------------------------------------------------- |  | -------------- | ------ |  | --------------- | - | -- | ---------- |  | ----------- | -------- |  | ---------- | ----------- | -- | ----- | ------------- | - | ------ | ----- |  | - | ---------------- | - |  | - | ------- | - |  | - | ------- | -
|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            | Deficit     |    |       |              
|                                                                                |  |                |        |  |                 |   |    |            |  | Accumulated |          |  |           
|                                                                                |  | Common Stock   |        |  | Preferred Stock |   |    | Additional |  |             |          |  | During the |             |    | Total |              
|                                                                                |  |                |        |  |                 |   |    | Paid-In    |  |             | Deferred |  |            | Development |    |       | Stockholders |  
|                                                                                |  | Shares         |        |  | Amount          |   |    | Shares     |  |             | Amount   |  |            | Capital     |    |       | Compensation  |   |        | Stage |  |   | Equity (Deficit) |  
|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            |             |    |       |               |   |        |       |  |   |                  |  
|                                                                                |  | (In thousands) |       
|Cancellation of employee stock options                                          |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | (5     | )     |  |   | 5                |   |  |   |        |   |  |   |        |  
|Amortization of deferred compensation, net                                      |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   |       |       |  |   | 41               |   |  |   |        |   |  |   | 41      |  
|Warrant valuation                                                               |  |                |        |  |                 |   |   |            |  |             |         |  |            |             |    |       |               |   | 368    |       |  |   |                 |   |  |   |        |   |  |   | 368     |  
|Comprehensive loss  net loss                                                   |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   |       |       |  |   |                 |   |  |   | (8,508  | ) |  |   | (8,508  | )
|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            |             |    |       |               |   |        |       |  |   |                  |  
|Balances at December 31, 2004                                                   |  |                | 19,029 |  |                 | $ | 19 |            |  |             |         |  |            |             |   |       |               | $ | 67,524 |       |  | $ | (7               | ) |  | $ | (72,753 | ) |  | $ | (5,217  | )
|Issuance of unregistered common stock and preferred stock to
    Toucan Capital |  |                |       |  |                 |   |   |            |  |             | 32,500   |  |            |             | 33 |       |               |   | 1,243  |       |  |   |                 |   |  |   |        |   |  |   | 1,276   |  
|Issuance of stock options to nonemployees for services                          |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | 3      |       |  |   |                 |   |  |   |        |   |  |   | 3       |  
|Issuance of warrants with convertible promissory note                           |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | 1,878  |       |  |   |                 |   |  |   |        |   |  |   | 1,878   |  
|Exercise of stock options and warrants for cash                                 |  |                | 49     |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | 4      |       |  |   |                 |   |  |   |        |   |  |   | 4       |  
|Amortization of deferred compensation, net                                      |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   |       |       |  |   | 7                |   |  |   |        |   |  |   | 7       |  
|Beneficial conversion feature of convertible promissory note                    |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | 1,172  |       |  |   |                 |   |  |   |        |   |  |   | 1,172   |  
|Common Stock warrant liability                                                  |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   | (604   | )     |  |   |                 |   |  |   |        |   |  |   | (604    | )
|Comprehensive loss  net loss                                                   |  |                |       |  |                 |   |   |            |  |             |         |  |            |             |   |       |               |   |       |       |  |   |                 |   |  |   | (9,937  | ) |  |   | (9,937  | )
|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            |             |    |       |               |   |        |       |  |   |                  |  
|Balances at December 31, 2005                                                   |  |                | 19,078 |  |                 | $ | 19 |            |  |             | 32,500   |  |            | $           | 33 |       |               | $ | 71,220 |       |  | $ |                 |   |  | $ | (82,690 | ) |  | $ | (11,418 | )
|                                                                                |  |                |        |  |                 |   |    |            |  |             |          |  |            |             |    |       |               |   |        |       |  |   |                  |  



F-21



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)


STATEMENTS OF STOCKHOLDERS EQUITY (DEFICIT) AND


COMPREHENSIVE LOSS  (Continued)


NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





STATEMENTS OF CASH FLOWS


|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |     |        |   |         |        |         |  
|------------------------------------- | --------------------------------------------------------------------------------- | -------------------------------------------------------- | ------ | -------------- | -------------- | - | ------ | ----------- | ------ | - | ------ | --- | ------ | - | ------- | ------ | ------- | -
|                                      |                                                                                   |                                                          |        |                |                |   |        | Period from |       
|                                      |                                                                                   |                                                          |        | March 18, 1996 |               
|                                      |                                                                                   | Years Ended December 31,                                 |        |                | (Inception) to |  
|                                      |                                                                                   |                                                          |        |                | December 31,   |  
|                                      |                                                                                   | 2003                                                     |        |                | 2004           |   |        | 2005        |        |   | 2005   |    
|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |    
|                                      |                                                                                   | (In thousands)                                           |       
|Cash Flows from Operating Activities: |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |     |        |   |         |       
|Net Loss                              |                                                                                   | $                                                        | (5,752 | )              |                | $ | (8,508 | )           |        | $ | (9,937 | )   |        | $ | (74,844 | )     
|                                      | Reconciliation of net loss to net cash used in operating
    activities:          |                                                          |        |                |                |   |        |             |        |   |        |     |        |   |         |        |        
|                                      |                                                                                   | Depreciation and amortization                            |        |                | 207            |   |        |             | 132    |   |        |     | 63     |   |         |        | 2,266   |  
|                                      |                                                                                   | Amortization of deferred financing costs                 |        |                |               |   |        |             |       |   |        |     |       |   |         |        | 320     |  
|                                      |                                                                                   | Amortization of debt discount                            |        |                | 42             |   |        |             | 1,559  |   |        |     | 2,908  |   |         |        | 10,258  |  
|                                      |                                                                                   | Accrued interest converted to preferred stock            |        |                |               |   |        |             |       |   |        |     |       |   |         |        | 260     |  
|                                      |                                                                                   | Accreted interest on convertible promissory note         |        |                | 2              |   |        |             | 192    |   |        |     | 603    |   |         |        | 797     |  
|                                      |                                                                                   | Stock-based compensation costs                           |        |                | 242            |   |        |             | 41     |   |        |     | 10     |   |         |        | 1,093   |  
|                                      |                                                                                   | Loss (gain) on sale and disposal of equipment            |        |                |               |   |        |             | (7     | ) |        |     | 41     |   |         |        | 516     |  
|                                      |                                                                                   | Gain on sale of intellectual property and royalty rights |        |                | (816           | ) |        |             |       |   |        |     |       |   |         |        | (3,656  | )
|                                      |                                                                                   | Gain on sale of property and equipment                   |        |                | (95            | ) |        |             | (41    | ) |        |     | (97    | ) |         |        | (233    | )
|                                      |                                                                                   | Warrant valuation                                        |        |                |               |   |        |             | 368    |   |        |     |       |   |         |        | 368     |  
|                                      |                                                                                   | Asset impairment loss                                    |        |                | 904            |   |        |             | 130    |   |        |     |       |   |         |        | 2,066   |  
|                                      |                                                                                   | Loss on facility sublease                                |        |                | 174            |   |        |             |       |   |        |     |       |   |         |        | 895     |  
|                                      | Increase (decrease) in cash resulting from changes in assets and
    liabilities: |                                                          |        |                |                |   |        |             |        |   |        |     |        |   |         |        |        
|                                      |                                                                                   | Accounts receivable                                      |        |                | (5             | ) |        |             | (3     | ) |        |     | (64    | ) |         |        | (75     | )
|                                      |                                                                                   | Prepaid expenses and other current assets                |        |                | 660            |   |        |             | (66    | ) |        |     | 34     |   |         |        | 349     |  
|                                      |                                                                                   | Accounts payable and accrued expenses                    |        |                | (84            | ) |        |             | 1,809  |   |        |     | 2,289  |   |         |        | 5,153   |  
|                                      |                                                                                   | Accrued loss on sublease                                 |        |                | (266           | ) |        |             |       |   |        |     | 1      |   |         |        | (265    | )
|                                      |                                                                                   | Deferred grant revenue                                   |        |                |               |   |        |             | 35     |   |        |     | (35    | ) |         |        |        |  
|                                      |                                                                                   | Deferred rent                                            |        |                | 110            |   |        |             | (66    | ) |        |     |       |   |         |        | 410     |  
|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |    
|                                      |                                                                                   | Net Cash used in Operating Activities                    |        |                | (4,677         | ) |        |             | (4,425 | ) |        |     | (4,184 | ) |         |        | (54,322 | )
|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |    
|Cash Flows from Investing Activities: |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |     |        |   |         |       
|                                      | Purchase of property and equipment, net                                           |                                                          |        | (149           | )              |   |        |            |        |   |        | (43 | )      |   |         | (4,580 | )      
|                                      | Proceeds from sale of property and equipment                                      |                                                          |        | 95             |                |   |        | 41          |        |   |        | 97  |        |   |         | 233    |        
|                                      | Proceeds from sale of intellectual property                                       |                                                          |        | 816            |                |   |        |            |        |   |        |    |        |   |         | 1,816  |        
|                                      | Proceeds from sale of marketable securities                                       |                                                          |        | 1,828          |                |   |        |            |        |   |        |    |        |   |         | 2,000  |        
|                                      | Refund of security deposit                                                        |                                                          |        | (45            | )              |   |        | 45          |        |   |        | (3  | )      |   |         | (3     | )      
|                                      | Transfer of restricted cash                                                       |                                                          |        |               |                |   |        | 75          |        |   |        | (1  | )      |   |         | (1,035 | )      
|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |    
|                                      |                                                                                   | Net Cash (used in) provided by Investing Activities      |        |                | 2,545          |   |        |             | 161    |   |        |     | 50     |   |         |        | (1,569  | )
|                                      |                                                                                   |                                                          |        |                |                |   |        |             |        |   |        |    

F-22



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##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)


STATEMENTS OF CASH FLOWS  (Continued)


|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |       |       |   |       |        |        | 
|---------------------------------------------------------------------------------------------------- | --------------------------------------------------------------------------------------------- | --------------------------------------------------- | ------ | -------------- | -------------- | - | ----- | ----------- | ----- | - | ----- | ----- | ----- | - | ----- | ------ | ------ | 
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       | Period from |      
|                                                                                                     |                                                                                               |                                                     |        | March 18, 1996 |               
|                                                                                                     |                                                                                               | Years Ended December 31,                            |        |                | (Inception) to |  
|                                                                                                     |                                                                                               |                                                     |        |                | December 31,   |  
|                                                                                                     |                                                                                               | 2003                                                |        |                | 2004           |   |       | 2005        |       |   | 2005  |      
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|                                                                                                     |                                                                                               | (In thousands)                                      |       
|                                                                                                     | Cash Flows from Financing Activities:                                                         |                                                     |        |                |                |   |       |             |       |   |       |       |       |   |       |        |       
|                                                                                                     | Proceeds from issuance of note payable to stockholder                                         |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | 1,650  |       
|                                                                                                     | Repayment of note payable to stockholder                                                      |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | (1,650 | )     
|                                                                                                     | Proceeds from issuance of convertible promissory note and
    warrants, net of issuance costs |                                                     |        | 335            |                |   |       | 4,350       |       |   |       | 3,050 |       |   |       | 12,799 |       
|                                                                                                     | Repayment of convertible promissory note                                                      |                                                     |        |               |                |   |       | (52         | )     |   |       | (54   | )     |   |       | (106   | )     
|                                                                                                     | Borrowing under line of credit, Northwest Hospital                                            |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | 2,834  |       
|                                                                                                     | Repayment of line of credit to Northwest Hospital                                             |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | (2,834 | )     
|                                                                                                     | Payment on capital lease obligations                                                          |                                                     |        | (67            | )              |   |       | (41         | )     |   |       | (38   | )     |   |       | (311   | )     
|                                                                                                     | Payment on note payable                                                                       |                                                     |        | (420           | )              |   |       |             |       |   |       |       |       |   |       | (420   | )     
|                                                                                                     | Proceeds from issuance of preferred stock, net                                                |                                                     |        |               |                |   |       |            |       |   |       | 1,276 |       |   |       | 28,708 |       
|                                                                                                     | Proceeds from exercise of stock options and warrants                                          |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | 220    |       
|                                                                                                     | Proceeds from issuance of common stock, net                                                   |                                                     |        |               |                |   |       |            |       |   |       | 4     |       |   |       | 17,373 |       
|                                                                                                     | Series A preferred stock redemption fee                                                       |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | (1,700 | )     
|                                                                                                     | Deferred financing costs                                                                      |                                                     |        |               |                |   |       |            |       |   |       |      |       |   |       | (320   | )     
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|                                                                                                     |                                                                                               | Net Cash provided by (used in) Financing Activities |        |                | (152           | ) |       |             | 4,257 |   |       |       | 4,238 |   |       |        | 56,243 | 
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|Net increase (decrease) in cash                                                                      |                                                                                               |                                                     | (2,284 | )              |                |   | (7    | )           |       |   | 104   |       |       |   | 352   |       
|Cash at beginning of period                                                                          |                                                                                               |                                                     | 2,539  |                |                |   | 255   |             |       |   | 248   |       |       |   |      |       
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|Cash at end of period                                                                                |                                                                                               | $                                                   | 255    |                |                | $ | 248   |             |       | $ | 352   |       |       | $ | 352   |       
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|Supplemental disclosure of cash flow information                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |       |       |   |       |       
|                                                                                                     | Cash paid during the period for interest                                                      |                                                     | $      | 29             |                |   | $     | 12          |       |   | $     | 7     |       |   | $     | 1,396  |       
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      
|Supplemental schedule of non-cash financing activities Equipment
    acquired through capital leases |                                                                                               | $                                                   |       |                |                | $ |      |             |       | $ |      |       |       | $ | 285   |       
|Common stock warrant liability                                                                       |                                                                                               |                                                     |       |                |                |   | 4,714 |             |       |   | 604   |       |       |   | 5,318 |       
|Accretion of Series A preferred stock mandatory redemption
    obligation                            |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 1,872 |       
|Beneficial conversion feature of convertible promissory notes                                        |                                                                                               |                                                     |       |                |                |   | 2,766 |             |       |   | 3,050 |       |       |   | 6,842 |       
|Conversion of convertible promissory notes and accrued interest
    to Series D preferred stock      |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 5,324 |       
|Issuance of Series C preferred stock warrants in connection
    with lease agreement                 |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 43    |       
|Issuance of common stock for license rights                                                          |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 4     |       
|Liability for and issuance of common stock and warrants to
    Medarex                               |                                                                                               |                                                     | 280    |                |                |   |      |             |       |   |      |       |       |   | 840   |       
|Issuance of common stock to landlord                                                                 |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 35    |       
|Deferred compensation on issuance of stock options and
    restricted stock grants                   |                                                                                               |                                                     | 240    |                |                |   | 41    |             |       |   | 7     |       |       |   | 759   |       
|Cancellation of options and restricted stock grant                                                   |                                                                                               |                                                     | 151    |                |                |   | 5     |             |       |   |      |       |       |   | 849   |       
|Financing of prepaid insurance through note payable                                                  |                                                                                               |                                                     |       |                |                |   |      |             |       |   | 71    |       |       |   | 491   |       
|Stock subscription receivable                                                                        |                                                                                               |                                                     |       |                |                |   |      |             |       |   |      |       |       |   | 480   |       
|                                                                                                     |                                                                                               |                                                     |        |                |                |   |       |             |       |   |       |      



F-23



---



##### Table of Contents



NORTHWEST BIOTHERAPEUTICS, INC.


(A Development Stage Company)





NOTES TO FINANCIAL STATEMENTS


December 31, 2003, 2004 and 2005




|    |                                         
|--- | ----------------------------------------
|(1) | Organization and Description of Business





|    |                         
|--- | ------------------------
|(2) | Operations and Financing





|                        |  |                                                                                          |  |           |         | 
|----------------------- |  | ---------------------------------------------------------------------------------------- |  | --------- | ------- | 
|Lender                  |  | Title                                                                                    |  | Principal |        
|                        |  |                                                                                          |  |           |        
|Alton L. Boynton, Ph.D. |  | Director, President, Chief Scientific Officer, Chief Operating
    Officer and Secretary |  | $         | 183,000 | 
|Marnix Bosch, Ph.D.     |  | Vice President of Vaccine Research and Development                                       |  |           | 41,000  | 
|Larry L. Richards       |  | Former Controller                                                                        |  |           | 11,000  | 
|                        |  |                                                                                          |  |           |        
|                        |  | Total                                                                                    |  | $         | 235,000 | 
|                        |  |                                                                                          |  |           |        

12-month




F-24



---



##### Table of Contents









| |                     
| | --------------------
| | Toucan Capital Loans







F-25



---



##### Table of Contents





|          |       |                |       |       |          |         |                |             |            |                |           |         |                |              |        |         |  |  |        |         | 
|--------- | ----- | -------------- | ----- | ----- | -------- | ------- | -------------- | ----------- | ---------- | -------------- | --------- | ------- | -------------- | ------------ | ------ | ------- |  |  | ------ | ------- | 
|          |       |                |       |       |          | Accrued |                |             | Conversion |                |           | Warrant |               
|Loan Date |       | Principal(1)   |       |       | Due Date |         |                | Interest(2) |            |                | Shares(2) |         |                | Shares(3)(4) |       
|          |       |                |       |       |          |         |                |             |            |                |           |         |                |              |       
|          |       | (In thousands) |       |       |          |         | (In thousands) |             |            | (In thousands) |           |         | (In thousands) |             
|02/02/04  |       | $              | 50    |       |          |         | 06/01/06       | (5)         |            | $              | 10        |         |                |              | 1,500  |         |  |  | 3,000  | (6)    
|03/01/04  |       |                | 50    |       |          |         | 06/01/06       | (5)         |            |                | 10        |         |                |              | 1,490  |         |  |  | 3,000  | (6)    
|04/26/04  |       |                | 500   |       |          |         | 06/01/06       | (5)         |            |                | 87        |         |                |              | 14,688 |         |  |  | 30,000 | (6)    
|06/11/04  |       |                | 500   |       |          |         | 06/01/06       | (5)         |            |                | 81        |         |                |              | 14,515 |         |  |  | 30,000 | (6)    
|07/30/04  |       |                | 2,000 |       |          |         | 06/01/06       | (5)         |            |                | 293       |         |                |              | 57,319 |         |  |  | 20,000 | (7)    
|10/22/04  |       |                | 500   |       |          |         | 06/01/06       | (5)         |            |                | 61        |         |                |              | 14,014 |         |  |  | 5,000  | (7)    
|11/10/04  |       |                | 500   |       |          |         | 06/01/06       | (5)         |            |                | 58        |         |                |              | 13,942 |         |  |  | 5,000  | (7)    
|12/27/04  |       |                | 250   |       |          |         | 06/01/06       | (5)         |            |                | 25        |         |                |              | 6,882  |         |  |  | 2,500  | (7)    
|04/12/05  |       |                | 450   |       |          |         | 06/01/06       | (5)         |            |                | 32        |         |                |              | 11,965 |         |  |  | 4,500  | (7)    
|05/13/05  |       |                | 450   |       |          |         | 06/01/06       | (5)         |            |                | 29        |         |                |              | 11,932 |         |  |  | 4,500  | (7)    
|06/16/05  |       |                | 500   |       |          |         | 06/16/06       |             |            |                | 27        |         |                |              | 13,041 |         |  |  | 5,000  | (7)    
|07/26/05  |       |                | 500   |       |          |         | 07/26/06       |             |            |                | 21        |         |                |              | 12,893 |         |  |  | 5,000  | (7)    
|09/07/05  |       |                | 500   |       |          |         | 09/07/06       |             |            |                | 16        |         |                |              | 12,629 |         |  |  | 5,000  | (7)    
|          |       |                |       |       |          |         |                |             |            |                |           |         |                |              |       
|          | Total |                | $     | 6,750 |          |         |                |             |            |                | $         | 750     |                |              |        | 186,810 |  |  |        | 122,500 | 
|          |       |                |       |       |          |         |                |             |            |                |           |         |                |              |       






|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|--- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The notes are secured by a first priority senior security
    interest in all of the Companys assets.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
|   
|(2) | Interest accrues at 10% per annum, based on a
    365-day basis
    compounded annually from the respective original issuance dates
    of the notes.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|   
|(3) | The notes are convertible into, and the warrants 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 notes shall be convertible
    into, and these warrants shall be exercisable for any equity
    security and/or debt security and/or any combination thereof.
|   
|(4) | Exercise period is 7 years from the issuance date of the
    convertible note except for the February 2, 2004 and
    March 1, 2004 warrants, which have an April 26, 2011
    expiration date.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                
|   
|(5) | As of March 9, 2006, the maturity dates were extended to
    June 1, 2006.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|   
|(6) | Per share exercise price is $0.01.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             
|   
|(7) | Per share exercise price is $0.04.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             



| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Toucan Capital Loans and Related Beneficial Conversions,
    Warrant Valuations, and Amortization

12-month


F-26



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##### Table of Contents







|                         |  |      |               |  |      |  |               | 
|------------------------ |  | ---- | ------------- |  | ---- |  | ------------- | 
|                         |  | 2004 |               |  | 2005 | 
|                         |  |      |               |  |      | 
|Risk-free interest rates |  |      | 1.61% - 3.87% |  |      |  | 2.86% - 4.03% | 
|Contractual life         |  |      | 7 years       |  |      |  | 7 years       | 
|Expected volatility      |  |      | 218% - 239%   |  |      |  | 416% - 440%   | 
|Dividend yield           |  |      | 0%            |  |      |  | 0%            | 







| |                                                                                      
| | -------------------------------------------------------------------------------------
| | Toucan Partners Loans, Beneficial Conversion, Warrant
    Valuation, and Amortization



|          |       |                |     |     |          |          |          |         |                |  |           |                |  |           |        |        |  |  |       |       | 
|--------- | ----- | -------------- | --- | --- | -------- | -------- | -------- | ------- | -------------- |  | --------- | -------------- |  | --------- | ------ | ------ |  |  | ----- | ----- | 
|          |       |                |     |     |          | Interest |          |         | Conversion     |  |           | Warrant        | 
|Loan Date |       | Principal(1)   |     |     | Due Date |          |          | Rate(2) |                |  | Shares(3) |                |  | Shares(3) |       
|          |       |                |     |     |          |          |          |         |                |  |           |                |  |           |       
|          |       | (In thousands) |     |     |          |          |          |         | (In thousands) |  |           | (In thousands) | 
|11/14/05  |       | $              | 400 |     |          |          | 11/14/06 |         |                |  | 10        | %              |  |           | 10,150 |        |  |  | 4,000 | (4)  
|12/30/05  |       |                | 250 |     |          |          | 12/30/06 |         |                |  | 10        | %              |  |           | 6,253  |        |  |  | 2,500 | (5)  
|          |       |                |     |     |          |          |          |         |                |  |           |                |  |           |       
|          | Total |                | $   | 650 |          |          |          |         |                |  |           |                |  |           |        | 16,403 |  |  |       | 6,500 | 
|          |       |                |     |     |          |          |          |         |                |  |           |                |  |           |       






|    |                                                                                                                                                      
|--- | -----------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The notes are secured by a first priority senior security
    interest in all of the Companys assets.                                               
|   
|(2) | Interest accrues at 10% per annum, based on a
    365-day basis
    compounded annually from the respective original issuance dates
    of the notes.

F-27



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##### Table of Contents





|    |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               
|--- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(3) | The notes are convertible into, and the warrants 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 notes shall be convertible
    into, and the warrants shall be exercisable for, any equity
    security and/or debt security and/or any combination thereof.
|   
|(4) | Exercise period is 7 years from the issuance date of the
    note.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
|   
|(5) | Exercise period is 7 years from April 17, 2006 (the
    issuance date of the warrant).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        









| |                                                                   
| | ------------------------------------------------------------------
| | 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, and is pari
    passu with the Series A-1 Preferred Stock, with respect to
    dividends and distributions;                         

F-28



---



##### Table of Contents





| |                                                                                                                                                                                                                                    
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (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 Preferred Stock
    and the Series A-1 Preferred Stock;  
|
| | (v) votes on an as converted basis with the common stock
    and the Series A-1 Preferred 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.).                                         







| |                                                                                                  
| | -------------------------------------------------------------------------------------------------
| | Liability For Potentially Dilutive Securities in Excess of
    Authorized Number of Common Shares

00-19,




F-29



---



##### Table of Contents







| |          
| | ---------
| | Liquidity









|    |                                           
|--- | ------------------------------------------
|(3) | Summary of Significant Accounting Policies



|    |                                                            
|--- | -----------------------------------------------------------
|(a) | Use of Estimates in Preparation of Financial
    Statements





|    |     
|--- | ----
|(b) | Cash

Cash consists of checking and money market accounts.




|    |                                                                   
|--- | ------------------------------------------------------------------
|(c) | Fair Value of Financial Instruments and Concentrations of
    Risk





F-30



---



##### Table of Contents







|    |                       
|--- | ----------------------
|(d) | Property and Equipment



|                                     |  |                                            
|------------------------------------ |  | -------------------------------------------
|Leasehold improvements               |  | Shorter of life of the lease or useful life
|Laboratory equipment                 |  | 5-7 years                                  
|Office furniture and other equipment |  | 3-5 years                                  





|    |                                
|--- | -------------------------------
|(e) | Impairment of long-lived assets

Accounting for the Impairment
or Disposal of Long-Lived Assets




|    |                
|--- | ---------------
|(f) | Restricted Cash





|    |                 
|--- | ----------------
|(g) | Operating Leases





|    |                    
|--- | -------------------
|(h) | Revenue Recognition



F-31



---



##### Table of Contents







|    |                                  
|--- | ---------------------------------
|(i) | Research and Development Expenses





|    |             
|--- | ------------
|(j) | Income Taxes

Accounting for
Income Taxes




|    |                         
|--- | ------------------------
|(k) | Stock-Based Compensation









F-32



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##### Table of Contents





|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |   |  |   |        |  
|------------------------------------------------------------------------------------- | ----------------------------------------------------------------------------------------------------- | ----------------------- | --- | ------ | ---- |  | -- | ------ | - |  | - | ------ | -
|                                                                                      |                                                                                                       | Year Ended December 31, |    
|                                                                                      |                                                                                                       |                         |    
|                                                                                      |                                                                                                       | 2003                    |     |        | 2004 |  |    | 2005   |  
|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |  
|Net loss applicable to common stockholders (in thousands)                             |                                                                                                       |                         |     |        |      |  |    |        |   |  |   |       
|                                                                                      | As reported                                                                                           |                         | $   | (5,752 | )    |  | $  | (8,508 | ) |  | $ | (9,937 | )
|Add: Stock-based employee compensation expense included in
    reported net loss, net |                                                                                                       |                         | 240 |        |      |  | 41 |        |   |  | 7 |       
|                                                                                      | Deduct: Stock-based employee compensation determined under fair
    value based method for all awards |                         |     | (590   | )    |  |    | (47    | ) |  |   | (13    | )
|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |  
|                                                                                      | Pro-forma net loss                                                                                    |                         | $   | (6,102 | )    |  | $  | (8,514 | ) |  | $ | (9,943 | )
|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |  
|Net loss per share  basic and diluted:                                               |                                                                                                       |                         |     |        |      |  |    |        |   |  |   |       
|                                                                                      | As reported                                                                                           |                         | $   | (0.30  | )    |  | $  | (0.45  | ) |  | $ | (0.52  | )
|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |  
|                                                                                      | Pro-forma                                                                                             |                         | $   | (0.32  | )    |  | $  | (0.45  | ) |  | $ | (0.52  | )
|                                                                                      |                                                                                                       |                         |     |        |      |  |    |        |  



|                        |  |      |         |   |      |  |         |  
|----------------------- |  | ---- | ------- | - | ---- |  | ------- | -
|                        |  | 2003 |         |   | 2005 | 
|                        |  |      |         |   |      | 
|Risk-free interest rate |  |      | 2.97    | % |      |  | 3.53    | %
|Expected life           |  |      | 5 years |   |      |  | 5 years |  
|Expected volatility     |  |      | 200     | % |      |  | 403     | %
|Dividend yield          |  |      | 0       | % |      |  | 0       | %



|    |               
|--- | --------------
|(l) | Loss Per Share





|    |                   
|--- | ------------------
|(m) | Operating Segments





| |                 
| | ----------------
| | Operating costs:



F-33



---



##### Table of Contents





| |                          
| | -------------------------
| | Research and development:





®




| |                            
| | ---------------------------
| | General and administrative:





|    |                                 
|--- | --------------------------------
|(n) | Recent Accounting Pronouncements

Share-Based
Payment






F-34



---



##### Table of Contents





143-1,




05-08 05-08


05-07 05-07




|    |                               
|--- | ------------------------------
|(4) | Stockholders Equity (Deficit)



|    |                                      
|--- | -------------------------------------
|(a) | Issuance of Unregistered Common Stock



F-35



---



##### Table of Contents





|    |                                         
|--- | ----------------------------------------
|(b) | Issuance of Unregistered 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, and is pari passu
    with the Series A-1 Preferred Stock, with respect to
    dividends and distributions;                                                                          
|
| | (iv) is entitled to participate on an as-converted basis with
    the common stock and the Series A-1 Preferred Stock on any
    distributions after the payment of any preferential amounts to
    the Series A Preferred Stock;  
|
| | (v) votes on an as converted basis with the common stock and the
    Series A-1 Preferred 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.).                                         





|    |                        
|--- | -----------------------
|(c) | Stock Purchase Warrants

Medarex






F-36



---



##### Table of Contents









| |                         
| | ------------------------
| | Management Loan Warrants





| |                                            
| | -------------------------------------------
| | Toucan Capital and Toucan Partners Warrants







F-37



---



##### Table of Contents





|                                                                                 |  |                |         |           |                |   |      | 
|-------------------------------------------------------------------------------- |  | -------------- | ------- | --------- | -------------- | - | ---- | 
|                                                                                 |  |                |         | Weighted- |               
|                                                                                 |  | Number         |         |           | Average        |  
|Type of Warrant                                                                  |  | Outstanding    |         |           | Exercise Price |  
|                                                                                 |  |                |         |           |                |  
|                                                                                 |  | (In thousands) |         |           |               
|Common stock warrant                                                             |  |                | 810     |           |                | $ | 0.24 | 
|Series A preferred stock warrants                                                |  |                | 142,000 |           |                | $ | 0.03 | 
|Series C preferred stock warrants(1)                                             |  |                | 235     |           |                | $ | 2.50 | 
|Series D preferred stock warrants(1)                                             |  |                | 324     |           |                | $ | 5.00 | 
|Common stock warrants issued in connection with convertible
    promissory notes |  |                | 3,722   |           |                | $ | 0.04 | 






|    |                                                                                                                                                                                                       
|--- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(1) | The exercise of Series C and Series D Preferred Stock
    warrants will result in the issuance of an equal number of
    shares of the Companys common stock with no issuance of
    preferred stock.





|    |                   
|--- | ------------------
|(d) | Stock Option Plans













| |     |                                   
| | --- | ----------------------------------
| | (i) | 1998 Stock Option Plan (1998 Plan)



| |                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys 1998 Stock Option Plan (1998 Plan) has
    reserved 413,026 shares of common stock for stock option
    grants to employees, directors and consultants of the Company.
    As of December 31, 2005, net of forfeitures, a total of
    337,146 shares remain available for granting under this
    plan.



| |      |                                             
| | ---- | --------------------------------------------
| | (ii) | 1999 Executive Stock Option Plan (1999 Plan)



| |                                                                                                                                                                                                                                                          
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | The Companys 1999 Executive Stock Option Plan (1999 Plan)
    has reserved 586,166 shares of common stock for issuance.
    As of December 31, 2005, net of forfeiture, a total of
    420,956 shares remain available for granting under this
    plan.

F-38



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##### Table of Contents





| |       |                                   
| | ----- | ----------------------------------
| | (iii) | 2001 Stock Option Plan (2001 Plan)



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under the 2001 Stock Option Plan (2001 Plan), 1,800,000 shares
    of the Companys common stock have been reserved for grant
    of stock options to employees and consultants. Additionally, on
    January 1 of each year, commencing January 1, 2002, the
    number of shares reserved for grant under the 2001 Plan will
    increase by the lesser of (i) 15% of the aggregate number
    of shares available for grant under the 2001 Plan or
    (ii) 300,000 shares. As of December 31, 2005, net of
    forfeitures, a total of 2,423,320 shares remain available under
    this plan.



| |      |                                                
| | ---- | -----------------------------------------------
| | (iv) | 2001 Non-employee Director Stock Incentive Plan



| |                                                                                                                                                                                                                                                                                                                                                  
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Under the 2001 Non-employee Director Stock Incentive Plan (2001
    Director Plan), 200,000 shares of the Companys common
    stock have been reserved for grant of stock options to
    non-employee directors of the Company. As of December 31,
    2005, net of forfeitures, a total of 147,500 shares remain
    available under this plan.



|                             |           |                      |       |           |                |   |      |      | 
|---------------------------- | --------- | -------------------- | ----- | --------- | -------------- | - | ---- | ---- | 
|                             |           | Options Outstanding  |      
|                             |           |                      |      
|                             |           |                      |       | Weighted- |               
|                             |           | Number               |       |           | Average        |  
|                             |           | of Shares            |       |           | Exercise Price |  
|                             |           |                      |       |           |                |  
|                             |           | (In thousands except |      
|                             |           | weighted average)    |      
|Balance at December 31, 2002 |           |                      | 1,208 |           |                |   | 1.24 |     
|                             | Granted   |                      |       | 895       |                |   |      | 0.10 | 
|                             | Exercised |                      |       | (8        | )              |   |      | 0.00 | 
|                             | Forfeited |                      |       | (301      | )              |   |      | 1.27 | 
|                             |           |                      |       |           |                |  
|Balance at December 31, 2003 |           |                      | 1,794 |           |                |   | 0.71 |     
|                             | Granted   |                      |       |          |                |   |      |     | 
|                             | Exercised |                      |       |          |                |   |      |     | 
|                             | Forfeited |                      |       | (930      | )              |   |      | 0.78 | 
|                             |           |                      |       |           |                |  
|Balance at December 31, 2004 |           |                      | 864   |           |                | $ | 0.63 |     
|                             | Granted   |                      |       | 25        |                |   |      | 0.21 | 
|                             | Exercised |                      |       | (49       | )              |   |      | 0.08 | 
|                             | Forfeited |                      |       | (97       | )              |   |      | 0.99 | 
|                             |           |                      |       |           |                |  
|Balance at December 31, 2005 |           |                      | 743   |           |                | $ | 0.60 |     
|                             |           |                      |       |           |                |  



|                         |  |                                        |     |           |              |  |           |                |                     |   |             |           |  |                |     |  |  |   |      | 
|------------------------ |  | -------------------------------------- | --- | --------- | ------------ |  | --------- | -------------- | ------------------- | - | ----------- | --------- |  | -------------- | --- |  |  | - | ---- | 
|                         |  | Options Outstanding                    |     |           |              |  |          
|                         |  |                                        |     |           |             
|                         |  |                                        |     | Weighted- |              |  |           |                | Options Exercisable |  
|                         |  |                                        |     | Average   |              |  |           |                |                     |  
|                         |  |                                        |     | Remaining |              |  | Weighted- |                |                     |   |             | Weighted- | 
|                         |  | Number                                 |     |           | Contractual  |  |           | Average        |                     |   | Number      |           |  | Average        |    
|Range of Exercise Prices |  | Outstanding                            |     |           | Life (Years) |  |           | Exercise Price |                     |   | Exercisable |           |  | Exercise Price |    
|                         |  |                                        |     |           |              |  |           |                |                     |   |             |           |  |                |    
|                         |  | (In thousands except weighted average) |    
|$0.00  - 0.50            |  |                                        | 430 |           |              |  | 7.6       |                |                     | $ | 0.11        |           |  |                | 292 |  |  | $ | 0.11 | 
|0.51  - 1.01             |  |                                        | 188 |           |              |  | 4.0       |                |                     |   | 0.85        |           |  |                | 188 |  |  |   | 0.85 | 
|1.02  - 2.02             |  |                                        | 102 |           |              |  | 5.3       |                |                     |   | 1.25        |           |  |                | 102 |  |  |   | 1.25 | 
|2.03  - 5.05             |  |                                        | 23  |           |              |  | 6.0       |                |                     |   | 4.93        |           |  |                | 23  |  |  |   | 4.94 | 
|                         |  |                                        |     |           |              |  |           |                |                     |   |             |           |  |                |    
|$0.0000 - 5.05           |  |                                        | 743 |           |              |  | 6.3       |                |                     | $ | 0.60        |           |  |                | 605 |  |  | $ | 0.71 | 
|                         |  |                                        |     |           |              |  |           |                |                     |   |             |           |  |                |    

F-39



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##### Table of Contents







| |                                     
| | ------------------------------------
| | (e)     Common Stock
    Equivalents



|                                           |  |                         |       |  |      |  |         |      |  |  |         | 
|------------------------------------------ |  | ----------------------- | ----- |  | ---- |  | ------- | ---- |  |  | ------- | 
|                                           |  | Years Ended December 31 |      
|                                           |  |                         |      
|                                           |  | 2003                    |       |  | 2004 |  |         | 2005 | 
|                                           |  |                         |       |  |      |  |         |      | 
|                                           |  | (In thousands)          |      
|Preferred stock                            |  |                         |      |  |      |  |        |      |  |  | 32,500  | 
|Common stock options                       |  |                         | 1,794 |  |      |  | 864     |      |  |  | 743     | 
|Common stock warrants                      |  |                         | 810   |  |      |  | 810     |      |  |  | 810     | 
|Convertible preferred stock warrants       |  |                         | 559   |  |      |  | 559     |      |  |  | 13,599  | 
|Convertible promissory note                |  |                         | 1,861 |  |      |  | 110,333 |      |  |  | 186,306 | 
|Convertible promissory note stock warrants |  |                         | 3,722 |  |      |  | 102,222 |      |  |  | 132,722 | 



|    |                             
|--- | ----------------------------
|(f) | Employee Stock Purchase Plan





|    |                     
|--- | --------------------
|(g) | Employee 401(k) Plan





|    |                             
|--- | ----------------------------
|(h) | Stockholder Rights Agreement





F-40



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##### Table of Contents







|    |                           
|--- | --------------------------
|(5) | Related Party Transactions



|    |                       
|--- | ----------------------
|(a) | Agreement with Medarex





|    |                  
|--- | -----------------
|(b) | Cognate Agreement

®




|    |             
|--- | ------------
|(6) | Income Taxes



F-41



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##### Table of Contents





|                                               |                           |      |         |        |      |   |         |        |  |   |         |        | 
|---------------------------------------------- | ------------------------- | ---- | ------- | ------ | ---- | - | ------- | ------ |  | - | ------- | ------ | 
|                                               |                           | 2003 |         |        | 2004 |   |         | 2005   | 
|                                               |                           |      |         |        |      |   |         |        | 
|Net operating loss carry forwards              |                           | $    | 14,699  |        |      | $ | 17,126  |        |  | $ | 20,450  |       
|Research and development credit carry forwards |                           |      | 1,136   |        |      |   | 1,319   |        |  |   | 1,525   |       
|Depreciation and amortization                  |                           |      | 627     |        |      |   | 981     |        |  |   | 927     |       
|Other                                          |                           |      | 355     |        |      |   | 313     |        |  |   | 325     |       
|                                               |                           |      |         |        |      |   |         |        | 
|                                               | Gross deferred tax assets |      |         | 16,817 |      |   |         | 19,739 |  |   |         | 23,227 | 
|Less valuation allowance                       |                           |      | (16,817 | )      |      |   | (19,739 | )      |  |   | (23,227 | )     
|                                               |                           |      |         |        |      |   |         |        | 
|                                               | Net deferred tax assets   |      | $       |       |      |   | $       |       |  |   | $       |       | 
|                                               |                           |      |         |        |      |   |         |        | 







|    |                                      
|--- | -------------------------------------
|(7) | Scientific Collaboration Arrangements





|    |                              
|--- | -----------------------------
|(8) | Commitments and Contingencies



|    |                  
|--- | -----------------
|(a) | Lease Obligations



|                                  |                                         |                              |    |    |           |   |     |   |     | 
|--------------------------------- | --------------------------------------- | ---------------------------- | -- | -- | --------- | - | --- | - | --- | 
|                                  |                                         | Capital                      |    |    | Operating |  
|                                  |                                         | Leases                       |    |    | Leases    |  
|                                  |                                         |                              |    |    |           |  
|                                  |                                         | (in thousands)               |   
|2006                              |                                         | $                            | 11 |    |           | $ | 324 |  
|2007                              |                                         |                              | 3  |    |           |   |     |  
|                                  |                                         |                              |    |    |           |  
|                                  |                                         | Total minimum lease payments |    |    | 14        |   |     | $ | 324 | 
|                                  |                                         |                              |    |    |           |  
|Less amount representing interest |                                         |                              | 1  |    |           |   |     |  
|                                  |                                         |                              |    |    |           |  
|                                  | Present value of minimum lease payments |                              |    | 13 |           |   |     |   |    
|Less current portion              |                                         |                              | 10 |    |           |   |     |  
|                                  |                                         |                              |    |    |           |  
|                                  |                                         | $                            | 3  |    |           |   |     |  
|                                  |                                         |                              |    |    |           |  

F-42



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##### Table of Contents







|    |              
|--- | -------------
|(b) | Legal Matters

















|    |                     
|--- | --------------------
|(c) | Sales Tax Assessment



F-43



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##### Table of Contents







|    |              
|--- | -------------
|(9) | Notes Payable



|    |                                  
|--- | ---------------------------------
|(a) | Notes Payable to Related Parties.



| |                 
| | ----------------
| | Management Loans





| |                     
| | --------------------
| | Toucan Capital Loans





| |                      
| | ---------------------
| | Toucan Partners Loans





|     |                                                                                         
|---- | ----------------------------------------------------------------------------------------
|(10) | Unaudited Quarterly Financial Information (in thousands,
    except loss per share data)



|                                           |  |         |      |   |         |   |        |         |  |   |         |   |  |   |        |  
|------------------------------------------ |  | ------- | ---- | - | ------- | - | ------ | ------- |  | - | ------- | - |  | - | ------ | -
|                                           |  | First   |      |   | Second  |   |        | Third   |  |   | Fourth  |  
|                                           |  | Quarter |      |   | Quarter |   |        | Quarter |  |   | Quarter |  
|                                           |  | 2004    |      |   | 2004    |   |        | 2004    |  |   | 2004    |  
|                                           |  |         |      |   |         |   |        |         |  |   |         |  
|Total revenues                             |  | $       | 127  |   |         | $ | 116    |         |  | $ | 91      |   |  | $ | 56     |  
|Net loss applicable to common stockholders |  | $       | (828 | ) |         | $ | (1,019 | )       |  | $ | (2,266  | ) |  | $ | (4,395 | )

|                                                                               |  |         |        |   |         |   |        |         |  |   |         |   |  |   |        |  
|------------------------------------------------------------------------------ |  | ------- | ------ | - | ------- | - | ------ | ------- |  | - | ------- | - |  | - | ------ | -
|                                                                               |  | First   |        |   | Second  |   |        | Third   |  |   | Fourth  |  
|                                                                               |  | Quarter |        |   | Quarter |   |        | Quarter |  |   | Quarter |  
|                                                                               |  | 2004    |        |   | 2004    |   |        | 2004    |  |   | 2004    |  
|                                                                               |  |         |        |   |         |   |        |         |  |   |         |  
|Net loss per share applicable to common stockholders 
    basic and diluted   |  | $       | (0.04  | ) |         | $ | (0.05  | )       |  | $ | (0.12   | ) |  | $ | (0.24  | )
|Weighted average shares used in computing basic and diluted loss
    per share |  |         | 19,025 |   |         |   | 19,026 |         |  |   | 19,026  |   |  |   | 19,026 |  

|                                                                               |  |         |        |   |         |   |        |         |  |   |         |   |  |   |        |  
|------------------------------------------------------------------------------ |  | ------- | ------ | - | ------- | - | ------ | ------- |  | - | ------- | - |  | - | ------ | -
|                                                                               |  | First   |        |   | Second  |   |        | Third   |  |   | Fourth  |  
|                                                                               |  | Quarter |        |   | Quarter |   |        | Quarter |  |   | Quarter |  
|                                                                               |  | 2005    |        |   | 2005    |   |        | 2005    |  |   | 2005    |  
|                                                                               |  |         |        |   |         |   |        |         |  |   |         |  
|Total revenues                                                                 |  | $       | 87     |   |         | $ | 8      |         |  | $ | 15      |   |  | $ | 14     |  
|Net loss applicable to common stockholders                                     |  | $       | (2,526 | ) |         | $ | (2,638 | )       |  | $ | (2,782  | ) |  | $ | (1,987 | )
|Net loss per share applicable to common
    stockholders  basic and diluted   |  | $       | (0.13  | ) |         | $ | (0.14  | )       |  | $ | (0.15   | ) |  | $ | (0.10  | )
|Weighted average shares used in computing basic and diluted loss
    per share |  |         | 19,035 |   |         |   | 19,078 |         |  |   | 19,078  |   |  |   | 19,078 |  

F-44



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##### Table of Contents





|     |                 
|---- | ----------------
|(11) | Loss on Sublease





|     |                                             
|---- | --------------------------------------------
|(12) | Impairment and Disposal of Long-lived Assets









|     |                  
|---- | -----------------
|(13) | Subsequent Events



| |               
| | --------------
| | Loan Agreement

365-day






| |                  
| | -----------------
| | Private Placement







F-45



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##### Table of Contents







| |                                
| | -------------------------------
| | Exercise of Management Warrants



F-46



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##### Table of Contents









58,969,641 Shares


Common Stock


Northwest Biotherapeutics, Inc.





PROSPECTUS
















---



##### Table of Contents



PART II


INFORMATION NOT REQUIRED IN THE PROSPECTUS




|         |                                             
|-------- | --------------------------------------------
|Item 13. | Other Expenses of Issuance and Distribution.



|                             |  |        |         | 
|---------------------------- |  | ------ | ------- | 
|                             |  | Amount |        
|                             |  |        |        
|SEC Registration Fee         |  | $      | 2,430   | 
|Printing Expenses            |  | $      | 30,000  | 
|Accounting Fees and Expenses |  | $      | 30,000  | 
|Legal Fees and Expenses      |  | $      | 100,000 | 
|Blue Sky Fees and Expenses   |  | $      | 3,000   | 
|Miscellaneous                |  | $      |        | 
|                             |  |        |        
|Total                        |  | $      | 165,430 | 
|                             |  |        |        



|         |                                           
|-------- | ------------------------------------------
|Item 14. | Indemnification of Directors and Officers.







II-1



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##### Table of Contents













|         |                                         
|-------- | ----------------------------------------
|Item 15. | Recent Sales of Unregistered Securities.





| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    
| | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 1. The Company sold an aggregate of 135,100 shares of
    common stock to employees, directors and consultants for cash
    consideration in the aggregate amount of $11,100 upon the
    exercise of stock options and stock awards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              
|
| | 2. The Company granted stock options and stock awards to
    employees, directors and consultants under its 1998 Stock Option
    Plan, 1999 Executive Stock Option Plan, 2001 Stock Option Plan,
    2001 Nonemployee Director Stock Incentive Plan and Employee
    Stock Purchase Plan covering an aggregate of 385,000 shares
    of common stock, with exercise prices ranging from $0.12 to
    $0.21 per share. Of these, options covering an aggregate of
    185,002 were cancelled without being exercised.                                                                                                                                                                                                                              
|
| | 3. On November 13, 2003, the Company borrowed an
    aggregate of $335,000 from members of its management, pursuant
    to a series of convertible promissory notes which accrue
    interest at a rate of prime plus 2% (and associated warrants to
    purchase an aggregate of approximately 3.7 million shares
    of our stock at $0.04 per share). In connection with the
    financing with Toucan Capital Fund II, L.P. (Toucan
    Capital) described below, the remaining $285,000 principal
    amount of notes were amended to, among other things, reduce the
    conversion prices to $0.10 per share. The notes that
    remained outstanding were amended on a number of occasions to
    extend their respective maturity dates.
|
| | 4. Beginning in 2004, the Company raised an aggregate of
    approximately $9 million in gross proceeds from issuances
    of debt and equity through a series of private placements. These
    financings included:                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               



| |   |                                                                                                                                                                                                                                                                                                                                                 
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |  | the sale of 32,500,000 shares of Series A Preferred
    Stock to Toucan Capital at a price of $0.04 per share, or
    an aggregate purchase price of $1.3 million (and an
    associated warrant to purchase an aggregate of 13 million
    shares of Series A Preferred Stock at an exercise price of
    $0.04 per share) on January 26, 2005;
|
| |  | the issuance of a series of 10% convertible promissory
    notes to Toucan Capital in aggregate principal amount of
    approximately $6.75 million (and warrants to purchase an
    aggregate of                                                                                                                                               

II-2



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##### Table of Contents



| |   |                                                                                                                                                                                                                                                                     
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| |   | 135.5 million shares at exercise prices ranging from $0.01
    to $0.04 per share) from February 2004 through September
    2005;                                                                                                                                   
|
| |  | the issuance of a 10% convertible promissory note to Toucan
    Partners, LLC (Toucan Partners) in principal amount
    of $400,000 (and an associated warrant to
    purchase 4 million shares at an exercise price of
    $0.04 per share) in November 2005; and
|
| |  | the issuance of two 10% non-convertible promissory notes to
    Toucan Partners in an aggregate principal amount of
    approximately $550,000 from December 2005 through March 2006.                                                                               



| |                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | 5. In April 2006, the Company sold 39,467,891 shares
    of common stock (and accompanying warrants to purchase an
    aggregate of 19,733,945 million shares of common stock at
    an exercise price of $0.14 per share) to certain accredited
    investors (the PIPE Financing) for aggregate
    proceeds of approximately $5.5 million.                                                                                            
|
| | 6. On April 7, 2006, the Company issued
    482,091 shares of its common stock to an accredited
    investor as a result of the net exercise of the warrant to
    purchase 714,286 shares of common stock at
    $0.14 per share acquired by such investor pursuant to the
    Companys private placement of common stock and warrants
    which closed on April 4, 2006.                                                                
|
| | 7. On April 17, 2006, in exchange for agreeing to
    consent to the PIPE Financing, the non-convertible notes held by
    Toucan Partners were amended and restated in order to make them
    convertible on the same terms and conditions as the convertible
    note held by Toucan Partners and warrants to purchase an
    aggregate of 5.5 million shares at an exercise price of
    $0.04 per share were issued to Toucan Partners.
|
| | 8. On April 17, 2006, Toucan Capital converted all of
    its promissory notes, including all accrued interest thereon,
    into an aggregate of 4,816,863 shares of a newly designated
    series of preferred stock, Series A-1 Preferred Stock, in
    accordance with the terms of the notes at a conversion price of
    $1.60 per share.                                                                                             
|
| | 9. From March 2006 through May 2006, the warrants referred
    to in paragraph (3) above were exercised on a net
    exercise basis for an aggregate of 3,459,705 shares.
    Additionally, in March 2006, the promissory notes referred to in
    paragraph (3) above, including all accrued interest
    thereon, were converted in accordance with their terms into an
    aggregate of 2,687,719 shares of common stock.               







II-3



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##### Table of Contents





|         |                                           
|-------- | ------------------------------------------
|Item 16. | Exhibits and Financial Statement Schedules



EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                                                                                   
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Sixth Amended and Restated Certificate of Incorporation, as
    amended.(3.1)(18)                                                                                                                                                                                                 
|        | 3  | .2          |  | Second Amended and Restated Bylaws of the Company.(3.2)(1)                                                                                                                                                                                                                        
|        | 3  | .3          |  | First Amendment to Second Amended and Restated Bylaws of the
    Company.(3.1)(19)                                                                                                                                                                                                
|        | 3  | .4          |  | Certificate of Designations, Preferences and Rights of
    Series A Cumulative Convertible Preferred Stock, as
    amended.(3.3)(18)                                                                                                                                              
|        | 3  | .5          |  | Certificate of Designations, Preferences and Rights of
    Series A-1 Cumulative Convertible Preferred Stock.(3.4)(18)                                                                                                                                                            
|        | 4  | .1          |  | Form of common stock certificate.(4.1)(2)                                                                                                                                                                                                                                         
|        | 4  | .2          |  | Northwest Biotherapeutics, Inc. Stockholders Rights Plan dated
    February 26, 2002 between the Company and Mellon Investors
    Services, LLC.(4.2)(3)                                                                                                                          
|        | 4  | .3          |  | Form of Rights Certificate.(4.1)(3)                                                                                                                                                                                                                                               
|        | 4  | .4          |  | Rights Agreement Amendment dated April 26, 2004.(4.1)(4)                                                                                                                                                                                                                          
|        | 5  | .1*         |  | Opinion of Johnston Law Firm as to the legality of the
    securities being registered.                                                                                                                                                                                           
|        | 10 | .1          |  | Loan Agreement, Security Agreement and 10% Convertible,
    Secured Promissory Note dated November 14, 2005 in the
    principal amount of $400,000 between the Company and Toucan
    Partners, LLC.(10.27)(5)                                                                   
|        | 10 | .2          |  | Amended and Restated Loan Agreement, Security Agreement and 10%
    Secured Promissory Note originally dated December 30, 2005,
    and amended and restated on April 17, 2006 in the principal
    amount of $250,000 between the Company and Toucan Partners,
    LLC.(10.2)(18)
|        | 10 | .3          |  | Amended and Restated Loan Agreement, Security Agreement and 10%
    Secured Promissory Note originally dated March 9, 2006, and
    amended and restated on April 17, 2006 in the principal
    amount of $300,000 between the Company and Toucan Partners,
    LLC.(10.3)(18)    
|        | 10 | .4          |  | Amended and Restated Investor Rights Agreement dated
    April 17, 2006.(10.4)(18)                                                                                                                                                                                                
|        | 10 | .5          |  | Securities Purchase Agreement, dated March 30, 2006 by and
    among the Company and the Investors identified therein.(10.1)(6)                                                                                                                                                   
|        | 10 | .6          |  | Form of Warrant.(10.2)(6)                                                                                                                                                                                                                                                         
|        | 10 | .7          |  | Warrant to purchase securities of the Company dated
    April 26, 2004 issued to Toucan Capital Fund II,
    L.P.(10.9)(7)                                                                                                                                                        
|        | 10 | .8          |  | Warrant to purchase securities of the Company dated
    June 11, 2004 issued to Toucan Capital Fund II,
    L.P.(10.8)(7)                                                                                                                                                         
|        | 10 | .9          |  | Warrant to purchase securities of the Company dated
    July 30, 2004 issued to Toucan Capital Fund II,
    L.P.(10.7)(7)                                                                                                                                                         
|        | 10 | .10         |  | Warrant to purchase securities of the Company dated
    October 22, 2004 issued to Toucan Capital Fund II,
    L.P.(10.3)(8)                                                                                                                                                      
|        | 10 | .11         |  | Warrant to purchase securities of the Company dated
    November 10, 2004 issued to Toucan Capital Fund II,
    L.P.(10.3)(9)                                                                                                                                                     
|        | 10 | .12         |  | Warrant to purchase securities of the Company dated
    December 27, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(10)                                                                                                                                                    
|        | 10 | .13         |  | First Amendment to Warrants between Northwest Biotherapeutics,
    Inc. and Toucan Capital Fund II, L.P. dated
    January 26, 2005.(10.5)(1)                                                                                                                                     
|        | 10 | .14         |  | Warrant to purchase Series A Preferred Stock dated
    January 26, 2005 issued to Toucan Capital Fund II,
    L.P.(10.2)(1)                                                                                                                                                       
|        | 10 | .15         |  | Warrant to purchase securities of the Company dated
    April 12, 2005 issued to Toucan Capital Fund II,
    L.P.(10.39)(11)                                                                                                                                                      

II-4



---



##### Table of Contents



|        |    |             |  |                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .16         |  | Warrant to purchase securities of the Company dated May 13,
    2005 issued to Toucan Capital Fund II, L.P.(10.3)(12)                      
|        | 10 | .17         |  | Warrant to purchase securities of the Company dated
    June 16, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(13)                 
|        | 10 | .18         |  | Warrant to purchase securities of the Company dated
    July 26, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(14)                 
|        | 10 | .19         |  | Warrant to purchase securities of the Company dated
    September 7, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(15)             
|        | 10 | .20         |  | Warrant to purchase securities of the Company dated
    November 14, 2005 issued to Toucan Partners, LLC.(10.17)(5)                        
|        | 10 | .21         |  | Warrant to purchase securities of the Company dated
    April 17, 2006 issued to Toucan Partners, LLC.(10.21)(18)                          
|        | 10 | .22         |  | Warrant to purchase securities of the Company dated
    April 17, 2006 issued to Toucan Partners, LLC.(10.22)(18)                          
|        | 10 | .23         |  | Amended and Restated Recapitalization Agreement by and between
    the Company and Toucan Capital Fund II, L.P., as
    amended.(10.23)(18)
|        | 10 | .24         |  | Amended and Restated Binding Term sheet, as amended.(10.24)(18)                                                                            
|        | 10 | .25         |  | Amended and Restated Employment Agreement with Dr. Alton L.
    Boynton(10.1)(16)                                                          
|        | 10 | .26         |  | Employment Agreement with Paul Zeltzer.(99.1)(17)                                                                                          
|        | 10 | .27         |  | Form of Warrant to purchase common stock of the Company dated
    November 13, 2003, as amended.(10.27)(18)                                
|        | 10 | .28         |  | Services Proposal between the Company and Cognate Therapeutics,
    Inc. dated July 30, 2004.(10.35)(7)                                    
|        | 10 | .29         |  | 1998 Stock Option Plan.(10.15)(2)                                                                                                          
|        | 10 | .30         |  | 1999 Executive Stock Option Plan.(10.16)(2)                                                                                                
|        | 10 | .31         |  | 2001 Stock Option Plan.(10.17)(2)                                                                                                          
|        | 10 | .32         |  | 2001 Nonemployee Director Stock Incentive Plan.(10.18)(2)                                                                                  
|        | 10 | .33         |  | Employee Stock Purchase Plan.(10.19)(2)                                                                                                    
|        | 10 | .34         |  | Lease Agreement.(10.34)(18)                                                                                                                
|        | 10 | .35         |  | Clinical Study Agreement between the Company and the Regents of
    the University of California dated February 14,
    2006.(10.35)(18)   
|        | 11 | .1          |  | Computation of net loss per share (included in notes to
    financial statements).                                                         
|        | 23 | .1*         |  | Consent of KPMG LLP, Independent Registered Accounting Firm.                                                                               
|        | 23 | .2*         |  | Consent of Peterson Sullivan, PLLC, Independent Registered
    Accounting Firm.                                                            
|        | 23 | .3*         |  | Consent of Johnston Law Firm, included in the opinion filed as
    Exhibit 5.1.                                                            






| |     |                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K,
    February 1, 2005.      
|
| | (2) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form S-1
    (Registration
    No. 333-67350).         
|
| | (3) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 8-A on
    July 8, 2002.                          
|
| | (4) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 10-K on
    May 14, 2004.                         
|
| | (5) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 14, 2005.

II-5



---



##### Table of Contents





| |     |                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (6) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    March 31, 2006.      
|
| | (7) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 15, 2004.
|
| | (8) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    October 22, 2004.    
|
| | (9) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    November 10, 2004.   



|     |                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    December 27, 2004.   
|    
|(11) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Annual Report on
    Form 10-K on
    April 15, 2005.      
|    
|(12) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    May 18, 2005.        
|    
|(13) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    June 21, 2005.       
|    
|(14) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    August 1, 2005.      
|    
|(15) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    September 9, 2005.   
|    
|(16) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 11, 2003.
|    
|(17) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    August 5, 2005.      
|    
|(18) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 10-K on
    April 18, 2006.                       
|    
|(19) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    April 26, 2006.      



| |   |               
| | - | --------------
| | * | Filed herewith

Item 17. Undertakings.






| |                                                                                                                                           
| | ------------------------------------------------------------------------------------------------------------------------------------------
| | (1) To file, during any period in which offers or sales are
    being made, a post-effective amendment to this registration
    statement:



| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            
| | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) To include any prospectus required by
    Section 10(a)(3) of the Securities Act of 1933, as
    amended; and                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          
|
| | (ii) To reflect in the prospectus any facts or events
    arising after the effective date of the registration statement
    (or the most recent post-effective amendment thereof) which,
    individually or in the aggregate, represent a fundamental change
    in the information in the registration statement.
    Notwithstanding the foregoing, any increase or decrease in
    volume of securities offered (if the total dollar value of
    securities offered would not exceed that which was registered)
    and any deviation from the low or high end of the estimated
    maximum offering range may be reflected in the form of
    prospectus filed with the Commission pursuant to
    Rule 424(b) (§230.424(b) of this chapter) if, in the
    aggregate, the changes in volume and price represent no more
    than a 20% change in the maximum aggregate offering price set
    forth in the Calculation of Registration Fee table
    in the effective registration statement; and

II-6



---



##### Table of Contents





| |                                                                                                                                                                                                                                
| | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (iii) To include any material information with respect to
    the plan of distribution not previously disclosed in the
    registration statement or any material change to such
    information in the registration statement.



| |                                                                                                                                                                                                                                                                                                                                                                       
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (2) That, for purposes of determining any liability under
    the Securities Act of 1933, as amended, each such post-effective
    amendment shall be deemed to be a new registration statement
    relating to the securities offered therein, and the offering as
    such securities at that time shall be deemed to be the initial
    bona fide offering thereof.
|
| | (3) To remove from registration by means of a
    post-effective amendment any of the securities being registered
    which remain unsold at the termination of the offering.                                                                                                                                                                                         







| |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (i) For purposes of determining any liability under the
    Securities Act of 1933, the information omitted from the form of
    prospectus filed as part of this registration statement in
    reliance under Rule 430A and contained in a form of
    prospectus filed by the registrant pursuant to
    Rule 424(b)(1) or (4), or 497(h) under the Securities Act
    of 1933 shall be deemed to be part of this registration
    statement as of the time it was declared effective.
|
| | (ii) For the purpose of determining any liability under the
    Securities Act of 1933, each post-effective amendment that
    contains a form of prospectus shall be deemed to be a new
    registration statement relating to the securities offered
    therein, and the offering of such securities at that time shall
    be deemed to be the initial bona fide offering thereof.                                                                                                  

II-7



---



##### Table of Contents



SIGNATURES




| |                                                                                                                                                                                                                                                                                                     
| | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | Pursuant to the requirements of the Securities Act of 1933, as
    amended, the registrant certifies has duly caused this
    registration statement to be signed on its behalf by the
    undersigned, thereunto duly authorized, in the City of Bothell,
    State of Washington, on May 19, 2006.



| |                                
| | -------------------------------
| | NORTHWEST BIOTHERAPEUTICS, INC.



| |     |                     
| | --- | --------------------
| | By: | /s/ ALTON L. BOYNTON

| |                                                       
| | ------------------------------------------------------
| |                                                       
| | Alton L. Boynton                                      
| | Its: President, Chief Operating and Scientific Officer

S-1


|                                                       |  |                                                                            |  |              |  | 
|------------------------------------------------------ |  | -------------------------------------------------------------------------- |  | ------------ |  | 
|Signature                                              |  | Title                                                                      |  | Date        
|                                                       |  |                                                                            |  |             
|                                                      
|/s/ ALTON L.
    BOYNTON, PH.D.Alton L. Boynton, Ph.D. |  | Director, Principal Executive Officer and Principal Accounting
    Officer |  | May 19, 2006

II-8



---



##### Table of Contents



EXHIBIT INDEX


|        |    |             |  |                                                                                                                                                                                                                                                                                   
|------- | -- | ----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 3  | .1          |  | Sixth Amended and Restated Certificate of Incorporation, as
    amended.(3.1)(18)                                                                                                                                                                                                 
|        | 3  | .2          |  | Second Amended and Restated Bylaws of the Company.(3.2)(1)                                                                                                                                                                                                                        
|        | 3  | .3          |  | First Amendment to Second Amended and Restated Bylaws of the
    Company.(3.1)(19)                                                                                                                                                                                                
|        | 3  | .4          |  | Certificate of Designations, Preferences and Rights of
    Series A Cumulative Convertible Preferred Stock, as
    amended.(3.3)(18)                                                                                                                                              
|        | 3  | .5          |  | Certificate of Designations, Preferences and Rights of
    Series A-1 Cumulative Convertible Preferred Stock.(3.4)(18)                                                                                                                                                            
|        | 4  | .1          |  | Form of common stock certificate.(4.1)(2)                                                                                                                                                                                                                                         
|        | 4  | .2          |  | Northwest Biotherapeutics, Inc. Stockholders Rights Plan dated
    February 26, 2002 between the Company and Mellon Investors
    Services, LLC.(4.2)(3)                                                                                                                          
|        | 4  | .3          |  | Form of Rights Certificate.(4.1)(3)                                                                                                                                                                                                                                               
|        | 4  | .4          |  | Rights Agreement Amendment dated April 26, 2004.(4.1)(4)                                                                                                                                                                                                                          
|        | 5  | .1*         |  | Opinion of Johnston Law Firm as to the legality of the
    securities being registered.                                                                                                                                                                                           
|        | 10 | .1          |  | Loan Agreement, Security Agreement and 10% Convertible,
    Secured Promissory Note dated November 14, 2005 in the
    principal amount of $400,000 between the Company and Toucan
    Partners, LLC.(10.27)(5)                                                                   
|        | 10 | .2          |  | Amended and Restated Loan Agreement, Security Agreement and 10%
    Secured Promissory Note originally dated December 30, 2005,
    and amended and restated on April 17, 2006 in the principal
    amount of $250,000 between the Company and Toucan Partners,
    LLC.(10.2)(18)
|        | 10 | .3          |  | Amended and Restated Loan Agreement, Security Agreement and 10%
    Secured Promissory Note originally dated March 9, 2006, and
    amended and restated on April 17, 2006 in the principal
    amount of $300,000 between the Company and Toucan Partners,
    LLC.(10.3)(18)    
|        | 10 | .4          |  | Amended and Restated Investor Rights Agreement dated
    April 17, 2006.(10.4)(18)                                                                                                                                                                                                
|        | 10 | .5          |  | Securities Purchase Agreement, dated March 30, 2006 by and
    among the Company and the Investors identified therein.(10.1)(6)                                                                                                                                                   
|        | 10 | .6          |  | Form of Warrant.(10.2)(6)                                                                                                                                                                                                                                                         
|        | 10 | .7          |  | Warrant to purchase securities of the Company dated
    April 26, 2004 issued to Toucan Capital Fund II,
    L.P.(10.9)(7)                                                                                                                                                        
|        | 10 | .8          |  | Warrant to purchase securities of the Company dated
    June 11, 2004 issued to Toucan Capital Fund II,
    L.P.(10.8)(7)                                                                                                                                                         
|        | 10 | .9          |  | Warrant to purchase securities of the Company dated
    July 30, 2004 issued to Toucan Capital Fund II,
    L.P.(10.7)(7)                                                                                                                                                         
|        | 10 | .10         |  | Warrant to purchase securities of the Company dated
    October 22, 2004 issued to Toucan Capital Fund II,
    L.P.(10.3)(8)                                                                                                                                                      
|        | 10 | .11         |  | Warrant to purchase securities of the Company dated
    November 10, 2004 issued to Toucan Capital Fund II,
    L.P.(10.3)(9)                                                                                                                                                     
|        | 10 | .12         |  | Warrant to purchase securities of the Company dated
    December 27, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(10)                                                                                                                                                    
|        | 10 | .13         |  | First Amendment to Warrants between Northwest Biotherapeutics,
    Inc. and Toucan Capital Fund II, L.P. dated
    January 26, 2005.(10.5)(1)                                                                                                                                     
|        | 10 | .14         |  | Warrant to purchase Series A Preferred Stock dated
    January 26, 2005 issued to Toucan Capital Fund II,
    L.P.(10.2)(1)                                                                                                                                                       
|        | 10 | .15         |  | Warrant to purchase securities of the Company dated
    April 12, 2005 issued to Toucan Capital Fund II,
    L.P.(10.39)(11)                                                                                                                                                      
|        | 10 | .16         |  | Warrant to purchase securities of the Company dated May 13,
    2005 issued to Toucan Capital Fund II, L.P.(10.3)(12)                                                                                                                                                             
|        | 10 | .17         |  | Warrant to purchase securities of the Company dated
    June 16, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(13)                                                                                                                                                        
|        | 10 | .18         |  | Warrant to purchase securities of the Company dated
    July 26, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(14)                                                                                                                                                        



---



##### Table of Contents



|        |    |             |  |                                                                                                                                            
|------- | -- | ----------- |  | -------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit |    |            
|Number  |    | Description
|        |    |            
|        | 10 | .19         |  | Warrant to purchase securities of the Company dated
    September 7, 2005 issued to Toucan Capital Fund II,
    L.P.(10.3)(15)             
|        | 10 | .20         |  | Warrant to purchase securities of the Company dated
    November 14, 2005 issued to Toucan Partners, LLC.(10.17)(5)                        
|        | 10 | .21         |  | Warrant to purchase securities of the Company dated
    April 17, 2006 issued to Toucan Partners, LLC.(10.21)(18)                          
|        | 10 | .22         |  | Warrant to purchase securities of the Company dated
    April 17, 2006 issued to Toucan Partners, LLC.(10.22)(18)                          
|        | 10 | .23         |  | Amended and Restated Recapitalization Agreement by and between
    the Company and Toucan Capital Fund II, L.P., as
    amended.(10.23)(18)
|        | 10 | .24         |  | Amended and Restated Binding Term sheet, as amended.(10.24)(18)                                                                            
|        | 10 | .25         |  | Amended and Restated Employment Agreement with Dr. Alton L.
    Boynton(10.1)(16)                                                          
|        | 10 | .26         |  | Employment Agreement with Paul Zeltzer.(99.1)(17)                                                                                          
|        | 10 | .27         |  | Form of Warrant to purchase common stock of the Company dated
    November 13, 2003, as amended.(10.27)(18)                                
|        | 10 | .28         |  | Services Proposal between the Company and Cognate Therapeutics,
    Inc. dated July 30, 2004.(10.35)(7)                                    
|        | 10 | .29         |  | 1998 Stock Option Plan.(10.15)(2)                                                                                                          
|        | 10 | .30         |  | 1999 Executive Stock Option Plan.(10.16)(2)                                                                                                
|        | 10 | .31         |  | 2001 Stock Option Plan.(10.17)(2)                                                                                                          
|        | 10 | .32         |  | 2001 Nonemployee Director Stock Incentive Plan.(10.18)(2)                                                                                  
|        | 10 | .33         |  | Employee Stock Purchase Plan.(10.19)(2)                                                                                                    
|        | 10 | .34         |  | Lease Agreement.(10.34)(18)                                                                                                                
|        | 10 | .35         |  | Clinical Study Agreement between the Company and the Regents of
    the University of California dated February 14,
    2006.(10.35)(18)   
|        | 11 | .1          |  | Computation of net loss per share (included in notes to
    financial statements).                                                         
|        | 23 | .1*         |  | Consent of KPMG LLP, Independent Registered Accounting Firm.                                                                               
|        | 23 | .2*         |  | Consent of Peterson Sullivan, PLLC, Independent Registered
    Accounting Firm.                                                            
|        | 23 | .3*         |  | Consent of Johnston Law Firm, included in the opinion filed as
    Exhibit 5.1.                                                            






| |     |                                                                                                                                                                        
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (1) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K,
    February 1, 2005.      
|
| | (2) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form S-1
    (Registration
    No. 333-67350).         
|
| | (3) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 8-A on
    July 8, 2002.                          
|
| | (4) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 10-K on
    May 14, 2004.                         
|
| | (5) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 14, 2005.
|
| | (6) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    March 31, 2006.      
|
| | (7) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 15, 2004.
|
| | (8) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    October 22, 2004.    



---



##### Table of Contents





| |     |                                                                                                                                                                     
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------
| | (9) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    November 10, 2004.



|     |                                                                                                                                                                        
|---- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|(10) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    December 27, 2004.   
|    
|(11) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Annual Report on
    Form 10-K on
    April 15, 2005.      
|    
|(12) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    May 18, 2005.        
|    
|(13) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    June 21, 2005.       
|    
|(14) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    August 1, 2005.      
|    
|(15) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    September 9, 2005.   
|    
|(16) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Quarterly Report on
    Form 10-Q on
    November 11, 2003.
|    
|(17) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    August 5, 2005.      
|    
|(18) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants
    Form 10-K on
    April 18, 2006.                       
|    
|(19) | Incorporated by reference to the exhibit shown in the preceding
    parentheses filed with the Registrants Current Report on
    Form 8-K on
    April 26, 2006.      



| |   |               
| | - | --------------
| | * | Filed herewith