SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| (Mark One) [X] |
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For The Quarterly Period Ended June 30, 2002
OR
| [ ] | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Commission File Number 0-26825
NORTHWEST BIOTHERAPEUTICS, INC.
| DELAWARE (State or Other Jurisdiction of Incorporation or Organization) |
94-3306718 (I.R.S. Employer Identification No.) |
21720 — 23rd DRIVE SE, SUITE 100, BOTHELL, WA 98021
(Address Of Principal Executive Offices, Including Zip Code)
(425) 608-3000
(Registrant’s Telephone Number, Including Area Code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes [X] No [ ]
As of July 31, 2002, the registrant had outstanding 16,991,321 shares of common stock, $0.001 par value.
NORTHWEST BIOTHERAPEUTICS, INC.
TABLE OF CONTENTS
| Page | |||||||
PART I — FINANCIAL INFORMATION |
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Item 1. Financial Statements (unaudited) |
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Condensed
Consolidated Balance Sheets (unaudited) as of June 30,
2002, and December 31, 2001 |
3 | ||||||
Condensed Consolidated Statements Of Operations (unaudited) for the three and six
month periods ended June 30, 2002 and 2001 and the period from March 18, 1996
(inception) to June 30, 2002 |
4 | ||||||
Condensed Consolidated Statements Of Cash Flows (unaudited) for the six-month
periods ended June 30, 2002 and 2001 and the period from
March 18, 1996 (inception) to June 30, 2002 |
5 | ||||||
Notes To Condensed Consolidated Financial Statements |
6 | ||||||
Item 2. Management’s Discussion And Analysis Of Financial Condition And Results Of Operations |
8 | ||||||
Item 3. Quantitative And Qualitative Disclosures About Market Risk |
21 | ||||||
PART II — OTHER INFORMATION |
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Item 2. Changes In Securities And Use Of Proceeds |
21 | ||||||
Item 6. Exhibits |
21 | ||||||
SIGNATURES |
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INDEX TO EXHIBITS |
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2
PART I — FINANCIAL INFORMATION
Item 1. Financial Statements
NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY
Condensed Consolidated Balance Sheets
(unaudited)
| JUNE 30, | DECEMBER 31, | ||||||||||
| 2002 | 2001 | ||||||||||
Assets |
|||||||||||
Current assets: |
|||||||||||
Cash and cash equivalents |
$ | 7,427,413 | $ | 14,966,126 | |||||||
Accounts receivable |
24,242 | 50,125 | |||||||||
Accounts receivable from affiliates |
13,196 | 42,183 | |||||||||
Stock subscription receivable |
— | 207,440 | |||||||||
Prepaid expenses and other current assets |
402,595 | 421,400 | |||||||||
Total current assets |
7,867,446 | 15,687,274 | |||||||||
Property and equipment: |
|||||||||||
Leasehold improvements |
1,982,942 | 1,742,453 | |||||||||
Laboratory equipment |
1,646,314 | 1,480,575 | |||||||||
Office furniture and other equipment |
601,338 | 433,554 | |||||||||
| 4,230,594 | 3,656,582 | ||||||||||
Less accumulated depreciation and amortization |
1,176,602 | 871,561 | |||||||||
Property and equipment, net |
3,053,992 | 2,785,021 | |||||||||
Restricted cash |
1,107,944 | 1,003,968 | |||||||||
Total assets |
$ | 12,029,382 | $ | 19,476,263 | |||||||
Liabilities And Stockholders’ Equity |
|||||||||||
Current liabilities: |
|||||||||||
Current portion of capital lease obligations |
$ | 75,352 | $ | 65,464 | |||||||
Accounts payable |
720,924 | 1,341,484 | |||||||||
Accrued expenses |
1,102,694 | 778,612 | |||||||||
Total current liabilities |
1,898,970 | 2,185,560 | |||||||||
Long-term liabilities: |
|||||||||||
Capital lease obligations, net of current portion |
138,644 | 123,212 | |||||||||
Deferred rent |
306,149 | 232,791 | |||||||||
Total liabilities |
2,343,763 | 2,541,563 | |||||||||
Stockholders’ equity: |
|||||||||||
Common stock, $0.001 par value; 125,000,000
shares authorized and 16,987,514 and 16,868,754
shares issued and outstanding at June 30, 2002
and December 31, 2001, respectively |
16,988 | 16,869 | |||||||||
Additional paid-in capital |
64,187,720 | 63,622,215 | |||||||||
Deferred compensation |
(1,256,372 | ) | (1,016,380 | ) | |||||||
Deficit accumulated during the development stage |
(53,262,717 | ) | (45,688,004 | ) | |||||||
Total stockholders’ equity |
9,685,619 | 16,934,700 | |||||||||
Total liabilities and stockholders’ equity |
$ | 12,029,382 | $ | 19,476,263 | |||||||
See accompanying notes to condensed consolidated financial statements.
3
NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY
Condensed Consolidated Statements Of Operations
(unaudited)
| Three Months Ended | Six Months Ended | Period from | ||||||||||||||||||||
| June 30, | June 30, | March 18, 1996 | ||||||||||||||||||||
| (inception) to | ||||||||||||||||||||||
| 2002 | 2001 | 2002 | 2001 | June 30, 2002 | ||||||||||||||||||
Revenues: |
||||||||||||||||||||||
Research material sales |
$ | 6,177 | $ | 16,345 | $ | 9,266 | $ | 60,406 | $ | 336,236 | ||||||||||||
Contract research and development
from related parties |
— | — | — | — | 1,127,638 | |||||||||||||||||
Research grants and other |
— | — | — | — | 132,090 | |||||||||||||||||
Total revenues |
6,177 | 16,345 | 9,266 | 60,406 | 1,595,964 | |||||||||||||||||
Operating expenses: |
||||||||||||||||||||||
Cost of research material sales |
4,800 | 13,312 | 7,500 | 40,187 | 251,900 | |||||||||||||||||
Research and development |
2,243,181 | 1,341,622 | 3,595,662 | 2,326,609 | 19,989,762 | |||||||||||||||||
General and administrative |
2,078,749 | 1,211,538 | 3,764,587 | 2,173,326 | 18,086,298 | |||||||||||||||||
Depreciation and amortization |
162,455 | 117,107 | 305,041 | 229,886 | 1,575,509 | |||||||||||||||||
Total operating expenses |
4,489,185 | 2,683,579 | 7,672,790 | 4,770,008 | 39,903,469 | |||||||||||||||||
Loss from operations |
(4,483,008 | ) | (2,667,234 | ) | (7,663,524 | ) | (4,709,602 | ) | (38,307,505 | ) | ||||||||||||
Other income (expense): |
||||||||||||||||||||||
Interest expense |
(10,170 | ) | (164,637 | ) | (22,075 | ) | (300,905 | ) | (7,766,619 | ) | ||||||||||||
Interest income |
46,309 | 63,045 | 110,886 | 79,815 | 659,270 | |||||||||||||||||
Net loss |
(4,446,869 | ) | (2,768,826 | ) | (7,574,713 | ) | (4,930,692 | ) | (45,414,854 | ) | ||||||||||||
Accretion of Series A preferred stock
mandatory redemption obligation |
— | (109,707 | ) | — | (219,226 | ) | (1,872,094 | ) | ||||||||||||||
Series A preferred stock redemption fee |
— | — | — | — | (1,700,000 | ) | ||||||||||||||||
Beneficial conversion feature of |
||||||||||||||||||||||
Series D preferred stock |
— | (4,273,566 | ) | — | (4,273,566 | ) | (4,273,566 | ) | ||||||||||||||
Net loss applicable to common
stockholders |
$ | (4,446,869 | ) | $ | (7,152,099 | ) | $ | (7,574,713 | ) | $ | (9,423,484 | ) | $ | (53,260,514 | ) | |||||||
Net loss per share applicable to
common stockholders — basic and
diluted |
$ | (0.26 | ) | $ | (3.70 | ) | $ | (0.45 | ) | $ | (4.87 | ) | ||||||||||
Weighted average shares used in
computing basic and diluted loss per
share |
16,885,414 | 1,935,085 | 16,882,397 | 1,934,684 | ||||||||||||||||||
See accompanying notes to condensed consolidated financial statements.
4
NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)
AND SUBSIDIARY
Condensed Consolidated Statements Of Cash Flows
(unaudited)
| Period from | |||||||||||||
| Six Months Ended | March 18, 1996 | ||||||||||||
| June 30, | (inception) to | ||||||||||||
| 2002 | 2001 | June 30, 2002 | |||||||||||
Cash flows from operating activities: |
|||||||||||||
Net loss |
$ | (7,574,713 | ) | $ | (4,930,692 | ) | $ | (45,414,854 | ) | ||||
Adjustments to reconcile net loss to net cash used by operating
activities: |
|||||||||||||
Depreciation and amortization |
305,041 | 229,886 | 1,575,509 | ||||||||||
Amortization of deferred financing costs |
— | — | 319,799 | ||||||||||
Amortization of debt discount |
— | 58,013 | 5,748,823 | ||||||||||
Accrued interest converted to preferred stock |
— | — | 260,378 | ||||||||||
Stock-based compensation costs |
316,866 | 156,910 | 675,847 | ||||||||||
Loss on retirement of equipment |
— | — | 86,325 | ||||||||||
Changes in operating assets and liabilities: |
|||||||||||||
Accounts receivable |
54,870 | 58,410 | (37,438 | ) | |||||||||
Prepaid expenses and other current assets |
18,805 | (54,156 | ) | (355,830 | ) | ||||||||
Accounts payable and accrued expenses |
(296,478 | ) | 341,198 | 1,823,303 | |||||||||
Accounts payable to Northwest Hospital |
— | (281,661 | ) | — | |||||||||
Deferred rent |
73,358 | 91,943 | 306,149 | ||||||||||
Net cash used by operating activities |
(7,102,251 | ) | (4,330,149 | ) | (35,011,989 | ) | |||||||
Cash flows from investing activities: |
|||||||||||||
Purchases of property and equipment, net |
(515,141 | ) | (107,536 | ) | (4,371,616 | ) | |||||||
Transfer of restricted cash |
(103,976 | ) | — | (1,107,944 | ) | ||||||||
Net cash used in investing activities |
(619,117 | ) | (107,536 | ) | (5,479,560 | ) | |||||||
Cash flows from financing activities: |
|||||||||||||
Proceeds from issuance of note payable to stockholder |
— | (862,232 | ) | 1,650,000 | |||||||||
Repayment of note payable to stockholder |
— | — | (1,650,000 | ) | |||||||||
Proceeds from issuance of convertible promissory notes and |
|||||||||||||
warrants, net of issuance costs |
— | — | 5,064,100 | ||||||||||
Borrowings under line of credit with Northwest Hospital |
— | — | 2,834,262 | ||||||||||
Repayment of line of credit with Northwest Hospital |
— | — | (2,834,262 | ) | |||||||||
Payments on capital lease obligations |
(33,551 | ) | (28,275 | ) | (130,214 | ) | |||||||
Proceeds from issuance of preferred stock, net |
— | 12,648,433 | 27,431,603 | ||||||||||
Proceeds from exercise of stock options and warrants |
216,206 | — | 417,840 | ||||||||||
Proceeds from issuances of common stock, net |
— | 582 | 17,155,432 | ||||||||||
Series A preferred stock redemption fee |
— | — | (1,700,000 | ) | |||||||||
Deferred financing costs |
— | — | (319,799 | ) | |||||||||
Net cash provided by financing activities |
182,655 | 11,758,508 | 47,918,962 | ||||||||||
Net increase (decrease) in cash and cash equivalents |
(7,538,713 | ) | 7,320,823 | 7,427,413 | |||||||||
Cash and cash equivalents at beginning of period |
14,966,126 | 410,756 | — | ||||||||||
Cash and cash equivalents at end of period |
$ | 7,427,413 | $ | 7,731,579 | $ | 7,427,413 | |||||||
Supplemental disclosure of cash flow information — cash paid during
the period for interest |
$ | 22,075 | $ | 185,916 | $ | 1,320,084 | |||||||
Supplemental schedule of noncash financing and investing activities: |
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Equipment acquired through capital leases |
$ | 58,871 | $ | 89,154 | $ | 344,210 | |||||||
| & | |||||||||||||