NORTHWEST BIOTHERAPEUTICS INC - 10-Q Quarterly Report

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 March 31, 2003


[ ]		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 0-26825

NORTHWEST BIOTHERAPEUTICS, INC.

(Exact Name Of Registrant As Specified In Its Charter)


DELAWARE (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 [ ]

Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As of May 5, 2003, the registrant had outstanding 18,940,776 shares of common stock, $0.001 par value.

TABLE OF CONTENTS


PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements
		Condensed Balance Sheets
		Condensed Statements of Operations
		Condensed Statements of Cash Flows
		Notes to Condensed Financial Statements
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
	Item 3. Quantitative and Qualitative Disclosures About Market Risk
	Item 4. Controls and Procedures
PART II — OTHER INFORMATION
	Item 1. Legal Proceedings
	Item 2. Changes in Securities and Use of Proceeds
	Item 3. Defaults upon Senior Securities
	Item 4. Submission of Matters to a Vote of Security Holders
	Item 5. Other Information
	Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
CERTIFICATIONS
INDEX TO EXHIBITS
EXHIBIT 10.1
EXHIBIT 99.1
EXHIBIT 99.2

NORTHWEST BIOTHERAPEUTICS, INC.

TABLE OF CONTENTS


			Page

PART I — FINANCIAL INFORMATION
	Item 1. Financial Statements (unaudited)
		Condensed Balance Sheets (unaudited) as of March 31, 2003, and December 31, 2002		3
		Condensed Statements of Operations (unaudited) for the three-month periods ended March 31, 2003 and 2002 and the period from March 18, 1996 (inception) to March 31, 2003		5
		Condensed Statements of Cash Flows (unaudited) for the three-month periods ended March 31, 2003 and 2002 and the period from March 18, 1996 (inception) to March 31, 2003		7
		Notes to Condensed Financial Statements		9
	Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			11
	Item 3. Quantitative and Qualitative Disclosures About Market Risk			23
	Item 4. Controls and Procedures			23
PART II — OTHER INFORMATION				23
	Item 1. Legal Proceedings			23
	Item 2. Changes in Securities and Use of Proceeds			24
	Item 3. Defaults Upon Senior Securities			24
	Item 4. Submission of Matters to a Vote of Security Holders			24
	Item 5. Other Information			24
	Item 6. Exhibits			24
SIGNATURES				25
CERTIFICATIONS				26
INDEX TO EXHIBITS				28

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

Condensed Balance Sheets
(unaudited)

(in thousands)


					March 31,		December 31,
					2003		2002

				Assets
Current assets:
	Cash and cash equivalents				$	2,543	$	2,539
	Marketable securities					—		704
	Accounts receivable					61		—
	Accounts receivable from affiliates					—		3
	Accounts receivable from Medarex					—		1,124
	Prepaid expenses and other current assets					464		745

			Total current assets			3,068		5,115

Property and equipment:
	Leasehold improvements					755		739
	Laboratory equipment					936		952
	Office furniture and other equipment					272		272

						1,963		1,963
	Less accumulated depreciation and amortization					677		615

	Property and equipment, net					1,286		1,348
Restricted cash						1,109		1,109

			Total assets		$	5,463	$	7,572

		Liabilities And Stockholders’ Equity
Current liabilities:
	Current portion of note payable				$	263	$	420
	Current portion of capital lease obligations					67		73
	Accounts payable					208		497
	Accrued expenses					235		241


			March 31,			December 31,
			2003			2002

	Accrued loss on facility sublease, current portion			275			418

		Total current liabilities		1,048			1,649
Long-term liabilities:
	Capital lease obligations, net of current portion			84			98
	Deferred rent			188			158
	Due to Medarex			—			280
	Accrued loss on facility sublease, less current portion			493			511

		Total liabilities		1,813			2,696

Stockholders’ equity:
	Common stock, $0.001 par value; 125,000,000 shares authorized and 18,940,776 and 17,930,276 shares issued and outstanding at March 31, 2003 and December 31, 2002, respectively			19			18
	Additional paid-in capital			64,073			63,794
	Deferred compensation			(359	)		(444	)
	Deficit accumulated during the development stage			(60,083	)		(58,492	)

		Total stockholders’ equity		3,650			4,876

		Total liabilities and stockholders’ equity	$	5,463		$	7,572

See accompanying notes to condensed financial statements.

NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)

Condensed Statements of Operations
(unaudited)

(in thousands, except per share data)


			Three Months Ended
			March 31,						Period from March 18, 1996
									(inception) to
			2003			2002			March 31, 2003

Revenues:
	Research material sales		$	—		$	3		$	336
	Contract research and development from related parties			—			—			1,128
	Research grants			69						168
	Other			—			—			33

		Total revenues		69			3			1,665

Operating expenses:
	Cost of research material sales			—			3			251
	Research and development			508			1,352			22,858
	General and administrative			1,066			1,687			22,851
	Depreciation and amortization			87			143			1,951
	Accrued loss on facility sublease			—			—			721
	Asset impairment loss			—			—			1,032

		Total operating expenses		1,661			3,185			49,664

		Loss from operations		(1,592	)		(3,182	)		(47,999	)

Other income (expense):
	Gain on sale of intellectual property			—			—			2,840
	Interest expense			(11	)		(12	)		(7,793	)
	Interest income			12			66			717

Net loss				(1,591	)		(3,128	)		(52,235	)
Accretion of Series A preferred stock mandatory redemption obligation				—			—			(1,872	)
Series A preferred stock redemption fee				—			—			(1,700	)
Beneficial conversion feature of


	Three Months Ended						Period from March 18, 1996
	March 31,						(inception) to
	2003			2002			March 31, 2003

Series D preferred stock		—			—			(4,274	)

Net loss applicable to common stockholders	$	(1,591	)	$	(3,128	)	$	(60,081	)

Net loss per share applicable to common stockholders — basic and diluted	$	(0.09	)	$	(0.19	)

Weighted average shares used in computing basic and diluted loss per share		18,657			16,879

See accompanying notes to condensed financial statements.

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

Condensed Statements of Cash Flows
(unaudited)

(in thousands)


								Period from
		Three Months Ended						March 18, 1996
		March 31,						(inception) to
		2003			2002			March 31, 2003

Cash flows from operating activities:
Net loss		$	(1,591	)	$	(3,128	)	$	(52,235	)
Adjustments to reconcile net loss to net cash used in operating activities:
	Depreciation and amortization		87			142			1,950
	Amortization of deferred financing costs		—			—			320
	Amortization of debt discount		—			—			5,749
	Accrued interest converted to preferred stock		—			—			260
	Stock-based compensation costs		85			179			885
	(Gain) loss on sale and disposal of equipment		(40	)		—			442
	Gain on sale of intellectual property to Medarex		—			—			(2,840	)
	Asset impairment loss		—			—			1,032
	Accrued loss on facility sublease		—			—			721
Changes in operating assets and liabilities:
	Accounts receivable		(58	)		77			(61	)
	Prepaid expenses and other current assets		281			(26	)		2
	Accounts payable and accrued expenses		(295	)		(953	)		842
	Accrued loss on facility sublease		(161	)		—			(161	)
	Deferred rent		30			37			396

Net cash used in operating activities			(1,662	)		(3,672	)		(42,698	)

Cash flows from investing activities:
	Purchases of property and equipment, net		(29	)		(141	)		(4,417	)
	Proceeds from sale of PP&E		44			—			44
	Proceeds from sale of intellectual property		—			—			1,000
	Proceeds from sale of marketable securities		1,828			—			2,000
	Transfer of restricted cash		—			(103	)		(1,109	)

Net cash provided by (used in) investing activities			1,843			(244	)		(2,482	)

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 notes and warrants, net of issuance costs		—			—			5,064


								Period from
		Three Months Ended						March 18, 1996
		March 31,						(inception) to
		2003			2002			March 31, 2003

	Borrowings under line of credit with Northwest Hospital		—			—			2,834
	Repayment of line of credit with Northwest Hospital		—			—			(2,834	)
	Payments on capital lease obligations		(20	)		(16	)		(185	)
	Proceeds from issuance of preferred stock, net		—			—			27,432
	Proceeds from exercise of stock options and warrants		—			216			220
	Proceeds from issuances of common stock, net		—			—			17,369
	Series A preferred stock redemption fee		—			—			(1,700	)
	Deferred financing costs		—			—			(320	)
	Payments on note payable		(157	)		—			(157	)

Net cash provided by (used in) financing activities			(177	)		200			47,723

Net increase (decrease) in cash and cash equivalents			4			(3,716	)		2,543
Cash and cash equivalents at beginning of period			2,539			14,966			—

Cash and cash equivalents at end of period		$	2,543		$	11,250		$	2,543

Supplemental disclosure of cash flow information — cash paid during the period for interest		$	11		$	12		$	1,359

Supplemental schedule of noncash financing and investing activities:

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