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 September 30, 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		94-3306718
(State or Other Jurisdiction of		(I.R.S. Employer Identification
Incorporation or Organization)		No.)

Canyon Park Building 8, 22322 20th Avenue S.E., Suite 150, Bothell, Wa. 98021
(Address of Principal Executive Offices, Including Zip Code)

(425) 608-3000
(Registrant’s Telephone Number, Including Area Code)

21720 23rd Dr. S.E., Suite 100, Bothell, Wa. 98021
(Registrant’s Former Address)

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 November 13, 2003, the registrant had outstanding 19,027,779 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 Statement 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
INDEX TO EXHIBITS
EXHIBIT 10.1
EXHIBIT 10.2
EXHIBIT 10.3
EXHIBIT 10.4
EXHIBIT 31.1
EXHIBIT 31.2
EXHIBIT 32.1
EXHIBIT 32.2

TABLE OF CONTENTS

NORTHWEST BIOTHERAPEUTICS, INC.

TABLE OF CONTENTS


				Page

PART I — FINANCIAL INFORMATION					3
		Item 1. Financial Statements (unaudited)			3
			Condensed Balance Sheets		3
			Condensed Statements of Operations		4
			Condensed Statement of Cash Flows		5
			Notes to Condensed Financial Statements		7
		Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			10
		Item 3. Quantitative and Qualitative Disclosures About Market Risk			26
		Item 4. Controls and Procedures			26
PART II — OTHER INFORMATION					26
		Item 1. Legal Proceedings			27
		Item 2. Changes in Securities and Use of Proceeds			27
		Item 3. Defaults Upon Senior Securities			27
		Item 4. Submission of Matters to a Vote of Security Holders			27
		Item 5. Other Information			27
		Item 6. Exhibits and Reports on Form 8-K			27
SIGNATURES					28
INDEX TO EXHIBITS
	Exhibit 10.1
	Exhibit 10.2
	Exhibit 10.3
	Exhibit 10.4
	Exhibit 31.1
	Exhibit 31.2
	Exhibit 32.1
	Exhibit 32.2

- 2 -

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

NORTHWEST BIOTHERAPEUTICS, INC.
(A Development Stage Company)

Condensed Balance Sheets
(unaudited)

(in thousands)


					September 30,			December 31,
					2003			2002

Assets
Current assets:
	Cash and cash equivalents				$	664		$	2,539
	Marketable securities					—			704
	Accounts receivable					61			—
	Accounts receivable from affiliates					—			3
	Receivable from Medarex					—			1,124
	Prepaid expenses and other current assets					108			745

				Total current assets		833			5,115

Property and equipment:
	Leasehold improvements					69			739
	Laboratory equipment					543			952
	Office furniture and other equipment					128			272

						740			1,963
	Less accumulated depreciation and amortization					(338	)		(615	)

		Property and equipment, net				402			1,348
Restricted cash						105			1,109
Deposit and other non-current assets						45			—

				Total assets	$	1,385		$	7,572

Liabilities And Stockholders’ Equity
Current liabilities:
	Note payable				$	—		$	420
	Current portion of capital lease obligations					48			73
	Accounts payable					109			497
	Accrued expenses					594			241
	Accrued loss on facility sublease, current portion					—			418

			Total current liabilities			751			1,649
Long-term liabilities:
	Capital lease obligations, net of current portion					59			98
	Deferred rent					61			158
	Due to Medarex					—			280
	Accrued loss on facility sublease, net of current portion					—			511

			Total liabilities			871			2,696

Stockholders’ equity:
	Common stock, $0.001 par value; 125,000,000 shares authorized and 19,027,779 and 17,930,276 shares issued and outstanding at September 30, 2003 and December 31, 2002, respectively					19			18
	Additional paid-in capital					63,956			63,794
	Deferred compensation					(89	)		(444	)
	Deficit accumulated during the development stage					(63,372	)		(58,492	)

			Total stockholders’ equity			514			4,876

Total liabilities and stockholders’ equity					$	1,385		$	7,572

See accompanying notes to condensed financial statements.

- 3 -

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

Condensed Statements of Operations
(unaudited)

(in thousands, except per share data)


				Three Months Ended							Nine Months Ended						Period from
				September 30,							September 30,						March 18, 1996
																	(inception) to
				2003				2002			2003			2002			September 30, 2003

Revenues:
		Research material sales			$	8		$	—		$	15		$	9		$	351
		Contract research and development from related parties				—			—			—			—			1,128
		License fee				25			—			25			—			25
		Research grants				112			—			361			—			493

			Total revenues			145			—			401			9			1,997

Operating expenses:
		Cost of research material sales				22			—			62			7			313
		Research and development				378			1,657			1,386			5,253			23,736
		General and administrative				893			1,721			3,396			5,486			25,181
		Depreciation and amortization				34			144			171			449			2,035
		Loss on facility sublease and lease cancellation				—			—			174			—			895
		Asset impairment loss				—			—			904			—			1,936

			Total operating expenses			1,327			3,522			6,093			11,195			54,096

			Loss from operations			(1,182	)		(3,522	)		(5,692	)		(11,186	)		(52,099	)

Other income (expense):
	Gain on sale of royalty rights					—			—			816			—			3,656
	Interest expense					(6	)		(8	)		(25	)		(31	)		(7,807	)
	Interest income					1			29			21			141			726

Net loss						(1,187	)		(3,501	)		(4,880	)		(11,076	)		(55,524	)
Accretion of Series A preferred stock mandatory redemption obligation						—			—			—			—			(1,872	)
Series A preferred stock redemption fee						—			—			—			—			(1,700	)
Beneficial conversion feature of Series D preferred stock						—			—			—			—			(4,274	)

Net loss applicable to common stockholders					$	(1,187	)	$	(3,501	)	$	(4,880	)	$	(11,076	)	$	(63,370	)

Net loss per share applicable to common stockholders - basic and diluted					$	(0.06	)	$	(0.21	)	$	(0.26	)	$	(0.66	)

Weighted average shares used in computing basic and diluted loss per share						19,014			16,896			18,896			16,887

See accompanying notes to condensed financial statements.

- 4 -

Northwest Biotherapeutics, Inc.
(A Development Stage Company)
Condensed Statement of Cash Flows
(unaudited)

(in thousands)


				Nine Months Ended							Period from
				September 30,							March 18, 1996
											(Inception) to
				2003				2002			September 30, 2003

Cash flows from operating activities:
Net loss					$	(4,880	)	$	(11,076	)	$	(55,524	)
	Reconciliation of net loss to net cash used in operating activities:
		Depreciation and amortization				171			449			2,034
		Amortization of deferred financing costs				—			—			320
		Amortization debt discount				—			—			5,749
		Accrued interest converted to preferred stock				—			—			260
		Stock-based compensation costs				203			438			1,003
		Loss on sale and disposal of property and equipment				904			—			1,386
		Gain on sale of intellectual property and royalty rights				(816	)		—			(3,656	)
		Asset impairment loss				—			—			1,032
		Loss on facility sublease and lease cancellation				174			—			895
	Increase (decrease) in cash resulting from changes in assets and liabilities:
		Accounts receivable				(58	)		53			(61	)
		Prepaid expenses and other current assets				637			20			502
		Accounts payable and accrued expenses				(35	)		(436	)		1,102
		Accrued loss on sublease				(266	)		—			—
		Deferred rent				105			107			61

			Net cash used in operating activities			(3,861	)		(10,445	)		(44,897	)

Cash flows from investing activities:
	Purchase of property and equipment, net					(196	)		(608	)		(4,584	)
	Proceeds from sale of property and equipment					67			—			67
	Proceeds from sale of intellectual property and royalty rights					816		</

Table of Contents

Table of Contents

Table of Contents

Table of Contents

Table of Contents