10-Q

Table of Contents ​

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

☒	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the quarterly period ended March 31, 2024

OR

☐	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

​

For the transition period from ______to _______

Commission File Number: 001-35737

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NORTHWEST BIOTHERAPEUTICS, INC .

(Exact name of registrant as specified in its charter)

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

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4800 Montgomery Lane , Suite 800 , Bethesda , MD **** 20814

(Address of principal executive offices) (Zip Code)

( 240 ) 497-9024

(Registrant’s telephone number)

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  ☒      No  ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes  ☒      No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐

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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Title of each class	Trading Symbol	Name of each exchange on which registered
Common Stock, par value $0.001 per share	NWBO	OTCQB

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As of May 6, 2024, the total number of shares of common stock, par value $0.001 per share, outstanding was 1,208,177,416.

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Table of Contents NORTHWEST BIOTHERAPEUTICS, INC.

FORM 10-Q

TABLE OF CONTENTS

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​	​	​
PART I - FINANCIAL INFORMATION		3
​	​	​
Item 1.	Condensed Consolidated Interim Financial Statements (Unaudited)	​
​		​
​	Condensed Consolidated Balance Sheets as of March 31, 2024 and December 31, 2023	3
​		​
​	Condensed Consolidated Statements of Operations and Comprehensive Loss for the three months ended March 31, 2024 and 2023	4
​		​
​	Condensed Consolidated Statements of Stockholders’ Deficit for the three months ended March 31, 2024 and 2023	5
​		​
​	Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2024 and 2023	6
​		​
​	Notes to Condensed Consolidated Financial Statements	8
​	​	​
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
		​
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
		​
Item 4.	Controls and Procedures	28
​	​	​
PART II - OTHER INFORMATION		29
​	​	​
Item 1.	Legal Proceedings	29
		​
Item 1A.	Risk Factors	29
		​
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
		​
Item 3.	Defaults Upon Senior Securities	30
		​
Item 4.	Mine Safety Disclosures	30
​		​
Item 5.	Other Information	30
		​
Item 6.	Exhibits	30
​	​	​
SIGNATURES		31

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Table of Contents PART I - FINANCIAL INFORMATION

NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

​

​	​	​	​	​	​	​
​	****	March 31,		****	December 31,
​	​	2024		​	2023
​	​	(Unaudited)		​	​
ASSETS		​			​	​
Current assets:		​			​
Cash and cash equivalents	​	$	2,478	​	$	2,126
Prepaid expenses and other current assets	​		2,470	​		1,999
Total current assets	​		4,948	​		4,125
​	​	​	​	​	​	​
Non-current assets:	​		​	​		​
Property, plant and equipment, net	​		17,268	​		17,278
Right-of-use asset, net	​	​	4,070	​	​	4,183
Indefinite-lived intangible asset	​	​	1,292	​	​	1,292
Goodwill	​	​	626	​	​	626
Other assets	​		363	​		361
Total non-current assets	​		23,619	​		23,740
​	​	​	​	​	​	​
TOTAL ASSETS	​	$	28,567	​	$	27,865
​	​	​	​	​	​	​
LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT	​		​	​		​
Current liabilities:	​		​	​		​
Accounts payable and accrued expenses	​	$	15,089	​	$	10,244
Accounts payable and accrued expenses to related parties and affiliates	​		2,734	​		3,544
Convertible notes, net	​		5,612	​		3,765
Convertible notes at fair value	​	​	16,496	​	​	12,771
Notes payable, net	​		12,125	​		3,944
Contingent payable derivative liability	​	​	9,099	​	​	9,188
Warrant liability	​		913	​		944
Investor advances	​	​	7	​	​	7
Share liability	​	​	120	​	​	483
Lease liabilities	​	​	245	​	​	314
Total current liabilities	​		62,440	​		45,204
​	​	​	​	​	​	​
Non-current liabilities:	​		​	​		​
Notes payable, net of current portion, net	​		10,215	​		20,312
Lease liabilities, net of current portion	​	​	4,384	​	​	4,454
Contingent payment obligation	​	​	5,000	​	​	4,950
Total non-current liabilities	​		19,599	​		29,716
​	​	​	​	​	​	​
Total liabilities	​		82,039	​		74,920
​	​	​	​	​	​	​
COMMITMENTS AND CONTINGENCIES (Note 12)	​		​	​		​
​	​	​	​	​	​	​
Mezzanine equity:	​	​	​	​	​	​
Series C Convertible Preferred Stock, 10,000,000 shares designated; 1.3 million and 1.2 million shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively; aggregate liquidation preference of $18.1 million	​	​	19,810	​	​	18,718
Stockholders’ deficit:	​		​	​		​
Preferred stock ($0.001 par value); 100,000,000 shares authorized as of March 31, 2024 and December 31, 2023, respectively	​	​	—	​	​	—
Common stock ($0.001 par value); 1,700,000,000 shares authorized; 1,195.4 million and 1,175.5 million shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively	​		1,195	​		1,175
Additional paid-in capital	​		1,301,485	​		1,291,316
Stock subscription receivable	​		(79)	​		(79)
Accumulated deficit	​		(1,378,033)	​		(1,359,721)
Accumulated other comprehensive income	​		2,150	​		1,536
Total stockholders’ deficit	​		(73,282)	​		(65,773)
​	​	​	​	​	​	​
TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT	​	$	28,567	​	$	27,865

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS

(in thousands, except per share amounts)

(Unaudited)

​

​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​	****	2024		****	2023
Revenues:	​	​	​	​	​	​
Research and other	​	$	284	​	$	880
Total revenues	​	​	284	​	​	880
Operating costs and expenses:	​	​	​	​	​	​
Research and development	​	​	7,942	​	​	6,861
General and administrative	​	​	8,086	​	​	6,983
Total operating costs and expenses	​	​	16,028	​	​	13,844
Loss from operations	​	​	(15,744)	​	​	(12,964)
Other income (expense):	​	​	​	​	​	​
Change in fair value of derivative liabilities	​	​	120	​	​	3,880
Change in fair value of share liabilities	​	​	(106)	​	​	(52)
Change in fair value of convertible notes	​	​	1,775	​	​	—
Loss from extinguishment of debt	​	​	(2,171)	​	​	(1,408)
Interest expense	​	​	(1,518)	​	​	(1,027)
Foreign currency transaction gain (loss)	​	​	(668)	​	​	919
Total other (loss) income	​	​	(2,568)	​	​	2,312
Net loss	​	​	(18,312)	​	​	(10,652)
Deemed dividend related to warrant modification	​	​	(568)	​	​	(395)
Net loss attributable to common stockholders	​	$	(18,880)	​	$	(11,047)
​	​	​	​	​	​	​
Other comprehensive loss	​	​	​	​	​	​
Foreign currency translation adjustment	​	​	614	​	​	(750)
Total comprehensive loss	​	$	(18,266)	​	$	(11,797)
​	​	​	​	​	​	​
Net loss per share applicable to common stockholders	​	​	​	​	​	​
Basic	​	$	(0.02)	​	$	(0.01)
Diluted	​	$	(0.02)	​	$	(0.01)
​	​	​	​	​	​	​
Weighted average shares used in computing basic loss per share	​	​	1,188,149	​	​	1,074,902
Weighted average shares used in computing diluted loss per share	​	​	1,188,149	​	​	1,074,902

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

​

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Table of Contents NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT

(in thousands)

(Unaudited)

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended March 31, 2024
​	​	Mezzanine equity				​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​	​
​	​	Series C Covertible				​	​	​	​	​	​	​	Additional		​	​	​	​	​	​	​	Other		​	Total
​	​	Preferred Stock				​	​	Common Stock				​	Paid-in		​	Subscription		​	Accumulated		​	Comprehensive		​	Stockholders’
​	****	Shares	****	Amount		****	****	Shares	****	Par value		****	Capital		****	Receivable		****	Deficit		****	Income		****	Deficit
Balances at January 1, 2024	****	1,209	​	$	18,718	​	​	1,175,459	​	$	1,175	****	$	1,291,316	****	$	(79)	​	$	(1,359,721)	****	$	1,536	​	$	(65,773)
Issuance of Series C convertible preferred stock for cash	​	308	​	​	3,624	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Series C convertible preferred stock conversion		(220)	​	​	(2,532)	​	​	5,493	​	​	5	​	​	2,527	​	​	—	​	​	—	​	​	—	​	​	2,532
Warrants exercised for cash	​	—	​	​	—	​	​	5,831	​	​	6	​	​	1,305	​	​	—	​	​	—	​	​	—	​	​	1,311
Cashless warrants and stock options exercise	​	—	​	​	—	​	​	1,633	​	​	2	​	​	(2)	​	​	—	​	​	—	​	​	—	​	​	—
Issuance of common stock for conversion of debt and accrued interest	​	—	​	​	—	​	​	6,942	​	​	7	​	​	3,945	​	​	—	​	​	—	​	​	—	​	​	3,952
Stock-based compensation	​	—	​	​	—	​	​	—	​	​	—	​	​	1,164	​	​	—	​	​	—	​	​	—	​	​	1,164
Net loss		—	​	​	—	​	​	—	​	​	—		​	—		​	—	​	​	(18,312)		​	—	​	​	(18,312)
Warrants modfication		—	​	​	—	​	​	—	​	​	—	​	​	1,798	​	​	—	​	​	—	​	​	—	​	​	1,798
Deemed dividend related to warrants modification		—	​	​	—	​	​	—	​	​	—	​	​	(568)	​	​	—	​	​	—	​	​	—	​	​	(568)
Cumulative translation adjustment		—	​	​	—	​	​	—	​	​	—		​	—		​	—	​	​	—		​	614	​	​	614
Balances at March 31, 2024	****	1,297	​	$	19,810	​	​	1,195,358	​	$	1,195	​	$	1,301,485	​	$	(79)	​	$	(1,378,033)	​	$	2,150	​	$	(73,282)

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	For the Three Months Ended March 31, 2023
​	​	Mezzanine equity				​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	Accumulated		​	​	​
​	​	Series C Covertible				​	​	​	​	​	​	​	Additional		​	​	​	​	​	​	​	Other		​	Total
​	​	Preferred Stock				​	​	Common Stock				​	Paid-in		​	Subscription		​	Accumulated		​	Comprehensive		​	Stockholders’
​	****	Shares	****	Amount		****		Shares	****	Par value		****	Capital		****	Receivable		****	Deficit		****	Income		****	Deficit
Balances at January 1, 2023	​	1,415	​	$	23,060	​	​	1,068,394	​	$	1,068	​	$	1,164,885	​	$	(79)	​	$	(1,297,122)	​	$	3,145	​	$	(128,103)
Issuance of Series C convertible preferred stock for cash		148	​	​	2,385	​	​	—		​	—		​	—		​	—		​	—	​	​	—	​	​	—
Issuance of Series C convertible preferred stock in lieu of debt redemption	​	43	​	​	806	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—
Series C convertible preferred stock conversion	​	(198)	​	​	(2,617)	​	​	4,946	​	​	5	​	​	2,612	​	​	—	​	​	—	​	​	—	​	​	2,617
Warrants exercised for cash	​	—	​	​	—	​	​	767	​	​	1	​	​	247	​	​	—	​	​	—	​	​	—	​	​	248
Cashless stock options exercise	​	—	​	​	—	​	​	710	​	​	1	​	​	(1)	​	​	—	​	​	—	​	​	—	​	​	—
Reclassification of warrant liabilities to stockholders' deficit	​	—	​	​	—	​	​	—	​	​	—	​	​	76,258	​	​	—	​	​	—	​	​	—	​	​	76,258
Issuance of common stock for conversion of debt and accrued interest	​	—	​	​	—	​	​	8,267	​	​	8	​	​	5,608	​	​	—	​	​	—	​	​	—	​	​	5,616
Stock-based compensation		8	​	​	118	​	​	—		​	—		​	918		​	—		​	—	​	​	—	​	​	918
Reclass earned but unissued milestone shares from equity to liability	​	—	​	​	—	​	​	—	​	​	—	​	​	(2,130)	​	​	—	​	​	—	​	​	—	​	​	(2,130)
Net loss	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	—	​	​	(10,652)	​	​	—	​	​	(10,652)
Warrants modfication	​	—	​	​	—	​	​	—	​	​	—	​	​	395	​	​	—	​	​	—	​	​	—	​	​	395
Deemed dividend related to warrants modification	​	—	​	​	—	​	​	—	​	​	—	​	​	(395)	​	​	—	​	​	—	​	​	—	​	​	(395)
Cumulative translation adjustment		—	​	​	—	​	​	—		​	—		​	—		​	—		​	—	​	​	(750)	​	​	(750)
Balances at March 31, 2023	****	1,416	​	$	23,752	​	​	1,083,084	​	$	1,083	​	$	1,248,397	​	$	(79)	​	$	(1,307,774)	​	$	2,395	​	$	(55,978)

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

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Table of Contents NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

​

​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​	****	2024		****	2023
Cash Flows from Operating Activities:		​	​	​	​	​
Net loss	​	$	(18,312)	​	$	(10,652)
Reconciliation of net loss to net cash used in operating activities:	​	​	​	​	​	​
Depreciation and amortization	​	​	428	​	​	335
Amortization of debt discount	​	​	576	​	​	552
Change in fair value of derivatives	​	​	(120)	​	​	(3,880)
Change in fair value of share liability	​	​	106	​	​	52
Change in fair value of convertible notes	​	​	(1,775)	​	​	—
Loss from extinguishment of debt	​	​	2,171	​	​	1,408
Amortization of operating lease right-of-use asset	​	​	77	​	​	67
Stock-based compensation for services	​	​	1,164	​	​	933
Subtotal of non-cash charges	​	​	2,627	​	​	(533)
Changes in operating assets and liabilities:	​	​	​	​	​	​
Prepaid expenses and other current assets	​	​	(477)	​	​	(709)
Other non-current assets	​	​	(8)	​	​	(16)
Accounts payable and accrued expenses	​	​	4,531	​	​	975
Related party accounts payable and accrued expenses	​	​	(810)	​	​	(341)
Lease liabilities	​	​	43	​	​	37
Net cash used in operating activities	​	​	(12,406)	​	​	(11,239)
Cash Flows from Investing Activities:	​	​	​	​	​	​
Purchase of equipment and construction in progress	​	​	(239)	​	​	(1,333)
Net cash used in investing activities	​	​	(239)	​	​	(1,333)
Cash Flows from Financing Activities:	​	​	​	​	​	​
Proceeds from issuance of Series C convertible preferred stock	​	​	3,624	​	​	2,385
Proceeds from exercise of warrants	​	​	1,311	​	​	248
Proceeds from investor advance	​	​	—	​	​	50
Proceeds from issuance of notes payable, net	​	​	—	​	​	10,000
Proceeds from issuance of convertible notes payable, net	​	​	7,100	​	​	—
Proceeds from contingent payment obligation	​	​	50	​	​	—
Repayment of notes payable	​	​	—	​	​	(101)
Net cash provided by financing activities	​	​	12,085	​	​	12,582
Effect of exchange rate changes on cash and cash equivalents	​	​	912	​	​	(784)
Net increase (decrease) in cash and cash equivalents	​	​	352	​	​	(774)
​	​	​	​	​	​	​
Cash and cash equivalents, beginning of the period	​	​	2,126	​	​	6,965
Cash and cash equivalents, end of the period	​	$	2,478	​	$	6,191
​	​	​	​	​	​	​
Supplemental disclosure of cash flow information	​	​	​	​	​	​
Interest payments on notes payable	​	$	—	​	$	(30)

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements

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Table of Contents NORTHWEST BIOTHERAPEUTICS, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

(Unaudited)

​

​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​	****	2024		****	2023
Supplemental schedule of non-cash investing and financing activities:		​			​	​
Cashless warrants and stock options exercise	​	$	2	​	$	1
Reclassification of warrant liabilities to stockholders’ deficit	​	$	—	​	$	76,258
Issuance of common stock for conversion of debt and accrued interest	​	$	3,952	​	$	5,616
Series C convertible preferred stock conversion	​	$	2,532	​	$	2,617
Capital expenditures included in accounts payable	​	$	500	​	$	1,013
Reclass earned but unissued milestone shares from equity to liability	​	$	—	​	$	2,130
Deemed dividend related to warrant modification	​	$	568	​	$	395
Debt discout related to warrant modificaiton	​	$	8	​	$	—
Issuance of Series C convertible preferred stock in lieu of debt redemption	​	$	—	​	$	806

​

The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.

​

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Table of Contents

NORTHWEST BIOTHERAPEUTICS, INC.

NOTES TO CONDENSED CONSOLIDATED STATEMENTS

1. Organization and Description of Business

Northwest Biotherapeutics, Inc. and its wholly owned subsidiaries Flaskworks, Northwest Biotherapeutics Limited (formerly known as Aracaris Ltd), Aracaris Capital, Ltd, Northwest Biotherapeutics B.V., and NW Bio GmbH (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer. The Company has developed DCVax® platform technologies for both operable and inoperable solid tumor cancers. The Company has wholly owned subsidiaries in Boston, the U.K., the Netherlands and Germany. On August 28, 2020, the Company acquired Flaskworks, LLC (“Flaskworks”), a company that has developed a system designed to close and automate the manufacturing of cell therapy products such as DCVax®. On July 24, 2023, the Company’s wholly-owned subsidiary changed its name from Aracaris Ltd to Northwest Biotherapeutics Limited.

The Company relies upon contract manufacturers for production of its DCVax products, research and development services, distribution and logistics, and related services, in compliance with the Company’s specifications and the applicable regulatory requirements.

The Company has completed a Phase 3 clinical trial of its DCVax®-L product for glioblastoma brain cancer, has publicly reported the results in a peer reviewed publication in a medical journal as well as at a medical conference, and submitted a Marketing Authorization Application (MAA) for regulatory approval in the U.K. in December 2023.

​

2. Financial Condition, Going Concern and Management Plans

The Company has incurred annual net operating losses since its inception. The Company had a net loss of $18.3 million for the three months ended March 31, 2024. The Company used approximately $12.4 million of cash in its operating activities during the three months ended March 31, 2024.

The Company does not expect to generate material revenue in the near future from the sale of products and is subject to all of the risks and uncertainties that are typically faced by biotechnology companies that devote substantially all of their efforts to research and development (“R&D”) and clinical trials and do not yet have commercial products. The Company expects to continue incurring annual losses for the foreseeable future. The Company’s existing liquidity is not sufficient to fund its operations, anticipated capital expenditures, working capital and other financing requirements until the Company reaches significant revenues. Until that time, the Company will need to obtain additional equity and/or debt financing, especially if the Company experiences downturns in its business that are more severe or longer than anticipated, or if the Company experiences significant increases in expense levels resulting from being a publicly-traded company or from expansion of operations. If the Company attempts to obtain additional equity or debt financing, the Company cannot assume that such financing will be available to the Company on favorable terms, or at all.

Because of recurring operating losses and operating cash flow deficits, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, however, they do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty.

​

3. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company uses to prepare its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2024, condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2024 and 2023, condensed consolidated statement of stockholders’ deficit for the three months ended March 31, 2024 and 2023, and the 8

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condensed consolidated statements of cash flows for the three months ended March 31, 2024 and 2023 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2024 are not necessarily indicative of results to be expected for the year ending December 31, 2024 or for any future interim period. The condensed consolidated balance sheet at March 31, 2024 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2023 and notes thereto included in the Company’s annual report on Form 10-K (the “2023 Annual Report”), which was filed with the SEC on March 5, 2024.

Use of Estimates

In preparing condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates.

On an ongoing basis, the Company evaluates its estimates and judgments, including valuing equity securities in share-based payment arrangements, estimating the fair value of financial instruments recorded as derivative liabilities, useful lives of depreciable assets, and whether impairment charges may apply. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.

Significant Accounting Policies

There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the 2023 Annual Report.

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Recently Issued Accounting Standards Not Yet Adopted

Compensation - Stock Compensation

In March 2024, the FASB issued ASU No. 2024-01, Compensation - Stock Compensation (Topic 718) - Scope Application of Profits Interest and Similar Awards, to clarify whether profits interest and similar awards should be accounted for in accordance with Topic 718, Compensation - Stock Compensation. The guidance applies to all business entities that issue profits interest awards as compensation to employees or nonemployees in exchange for goods or services. These amendments are effective for the Company for annual and interim periods in 2025, applied prospectively, with early adoption and retrospective application permitted. As the Company does not issue profit interest awards, the impact of the adoption of the amendments in this update is not expected to be material to the Company’s consolidated financial statements.

Improvements to Income Tax Disclosures

In December 2023, the FASB issued ASU No. 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (ASU 2023-09), which improves the transparency of income tax disclosures by requiring consistent categories and greater disaggregation of information in the effective tax rate reconciliation and income taxes paid disaggregated by jurisdiction. It also includes certain other amendments to improve the effectiveness of income tax disclosures. This guidance will be effective for the annual periods beginning the year ended December 31, 2025. Early adoption is permitted. Upon adoption, the guidance can be applied prospectively or retrospectively. The Company does not expect the adoption of this guidance to have a material impact on its consolidated financial statements.

Recently Issued Accounting Standards, Adopted

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions

In June 2022, the FASB issued ASU 2022-03, ASC Subtopic 820 “Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions”. The FASB is issuing this Update (1) to clarify the guidance in Topic 820, Fair Value Measurement, when measuring the fair value of an equity security subject to contractual restrictions that prohibit the sale of an equity security, (2) to amend a related illustrative example, and (3) to introduce new disclosure requirements for equity securities subject to contractual sale restrictions that are measured at fair value in accordance with Topic 820.

For public business entities, the amendments in this Update are effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years. Early adoption is permitted for both interim and annual financial statements that have not yet been issued or made available for issuance. The Company adopted ASU 2022-03 effective January 1, 2024. The adoption of this guidance did not have a material impact on its condensed consolidated financial statements.

​

4. Fair Value Measurements

In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the fair value of liabilities related to certain embedded conversion features associated with convertible debt, share liability (receivable), and the contingent payable to Cognate BioServices on a recurring basis to determine the fair value of these liabilities. The Company also elects the fair value option (“FVO”) for certain eligible financial instruments, such as convertible notes, in order to simplify the accounting treatment.

ASC 820 establishes a hierarchy categorizing inputs into three levels used to measure and disclose fair value. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to unobservable inputs. An explanation of each level in the hierarchy is described below:

Level 1 - Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date.

Level 2 - Quoted prices in markets that are not active or inputs which are either directly or indirectly observable. 10

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Level 3 - Unobservable inputs for the instrument requiring the development of assumptions by the Company.

The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2024 and December 31, 2023 (in thousands):

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fair value measured at March 31, 2024
​	****	​	​		Quoted prices in active			Significant other			Significant
​	****	Fair value at		​	markets		​	observable inputs		​	unobservable inputs
​	​	March 31, 2024			(Level 1)			(Level 2)			(Level 3)
Warrant liability	​	$	913	​	$	—	​	$	—	​	$	913
Contingent payable derivative liability	​	​	9,099	​	​	—	​	​	—	​	​	9,099
Convertible notes at fair value	​		16,496	​		—	​		—	​		16,496
Share liability	​	​	120	​	​	—	​	​	—	​	​	120
Total fair value	​	$	26,628	​	$	—	​	$	—	​	$	26,628

​

​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	Fair value measured at December 31, 2023
​	****	​	​		Quoted prices in active			Significant other			Significant
​	​	Fair value at		​	markets		​	observable inputs		​	unobservable inputs
​	****	December 31, 2023			(Level 1)			(Level 2)			(Level 3)
Warrant liability	​	$	944	​	$	—	​	$	—	​	$	944
Contingent payable derivative liability	​	​	9,188	​	​	—	​	​	—	​	​	9,188
Convertible notes at fair value	​	​	12,771	​	​	—	​	​	—	​	​	12,771
Share liability		​	483	​		—	​		—	​		483
Total fair value	​	$	23,386	​	$	—	​	$	—	​	$	23,386

​

There were no transfers between Level 1, 2 or 3 during the three-month period ended March 31, 2024.

The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2024. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​		​	​		​	​	​	​	Convertible		​	​	​
​	​	Warrant		​	Contingent Payable		​	Share		​	​	Notes	​	​	​
​	****	Liability			Derivative Liability			Liability			​	At Fair Value		Total
Balance - January 1, 2024	​	$	944	​	$	9,188	​	$	483	​	$	12,771	​	$	23,386
Additional share liability	​	​	—	​	​	—	​	​	117	​	​	—	​	​	117
Issuance of convertible notes at fair value	​	​	—	​	​	—	​	​	—	​	​	5,500	​	​	5,500
Redemption of share liability	​	​	—	​	​	—	​	​	(586)	​	​	—	​	​	(586)
Change in fair value	​	​	(31)	​	​	(89)	​	​	106	​	​	(1,775)	​	​	(1,789)
Balance - March 31, 2024	​	$	913	^(1)^	$	9,099	​	$	120	​	$	16,496	​	$	26,628
(1)	The remaining balance of $0.9 million in warrant liability as of March 31, 2024 was related to certain conditional rights to independently purchase shares from the Company in a future raise of capital (the “Piggy-back Rights”). The Company accounted for the Piggy-back Rights as a freestanding financial instrument, which was classified as a liability at fair value on the Condensed Consolidated Balance Sheet.
---	---

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A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s warrant liabilities and embedded conversion feature that are categorized within Level 3 of the fair value hierarchy as of March 31, 2024 and December 31, 2023 is as follows:

​

​	​	​	​	​	​	​	​
​		As of March 31, 2024
​	​	Share		​	Contingent Payable		​
​	​	Liability		​	Derivative Liability		​
Strike price	​	$	0.44	​	$	0.52	*
Contractual term (years)	​		0.04	​		1.0
Volatility (annual)	​		74	%		73	%
Risk-free rate	​		5.5	%		5.2	%
Dividend yield (per share)	​		0	%		0	%

​

​	​	​	​	​	​	​	​
​	​	As of December 31, 2023					​
​	****	Share			Contingent Payable		****
​	****	Liability		​	Derivative Liability		****
Strike price	​	$	0.64	​	$	0.70	*
Contractual term (years)	​	​	0.1	​		1.0	​
Volatility (annual)	​	​	71	%		71	%
Risk-free rate	​	​	5.6	%		5.2	%
Dividend yield (per share)	​	​	0	%		0	%
*	The strike price assumes the current stock price as of March 31, 2024 and December 31, 2023.
---	---

​

​

5. Stock-based Compensation

The following table summarizes total stock-based compensation expense for the three months ended March 31, 2024 and 2023 (in thousands).

​

​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​	****	2024		****	2023
Research and development	​	$	1,009	​	$	296
Research and development - related party	​	​	​	​	​	​
Milestones achieved ^(1)^	​	​	—	​	​	520
Future milestones ^(2)^	​	​	—	​	​	100
General and administrative	​		155	​	​	17
Total stock-based compensation expense	​	$	1,164	​	$	933

​

The related party amounts were for milestone incentives that either were earned or are deemed probable to be achieved in the future and become issuable at that time (as detailed below in Restricted Stock Awards).

​

(1)	During the quarter ended March 31, 2023, the Company recognized the remaining $0.5 million stock-based compensation related to the achieved milestone (obtaining a commercial manufacturing license from the MHRA) and accrued for 3.0 million shares that will become issuable for this milestone. The Company has previously recognized $1.6 million stock - based compensation as of December 31, 2022.
(2)	This is related to a one-time milestone (drafting key portions of the application for product approval) that is anticipated to be achieved and earned in the future. The Company recognized and expensed (but did not issue shares for) the pro-rata portion of the remaining potential milestone stock awards during the quarter ended March 31, 2023, of $0.1 million.
---	---

The total unrecognized stock compensation (primarily for consultants) cost was approximately $3.6 million as of March 31, 2024 and will be recognized over the next 1.8 years. 12

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Stock Options

The following table summarizes stock option activity for options granted to key external experts during the three months ended March 31, 2024 (amount in thousands, except per share number):

​

​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	Weighted Average	​	​	​
​	​	​	​	Weighted		​	Remaining	​	​	​
​	​	Number of	​	Average		​	Contractual Life	​	Total Intrinsic
​		Shares		Exercise Price			(in years)		Value
Outstanding as of January 1, 2024		317,076	​	$	0.35	​	6.0	​	$	114,097
Granted	​	500	​	​	0.53	​	4.2	​	​	—
Cashless exercised	​	(650)	​	​	0.35	​	—	​	​	—
Outstanding as of March 31, 2024		316,926	​	$	0.35	​	5.8	​	$	59,173
Options vested ^(1)^		280,514	​	$	0.33	​	5.8	​	$	55,534

^(1)^An aggregate 153 million stock options held by Ms. Linda Powers, the Company’s Chief Executive Officer, and Mr. Leslie Goldman, the Company’s Senior Vice President, General Counsel are subject to an agreement (the “Blocker Letter Agreement”) under which they cannot exercise any options or warrants except upon at least 61 days’ prior notice.

During the three months ended March 31, 2024, the Company granted 500,000 stock options (the “Options”) with an exercise price at $0.53 per share to a staff employee. The Options vested immediately on the grant date. In addition, the Company will make an additional payment of $0.30 per option exercised by the employee for a maximum amount of $150,000. The Company has fully accrued this additional payment as of  March 31, 2024 on its condensed consolidated balance sheets.

The Black-Scholes option pricing model is used to estimate the fair value of stock options granted. The assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2024 was as follows:

​

​	​	​	​	​
​	​	For the three months ended		​
​	​	March 31,		​
​		2024
Exercise price	​	$	0.53	​
Expected term (years)	​		2.1	​
Expected stock price volatility	​		73	%
Risk-free rate	​		4.5	%
Dividend yield (per share)	​		0	%

​

Restricted Stock Awards

Advent SOW 6

There was no stock based compensation recognized during the three months ended March 31, 2024.  As previously reported, the Company previously achieved all of the 10 one-time milestones (i.e., for all six workstreams that are prerequisites for a MAA application for product approval, for obtaining all three licenses required for the Sawston facility, and for the completion of key portions of the MAA application) pursuant to the Statement of Work #6 (the “SOW 6”) with Advent BioServices, a related party of the Company.

As of March 31, 2024, 1.5 million shares related to the completed milestone (submission of the application to MHRA for approval) had not been  issued and the fair value of the shares of $1.1 million remained accrued in accounts payable and accrued expenses to related parties and affiliates.

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6. Property, Plant and Equipment

Property, plant and equipment consist of the following at March 31, 2024 and December 31, 2023 (in thousands):

​	​	​	​	​	​	​	​	​
​	****	March 31,			December 31,			Estimated
​	​	2024		​	2023		​	Useful Life
Leasehold improvements	​	$	17,867	​	$	17,785		Lesser of lease term or estimated useful life
Office furniture and equipment	​		527	​		487		3-5 years
Computer and manufacturing equipment and software	​		3,055	​		2,776		3-5 years
Land in the United Kingdom	​		85	​		86		NA
​	​		21,534	​		21,134		NA
Less: accumulated depreciation	​		(4,266)	​		(3,856)
Total property, plant and equipment, net	​	$	17,268	​	$	17,278

​

Depreciation expense was approximately $0.4 million and $0.3 million for the three months ended March 31, 2024, and 2023, respectively.

​

​

7. Outstanding Debt

The following two tables summarize outstanding debt as of March 31, 2024 and December 31, 2023, respectively (amount in thousands):

​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	​	****	Stated		****	​	​		​	​	****	​	​	****	Fair		****	​
​	​	​	​	Interest		​	Conversion		​	​	​	​	Remaining		​	Value		​	Carrying
​	​	Maturity Date	​	Rate		​	Price		​	Face Value		​	Debt Discount		​	Adjustment		​	Value
Short term convertible notes payable				​			​			​			​			​			​
6% unsecured		Due		​	6	%	$	3.09	​	$	135	​	$	—	​	$	—	​	$	135
8% unsecured	****	Various	​	​	8	%	$	0.20-$0.50	*	​	5,246	​	​	(269)	​		—	​		4,977
10 % unsecured	​	7/11/2024	​	​	10	%	$	0.50	*	​	500	​	​	—	​	​	—	​	​	500
​	​	​	​	​	​	​	​	​	​	​	5,881	​	​	(269)	​	​	—	​	​	5,612
Short term convertible notes at fair value	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
11% unsecured	​	Various	​	​	11	%	$	0.40 - $0.49	*	​	16,250	​	​	—	​	​	246	​	​	16,496
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Short term notes payable				​		​			​			​			​			​
8% unsecured		Various		​	8	%		N/A	​		11,399	​		(404)	​		—	​		10,995
12% unsecured		On Demand		​	12	%		N/A	​		562	​		—	​		—	​		562
6% secured		3/25/2025		​	6	%		N/A	​		568	​		—	​		—	​		568
​	****	​	​	​	​	​	​	​	​	​	12,529	****	​	(404)	****	****	—	​	****	12,125
Long term notes payable				​		​			​			​			​			​		​
8% unsecured		Various		​	8	%		N/A	​		11,005	​	****	(790)	​	****	—	​	****	10,215
​	****	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Ending balance as of March 31, 2024	​	​	​	​	​	​	​	​	​	$	45,665	​	$	(1,463)	​	$	246	​	$	44,448

*These convertible notes are convertible into Series C preferred shares at $5.00 - $12.50 per share. Each Series C preferred share is convertible into common shares with 30 days’ restriction period. The conversion price in common share equivalent is at $0.20-$0.50 per share. 14

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​

​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
​	****	​	****	Stated			​	​		​	​		​	​		​		****	​	​
​	​	​	​	Interest		​	Conversion		​	​	​	​	Remaining		​	Fair Value		​	Carrying
​	​	Maturity Date	​	Rate		​	Price		​	Face Value		​	Debt Discount		​	Adjustment		​	Value
Short term convertible notes payable				​			​			​			​			​			​
6% unsecured		Due		​	6	%	$	3.09	​	$	135	​	$	—	​	$	—	​	$	135
8% unsecured	​	Various	​	​	8	%	$	0.50-$0.70	*	​	3,486	​	​	(356)	​	​	—	​	​	3,130
10% unsecured	​	7/11/2024	​	​	10	%	$	0.50	*	​	500	​	​	—	​	​	—	​	​	500
​	​	​	​	​	​	​	​	​	​	​	4,121	​	​	(356)	​	​	—	​	​	3,765
Short term convertible notes at fair value	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
11% unsecured	​	Various	​	​	11	%	$	0.40-$0.49	*	​	10,750	​	​	—	​	​	2,021	​	​	12,771
​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
Short term notes payable				​		​			​		​	​			​		​	​
8% unsecured		Various		​	8	%		N/A	​		3,539	​		(157)	​		—	​		3,382
12% unsecured		On Demand		​	12	%		N/A	​		562	​		—	​		—	​		562
​	****	​	​	​	​	​	​	​	​	​	4,101	****	​	(157)	****	****	—	​	​	3,944
Long term notes payable	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​	​
8% unsecured		Various		​	8	%		N/A	​		21,224	​		(1,485)	​		—	​		19,739
6% secured	****	3/25/2025	​	​	6	%	​	N/A	​	​	573	****	​	—	****	****	—	​	​	573
​	​	​	​	​	​	​	​	​	​	​	21,797	​	​	(1,485)	​	​	—	​	​	20,312
​	​	​	​	​	​	​	​	​	​	​	**** ​	​	​	**** ​	​	​	**** ​	​	​	​
Ending balance as of December 31, 2023	​	​	​	​	​	​	​	​	​	$	40,769	​	$	(1,998)	​	$	2,021	​	$	40,792

*These convertible notes are convertible into Series C preferred shares at $10.00 - $17.50 per share. Each Series C preferred share is convertible into common shares with 30 days’ restriction period. The conversion price in common share equivalent is at $0.40 - $0.70 per share.

​

Promissory Note

During the three months ended March 31, 2024, the Company issued approximately 6.9 million shares of common stock with a fair value of $4.0 million to certain lenders in lieu of cash payments of $2.7 million of debt, including $0.3 million of accrued interest. In addition, pursuant to exchange agreements executed with various holders, the Company is required to potentially issue additional common stock (the “Share liability”) if the stock price is less than the price, defined in the exchange agreement as of the true-up date (the “True-up Price”), or the lender is required to return common shares to the Company (the “Share receivable”) if the stock price is greater than the True-up Price as of the true-up date. During the three months ended March 31, 2024, the Company extinguished Share liabilities of $0.6 million and recognized additional $0.1 million in Share liabilities. The Company recognized an approximately $0.8 million debt extinguishment loss during the three months ended March 31, 2024 from the debt redemption.

Convertible Notes

On February 21, 2024, the Company entered into several one-year convertible notes (the “February Convertible Notes”) with multiple investors (the “Holders”) with an aggregate principal amount of $1.8 million for a purchase price of $1.6 million. The February Convertible Notes bear interest at 8% per annum and are convertible into Series C preferred shares at $12.50 per share at the Holders’ sole option. The Series C preferred shares are convertible into common stock 30 days after the debt conversion date. Each Series C preferred share is convertible into 25 shares of common stock.

As consideration for entering into the package of February Convertible Notes for $1.8 million as described above, the Company amended the Holders’ existing convertible notes and warrants, whereby the maturity date of certain notes and warrants were extended,  the conversion price of certain notes were reduced, and the exercise prices of certain warrants were reduced. These amendments in January and February of 2024 involving 16 tranches warrants and 10 debt instruments were accounted for as both debt modification and debt extinguishment. The Company recognized  approximately $1.4 million of debt extinguishment losses during the three months ended March 31, 2024 from these debt amendments. 15

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Convertible Notes at Fair Value

During the three months ended March 31, 2024, the Company entered into several one-year convertible notes (the “Convertible Notes”) with multiple individual investors (the “Holders”) with an aggregate principal amount of $5.5 million. The Convertible Notes bear interest at 11% per annum and are convertible into Series C preferred shares between $10.00 and $11.50 per share at the Holder’s sole option. The Series C preferred shares are convertible into common stock 30 days after the debt conversion date. Each Series C preferred share is convertible into 25 shares of common stock. In addition, the Holders have an alternative option to convert the Convertible Notes into a non-dilutive financial instrument, which has the same terms at those in the non-dilutive funding agreements as described in Note 12.

The Company elected the FVO to fair value the Convertible Notes under the guidance in ASC 825. The convertible notes at fair value are required to be remeasured using level 3 fair value measurements (see Note 4).

For the three months ended March 31, 2024 and 2023, interest expense related to outstanding debt totaled approximately $1.5 million and $1.0 million including amortization of debt discounts totaling $0.6 million and $0.6 million, respectively.

​

​

​

8. Net Loss per Share Applicable to Common Stockholders

Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per common share would be computed similar to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Because of the net loss from operations for each period, inclusion of such securities in the computation of loss per share would be anti-dilutive and thus they are excluded. Potentially dilutive weighted average common shares include common stock potentially issuable under the Company’s convertible notes and preferred stock, warrants and vested and unvested stock options.

The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):

​

​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​		2024	****	2023
Series C convertible preferred stock	​	32,420	​	35,412
Common stock options	​	316,926	​	299,938
Common stock warrants	​	97,040	​	140,244
Convertible notes and accrued interest	​	60,929		79
Potentially dilutive securities	​	507,315	​	475,673

​

​

​

9. Related Party Transactions

The Company had three operational programs with Advent: (a) an ongoing development and manufacturing program at the GMP facility in London, (b) an ongoing development and manufacturing program at the Sawston GMP facility, and (c) a one-time program for specialized work, organized into 10 sets of one-time milestones that were required for the MAA application, for the following:

●	Qualifying for and obtaining 3 required licenses for the Sawston facility: a license from the Human Tissue Authority to collect and process human cells and tissues, a license from the MHRA for manufacturing for clinical trials and compassionate use cases, and a license from the MHRA for commercial manufacturing.
●	6 workstreams relating to product matters required for the MAA application, including Comparability, Stability, Potency, Product Profile, Mechanism of Action and Fill/Finish.
---	---
●	Drafting and submission of key portions of the application for product approval itself.
---	---

16

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NOTES TO CONDENSED CONSOLIDATED STATEMENTS

Each of the three operational programs is covered by a separate contract. The ongoing manufacturing in the London facility is covered by a Manufacturing Services Agreement (“MSA”) entered into on May 14, 2018. The development and manufacturing program at the Sawston facility is covered by an Ancillary Services Agreement entered into on November 18, 2019. The specialized work associated with the 10 one-time milestones is covered by an SOW 6 entered into under the Ancillary Services Agreement as of April 1, 2022 and amended on September 26, 2022 and September 26, 2023. The 2023 amendment extended the SOW 6 service period for about 6 months, through March 31, 2024. Subsequently on April 1, 2024, the SOW 6 was further extended through September 30, 2024.

The Ancillary Services Agreement establishes a structure under which the Company and Advent negotiate and agree upon the scope and terms for Statements of Work (“SOWs”) for facility development activities and compassionate use program activities. After an SOW is agreed and approved by the Company, Advent will proceed with, or continue, the applicable services and will invoice the Company pursuant to the SOW. Since both the facility development and the compassionate use program involve pioneering and uncertainties in most aspects, the invoicing under the Ancillary Services Agreement is on the basis of costs incurred plus fifteen percent. The SOWs may involve ongoing activities or specialized one-time projects and related one-time milestone payments. The current Ancillary Services Agreement ended in July 2023. The Company subsequently extended the term by 12 months to July 2024 with no other changes.

The following table summarizes total research and development costs from Advent for the three months ended March 31, 2024 and 2023, respectively (in thousands).

​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31,
​	​	2024		​	2023
Advent BioServices		​			​
Manufacturing cost in London	​	$	1,726	​	$	1,643
Manufacturing cost at Sawston facility	​		2,652	​		1,712
SOW 6 one-time milestones - Shares	​		​	​		​
Expensed but unpaid (milestone complete) ^(1)^	​		—	​		520
Expensed but unpaid, not yet due (milestone not yet complete) ^(2)^	​		—	​		100
SOW 6 one-time milestones - Cash	​		​	​	​	​
Expensed and due, but unpaid (milestone complete) ^(3)^	​		—	​		550
Expensed but unpaid, not yet due (milestone not yet complete) ^(2)^	​	​	—	​	​	150
Total	​	$	4,378	​	$	4,675
(1)	This covers the one-time milestone for obtaining a commercial manufacturing license from the MHRA. The milestone was achieved but shares were not yet issued as of March 31, 2023.
---	---
(2)	This covers the one-time milestone for drafting key portions of the application for product approval.
---	---
(3)	This covers two one-time milestones: Mechanism of Action and obtaining a commercial manufacturing license from the MHRA.
---	---

Advent BioServices Sublease Agreement

On December 31, 2021, the Company entered into a Sub-lease Agreement (the “Agreement”) with Advent. The Agreement permits use by Advent of a portion of the space in the Sawston facility, which is leased by the Company under a separate head lease with a different counterparty (Huawei) that commenced on December 14, 2018. The Company subleased approximately 14,459 square feet of the 88,000 square foot building interior space, plus corresponding support space and parking. The lease payments amount under the Agreement are two times the amount payable by the Company under the head lease (which is currently  £5.75 or approximately $7.26 per square foot based on exchange rate as of March 31, 2024), but subject to a cap of $10 per square foot. Accordingly, the monthly lease payments under the Sublease are based on $145,000 annually for 2024. The total lease payments paid by the Company to Huawei for the 88,000 square foot facility, exterior spaces and parking under the head lease are £550,000 (approximately $694,000) per year. The term of the Agreement shall end on the same date as the head lease term ends. 17

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NOTES TO CONDENSED CONSOLIDATED STATEMENTS

During the three months ended March 31, 2024 and 2023, the Company recognized sub-lease income of $36,000 and $36,000, respectively.

Related Party Accounts Payable

As of March 31, 2024, there were outstanding unpaid accounts payable and accrued expenses owed to Advent as summarized in the following table (in thousands). These unpaid amounts are part of the Related Party expenses reported in the above section.

​

​	​	​	​	​	​	​
​	****	March 31,		****	December 31,
​	​	2024		​	2023
Advent BioServices - amount invoiced but unpaid	​	$	1,633	​	$	1,668
Advent BioServices - amount accrued but unpaid ^(1)^	​	​	1,101	​	​	1,601
Total payable and accrued, but unpaid to Advent BioServices	​	$	2,734	​	$	3,269

(1) This includes $1.1 million which is not payable in cash but represents the value of 1.5 million shares that will become issuable to Advent, following final Board approval, for achievement of the one-time milestone for submission of the MAA application to MHRA on December 20, 2023. Such shares were not issued as of March 31, 2024, and the total value, previously recognized as stock compensation expense, was reclassified from Additional Paid-in-Capital to Accounts payable and accrued expenses to related parties and affiliates.

​

10. Preferred Stock

Series C Convertible Preferred Stock

During the three months ended March 31, 2024, the Company entered into various Subscription Agreements (the “Series C Subscription Agreements”) with certain investors (the “Series C Investors”). Pursuant to the Series C Subscription Agreements, the Company issued the Series C Investors an aggregate of 0.3 million shares of the Company’s Series C convertible preferred stock, par value $0.001 per share (the “Series C Shares”), at a weighted purchase price of $11.77 per share for proceeds of approximately $3.6 million.

During the three months ended March 31, 2024, approximately 0.2 million Series C Shares with a book value of $2.5 million were converted into 5.5 million common shares at a ratio of 1:25.

The Company determined that the Series C Shares contain contingent redemption provisions allowing redemption by the holder upon certain defined events (“deemed liquidation events”). As the event that may trigger the redemption of the Series C Shares is not solely within the Company’s control, the Series C Shares are classified as mezzanine equity (temporary equity) in the Company’s condensed consolidated balance sheets.

​

11. Stockholders’ Deficit

Common Stock

During the three months ended March 31, 2024, the Company received $1.3 million from the exercise of outstanding warrants with a weighted average exercise price of $0.22 per share. The Company issued approximately 5.8 million shares of common stock upon these warrant exercises.

During the three months ended March 31, 2024, certain options and warrants holders elected to exercise some of their options and warrants pursuant to cashless exercise formulas. The Company issued approximately 1.6 million shares of common stock upon exercise of 2.4 million warrants at exercise prices between $0.20 and $0.34 per share, and 0.7 million options at exercise prices of $0.35 per share. 18

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Stock Purchase Warrants

The following is a summary of warrant activity for the three months ended March 31, 2024 (dollars in thousands, except per share data):

​

​	​	​	​	​	​	​	​
​	****	Number of	****	Weighted Average		****	Remaining
​	​	Warrants	​	Exercise Price		​	Contractual Term
Outstanding as of January 1, 2024	****	105,241	​	$	0.31	****	1.83
Warrants exercised for cash		(5,831)	​		0.22		—
Cashless warrrants exercise	​	(2,369)	​	​	0.35	​	—
Outstanding as of March 31, 2024	****	97,040	​	$	0.28	****	2.05

​

The options and warrants held by Ms. Powers and Mr. Goldman are subject to an ongoing suspension on a rolling basis pursuant to the Blocker Letter Agreement.

At March 31, 2024, of the approximately 97 million total outstanding warrants listed above, approximately 92 million warrants were under the Blocker Letter Agreement or suspension agreements.

Warrant Modifications

During the three months ended March 31, 2024, the Company amended multiple warrants whereby the maturity dates of certain warrants were extended for an additional approximately 3 months. The value of these modifications were calculated using the Black-Scholes-Merton option pricing model based on the following weighted average assumptions.

​

​	​	​	​	​	​	​	​
​	****	Post-modification			Pre-modification		****
Exercise price	​	$	0.28	​	$	0.31	​
Expected term (in years)	​		2.1	​		1.8	​
Volatility	​		80	%		81	%
Risk-free interest rate	​		4.7	%		4.9	%
Dividend yield	​		0	%		0	%

​

The incremental fair value attributable to the modified awards compared to the original awards immediately prior to the modification was calculated at $1.8 million, of which $1.2 million was associated with debt amendments and was recognized as an additional debt discount under debt modification and debt extinguishment loss under debt extinguishment (see Note 7), and the remaining $0.6 million was treated as a deemed dividend and is reflected as “Deemed dividend related to warrant modifications” in the accompanying condensed consolidated statement of operations and comprehensive loss.

​

12. Commitments and Contingencies

Operating Lease- Lessee Arrangements

The Company has operating leases for corporate offices in the U.S. and U.K., and for manufacturing facilities in the U.K. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company has elected the practical expedient to account for each separate lease component of a contract and its associated non-lease components as a single lease component, thus causing all fixed payments to be capitalized. The Company also elected the package of practical expedients permitted within the new standard, which among other things, allows the Company to carry forward historical lease classification. The lease renewal options have not been included in the calculation of the lease liabilities and right-of-use (“ROU”) assets as the Company has not yet determined whether to exercise the options. Variable lease payment amounts that cannot be determined at the commencement of the lease such as increases in lease payments based on changes in index rates or usage, are not included in the ROU assets or liabilities. These are expensed as incurred and recorded as variable lease expense.

At March 31, 2024, the Company had operating lease liabilities of approximately $4.6 million for both the 20-year lease of the building for the manufacturing facility in Sawston, U.K., and the current office lease in the U.S. and ROU assets of approximately $4.1 million for the Sawston lease and U.S. office lease are included in the condensed consolidated balance sheet. 19

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Operating Lease - Lessor Arrangements

On December 31, 2021, the Company entered into a Sub - lease Agreement (the “Agreement”) with Advent. The Agreement permits use by Advent of a portion of the space in the Sawston facility, which is leased by the Company under a separate head lease with a different counterparty (Huawei) that commenced on December 14, 2018. The Company subleased approximately 14,459 square feet of the 88,000 square foot building interior space, plus corresponding support space and parking. The lease payments amount under the Agreement are two times the amount payable by the Company under the head lease (which is currently L5.75 or approximately $7.26 per square foot based on exchange rate as of March 31, 2024), but subject to a cap of $10 per square foot. Accordingly, the monthly lease payments under the Sublease are based on $145,000 annually for 2024. The total lease payments paid by the Company to Huawei for the 88,000 square foot facility, exterior spaces and parking under the head lease are L550,000 (approximately $694,000) per year. The term of the Agreement shall end on the same date as the head lease term ends.

The following summarizes quantitative information about the Company’s operating leases (amount in thousands):

​

​	​	​	​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31, 2024
​		U.K			U.S			Total
Lease cost		​			​			​
Operating lease cost	​	$	156	​	$	65	​	$	221
Short-term lease cost	​		13	​		—	​		13
Variable lease cost	​		—	​		6	​		6
Sub-lease income	​		(36)	​		—	​		(36)
Total	​	$	133	​	$	71	​	$	205
​	​	​	​	​	​	​	​	​	​
Other information	​		​	​		​	​		​
Operating cash flows from operating leases	​	$	(166)	​	$	(75)	​	$	(241)
Weighted-average remaining lease term – operating leases	​		7.7	​		0.4	​		​
Weighted-average discount rate – operating leases	​		12	%		12	%		​

​

​	​	​	​	​	​	​	​	​	​
​	​	For the three months ended
​	​	March 31, 2023
​	****	U.K			U.S			Total
Lease cost		​			​			​
Operating lease cost	​	$	144	​	$	65	​	$	209
Short-term lease cost	​		23	​		—	​		23
Variable lease cost	​		—	​		4	​		4
Sub-lease income	​	​	(36)	​	​	—	​	​	(36)
Total	​	$	131	​	$	69	​	$	200
​	​	​	​	​	​	​	​	​	​
Other information	​		​	​		​	​		​
Operating cash flows from operating leases	​	$	(152)	​	$	(73)	​	$	(225)
Weighted-average remaining lease term – operating leases	​		8.4	​		1.1	​		​
Weighted-average discount rate – operating leases	​		12	%		12	%		​

​

The Company recorded lease costs as a component of general and administrative expense during the three months ended March 31, 2024 and 2023, respectively. 20

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NOTES TO CONDENSED CONSOLIDATED STATEMENTS

Maturities of our operating leases, excluding short-term leases and sublease agreement, are as follows:

​

​	​	​	​
Nine months ended December 31, 2024	​	$	621
Year ended December 31, 2025	****	​	656
Year ended December 31, 2026	​	​	656
Year ended December 31, 2027	​	​	656
Year ended December 31, 2028	​	​	656
Thereafter	​	​	6,542
Total	​	​	9,787
Less present value discount	​	​	(5,158)
Operating lease liabilities included in the condensed consolidated balance sheet at March 31, 2024	​	$	4,629

​

Maturities of our operating leases under the sublease agreement, are as follows:

​

​	​	​	​
Nine months ended December 31, 2024		$	108
Year ended December 31, 2025		​	145
Year ended December 31, 2026		​	145
Year ended December 31, 2027		​	145
Year ended December 31, 2028		​	145
Thereafter		​	1,450
Total	​	$	2,138

​

Advent BioServices Services Agreement

On May 14, 2018, the Company entered into a DCVax®-L Manufacturing and Services Agreement (“MSA”) with Advent BioServices, a related party which was formerly part of Cognate BioServices and was spun off separately as part of an institutional financing of Cognate. The MSA provides for manufacturing of DCVax-L products at an existing facility in London. The MSA is structured in the same manner as the Company’s prior agreements with Cognate BioServices. The MSA provides for certain payments for achievement of milestones and, as was the case under the prior agreement with Cognate BioServices, the Company is required to pay certain fees for dedicated production capacity reserved exclusively for DCVax production and pay for manufacturing of DCVax-L products for a certain minimum number of patients, whether or not the Company fully utilizes the dedicated capacity and number of patients. The MSA remains in force until five years after the first commercial sales of DCVax-L products pursuant to a marketing authorization, accelerated approval or other commercial approval, unless cancelled. Either party may terminate the MSA on twelve months’ notice, to allow for transition arrangements by both parties. During the notice period services would still be provided. Minimum required payments for this notice period are anticipated to total approximately £4.5 million ($5.7 million).

German Tax Matter

The German tax authorities have audited our wholly owned subsidiary, NW Bio GmbH, for 2013-2015. The NW Bio GmbH submitted substantial documentation to refute certain aspects of the assessments and the German tax authorities agreed in principle with the Company’s proposed revised approach and settlement offer. A final settlement bill was received from the German Tax Authority confirming that only a portion of the original bill was owed, €277,000 (approximately $299,000), for corporate taxes, interest, and reduced penalty for the period under audit, which the Company paid on September 2, 2021. The Company also received and paid the final settlement bill from the local authority for trade taxes for the audit period in the amount of €231,000 (approximately $249,000). On November 4, 2021, the Company received a letter from the local tax authorities asking for additional late fees of €513,000 (now approximately $554,000) on reimbursable withholding taxes that had been waived during the settlement process. On December 8, 2021, the Company appealed the assessment of additional late fees. Additionally, the Company requested that NW Bio GmbH be deregistered from the trade register, as it no longer had current operations. The deregistration was granted effective December 31, 2021. Between January 2022 and July 2022, the Company received tax bills for the corporate and trade taxes for the 2016-2020 tax years that totaled approximately €222,000 (approximately $240,000). On July 27, 2022, the Company was informed that the German Tax Authorities were prepared to waive €135,000 (approximately $146,000) of the penalties. The Company offered to pay this reduced penalty if an 21

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NOTES TO CONDENSED CONSOLIDATED STATEMENTS

extended payment plan was approved. A response was received dated November 14, 2022 indicating that the tax authority would not be able to grant a further deferral of payment of these penalties. In a letter dated December 27, 2022, the Leipzig tax authority sent letters to the former and current managing directors of NW Bio GmbH giving 30 days to respond to a tax liability questionnaire. Based on the responses to the liability questionnaires the tax authorities have currently not directed any further measures against former and current managing directors of NW Bio GmbH with respect to tax liability proceedings. On October 12, 2023 and January 16, 2024, the Company made €189,000 and €189,000 payments, respectively, regarding to the late payment penalty. As of March 31, 2024, the Company accrued for trade tax liability of €155,000 (approximately $168,000) and corporation tax of €99,000 (approximately $107,000). Based on the Company’s current operating state in Germany and the negotiations, the Company believes, based on its evaluation under ASC 740, that the resolution of these tax matters will not likely result in a net material charge to the Company.

Other Contingent Payment Obligation

During the three months ended March 31, 2024, the Company entered into a non-dilutive funding agreement with an individual investor, pursuant to which the Company received funding of $50,000 related to a gain contingency. These agreements are accounted for under ASC 470 and are recognized as contingent payment obligations on the Company’s condensed consolidated balance sheet. The Company’s payment obligations only apply when such are received by the Company.

​

13. Subsequent Events

Between April 1, 2024 and May 8, 2024, the Company received $11.4 million in funding from the sale of preferred shares, proceeds from warrant exercise, and proceeds of debt arrangements.

Between April 1, 2024 and May 8, 2024, the Company issued approximately 0.1 million shares of Series C preferred stock for proceeds of $1.4 million.

Between April 1, 2024 and May 8, 2024, the Company received $9,000 from the exercise of 43,000 outstanding warrants.

Between April 1, 2024 and May 8, 2024, approximately 0.3 million Series C Shares with a book value of $3.5 million were converted into 8.5 million common shares in accordance with their terms at a ratio of 1:25.

Between April 1, 2024 and May 8, 2024, the Company issued approximately 2.8 million shares of common stock to certain lenders in lieu of cash payments of $1.3 million of debt, including $0.1 million of accrued interest. The Company also issued 0.2 million shares of common stock to extinguish $0.1 million outstanding share liability.

On April 4, 2024, the Company issued approximately 0.1 million shares of Series C Shares to certain lenders for debt conversion of $0.5 million, including $0.1 million of accrued interest.

On April 26, 2024, the Company entered into a Commercial Loan Agreement (the “April Commercial Loan”) with a commercial lender for an aggregate principal amount of $11.0 million. The April Commercial Loan bears interest at 8% per annum with a 22 - month term. There are no principal repayments during the first eight months of the term. The April Commercial Loan is amortized in 14 installments starting on December 26, 2024. The April Commercial Loan carries an original issue discount of $1.0 million.

On April 29, 2024, the Company issued approximately 1.3 million shares of common stock upon cashless exercise of 2.1 million warrants at exercise prices of $0.20 per share.

​

​

​ 22

Table of Contents Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “intend,” “anticipate,” and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under “Risk Factors” in our Form 10-K for the year ended December 31, 2023 and in Part II Item 1A of this report. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not place undue reliance on these forward-looking statements.

Overview

We are a biotechnology company focused on developing personalized immune therapies for cancer. We have developed a platform technology, DCVax®, which uses activated dendritic cells to mobilize a patient’s own immune system to attack their cancer.

Our lead product, DCVax®-L, is designed to treat solid tumor cancers in which the tumor can be surgically removed. We have completed a 331-patient international Phase III trial of DCVax-L for Glioblastoma multiforme brain cancer (GBM), published the results in the JAMA Oncology peer reviewed journal, and on December 20, 2023 we submitted a Marketing Authorization Application (MAA) for commercial approval in the U.K. We plan to conduct clinical trials of DCVax-L for other solid tumor cancers in the future, when resources permit. Our second product, DCVax®-Direct, is designed to treat inoperable solid tumors. A 40-patient Phase I trial has been completed, and included treatment of a diverse range of more than a dozen types of cancers. We plan to work on preparations for Phase II trials of DCVax-Direct as resources permit.

The Company’s programs and operations continue to be impacted by supply chain issues and backlogs which, surprisingly, have still not substantially resolved. These involve service firms and also vendors and suppliers of a wide variety of items, ranging from major equipment to particular reagents required for the manufacturing process. Shortages of certain key materials and supplies have also occurred. The Company is hopeful that the various backlog circumstances will improve over the course of 2024.

During the first quarter of 2024, the Company continued its progress on multiple fronts, including the following.

MAA Application . As previously reported, the Company filed a Marketing Authorization Application (MAA) to the U.K. Medicines and Healthcare Products Regulatory Agency (MHRA) on December 20, 2023, seeking regulatory approval for commercialization of DCVax - L for newly diagnosed and recurrent Glioblastoma (GBM). On January 24, 2024 the Company received notification from the MHRA that the MAA had passed validation. On March 7, 2024, the Company received notification from the MHRA that the validation was confirmed. The Company did not make any amendment or addition to its MAA after the original December 20, 2023 submission.

As is typical, the Company does not plan to make any interim announcements while its MAA is going through the regulatory process. The Company will announce the results when the regulatory review and decision - making about the MAA is complete.

Preparations for Regulatory Inspections . As anticipated in the Company’s prior reports, preparations for regulatory inspections associated with the MAA have continued to be a major focus of the Company’s activities this year to date. The Company has continued working intensively with teams of expert consultants in both the U.S. and U.K. on these preparations, and has also arranged for further mock inspections by specialists who were formerly inspectors for regulatory agencies. It is anticipated that teams of multiple inspectors for extended periods will conduct comprehensive inspections of all the key parties involved conducting in the Phase 3 trial and of all documentation and records. The Company does not know when MAA - related inspections may take place.

Pediatric Glioma Clinical Trials . The Company continued its discussions with physicians about the two planned trials of DCVax - L for pediatric gliomas. The arrangements for the trials have not yet been finalized. 23

Table of Contents Flaskworks . The Flaskworks team and Advent BioServices continued to work with the specialized contractor on the development of the GMP-grade units of the Flaskworks system. Two key areas of focus in the work have been the ability to clean the machines to GMP requirements and additional safety features for protection of the operators in the GMP setting. Enabling all parts of the machines to be cleanable to the level of sterility required for GMP operations has required changing certain materials to achieve acceptable surface properties, constructing housings around certain portions of the machines or otherwise eliminating nooks and crannies while not interfering with the movements of the machines, and other such development aspects. The Company believes the work is on track for the GMP adaptation work to be finished in the near future, and the first GMP units to be delivered to the Company soon after that.

Sawston Facility . The Company has commenced the design and build works for the construction of the first Grade C cleanroom at the Sawston facility and the contractor is onsite. The Company expects the Grade C cleanrooms to be important for scale - up, as they will accommodate the “closed” Flaskworks system, and be able to manufacture a number of patients’ products in the lab at the same time. In contrast, with the existing “open” process in the Grade B cleanrooms, products must be manufactured for one patient at a time and the whole lab must be cleaned and sterilized between each patient’s process. Since construction work in the facility can directly and/or indirectly impact the existing cleanrooms in the facility (e.g., by generating a lot of dust and particles) and prevent the existing Grade B cleanrooms  from being able to operate in accordance with GMP sterility standards, the Company has been working with Advent BioServices and contractors to arrange for the construction work to take place as much as possible during periodic scheduled shutdowns of the existing clean rooms for deep cleaning and special maintenance which are required for GMP compliance.

​

Intellectual Property and Collaborations. As previously reported, the Company filed new patent applications relating to the Flaskworks system, which the Company believes will be an important factor for facilitating scale - up and commercialization of DCVax - L products. In addition, multiple new patents were granted and 1 new patent was allowed from patent applications previously filed. The Company continued working with certain intellectual property that it has in - licensed as previously reported, on preparations for expansion of the Company’s pipeline with certain new clinical programs when bandwidth and resources permit. The Company also continued discussions and negotiations during the first quarter of 2024 relating to collaborations which the Company believes will help it build a broad franchise in dendritic cell-based immunotherapies.

Litigation . Significant amounts of Company bandwidth and resources were spent on litigations during the first quarter of 2024 (and to date in the second quarter of 2024). The cases are described in Part II - Item 1, Legal Proceedings, below.

Annual Shareholder Meeting. The Company plans to conduct its Annual Shareholder Meeting before the end of June 2024.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.

On an ongoing basis, we evaluate our estimates and judgments, including those related to derivative liabilities, accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.

Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2023. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2023.

Results of Operations

Operating costs:

Our operating costs and expenses consist primarily of research and development (R&D) expenses. R&D expenses include clinical trial expenses, and increased costs after completion of a Phase III trial, especially for the extensive preparations, and teams of expert consultants, required for an application for product approval. 24

Table of Contents In addition to clinical trial and post-trial costs, our operating costs may include ongoing work relating to our DCVax products, including R&D, product characterization, manufacturing process development, quality control process development, and related matters. Additional substantial costs relate to the development and expansion of manufacturing capacity.

Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs, such as our anticipated trials of combination treatment regimens. The preparation costs include payments to regulatory consultants, lawyers, statisticians, sites and others, evaluation of potential investigators, the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, clinical trial agreements (business contracts with sites), training of medical and other site personnel, trial supplies and other.

Our operating costs also include legal and accounting costs in operating the Company.

The foregoing operating costs include the costs for Flaskworks’ ongoing operations and intellectual property filings, and the operations of our subsidiaries in the U.K., the Netherlands and Germany.

Research and development:

R&D expenses include costs for substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.

Because we are a pre-revenue company, we do not allocate R&D costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.

General and administrative:

General and administrative expenses include personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal services, property and equipment and amortization of stock options and warrants.

Three Months Ended March 31, 2024 and 2023

We recognized a net loss of $18.3 million and $10.7 million for the three months ended March 31, 2024 and 2023, respectively.

Research and Development Expense

For the three months ended March 31, 2024 and 2023, research and development expenses were $7.9 million and $6.9 million, respectively. The increase in 2024 was mainly related to an increase of $0.7 million in stock-based compensation which was mainly related to additional awards that were granted to various key external consultants in the third quarter of 2023.

General and Administrative Expense

For the three months ended March 31, 2024 and 2023, general and administrative expenses were $8.1 million and $7.0 million, respectively. The increase in 2024 was mainly related to an increase of $0.9 million in legal expenses.

Change in Fair Value of Derivatives

We recognized a non-cash gain of $0.1 million and a non-cash gain of $3.9 million for the three months ended March 31, 2024 and 2023, respectively. The gain was primarily due to the decrease of stock price as of March 31, 2024 and 2023 compared to December 31, 2023 and 2022.

Change in Fair Value of Convertible Notes

We recognized a non-cash gain of $1.8 million change in fair value of the convertible notes during the three months ended March 31, 2024. The gain was primarily due to the decrease of stock price as of March 31, 2024 compared to December 31, 2023. 25

Table of Contents Debt Extinguishment

We recognized an approximately $0.8 million debt extinguishment loss during the three months ended March 31, 2024 from the debt redemption, and $1.4 million from the amendments of certain convertible notes and existing warrants (see Note 7).

We recognized an approximately $1.4 million debt extinguishment loss during the three months ended March 31, 2023 from the debt redemption.

Interest Expense

During the three months ended March 31, 2024 and 2023, we recorded interest expense of $1.5 million and $1.0 million, respectively. The increase in interest expense in 2024 was mainly related to an increase of outstanding debt balance.

Foreign currency transaction loss

During the three months ended and March 31, 2024 and 2023, we recognized foreign currency transaction loss of $0.7 million and gain of $0.9 million, respectively. The loss was due to the strengthening of the U.S. dollar relative to the British pound sterling. The gain was due to the weakening of the U.S. dollar relative to the British pound sterling.

Liquidity and Capital Resources

We have experienced recurring losses from operations since inception. We have not yet established an ongoing source of revenues and must cover our operating expenses through debt and equity financings to allow us to continue as a going concern. Our ability to continue as a going concern depends on the ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund our operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.

We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management determined that there was substantial doubt about our ability to continue as a going concern for at least one year after the annual consolidated financial statements were issued, and management’s concerns about our ability to continue as a going concern within the year following this report persist.

Cash Flow

Operating Activities

During the three months ended March 31, 2024 and 2023, net cash outflows from operations were approximately $12.4 million and $11.2 million, respectively. The increase in cash used in operating activities was primarily attributable to an increase in clinical trial related expenditures.

Investing Activities

We spent approximately $0.2 million and $1.3 million in cash for the purchase of additional equipment and our build-out in Sawston, UK during the three months ended March 31, 2024 and 2023, respectively.

Financing Activities

We received approximately $3.6 million of cash from issuance of 0.3 million shares of Series C convertible preferred stock during the three months ended March 31, 2024.  We received approximately $2.4 million cash from issuance of 0.1 million shares of Series C convertible preferred stock during the three months ended March 31, 2023.

We received approximately $7.1 million of cash from issuance of convertible notes to individual lenders during the three months ended March 31, 2024.

We received approximately $10.0 million of cash from the issuance of a loan from a commercial lender during the three months ended March 31, 2023. 26

Table of Contents We received approximately $1.3 million and $0.2 million of cash from the exercise of warrants during the three months ended March 31, 2024 and 2023, respectively.

We received $50,000 from issuance of non-dilutive funding agreements during the three months ended March 31, 2024.

We made aggregate debt payments of $0.1 million during the three months ended March 31, 2023.

Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites, number of patients and amount of activity in our clinical trial programs, the costs of further product and process development work relating to our DCVax products, the costs of preparations for Phase II trials, the costs of expansion of manufacturing, and unanticipated developments. The extent of resources available to us will determine which programs can move forward and at what pace.

Off-Balance Sheet Arrangements

Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.

​

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Market risk represents the risk of loss that may result from the change in value of financial instruments due to fluctuations in its market price. Market risk is inherent in all financial instruments. Market risk may be exacerbated in times of trading illiquidity when market participants refrain from transacting in normal quantities and/or at normal bid-offer spreads. Our exposure to market risk is directly related to derivatives, debt and equity linked instruments related to our financing activities.

Our assets and liabilities are overwhelmingly denominated in U.S. dollars. We do not use foreign currency contracts or other derivative instruments to manage changes in currency rates. We do not now, nor do we plan to, use derivative financial instruments for speculative or trading purposes. However, these circumstances might change.

The primary quantifiable market risk associated with our financial instruments is sensitivity to changes in interest rates. Interest rate risk represents the potential loss from adverse changes in market interest rates. We use an interest rate sensitivity simulation to assess our interest rate risk exposure. For purposes of presenting the possible earnings effect of a hypothetical, adverse change in interest rates over the 12-month period from our reporting date, we assume that all interest rate sensitive financial instruments will be impacted by a hypothetical, immediate 100 basis point increase in interest rates as of the beginning of the period. The sensitivity is based upon the hypothetical assumption that all relevant types of interest rates that affect our results would increase instantaneously, simultaneously and to the same degree. We do not believe that our cash and equivalents have significant risk of default or illiquidity.

The sensitivity analyses of the interest rate sensitive financial instruments are hypothetical and should be used with caution. Changes in fair value based on a 1% or 2% variation in an estimate generally cannot be extrapolated because the relationship of the change in the estimate to the change in fair value may not be linear. Also, the effect of a variation in a particular estimate on the fair value of financial instruments is calculated independent of changes in any other estimate; in practice, changes in one factor may result in changes in another factor, which might magnify or counteract the sensitivities. In addition, the sensitivity analyses do not consider any action that we may take to mitigate the impact of any adverse changes in the key estimates.

​

Based on our analysis, as of March 31, 2024, the effect of a 100+/- basis point change in interest rates on the value of our financial instruments and the resultant effect on our net loss are considered immaterial.

​ 27

Table of Contents Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of March 31, 2024, of the design and operation of our disclosure controls and procedures, as such terms are defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, management concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

Remediation of a Material Weakness in Internal Control over Financial Reporting

The Company recognizes the importance of internal controls to ensure accurate financial reporting. Consequently, we designed and implemented remediation measures to address the material weakness previously identified during the quarter ended December 31, 2023, which was due solely to the material weakness over the valuation of debt and derivative liabilities which primarily involved applying an incorrect valuation method using the market price actually paid for certain convertible notes rather than using a Monte Carlo valuation formula. In light of the material weakness, we enhanced our valuation of debt and derivative liability processes. Based on the actions taken, as well as the evaluation of the design of the new controls, we concluded that the controls were operating effectively as of March 31, 2024. As a result, management concluded that the material weakness was remediated as of March 31, 2024.

Changes in Internal Control over Financial Reporting

No change in internal control over financial reporting occurred during the most recent quarter with respect to our operations, which materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.

​ 28

Table of Contents Part II - Other Information

Item 1. Legal Proceedings

On December 1, 2022, we filed a Complaint in the United States District Court for the Southern District of New York against certain market makers. The Complaint alleges that the defendants engaged in manipulation of the Company’s stock, in violation of the Securities Exchange Act of 1934 and common law fraud, over a period of years. On March 20, 2023, the defendants filed a Motion to Dismiss the Complaint. On April 10, 2023 we filed an Amended Complaint against Canaccord Genuity LLC, Citadel Securities LLC, G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, Lime Trading Corp., and Virtu Americas LLC (Northwest Biotherapeutics Inc. v. Canaccord, et al., No. 1:22-cv-10185-GHW-GWG).

​

Following defendant’s filing of a new Motion to Dismiss (MTD) and various filings on both sides, an oral argument on defendants’ latest Motion to Dismiss was held on November 14, 2023. The Magistrate Judge issued an 85 page Recommendation and Results Opinion (R&R) for review by the Senior Judge. The Magistrate Judge found that the Company had adequately plead all of the elements of its claim of market manipulation, with the exception of producing enough details for calculating actual damages, known as loss causation. On that basis, he granted defendant’s motion to dismiss without prejudice, subject to the Company’s right to replead on just the question of loss causation, finding that such a filing would “not be futile”.

​

On February 14, 2024, the Senior Judge issued an opinion accepting all the recommendations and findings of the R&R, and gave the Company 30 days to file this limited repleading amendment on loss causation and damages no later than March 15, 2024. On March 15, 2024, the Company filed their more detailed repleading on loss causation and damages. At the end of March, defendants asked for the right to object to the Judge’s findings against them on December 29, 2023 and February 14, 2024. This motion was denied. The defendants then asked for leave to file a new MTD. That motion was granted with a 30 day filing requirement for defendants and a 30 day response time for the Company.

​

On May 1, 2024 the defendants filed their new MTD. The Company is currently drafting its response, and plans to continue to pursue this case vigorously.

​

As previously reported, three stockholders filed in the Delaware Court of Chancery three similar derivative lawsuits against the Company and certain of its directors and officers, including J. Cofer Black, Marnix L. Bosch, Alton L. Boynton, Leslie J. Goldman, Jerry Jasinowski, Navid Malik, and Linda F. Powers (the “Individual Defendants”), alleging the Individual Defendants (i) breached their fiduciary duties, and (ii) were unjustly enriched by director and officer compensation awarded in 2020 to the Individual Defendants—notwithstanding the fact that approximately 90% of shareholders voted to approve of the Company’s executive compensation (the same compensation that these three stockholders are seeking to challenge) twice (both through its Say on Pay vote at the Company’s Annual Meeting in 2021, and again in a binding vote at the Company’s Annual Meeting in 2022) and approximately 90% of shareholders also voted to approve the director awards at the 2022 Annual Meeting. On March 31, 2022, the Delaware Court of Chancery consolidated these actions into a single action under the caption In re Northwest Biotherapeutics, Inc. Stockholder Litigation (the “Derivative Action”).

​

On December 30, 2022, following the shareholder approvals at the December 2022 Annual Meeting, the Plaintiff filed an Amended Complaint asserting that the shareholder votes should be deemed ineffective. On February 22, 2023, the Individual Defendants and the Company filed a Motion to Dismiss the Amended Complaint. On November 17, 2023, the court issued an oral decision denying the Motion to Dismiss. On December 20, 2023, Gibson Dunn filed an answer to the Consolidated Amended Complaint on behalf of the Company. On December 28, 2023, the Individual Defendants, represented by separate counsel, filed their response to the Consolidated Amended Complaint. The parties are currently in the midst of discovery.

​

Item 1A. Risk Factors

Applicable risk factors are set forth in the Company’s report on Form 10-K for the fiscal year ended December 31, 2023.

​

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

​ 29

Table of Contents Item 3. Defaults Upon Senior Securities

Not Applicable.

​

Item 4. Mine Safety Disclosures

Not applicable.

​

Item 5. Other Information

None.

​

Item 6. Exhibits

​

21.1	​	Subsidiaries of the Registrant
​	​	​
21.2	​	Certificate of Incorporation on Change of Name
​	​	​
31.1		Certification of President (Principal Executive Officer and Principal Financial and Accounting Officer), Pursuant to Exchange Act Rules 13a-14(a) and 15d-14(a), as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
​	​	​
32.1	​	Certification of President, Chief Executive Officer and Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
​	​	​
101.INS	​	Inline XBRL Instance Document.
	​
101.SCH	​	Inline XBRL Schema Document.
	​
101.CAL	​	Inline XBRL Calculation Linkbase Document.
	​
101.DEF	​	Inline XBRL Definition Linkbase Document.
	​
101.LAB	​	Inline XBRL Label Linkbase Document.
	​
101.PRE	​	Inline XBRL Presentation Linkbase Document.
​	​	​
104	​	The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2024, formatted in Inline XBRL (included as Exhibit 101).

*    Filed herewith

​

**  Furnished herewith

​ 30

Table of Contents SIGNATURES

​

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

​

​	NORTHWEST BIOTHERAPEUTICS, INC
​	​	​
Dated: May 10, 2024	By:	/s/ Linda F. Powers
​	​	Name:	Linda F. Powers
​	​	​	​
​	​	​	​
​	​	Title:	President and Chief Executive Officer
​	​	​	​
​	​	​	Principal Executive Officer
​	​	​	​
​	​	​	Principal Financial and Accounting Officer

​

​

​ 31

Exhibit 31.1

CERTIFICATION PURSUANT TO

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

​

I, Linda F. Powers, certify that:

​

(1) I have reviewed this quarterly report on Form 10-Q of Northwest Biotherapeutics, Inc.;

​

(2) Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

​

(3) Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

​

(4) I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)), and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15 (f)), for the registrant and have:

​

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under my supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to me by others within those entities, particularly during the period in which this report is being prepared;

​

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under my supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

​

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

​

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

​

(5) I have disclosed, based on my most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s Board of Directors (or persons performing the equivalent functions):

​

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

​

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

​

Date: May 10, 2024

​

​

​	​	​
​	By:	/s/ Linda F. Powers
​	​	Name:	Linda F. Powers
​	​	Title:	President and Chief Executive Officer
​	​	​	Principal Executive Officer
​	​	​	Principal Financial and Accounting Officer

​

Exhibit 32.1

CERTIFICATION PURSUANT TO 18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

​

In connection with the quarterly report of Northwest Biotherapeutics, Inc. (the “Company”) on Form 10-Q for the quarter ended March 31, 2024, as filed with the Securities and Exchange Commission (the “Report”), I, Linda F. Powers, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

​

(1)	The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

​

(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

​

Date: May 10, 2024

​

​

​	​	​
​	By:	/s/ Linda F. Powers
​	​	Name:	Linda F. Powers
​	​	Title:	President and Chief Executive Officer
​	​	​	Principal Executive Officer
​	​	​	Principal Financial and Accounting Officer

​