SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) June 13, 2007
NORTHWEST BIOTHERAPEUTICS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE
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(STATE OR OTHER
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0-33393
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94-3306718
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JURISDICTION
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(COMMISSION FILE
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(I.R.S. EMPLOYER
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OF INCORPORATION)
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NUMBER)
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IDENTIFICATION NO.)
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18701 120th Avenue NE, Suite 101, Bothell, WA 98011
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE (425) 608-3000
INAPPLICABLE
(FORMER NAME OR FORMER ADDRESS IF CHANGED SINCE LAST REPORT)
Check the appropriate box below if the Form 8-K is intended to simultaneously satisfy the filing
obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item 1.01 Entry Into a Material Definitive Agreement.
On June 13, 2007, Northwest Biotherapeutics, Inc.(the “Company”) received additional financing
from Toucan Partners, LLC (“Toucan Partners”) in the form of a $225,000 demand note bearing
interest of 10% (the “Demand Note”). The Demand Note is payable upon demand of Toucan Partners at
any time and is automatically due and payable on the date that the Company’s common stock is
admitted to trading on a European securities market (the “Admission”). The foregoing description
of the Demand Note is subject to the detailed provisions of the Demand Note which is set forth as
Exhibit 10.1 to this Current Report on Form 8-K and incorporated by reference herein.
Item 2.03 Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet
Arrangement of a Registrant.
The information set forth it Item 1.01 of this report is incorporated by reference herein.
Item 7.01 Regulation FD Disclosure.
European Securities Market Listing
In conjunction with the Company’s proposed placement of its common stock with foreign institutional
investors, as further described in Item 8.01 of this Current Report on Form 8-K, and the Admission,
the Company is providing this information to update the status of events described in the Form 8-K
filed on June 4, 2007. The Company has entered into the agreements and taken the actions set out
below, each conditional on Admission. The Company cannot provide assurance that the proposed
placement of its common stock with foreign institutional investors will be completed or that the
Company’s common stock will be successfully listed on a European securities market.
Reverse Stock Split and Reduction in Authorized Shares
The Board has fixed the exchange ratio of its previously announced reverse stock split of its
outstanding common stock at 1-for-15 (the “Reverse Stock Split”). The Board has also approved an
amendment to the Company’s Certificate of Incorporation, which is subject to Admission and
stockholder approval, to reduce the number of authorized shares of common stock from 800,000,000 to
100,000,000 and reduce the number of authorized shares of preferred stock of the Company from
300,000,000 to 20,000,000.
Elimination of Series A and Series A-1 Cumulative Convertible Preferred Stock
The Board has also approved, conditional upon Admission, the filing with the Secretary of State of
the State of Delaware a Certificate of Elimination of the Company’s Series A Cumulative Convertible
Preferred Stock and a Certificate of Elimination of the Company’s Series A-1 Cumulative Convertible
Preferred Stock, to eliminate the Company’s Series A Cumulative Convertible Preferred stock (the
“Series A Preferred Stock”) and Series A-1 Cumulative Convertible Preferred Stock (the “Series A-1
Preferred Stock”).
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Conversion of Preferred Stock and Related Matters
On 15 June 2007, the Company, Toucan Capital and Toucan Partners entered into a conversion
agreement (the ‘‘Conversion Agreement’’), to be effective upon Admission, under which Toucan
Capital has agreed to convert all of its Series A Preferred Stock and Series A-1 Preferred Stock
(excluding any accrued and unpaid dividends) into Common Shares and to eliminate a number of
rights, preferences and protections associated with the Series A and Series A-1 Preferred Stock,
including the liquidation preference entitling Toucan Capital to certain substantial cash payments,
and Toucan Partners agreed to eliminate all of its existing rights to receive Series A-1 Preferred
Stock under certain notes and warrants (and thereafter to receive Common Stock rather than Series
A-1 Preferred Stock), and the rights, preferences and protections associated with the Series A-1
Preferred Stock, including the liquidation preference that would entitle Toucan Partners to certain
substantial cash payments, in return for issuance by the Company of an aggregate of 6,860,561
additional Common Shares, to be apportioned between Toucan Capital and Toucan Partners as to
4,287,851 and 2,572,710 Common Shares respectively.
Accordingly, under the Conversion Agreement, the Toucan Series A Preferred Warrant will become
exercisable for 2,166,667 Common Shares rather than shares of Series A Preferred Stock (plus Common
Shares, rather than shares of Series A Preferred Stock, attributable to accrued dividends on the
Toucan Series A Preferred Shares, subject to the further provisions of the Conversion Agreement as
described below), and the Toucan Capital Note Warrants will become exercisable for an aggregate of
17,256,888 Common Shares rather than shares of Series A-1 Preferred Stock (plus Common Shares,
rather than shares of Series A-1 Preferred Stock, attributable to accrued dividends on the Toucan
Series A-1 Preferred Stock). The 32,500,000 shares of Toucan Series A Preferred Stock will convert,
in accordance with their terms into 2,166,667 Common Shares and the 4,816,863 shares of Toucan
Series A-1 Preferred Stock will convert, in accordance with their terms, into 12,844,968 Common
Shares; and the Toucan Partners Notes will become convertible solely for Common Shares.
Under the Conversion Agreement Toucan Capital also agreed to defer temporarily receipt of the
accrued and unpaid dividends on the Toucan Series A Preferred Stock and Toucan Series A-1 Preferred
Stock of an amount equal to $334,340 and $917,451, respectively until not later than 30 September
2007. To the extent that all accrued and unpaid dividends are not paid in cash on or before 30
September 2007, Toucan Capital may elect, in its sole discretion, to have the accrued and unpaid
dividends satisfied, in whole or in part (including through a combination of the following), by (A)
cash payment; (B) offset or satisfaction of the applicable exercise prices of some or all Toucan
Series A Preferred Warrant and/or Toucan Capital Note Warrants, such that the aggregate exercise price of such warrants is
reduced by an amount equal to the amount of accrued and unpaid dividends being satisfied through
such adjustment; or (C) the issuance of Common Shares at $0.60 per share (after giving effect to
the 15 to 1 reverse stock split, and as may be further adjusted for stock splits, stock dividends,
reverse stock splits and similar actions effected after the date of the Conversion Agreement). If
Toucan Capital elects to have the accrued and unpaid dividends (which are currently estimated to be
approximately $1,251,791) satisfied in whole by the issuance of Common Shares at $0.60 per share,
Toucan Capital would be issued 2,086,318 Common Shares.
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Stock Option Plans
The Company has established a new stock option plan, to be effective upon Admission. The Company
has reserved a total of 5,480,868 shares of common stock for issue in respect of options granted
under the plan (after giving effect to the Reverse Stock Split). Subject to Admission, the plan
provides for the grant to employees of the Company, its parents and subsidiaries, including
officers and employee directors, of “incentive stock options” within the meaning of Section 422 of
the US Internal Revenue Code and for the grant of non-statutory stock options to the employees,
officers, directors, including non-employee directors, and consultants of the Company, its parents
and subsidiaries. To the extent an optionee would have the right in any calendar year to exercise
for the first time one or more incentive stock options for shares having an aggregate fair market
value, under all of the Company’s plans and determined as of the grant date, in excess of $100,000,
any such excess options will be treated as non-statutory options.
In addition, the Company has amended its existing equity plans, with such amendments to be
effective upon Admission, such that no further option grants may be made under those plans.
Board Appointment
Conditioned on Admission, the Company intends to expand the Board of Directors to four members and
appoint R. Steve Harris, 64, to fill the newly created vacancy on the Board. Mr. Harris would join
the Board as a non-executive director of the Company effective upon Admission. Mr. Harris is
currently the non-executive Chairman of Proteome Sciences plc, Convé plc and Sinclair Pharma plc.
He is also a non-executive director of SkyePharma plc, Advanced Medical Solutions plc and Premier
Research plc. Mr. Harris holds a Bachelor of Pharmacy Degree (University of London) and was
elected a Fellow of the Royal Pharmaceutical Society in 2000.
Employment and Other Compensation Arrangements
On June 18, 2007, the Company entered into the following service agreements, to become effective
upon Admission:
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Employment agreement with Alton L. Boynton.
On June 18, 2007, the Company entered into an
employment agreement with Alton L. Boynton, Ph.D. Under the terms of the agreement, Dr. Boynton is
employed as Chief Executive Officer and President of the Company. Pursuant to the terms of the
agreement, Dr. Boynton will be paid annual compensation of $331,250 per annum for his services. The
agreement provides for standard benefits, including coverage under the Company’s medical, dental,
vision, life and disability policies. Dr. Boynton is eligible to participate in the Company’s
401(k) plan and to receive a bonus at the discretion of the Board. The agreement is conditional
upon Admission.
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Employment agreement with Jim D. Johnston.
On June 18, 2007, the Company entered into an
employment agreement with Jim D. Johnston. Under the terms of the agreement, Mr. Johnston is
employed as Chief Financial Officer and General Counsel of the Company. Pursuant to the terms of
the agreement, Mr. Johnston will be paid annual compensation of $180,000 per annum for his
services. Mr. Johnston is required to devote 60 percent of his time to the Company’s business. The
agreement provides for standard benefits, including coverage under the Company’s medical, dental,
vision, life and disability policies. Mr. Johnston is eligible to participate in the Company’s
401(k) plan and to receive a bonus at the discretion of the Board. The agreement is conditional
upon Admission.
On June 15, 2007, the Company entered into the following service agreements, to become effective
upon Admission:
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Non-executive directors.
Subject to Admission, the Company will pay Linda Powers as Chairperson
and a non-executive member of the Board of Directors approximately $100,000 per annum for her
services. Also subject to Admission, the Company will pay R. Steve Harris as a non-executive member
of the Board of Directors approximately $60,000 per annum for his services.
Lock up Agreements
Each of the directors of the Company, Toucan Capital and Toucan Partners have agreed that,
following the Admission, they will not dispose of any common stock (or any interest) held by them
(subject to certain limited exemptions) for a period of 12 months following Admission. Each of the directors and Toucan Capital and Toucan Partners have also given certain
undertakings with a view to maintaining an orderly market in respect of any disposal of Common Shares (or any interest therein) for a further period
of six months thereafter.
Item 8.01 Other Information.
On June 18, 2007, the Company issued a press release in compliance with Rule 135c of the Securities
Act of 1933 relating to its intended placement of shares of its common stock with foreign
institutional investors, subject to market and other customary conditions. A copy of the press
release is attached hereto as Exhibit 99.1.
Item 9.01 Financial Statements and Exhibits.
10.1 Northwest Biotherapeutics, Inc. $225,000 Demand Note dated June 13, 2007.
99.1 Northwest Biotherapeutics, Inc. press release dated June 18, 2007.
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SIGNATURE
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 hereunto duly authorized.
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June 18, 2007
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NORTHWEST BIOTHERAPEUTICS, INC.
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By
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/s/ Alton Boynton
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Alton L. Boynton
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President & Chief Executive Officer
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6
EXHIBIT 10.1
DEMAND NOTE
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$225,000.00
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Bothell, Washington
June 13, 2007
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1.
The Loan
. For value received, NORTHWEST BIOTHERAPEUTICS, INC., a Delaware
corporation (the “
Issuer
”), promises to pay to the order of TOUCAN PARTNERS, LLC., a limited
liability company organized under the laws of the State of DELAWARE (the “
Lender
”), on demand on
any business day the principal amount of Two Hundred and Twenty-Five Thousand Dollars and No Cents
($225,000.00), together with such interest thereon as is then accrued but unpaid and, further, to
pay interest thereon as hereinafter required. The Lender may at any time or from time to time,
upon at least two business days’ notice to the Issuer, demand payment of all or any portion of the
outstanding principal amount hereof and the Issuer shall thereupon pay to the order of the Lender
such principal amount so demanded, together with accrued and unpaid interest thereon to the date of
such payment. Additionally, without the requirement of any notice or demand by the Lender, on the
date that Issuer’s common stock is admitted for trading on AIM, which date is currently expected to
be June 22, 2007, the Issuer shall thereupon pay to the order of the Lender all of the outstanding
principal amount hereof, together with accrued and unpaid interest thereon to the date of such
payment. The term “
business day
” means any day except a Saturday, Sunday or other day on which
commercial banks in New York City are authorized by law to close.
2.
Interest
. The outstanding principal amount under this Demand Note shall bear
interest, for each day from (and including) the date hereof to (but excluding) the date on which
such outstanding principal amount hereof becomes due as a result of a demand or is prepaid in full,
at a rate per annum equal to 10%. Such interest shall be due and payable on the last business day
of each September and March of each calendar year during the term of this Demand Note (commencing
with the last business day of September 2007). Any overdue principal of and, to the extent
permitted by law, overdue interest on any such amount shall bear interest, payable on demand, for
each day from the date payment thereof was due pursuant to the provisions hereof until paid at the
rate per annum equal to the greater of (a) 12% and (b) the sum of (i) 3% and (ii) the Prime Rate
for each such day. The term “
Prime Rate
” means the rate of interest publicly announced by
Citibank, N.A. in New York City from time to time as its Prime Rate. All interest accruing
hereunder shall be calculated on the basis of the actual days elapsed in a year of 365 or 366 days,
as applicable.
3.
Prepayments
. The Issuer may, upon at least two business days’ notice to the
Lender, prepay the principal amount of this Demand Note (in whole but not in part) together with
accrued but unpaid interest thereon to the date of prepayment.
4.
Obligations Absolute
. The obligations of the Issuer hereunder shall be
unconditional and absolute and shall not be released, discharged or otherwise affected by the
existence of any claim, set-off or other rights that the Issuer may have at any time against the
Lender, any affiliates of the Lender or any other corporation, entity or person.
(Demand Note Signature Page)
5.
Payments
. The payment of the principal amount hereof and interest thereon shall be
made in lawful money of the United States of America in immediately available funds to the Lender
at such place as Lender may designate from time to time. Such payments shall be made without
set-off or deduction of any kind. Any payments made hereunder shall be allocated first to accrued
interest, if any, and the remainder of such payment, if any, shall be allocated to principal.
6.
Representations and Warranties.
The Issuer represents and warrants that:
(a)
No Contravention
. The execution, delivery and performance by the Issuer of this
Demand Note will not contravene, or constitute a default under, any provision of applicable law or
regulation or of any agreement, judgment, injunction, order, decree or other instrument binding
upon such Issuer or result in the creation or imposition of any lien or encumbrance on any asset of
the Issuer.
(b)
Binding Effect
. This Demand Note constitutes a valid and binding obligation of
the Issuer, enforceable in accordance with its terms.
7.
Miscellaneous
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(a)
No Waivers
. No waiver of any provision of, or consent or approval required by,
this Demand Note, nor any consent to or approval of any departure herefrom, shall be effective
unless it is in writing and signed by the party against whom enforcement of any such waiver,
consent or approval is sought. Such waiver, consent or approval shall be effective only in the
specific instance and for the purpose for which given. Neither the failure of either party to
enforce, nor the delay of either party in enforcing, any condition, provision or part of this
Demand Note at any time shall be construed as a waiver of that condition, provision or part or
forfeit any rights to future enforcement thereof. No action taken pursuant to this Demand Note,
including any investigation by or on behalf of either party hereto, shall be deemed to constitute a
waiver by the party taking action of compliance by the other party with any representation,
warranty, covenant or agreement contained herein.
(b)
Collection Fees
. If the Issuer fails to make payment on this Demand Note when due
and Lender is required to commence legal proceedings to cause such payment, the Issuer shall pay to
Lender all of the unpaid principal and interest as well as all costs of counsel, expert fees, court
costs and other expenses incurred by the Lender in connection with such recovery efforts.
(c)
Waivers of Certain Notices
. The Issuer hereby waives presentment for payment,
demand, protest, notice of protest, notice of dishonor and any other notice not expressly provided
for herein.
(d)
Notices
. Any and all notices given in connection with this Demand Note shall be
deemed properly given only if in writing and addressed to the party for whom such notices are
intended at the address set forth below. All notices shall be sent by personal delivery, facsimile
transmission or nationally recognized overnight courier. A written notice shall be deemed to have
been given to the recipient party on the earlier of: (i) the date it shall be delivered (including
by facsimile transmission) to the address required by this Demand
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Note; (ii) the date delivery shall have been refused at the address required by this Demand
Note; or (iii) with respect to notices sent by courier service, the date as of which the courier
service shall have indicated such notice to be undeliverable at the address required by this Demand
Note. Any and all notices referred to in this Demand Note, or which either party desires to give
to the other, shall be addressed as follows:
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To the Issuer:
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Northwest Biotherapeutics, Inc.
18701 120th Avenue, NE
Suite 101
Bothell, Washington 98011
Fax: (425) 608-3009
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To Lender:
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Toucan Capital, LLC
7600 Wisconsin Avenue
Suite 700
Bethesda, MD 20814
Fax: (240) 497-4065
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The Issuer or the Lender may, by notice given hereunder, designate any further or different
addresses to which subsequent notices, certificates or other communications shall be sent.
Notwithstanding anything herein to the contrary, a delivery of a notice pursuant to the terms of
this Demand Note to an address, or by means of delivery, other than as specified above shall, if
actually received by such party, be deemed given to the recipient party as of the date of such
receipt.
(e)
Amendments
. This Demand Note may not be amended, modified, altered or
supplemented other than by means of a written instrument duly executed and delivered by the parties
hereto in accordance with Section 6(d).
(f)
Successors and Assigns
. The provisions of this Demand Note shall be binding upon
and inure to the benefit of the Issuer and the Lender and their respective permitted successors and
assigns, except that the Issuer may not assign its rights or delegate its obligations under this
Demand Note, in whole or in part, without the prior written consent of the Lender.
(g)
Governing Law; Consent to Jurisdiction; Service of Process
. This Demand Note
shall be governed by, and construed and interpreted in accordance with, the laws of the State of
Delaware excluding any conflicts or choice of law rule or principle that might otherwise refer
construction or interpretation of this Demand Note to the substantive law of another jurisdiction.
The Issuer consents and agrees that any legal action, suit or proceeding against it with respect to
its obligations or liabilities under or arising out of or in connection with this Demand Note may
be brought in any applicable court in the State of Delawaret and unconditionally submits to the
exclusive jurisdiction of each of the aforesaid courts
in personam
, with respect to any such,
action, suit or proceeding. The Issuer hereby irrevocably and unconditionally waives, to the
fullest extent permitted by law, any objection which it may now or hereafter have to the laying of
venue of any such suit, action or proceeding brought in any
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applicable court in the State of Delaware and any claim or defense that any such suit, action
or proceeding has been brought in an inconvenient forum. The Issuer irrevocably consents to
process being served in any such suit, action or proceeding by delivering a copy thereof to it (by
hand or overnight courier) at the address specified pursuant to Section 6(d). The Issuer agrees
that such service (i) shall be deemed in every respect effective service of process upon such
Issuer in any such suit, action or proceeding and (ii) shall, to the fullest extent permitted by
law, be taken and held to be valid personal service upon the Issuer. The Issuer agrees that a
judgment in any such suit, action or proceeding brought in any applicable court in the State of
Delaware shall be conclusive and binding upon the Issuer and may be enforced in any other court by
a suit upon such judgment. Nothing in this Demand Note shall affect or limit any right to serve
process in any other manner permitted by law.
(h)
WAIVER OF JURY TRIAL
. THE ISSUER AND THE LENDER HEREBY IRREVOCABLY WAIVE ANY AND
ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS DEMAND NOTE
OR THE TRANSACTIONS CONTEMPLATED HEREBY.
(i)
Entire Agreement
. This Demand Note contains the entire agreement and
understanding between the parties with respect to the transactions contemplated by this Demand Note
and supersedes all prior agreements or understandings, whether written or oral, between the parties
with respect to the subject matter hereof.
(j)
Execution
. This Demand Note may be executed by Issuer by the delivery by Issuer
by facsimile or other electronic transmission of a copy of the signature page of this Demand Note
duly executed by such party. Any copy of this Demand Note so executed by facsimile or other
electronic transmission shall be deemed to be an originally executed copy of this Demand Note.
(k)
Cumulative Rights
. Except as expressly provided herein, the parties’ respective
rights under the various provisions of this Demand Note shall be construed as cumulative, and no
one of them is exclusive of the other or exclusive of any rights allowed by law.
[
Signature Page Follows
]
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IN WITNESS WHEREOF, intending to be legally bound, the Issuer has executed and delivered this
Demand Note on the day and year first above written.
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NORTHWEST BIOTHERAPEUTICS, INC
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By:
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Name:
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Alton L. Boynton
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Title:
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President & Chief Executive Officer
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(Demand Note Signature Page)
