NORTHWEST BIOTHERAPEUTICS INC - Annual Report: 2010 (Form 10-K)

Unassociated Document

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2010

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

For the transition period from to .

Commission file number 000-33393

NORTHWEST BIOTHERAPEUTICS, INC.

(Exact name of registrant as specified in its charter)

Delaware		94-3306718
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification No.)

4800 Montgomery Lane, Suite 800		20814
Bethesda, MD		(Zip Code)
(Address of principal executive offices)

(240) 497-9024

Registrant’s telephone number, including area code:

Securities registered pursuant to section 12(b) of the Act:

None

Securities registered pursuant to Section 12(g) of the Act:

Common Stock, $0.001 Par Value

(Title of class)

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ¨ No þ

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ¨ No þ

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 þ No ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, if any, every interactive Data File required to be submitted and posted pursuant to rule 405 of regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes þ No ¨

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. þ

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

Large accelerated filer ¨	Accelerated filer ¨	Non-accelerated filer ¨	Smaller reporting company þ
(Do not check if a smaller reporting company)

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

The aggregate market value of the voting and non-voting common equity held by non-affiliates of the Registrant, computed by reference to the closing price on the consolidated transaction reporting system on June 30, 2010 was approximately $48.0 million.

As of March 31, 2011, the Registrant had an aggregate of 83,180,927 shares of common stock issued and outstanding.

Documents Incorporated by Reference: None

TABLE OF CONTENTS

		Page
PART I

Item 1.	Business	3

Item 1A.	Risk Factors	17

Item 1B.	Unresolved Staff Comments	27

Item 2.	Properties	27

Item 3.	Legal Proceedings	27

Item 4.	(Removed and Reserved).	27

PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	27

Item 6.	Selected Financial Data	30

Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31

Item 7A.	Quantitative and Qualitative Disclosures about Market Risk	36

Item 8.	Financial Statements and Supplementary Data	36

Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	36

Item 9A	Controls and Procedures	36

Item 9B.	Other Information	38

PART III

Item 10.	Directors, Executive Officers and Corporate Governance	38

Item 11.	Executive Compensation	39

Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	46

Item 13.	Certain Relationships and Related Transactions, and Director Independence	47

Item 14.	Principal Accounting Fees and Services	50

PART IV

Item 15.	Exhibits, Financial Statement Schedules	50

Signatures		82

Exhibit Index		83

PART I

Forward-Looking Statements

The following description of our business, discussion and analysis of our financial condition and results of operations should be read in conjunction with the information included elsewhere in this Annual Report on Form 10-K. 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”). These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties and other factors that might cause our actual results, levels of activity, performance or achievements to differ materially from any future results, levels of activity, performance or achievements expressed or implied by these forward-looking statements. The words “believes,” “expects,” “intends,” “anticipates,” “may,” “might,” “will,” “should,” “plans,” “could,” “target,” “projects,” “contemplates,” “estimates,” “predicts,” “potential,” “continue,” the negative of these terms and similar expressions are used to identify forward-looking statements, but their absence does not mean that such statement is not forward-looking. You are encouraged to carefully review the various disclosures made by us in this report and in the documents incorporated herein by reference, in our previous filings with the Securities and Exchange Commission (“SEC”), and those factors described under Item 1A. “Risk Factors”. These factors, among others, could cause results to differ materially from those presently anticipated by us. In addition, past financial or operating performance is not necessarily a reliable indicator of future performance and you should not use our historical performance to anticipate results or future period trends. We can give no assurances that any of the events anticipated by the forward-looking statements will occur or, if any of them do, what impact they will have on our results of operations and financial condition. Except as required by law, we undertake no obligation to publicly revise our forward-looking statements to reflect events or circumstances that arise after the filing of this Annual Report on Form 10-K or documents incorporated by reference herein that include forward-looking statements.

In this Annual Report on Form 10-K, references to “Northwest Biotherapeutics,” the “Company,” “we,” “us,” and “our” refer to Northwest Biotherapeutics, Inc. and its subsidiary.

Item 1. Business

Overview

Northwest Biotherapeutics, Inc. was formed in 1996 and incorporated in Delaware in July 1998. We are a development stage biotechnology company focused on discovering, developing, and commercializing immunotherapy products that safely generate and enhance immune system responses to effectively treat cancer. Currently approved cancer treatments are frequently ineffective, can cause undesirable side effects and provide marginal clinical benefits. Our approach in developing cancer therapies utilizes our expertise in the biology of dendritic cells (“DC”), which are a type of white blood cells that activate the immune system. Our primary activities since incorporation have been focused on advancing a proprietary dendritic cell immunotherapy for prostate and brain cancer together with strategic and financial planning, and raising capital to fund our operations.

We have two basic technology platforms applicable to cancer therapeutics: dendritic cell-based cancer vaccines, which we call DCVax, and monoclonal antibodies for cancer therapeutics. DCVax is our registered trademark. Our DCVax dendritic cell-based cancer vaccine program is our main technology platform.

We completed an initial public offering of our common stock on the NASDAQ Stock market in December 2001 and an initial public offering of our common stock on the Alternative Investment Market (“AIM”) of the London Stock Exchange in June 2007. The company voluntarily delisted from the AIM market in September 2009.

Industry Background

Cancer

Cancer is characterized by aberrant cells that multiply uncontrollably. As cancer progresses, the cancer cells may invade other tissues throughout the body producing additional cancers, called metastases. Cancer growth can cause tissue damage, organ failure and, ultimately, death. Many immunologists believe that cancer cells occur frequently in the human body, yet are effectively controlled by the immune system because these cells are recognized as aberrant. Cancer growth occurs if this natural process fails.

Cancer cells produce abnormal kinds and amounts of biomarkers (called antigens), which may be distinguishable from the antigens produced by healthy cells. These cancer-associated antigens provide the targets to enable the immune system to seek and destroy cancer cells marked by these antigens.

The Human Immune System

The immune system is the body’s defense mechanism responsible for recognizing and eliminating cancer cells, viruses, bacteria and other disease-causing organisms. This system consists of populations of white blood cells whose components are responsible for initiating the cellular immune response, and the humeral, or antibody-based, immune response.

Dendritic cells, a component of white blood cells, are the master cells of the immune system responsible for mobilizing the overall immune response. The dendritic cells stimulate cellular immune responses by processing and displaying disease-associated antigen fragments on their outer cell surface, where they are recognized by naive T-cells that have not yet been exposed to antigens. Upon exposure to these antigen fragments, naive T-cells become disease-specific Helper T-cells or Killer T-cells. Helper T-cells then help Killer T-cells to locate and potentially destroy the cells marked by the disease- associated antigen.

Dendritic cells also mobilize B-cells. Such B cells contribute to the immune response by binding to disease-associated antigens on the surface of various cell types, producing disease-specific antibodies. Helper T-cells also enhance B-cell production of disease- specific antibodies. These antibodies bind to and initiate the destruction of cells marked by the associated disease-specific antigens.

A small population of activated Helper T-cells, Killer T-cells, and antibody-producing B-cells survive for long periods of time, retaining the memory of what the disease fragment looks like. These cells can respond very rapidly to subsequent exposure to disease-specific antigens and fragments. The most effective natural immune response is one in which both Helper and Killer T-cells and antibody-producing B-cells are activated.

The immune system response to cancer can be generally characterized by the following sequence:

•

Step 1. Dendritic cells ingest cancer antigens, break them into small fragments and display them on their outer cell surfaces.

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Step 2. Dendritic cells bearing these cancer antigen fragments bind to and activate naive T-cells, which become disease-specific Helper T-cells and Killer T-cells.

•

Step 3. The activated Helper T-cells produce factors that greatly enhance the cell division of Killer T-cells and mature their cancer-killing properties.

•

Step 4. Cancer cells and their cancer-associated antigens are also recognized by antibody-producing B-cells.

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Step 5. The activated Helper T-cells produce factors that greatly enhance antibody production by B-cells that in turn are specific for the cancer-associated antigens.

•

Step 6. The Killer T-cells and antibodies, acting alone or in combination, destroy cancer cells.

Limitations of Current Cancer Therapies

Traditional treatments for cancer include:

•

Surgery. Surgery may be used to remove cancer cells, but not all cancer cells can be removed surgically. Surgery may also result in significant adverse side effects such as collateral damage to healthy tissue, bleeding and infection.

•

Radiation Therapy. Radiation therapy may be used to treat cancers, but it can cause significant damage to healthy tissue surrounding the targeted cancer cells. Recurrent cancers may not be treatable with further radiation therapy. Radiation therapy may also cause additional significant adverse side effects such as burns to treated skin, organ damage and hair loss.

•

Chemotherapy. Chemotherapy may be used to treat cancer, but involves the use of toxic chemical agents. These toxic chemical agents affect both healthy and diseased cells and may cause additional significant adverse side effects such as hair loss, immune suppression, nausea and diarrhea.

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Hormone Therapy. Hormone therapy may be used to treat cancer, but involves the use of substances that chemically inhibit the production of growth and reproductive hormones and is also limited in effectiveness. Hormone therapy may cause significant adverse side effects such as bone loss, hot flushes, impotence and blood clots.

Current Cancer Immunotherapy Approaches

Immunotherapy offers a new approach to be used as an adjuvant in combination with traditional therapies (or potentially alone). It can stimulate and enhance the body’s natural mechanism for destroying cancer cells, and may overcome many of the limitations of traditional cancer therapies. In recent years, two cancer immunotherapy approaches have emerged to address the limitations of traditional therapies, which have resulted in a number of products approved by the U.S. Food and Drug Administration, or FDA:

•

Antibody-Based Therapies. Currently approved antibody-based cancer therapies have modestly improved survival rates with partially reduced side effects when compared with traditional therapies. However, these antibody-based therapies can elicit an immune response against themselves because they often contain mouse proteins or fragments of such proteins. This can limit their effectiveness and potentially cause toxic side effects.

•

Immune-Modulating Agents. Currently approved immune-modulating agents, such as IL-2 and alpha-interferon, are known to have some ability to enhance the immune system and limited efficacy to control cancer growth. However, these therapies involve delivery of the immune modulating agent through the blood system and may result in significant toxicity to healthy tissue.

Our Approach

We have developed a proprietary personalized-dendritic cell vaccine, DCVax for stimulating and enhancing a patient’s natural cellular and humeral (i.e. antibody) immune response to cancer. Given appropriate funding for future development, we believe that DCVax may overcome certain limitations of current cancer therapies and offer cancer patients safe and effective treatment alternatives, alone or in combination with other therapies.

DCVax is a platform technology which we believe is applicable to most cancers. It combines a patient’s own dendritic cells either with a patient’s own cancer-related biomarkers (called antigens), or with off-the-shelf antigens, to induce immune responses against a patient’s cancer cells. The Company’s early-stage clinical trial data, and those of its collaborators, suggest that DCVax -Brain and DCVax -Prostate may have the ability to significantly delay disease progression and significantly prolong patient survival, while maintaining a superior quality of life when compared with current therapies.

The natural immune response starts with activation of a master immune cell type, the dendritic cell (DC). These cells direct all ensuing activities of all components of the immune response. When a virus, bacteria, or a cancer cell, encounters a DC, the DC consumes the virus, bacteria or cancer cell and reduces it into small pieces. In the process, the DC becomes activated and starts traveling to the lymph node. In the lymph node, the DC elicits a cascade of events that leads to an immune response. Importantly, the nature of the virus, bacteria or cancer cell and the nature of the DC activation dictate the type of immune response. Preparing the DC outside the body, as is done for DCVax products, is intended to allow the greatest degree of control and effectiveness, avoiding suppressive effects and obstacles generated by tumors in the patient’s body. The prepared or “educated” DCs then are re-injected back into the patient to begin the immune response in the natural fashion, leading to an enhanced response against the virus, bacteria or cancer cell.

In cancer patients, the signaling through which the master immune cells (DCs) are activated is impaired. Our technology, therefore, involves delivering the necessary signals to activate the master immune cells outside the patients’ body. We believe that after receiving these signals, the master immune cells will be able to function normally and mobilize the full immune response in the natural manner.

THE IMMUNE SYSTEM

Different Approaches

Most traditional immunization approaches, including traditional virus, specific antigen or peptide vaccines, as well as some that are used for immunotherapy of cancer, rely upon signaling inside the patient’s body to try to activate and mobilize the already existing DCs in the body, or try to modulate only one arm of the immune system. These approaches have worked well to address infectious diseases, but have generally failed to work in cancer patients because such approaches are reliant upon signaling in the patients’ bodies which, as discussed above, is impaired in cancer patients.

In addition, the immunogen, i.e. the virus, specific antigen, peptide or the cancer cells used to prepare the vaccine, is in those cases injected into the body in a formulation that aims at targeting and activating local DCs. Examples are viral, specific antigen or peptide vaccines formulated with adjuvant, or killed tumor cells alone or modified to produce the DC mobilizing protein GM-CSF. In these instances, it is left to chance as to whether the immunogen arrives at the DC, and whether the DCs are properly activated and effectively migrate to lymph nodes to produce an effective immune response.

Treatments that use only a single arm of the immune system may employ large amounts of T-cells, or a single (monoclonal) antibody. We believe that the DCVax products have a clear advantage compared to this approach in that they are designed to activate all aspects of the immune response, both cellular and antibody, thereby potentially providing a broader and longer lasting immune and clinical response. Our DCVax products consist of pure, activated DCs loaded with the immunogen as would naturally occur, and that are capable of migrating to lymph nodes. The intended result is a full immune response consisting of both a specific cellular T-cell response and a specific antibody response against the cancer-associated antigen consistent with our Phase I and Phase II clinical trial results for DCVax -Brain and DCVax -Prostate, respectively, and that is translated into a potential clinical benefit — in this case, a delay in disease recurrence and an extension of overall survival of the patient.

Cancer and the Immune System

Cancer cells produce many substances that shut down the immune response, as well as substances that suppress or block the DCs that are resident in the body. The optimal time for controlling cancer growth by activating the immune system is, therefore, at the time when tumor burden is low. Our DCVax products target patients with brain cancer following surgery, radiation and chemotherapy, and hormone independent prostate cancer patients with no detectable tumor. This approach is designed to allow induction of powerful immune responses to control progression of the disease. However, in clinical trials, delays in cancer progression and extension of survival have also been seen in late stage patients treated with DCVax -Brain and DCVax -Prostate.

The DCVax Process

The DCVax platform uses our proprietary process to efficiently produce and activate DCs outside a patient’s body. The clinical trials with DCVax-Brain and DCVax-Prostate suggest that these cells can generate an effective immune system response when administered therapeutically. Manufacture of a DCVax product takes approximately 30 days to complete for DCVax-Prostate and approximately 10 days for DCVax-Brain, and is characterized by the following sequence:

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Collection. A sample of a patient’s white blood cells is collected in a single and simple outpatient procedure called leukapheresis.

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Isolation of Precursors. These cells are sent to a manufacturing facility, where DC precursors are isolated from the patient’s white blood cells.

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Differentiation by Growth Factors. DC precursors are transformed in a manner that mimics the natural process in a healthy person’s body, through the application of specific growth factors, into highly pure populations of immature DCs during a six-day culture period.

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Maturation. Immature DCs are exposed to a proprietary maturation factor or maturation method in order to maximize Helper T-cell, Killer T-cell, and B-cell activation.

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Antigen Display. Cancer-associated antigens, fragments of cancer-associated antigens or deactivated whole cancer cells are added to, ingested, and processed by the maturing DCs, causing the DCs to display fragments of cancer-associated antigens on their outer cell surfaces.

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Harvest. These DCs are harvested and separated into standardized single-use DCVax administration vials, frozen and stored.

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Quality Control. DCVax product lot undergoes, according to current industry standards, rigorous quality control testing, including sterility testing for bacterial and mycoplasma contamination, and potency testing prior to shipment to the administration site for injection.

DCVax -Brain Manufacturing Steps:

DCVax — Characteristics

The DCVax platform combines our expertise in dendritic cell biology, immunology and antigen discovery with our proprietary process of activating DCs outside of a patient’s body to develop therapeutic products intended to stimulate beneficial immune responses to treat cancer in a cost-effective manner. DCVax has the following significant characteristics, the combination of which we believe makes it a highly attractive alternative to current therapies.

Activation of the Natural Immune System

Our DCVax product candidates are designed to elicit a natural immune response. Pre-clinical and clinical trials suggest that our DCVax product candidates can train a patient’s own Killer T-cells to locate and destroy specifically targeted cancer cells. These same clinical trials also suggest that DCVax -Prostate stimulates the body to produce antibodies and/or Killer T-cells that bind to cancer-associated antigens and potentially destroy cancer cells marked by these antigens. Moreover, the clinical trials show that this immune response may be effective in delaying time to disease progression in brain and prostate cancer, and both may prolong survival and improve the quality of life for brain and prostate cancer patients.

Multiple Cancer Targets

We believe that our DCVax platform can be applied towards the treatment of a wide variety of cancers. The platform affords the flexibility to target many different forms of cancer through the pairing of DCs with cancer-associated antigens, fragments of cancer-associated antigens or deactivated whole cancer cells as well as possible direct intra-tumoral injection of partially mature dendritic cells.

Targeting of Serious Cancers with No Effective Treatments

DCVax-Prostate targets men with rising PSA levels while on hormone therapy, but before metastases develop. There is currently no effective treatment for this growing population of patients who invariably go on to develop complications from the spread of their cancer to the bone and, eventually, succumb to their disease. DCVax-Brain targets patients with GBM, a highly lethal form of brain cancer. In two Phase I trials carried out at UCLA from 1999 to the present day, patients treated with DCVax-Brain have survived more than twice as long without relapse compared to matched concurrent controls not receiving DCVax-Brain (under “matched concurrent controls” patients received standard of care treatment at the same time clinical trial patients were treated with standard of care treatment together with DCVax-Brain; these control patients have been matched for the major prognostic factors for GBM).

Low Incidence of Significant Adverse Side Effects or Toxicity

Our initial two DCVax-Brain Phase I trials and DCVax-Prostate Phase I/II clinical trial have shown no significant adverse side effects in over 250 administered injections. Some patients had moderate injection site reactions, and we observed some severe injection site reactions that we believe to be a result of immune activation. Patients treated with DCVax-Brain or DCVax-Prostate therefore might not need to take additional prescription drugs to manage undesirable side effects as is often the case with certain current cancer treatments. We minimize the potential for toxicity by using the patient’s own cells to create its DCVax product candidates. Additionally, because our DCVax products are designed to target the cancer- associated antigens in the patient, collateral damage to healthy cells is minimized.

Efficient and Cost-Effective Manufacturing

We have developed a second generation closed and automated device based on tangential flow filtration (“TFF-Cell Separation System”) for manufacturing DC from patient leukapheresis material. We have a contract with Cognate BioServices, Inc. (“Cognate”) for the manufacture of DCVax-Brain product for clinical use. This TFF-Cell Separation System is currently undergoing validation. See “— Manufacturing”.

Ease of Administration

We initially collect a sample of a patient’s white blood cells in a single standard outpatient procedure called leukapheresis. After patient-specific manufacturing and quality control testing, each small dose of a DCVax product candidate is administered by a simple intradermal injection in an outpatient setting. Dendritic cells administered by intradermal injection migrate to the draining lymph nodes where they interact with and activate T-cells.

Complementary with Other Treatments

Our DCVax product candidates are designed to stimulate the patient’s own immune system to safely target cancer cells. Consequently, we believe these products may be used as an adjuvant to standard therapies such as chemotherapy, radiation therapy, hormone therapy and surgery.

Our Clinical and Pre-clinical Development Programs

The following table summarizes the targeted indications and status of our product candidates:

Product Candidate	Target Indications	Status
DCVax Platform
DCVax-Prostate	Prostate cancer	Phase III — clinical trial cleared by the FDA for recruitment of patients for non-metastatic hormone independent prostate cancer

DCVax-Brain	Glioblastoma multiforme	Phase II — clinical trial initiated. Orphan Drug designation granted in the U.S. in 2006 and in the European Union in 2007

DCVax-LB	Non-small cell lung cancer	Phase I — clinical trial cleared by the FDA

DCVax-Direct	Solid tumors	Phase I — clinical trial cleared by the FDA for ovarian cancer, head and neck cancer and two other indications (expected to be liver and pancreatic cancers)

DCVax-L	Resectable solid tumors	Phase I/II — completed clinical trial at the University of Pennsylvania for ovarian cancer

Pre-clinical means that a product candidate is undergoing efficacy and safety evaluation in disease models in preparation for human clinical trials. Phase I-III clinical trials denote safety and efficacy tests in humans as follows:

Phase I: Evaluation of safety and dosing.

Phase II: Evaluation of safety and efficacy.

Phase III: Larger scale evaluation of safety and efficacy.

DCVax Product Candidates

DCVax-L for Brain Cancer

DCVax-Brain uses our DCVax platform in combination with the patient’s own glioblastoma tumor cell lysate antigens. Our clinical collaborators at UCLA conducted two Phase I clinical trials to assess the safety and efficacy of DC-based immunotherapy for Glioblastoma multiforme (“GBM”). In the first Phase I clinical trial, DCVax-Brain was administered to 12 patients and in the second Phase I clinical trial it was administered to 17 patients. The patients in both trials were treated with DCVax-Brain being administered as an adjuvant to the standard of care. Standard of care is defined as surgery followed by 6 weeks of radiation and temodar chemotherapy combination and a further 6 months of temodar chemotherapy.

The data from progression and survival Kaplan Meier curves of both of these trials together show that newly diagnosed GBM patients treated at UCLA, and matched for the major prognostic factors, with DCVax-Brain had a delay in the median time to recurrence or progression of disease from 8.1 months with standard of care treatments in matched concurrent control patients to 18.1 months in patients treated with DCVax-Brain (p = 0.00001; n=20). DCVax-Brain increased median overall survival from 17.0 months with standard of care in matched concurrent control patients treatments to 36.4 months in patients treated (and continuing as the median is not yet reached) for DCVax-Brain treated patients, again matched for the major prognostic factors (p < 0.0004; n=20). The ‘p’ value measures the likelihood that the difference between the treated and non-treated patients is due to chance. A p’ value less than or equal to 0.05 (meaning there is a 5 percent or lower possibility that the observed clinical effect is due to chance) is required for product approval by the FDA and European regulatory authorities. The ‘p’ value of 0.0004 observed with DCVax-Brain means that there is only a 0.04 percent (i.e. 4 in 10,000) possibility that the observed effect between standard of care and DCVax-treated patients is due to chance, and the ‘p’ value of 0.00001 means that there is only a 0.001 percent (i.e., 1 in 100,000) possibility that the results are due to chance. Five of the 20 patients remained alive for periods ranging, to date, from 40 to 128 months, with seven patients having lived for over 45 months without cancer recurrence. Similarly, in recurrent (late stage) patients, DCVax-Brain has increased median survival from 6.4 months for those receiving standard of care to 11.9 months for patients receiving DCVax-Brain.

In December 2006, we commenced recruiting patients with newly diagnosed GBM in a 141 patient Phase II DCVax-Brain clinical trial. We planned to carry out the study at 12 to 15 clinical sites. The study was designed as a randomized study in which patients received either DCVax-Brain in addition to standard of care or standard of care alone. The study was not blinded because there was no available approach for making a placebo that was indistinguishable from the DCVax-L. Almost 50 patients were screened at 4 clinical sites. However, patients were reluctant to enroll in the study when faced with a 33% chance of being randomized into the control arm of the study under which they will receive standard of care alone. In addition, even patients who did enroll were reluctant to stay in the study if they were assigned to the control arm. Since the study was not blinded, patients were able to know which arm of the study they were assigned to. So, the Company stopped and undertook a development program to develop a placebo that is indistinguishable from DCVax

With the placebo developed the Company redesigned the study as a randomized, placebo controlled, double blinded study with a cross-over arm allowing control patients to be treated with DCVax-Brain in the event that their cancer progresses. The study size has been increased from 141 to 240 patients and is designed to enable us to petition the FDA for accelerated approval if the study generates results similar to those achieved in the two prior clinical trials. We currently have 13 clinical sites that are qualified and ready to enroll patients. In order to enable rapid enrollment, we may add some additional clinical sites for this trial when resources permit. We are engaged in discussions with the FDA concerning the study design and end points. Depending on trial results, we plan to seek product approval in both the U.S. and the European Union.

In February 2007, we, through our legal representative, applied to the Bundesamt für Gesundheit (“BAG” or “Office Fédéral de la Santé Publique”) in Switzerland for an Authorization for Use (“Autorisation”). In June 2007, we, through our legal representative, received such Autorisation from the BAG to make DCVax-Brain available at limited selected medical centers in Switzerland, as well as an authorization (“Autorisation pour activités transfrontalières avec des transplants”) to export patients’ cells and tissues from Switzerland for vaccine manufacturing in the United States, and to import patients’ DCVax-Brain finished vaccines into Switzerland. These authorizations are conditional upon certain implementation commitments which had to be fulfilled to the satisfaction of Swissmedic (“Institut Suisse des Agents Thérapeutiques”) before the product could be made available (e.g., finalizing our arrangements for a clean-room suite for processing of patients’ immune cells). We believe that we have fulfilled these commitments, and have been awaiting Swissmedic assessment.

Subsequent to the BAG’s favorable decision, the BAG and Swissmedic underwent reorganization, and the BAG’s jurisdiction was transferred to Swissmedic. Following that reorganization, each party, who had received a BAG decision such as NWBT had received, was requested to file a Marketing Authorization Application (MAA) with Swissmedic for full product approval. NWBT did so at year end 2007. During the two-plus years since then, Swissmedic has conducted inspections, and has been reviewing and evaluating the Company’s MAA. We further engaged a contract manufacturer in Switzerland and developed procedures for partial manufacturing DCVax-Brain. Recently, this manufacturer ceased business operations in Switzerland which created serious manufacture problems in Switzerland and for the MAA application. Subsequent to this event, we decided to withdraw our MAA and resubmit the application at a later date when manufacturing operations are again created either through a partnership or by opening our own manufacturing operations.

Standard of Care: The current standard of care for GBM was established in a 573 patient study as set out by Stupp, et al. in N Engl J Med 352;10, and resulted in a median time to progression of 6.9 months and a median overall survival rate of 14.6 months in patients receiving a standard of care treatment regimen. The standard of care established in the Stupp trial for GBM patients consists of surgery followed two weeks later by radiation therapy with concomitant daily low-dose Temodar chemotherapy, followed by six monthly cycles of full-doseTemodar chemotherapy. The DCVax-Brain treatment regimen fits between the steps of this current standard of care, and does not require a change in clinical practices, other than one 30-day delay after the first chemotherapy treatment.

Target Market: The American Cancer Society estimates that about 21,810 new cases of primary brain cancer will be diagnosed in the U.S. during 2008. Deaths from newly diagnosed malignant primary brain cancer in the U.S. are estimated to be approximately 13,070 per year. Globocan has estimated that about 48,385 new cases of primary brain cancer would be diagnosed in Europe in 2002 (the last year for which estimates are available). Deaths from brain cancer in Europe were estimated at 39,061 in 2002.

Current Treatments: As described above, existing treatments for GBM include surgery, radiation and chemotherapy. Such treatments are often used in various combinations and/or sequences and have significant adverse side effects such as bleeding, seizures, nausea and collateral tissue damage. Following initial treatment, virtually all cases of this cancer recur, with a life expectancy of approximately six months following recurrence. Few, if any, effective therapies exist for these patients. We believe that DCVax-Brain has the potential to address this critical unmet medical need.

DCVax-L for Ovarian Cancer

This trial treated “no option” patients who had already been treated with most or all major drugs currently available for recurrent, metastatic ovarian cancer (including carboplatin, paclitaxel docetaxel, abraxane, gemcitabine and topotecan), and whose cancer had still continued to progress. In other recent clinical trials testing various drugs and drug combinations for recurrent ovarian cancer, the treated patients have generally attained less than 3 or 4 months without progression of their cancer, and have experienced serious side effects (including gastro-intestinal perforation, a life-threatening condition).

In the Company trial, 6 patients have been treated and 3 of the 6 are still alive with survival times of 316, 330 and 783 days. The 3 patients who died had survival times of 401, 428 and 601 days. Two of the treated patients who received DCVax-L treatment were classified as partial responders, 3 stable disease and one progressive disease. Partial response is defined by the tumor shrinking by 20-25% or combined with remaining the same size and not growing, or by disappearing. The patients did not experience any toxicity or debilitating side effects.

Metastatic ovarian cancer poses a particularly serious and urgent unmet medical need. In most patients, the disease is not discovered until it is already late stage, because ovarian cancer typically causes little or no symptoms until it is late stage. When this cancer has metastasized, as in the case of the no-option patients in NWBT’s trial, the cancer usually progresses rapidly and aggressively. In other recent clinical trials in recurrent ovarian cancer, only limited clinical responses were obtained in the treated patients, and even those were only in a small percentage of patients (for example, 18-28% of those treated).

DCVax-Prostate

DCVax-Prostate targets hormone independent (i.e. late stage) prostate cancer. DCVax-Prostate combines our DCVax platform with the cancer-associated antigen “prostate specific membrane antigen” or “PSMA”. PSMA is located on the surface of prostate cells. It is expressed at very low levels on benign or healthy prostate cells, and at much higher levels on prostate cancer cells. Because PSMA is over-expressed in virtually all prostate cancers, it represents an effective target for prostate cancer therapeutics. In addition, we do not have to screen patients. DCVax-Prostate is designed to be used in the whole patient population. In contrast, the use of other cancer vaccines in development may be limited to part of the patient population and require screening of patients.

In September 1999, we filed an application to conduct a Phase I/II clinical trial for DCVax-Prostate to treat late-stage prostate cancer patients for whom hormone therapy was no longer effective. This trial, which was carried out at the M.D. Anderson Cancer Centre and at UCLA, involved the administration of DCVax-Prostate to 33 evaluable patients in order to establish the safety of three different dosage levels of DCVax -Prostate.

Additional data from our Phase I/II DCVax -Prostate clinical trial in 33 patients with non-metastatic and metastatic hormone independent prostate cancer indicates the following. Of a total of 33 patients who have been treated in this trial, 11 were non-metastatic hormone independent prostate cancer patients (group A) and 22 were metastatic hormone independent prostate cancer patients (group B). In group A, there has been an increase in survival from 36 months for the natural course of the disease to >54 months for DCVax-Prostate treated patients. The median had not yet been reached as of the end of 2005 (the latest date to which long-term data is so far available). In this group the time to metastases under the natural course of the disease is 28 to 36 weeks. This time was lengthened to 59 weeks in patients who received DCVax -Prostate. In group A, none of the 11 patients had progressed at 28 weeks and only five had progressed at 59 weeks. The group A patient population is the patient population that we will focus on in our Phase III clinical trial.

In group B (hormone independent patients with metastases), there was an increase in median overall survival from 18.9 months for standard of care to 38.7 months for DCVax-Prostate treated patients. Patients in this study had a six-times greater chance of being alive at 36 months compared to patients treated with the standard of care.

Many cancer therapeutics elicit a clinical response in only a small fraction of patients. In clinical trials, DCVax -Prostate has been shown to elicit a specific PSMA antibody response and a specific and strong T-cell response in about 80 percent of patients. The Company believes that the administration of DCVax-Prostate may enhance progression free survival relative to placebo, delay the development of symptomatic disease and increase overall survival.

DCVax-Prostate has been cleared by the FDA for a Phase III clinical trial in about 600 patients in 50 centers. The patient population is non-metastatic hormone independent prostate cancer. We currently intend to separate the 600 patient Phase III trial into two Phase III clinical trials in non- metastatic hormone independent prostate cancer patients with about 300 patients per trial.

Standard of Care. The standard of care for metastatic hormone independent prostate cancer was established in a 674 patient study as set out by Petrylak, et al. in N Engl J Med 351; 15 and resulted in a median overall survival rate of 18.9 months. This standard of care consists of taxotere (chemotherapy) being administered as a single dose every three weeks or in a weekly regime. Other drugs, such as mitoxantrone and prednisone, are also administered to patients for pain derived from bone metastasis. The DCVax-Prostate treatment regimen fits between the steps of current standard of care, and does not require a change in clinical practices. There is no established standard of care for non-metastatic hormone independent prostate cancer as there is no FDA approved therapeutic product for this type of prostate cancer.

Target Market. The American Cancer Society estimates that 186,320 new cases of prostate cancer will be diagnosed in the U.S. during 2008. Deaths from prostate cancer in the U.S. are estimated to be 28,660 for 2008. We estimate that there is an initial DCVax-Prostate target population in the U.S. consisting of approximately 100,000 patients per year with non-metastatic hormone independent prostate cancer. Globocan has estimated that 230,627 new cases of prostate cancer would be diagnosed in Europe in 2002 (the last year for which estimates are available). Deaths from prostate cancer in Europe were estimated at 83,066 in 2002.

Current Treatments. Existing treatments for localized (i.e. newly-diagnosed) prostate cancer include surgery and/or various forms of radiation therapy. The current standard of care for treating patients who fail primary therapy is hormone therapy through which the effect of male hormones is blocked. Although this therapy achieves temporary tumor control, prostate cancer patients eventually fail hormone treatments, meaning that blocking of hormones no longer keeps the cancer under control. The United States National Cancer Institute’s 1989-1996 five-year survival rate for metastatic prostate cancer is only 32 percent. Moreover, hormone therapy may cause significant adverse side effects, including bone loss, hot flushes and impotence. Disease progression despite hormone therapy occurs on average in two years, and is then classified as hormone independent prostate cancer. Approximately 55 percent of patients with hormone independent prostate cancer will die within two years of its onset. Currently, the only FDA approved treatments for hormone independent prostate cancer are chemotherapy and radioactive pharmaceuticals, which can alleviate cancer-related symptoms but may cause significant toxic side effects and only prolong survival by approximately two and a half months. A large proportion of hormone independent patients do not have objective metastatic disease as measured by bone and CT scans. We believe that DCVax-Prostate has the potential to address this critical unmet medical need.

DCVax-LB

DCVax-LB is targeting non-small cell lung cancer, the largest cause of cancer deaths in both the U.S. and Europe. DCVax-LB combines our DCVax platform with isolated and killed lung cancer cells as antigens. The autologous DCs used to formulate DCVax-LB are activated through a process similar to that used in the manufacturing of DCVax-Prostate. We had an investigational new drug application cleared by the FDA in May 2006 for a Phase I clinical trial using DCVax-LB in non-small cell lung cancer.

Target Market. The American Cancer Society estimates that 215,020 new cases of lung cancer will be diagnosed in the U.S. during 2008Approximately 80 percent of these cases are expected to be attributable to non-small cell lung cancer, the indication that we are targeting. Deaths from all forms of lung cancer are estimated to be 161,840 for 2008. Globocan has estimated that 374,764 new cases of lung cancer would be diagnosed in Europe in 2002 (the last year for which estimates are available). Deaths from lung cancer in Europe were estimated at 341,595 in 2002.

Current Treatments. Existing treatments for non-small cell lung cancer include surgery and radiation therapy, which are used in various combinations. These treatments have significant toxic side effects and have limited clinical benefit. The American Cancer Society has reported that only 16 percent of patients diagnosed with non-small cell lung cancer survive after five years. Following initial treatment, virtually all cases of this cancer recur, with a life expectancy of approximately one year following recurrence.

DCVax-L

DCVax-L targets any kind of solid tumor cancer and it combines our DCVax platform with patient specific tumor lysate. Following surgery, the tumor is prepared as a lysate (i.e. the tumor tissue is finely chopped) for loading into autologous dendritic cells. The patient’s tumor lysate contains cancer specific biomarkers which will be added to the patient’s own dendritic cells and subsequently injected back into the patient to elicit a cancer specific immune response. The company commenced a Phase I/II study using DCVax-L at the University of Pennsylvania in 2007.

Target Market: The American Cancer Society estimates that 21,650 new cases of ovarian cancer will be diagnosed in 2008 and that there will be approximately 15,520 deaths from the disease. Globocan has estimated that 63,467 new cases of ovarian cancer were diagnosed in Europe in 2002 (the last year for which estimates are available). Once ovarian cancer has recurred, there are currently no effective treatments for the disease. Thus, new treatment modalities that prevent or delay cancer recurrence are of importance in prolonging survival in women with ovarian cancer. This study is being funded by the Ovarian Cancer Vaccine Initiative (OCVI), a private philanthropic organization.

Current Treatments: Standard therapy includes surgical debulking, followed by chemotherapy with a taxane/platinum combination for six to eight cycles. Of the patients who present with advanced stage disease (III or IV), 70 percent will have an initial clinical remission following surgery and chemotherapy, with no evidence of disease by physical examination, radiographic imaging (such as CT or MRI) or normalization of the CA125 tumor marker. However, for most of these patients, the ovarian cancer will recur within two years. The median time to progression is approximately 20 months even for patients who received total or near-total surgical removal of the initial tumor and is approximately 14 months for patients with less complete surgical removal of the initial tumor. Once ovarian cancer has recurred, it is not considered curable and progression to death is usually inevitable, despite aggressive chemotherapy strategies. The overall five year survival for advanced ovarian cancer remains at only 20 to 30 percent.

DCVax -Direct

DCVax-Direct uses our DCVax platform to activate DCs suitable for direct injection into solid tumors. DCVax-Direct is designed to treat cancer patients whose tumor tissue is not available or whose tumors are considered to be inoperable. Several scientific studies have shown that DCs injected into solid tumors in animal models can result in tumor regression. We have demonstrated in pre-clinical animal studies the ability of activated DCs, when injected directly into just a single tumor of mice bearing multiple tumors, to cause all tumors to regress. In these studies, subsequent challenge of these now tumor-free mice with the injection of additional tumor cells was met with total rejection of tumor growth demonstrating an immunization of the mouse against regrowth of the tumor. The DCs used in the formulation of DCVax-Direct are activated through a process similar to that used for DCVax-Brain and DCVax-Prostate (i.e. using heat-killed and formalin-fixed BCG mycobacteria and interferon gamma), although they are not loaded with tumor antigens prior to injection. Rather, the antigen loading takes place in vivo after injection of the DCVax-Direct DCs into the tumor tissue, typically following radiation therapy, chemotherapy, or other treatments that kill tumor cells.

We have a Phase I clinical trial protocol under the DCVax-Direct IND for the treatment of head and neck cancer. This clinical trial protocol was cleared by the FDA in the third quarter of 2006. We intend to identify the most appropriate cancers for the remaining two available trials under the DCVax-Direct IND at the appropriate time, although our present intention is to pursue liver and pancreatic cancers.

Target markets: The American Cancer Society estimates that 21,650 new cases of ovarian cancer and 35,310 new cases of head and neck cancer will be diagnosed in the U.S. during 2008. Globocan has estimated that 63,467 new cases of ovarian cancer and 98,175 new cases of head and neck cancer were diagnosed in Europe in 2002 (the last year for which estimates are available). Deaths from ovarian cancer and head and neck cancer in Europe were estimated at 41,024 and 43,273 respectively. Deaths from all solid tumors are estimated to be approximately 500,000 in 2008. Deaths from all solid tumors are estimated at approximately 815,000 in the E.U. in 2002 (the last year for which estimates are available).

Current treatments: Current treatments for solid tumors typically involve cytotoxic therapy aimed at killing tumor cells. Such treatments include radiation therapy, chemotherapy, or other cell killing treatments such as cryotherapy. These treatments can still be used along with DCVax-Direct as they can potentially prepare the tumor tissue for the injection of DCVax-Direct. The ability to still use conventional cytotoxic agents along with DCVax-Direct will enable DCVax-Direct to be adopted in the market without requiring any change of existing clinical practice if so desired.

Therapeutic Antibody Product Candidates

We have been issued patent coverage by the U.S. Patent and Trademark Office which gives us broad rights to the use of CXCR4 antibodies to treat cancer. CXCR4 is a protein that plays a key role in the progression of primary cancers and in the metastatic process. CXCR4 is over-expressed in more than 75 percent of cancers including non- small cell lung cancer, breast cancer, GBM, colon cancer, melanoma, prostate, pancreatic, kidney, ovarian, and certain blood cancers. In all of these cancers CXCR4 is centrally involved in all three phases of disease progression: proliferation of the primary tumor, migration of cancer cells out of the primary tumor, and establishment of distant metastatic sites.

We have completed substantial research and pre-clinical testing phases with two versions of CXCR4 antibodies. We intend to identify the most appropriate cancers for clinical trial or multiple clinical trials using CXCR4 antibodies at the appropriate time.

Manufacturing

We have developed a proprietary manufacturing system that enables us to produce vaccines for an entire multi-year course of treatments in a single manufacturing run using the cancer patient’s own DCs and the patient’s own tumor biomarkers. This manufacturing process results in sufficient patient-specific DCVax product for at least a course of 11 injections of DCVax, which is sufficient for three years of treatment. The product thus becomes an “off-the-shelf” personalized drug after the initial manufacturing run. The advantages of this method, compared to other cell vaccine production, include not only the “off-the-shelf” feature of drug delivery to clinics and patients, but also the significant reduction in product cost due to the fact that the product does not have to be separately manufactured for each treatment injection or each couple of treatments.

We have entered into a services agreement with Cognate pursuant to which Cognate will provide certain consulting and manufacturing services, for our DCVax-Brain Phase II clinical trial. In this process, DC precursor cells are isolated from the patient’s blood and matured into new functional DCs. These DCs are combined with a patient’s own cancer biomarkers from the patient’s tumor tissue removed in surgery. The finished vaccine is then frozen in single-dose vials, and can remain frozen for many years until required for treatment of the patient.

Cognate has it’s a cGMP (clean room manufacturing under current Good Manufacturing Practices) facility in Memphis, Tennessee with capacity of approximately 600 patients per year, which we believe will be sufficient for our Phase II clinical trial for DCVax -Brain. We have a plan with Cognate to accommodate an increase in production capacity based on demand and have detailed plans and cost analysis for additional modular expansions which should increase the capacity of the current facilities from approximately 600 patients to over 9,000 patients per year.

The Company has developed partial automation of its manufacturing process using a TFF System. This TFF System has been cleared by FDA for use in an upcoming DCVax Phase I clinical trials, and the Company’s patent coverage in the US issued during 2009. The TFF System is also targeted to be implemented into the DCVax-Brain product after bioequivalence studies have been completed. Since the product economics are favorable even with the existing first generation manufacturing process, the Company intends to only implement the TFF System at a time and in a manner that does not interfere with the pivotal Phase II clinical trial for DCVax-Brain, or product approval or launch.

Intellectual Property

We protect our proprietary technologies through patents issued and licensed throughout the world. We have 76 issued patents (11 in the United States and 65 in other jurisdictions) and 96 patent applications pending (10 in the United States and 86 in other jurisdictions) which cover the use of dendritic cells in DCVax as well as targets for either our dendritic cell or fully human monoclonal antibody therapy candidates. The issued patents expire at various dates from 2015 to 2026. We intend to continue using our scientific expertise to pursue and patent new developments with respect to uses, methods, and compositions to enhance our position in the field of cancer treatment.

We have received orphan designation in the U.S., the E.U. and Switzerland for our DCVax-Brain product candidate applicable to gliomas, which comprise most primary brain cancers, including GBM. Orphan designation in the U.S. entitles us to seven years of market exclusivity for the particular indication and active ingredient provided that the product is the first such orphan to be approved for that indication. Orphan designation in the E.U. and Switzerland entitles us to ten years of market exclusivity on a similar basis.

Any patents that we obtain may be circumvented, challenged or invalidated by our competitors. Our patent applications may not result in the issuance of any patents, and any patents that may be issued may not offer any protection against others who seek to practice the claimed inventions. We have obtained licenses for certain technologies that we use, but we may be unable to maintain those licenses and may be unable to secure additional licenses in the future. Thus, we may be forced to abandon certain product areas or develop alternative methods for operating in those areas.

In addition to patents, we rely on copyright protection, trade secrets, proprietary know-how and trademarks to maintain our competitive position. Our future success will depend in part on our ability to preserve our copyrights and trade secrets. Although our officers, employees, consultants, contractors, manufacturers, outside scientific collaborators, sponsored researchers and other advisors are required to sign agreements obligating them not to disclose our confidential information, these parties may nevertheless disclose such information and compromise our confidential data. We may not have adequate remedies for any such breach. It is also possible that our trade secrets or proprietary know-how will otherwise become known or be independently replicated or otherwise circumvented by competitors.

Our technologies may infringe the patents or violate other proprietary rights of third parties. In the event of infringement or violation, we may be prevented from pursuing further licensing, product development or commercialization. Such a result would materially adversely affect our business, financial condition and results of operations.

If we become involved in any litigation, interference or other administrative proceedings, we will incur substantial expenses and the efforts of our technical and management personnel will be significantly diverted. An adverse determination may subject us to significant liabilities or require us to seek licenses, which may not be available. We may also be restricted or prevented from manufacturing and selling our products, if any, in the event of an adverse determination in a judicial or administrative proceeding, or if we fail to obtain necessary licenses. In addition, any potential litigation or dispute may, as a result of our lack of funding, require us to further reduce or even curtail our operations entirely.

Competition

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies and a strong emphasis on proprietary products. Several companies, such as Dendreon Corporation, Immuno-Designed Molecules, Inc., ImmunoCellular Therapeutics, Celldex Therapeutics, Inc., Ark Therapeutics plc, Oxford Biomedica plc, Argos Therapeutics, Inc., Antigenics and others are actively involved in the research and development of immunotherapies or cell-based cancer therapeutics.

Of these companies, Dendreon has completed its Phase III clinical trials in patients with prostate cancer, although their patient populations are different from those targeted by our Phase III DCVax -Prostate product candidate. Celldex Therapeutics has conducted a Phase II clinical trial, with a peptide immunotherapy for newly diagnosed GBM. Ark Therapeutics has completed a Phase III trial with a gene therapy for operable high grade gliomas and applied for product approval in the EU, but recently received a negative decision from the European regulator. The clinical trial data reported to date by these companies for brain and prostate cancer have not shown as long a delay in disease progression, or as long an extension of survival, as have our clinical data to date. As far as we are aware, no cell-based therapeutic product for cancer is currently available for commercial sale, although Dendreon’s vaccine is expected to become commercially available soon.

Additionally, several companies, such as Medarex, Inc., Amgen, Inc., Agensys, Inc., and Genentech, Inc. are actively involved in research and development of monoclonal antibody-based cancer therapies. Currently, at least seven antibody-based products are approved for commercial sale for cancer therapy. Genentech is also engaged in several Phase III clinical trials for additional antibody-based therapeutic products for a variety of cancers, and several other companies are in early stage clinical trials for such products. Many other third parties compete with us in developing alternative therapies to treat cancer, including:

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biopharmaceutical companies;

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biotechnology companies;

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pharmaceutical companies;

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academic institutions; and

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other research organizations.

Most of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing. In addition, many of these competitors have become more active in seeking patent protection and licensing arrangements in anticipation of collecting royalties for use of technology they have developed. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These competitors may prevent us from recruiting and retaining qualified scientific and management personnel, or from acquiring technologies complementary to our programs.

We expect that our ability to compete effectively will be dependent upon our ability to:

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secure the necessary funding to continue our development efforts with respect to our product candidates;

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successfully complete clinical trials and obtain all requisite regulatory approvals;

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maintain a proprietary position in our technologies and products;

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attract and retain key personnel; and

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maintain existing or enter into new partnerships.

Governmental Regulation

Governmental authorities in the United States and other countries extensively regulate the pre-clinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing and distribution, among other things, of immunotherapeutics. In the United States, the FDA subjects pharmaceutical and biologic products to rigorous review. Even if we ultimately receive FDA approval for one or more of our products, if we or our partners do not comply with applicable requirements, we may be fined, our products may be recalled or seized, our production may be totally or partially suspended, the government may refuse to approve our marketing applications or allow us to distribute our products and we may be criminally prosecuted. The FDA also has the authority to revoke previously granted marketing authorizations.

In order to obtain approval of a new product from the FDA, we must, among other requirements, submit proof of safety and efficacy as well as detailed information on the manufacture and composition of the product. In most cases, this proof requires documentation of extensive laboratory tests, and pre-clinical and clinical trials. This testing, and the preparation of necessary applications and processing of those applications by the FDA, are expensive and typically take several years to complete. The FDA may not act quickly or favorably in reviewing these applications, and we may encounter significant difficulties or costs in our efforts to obtain FDA approvals that could delay or preclude us from marketing any products we may develop. The FDA also may require post-marketing testing and surveillance to monitor the effects of approved products or place conditions on any approvals that could restrict the commercial applications of these products. Regulatory authorities may withdraw product approvals if we fail to comply with regulatory standards or if we encounter problems following initial marketing. With respect to patented products or technologies, delays imposed by the governmental approval process may materially reduce the period during which we might have the exclusive right to exploit the products or technologies.

After an Investigational New Drug, or IND, application becomes effective, a sponsor may commence human clinical trials in the United States. The sponsor typically conducts human clinical trials in three sequential phases, but these phases may overlap. In Phase I clinical trials, the product is tested in a small number of patients or healthy volunteers, primarily for safety at one or more doses. In Phase II, in addition to safety, the sponsor evaluates the efficacy of the product in a patient population somewhat larger than Phase I clinical trials. Phase III clinical trials typically involve additional testing for safety and clinical efficacy in an expanded population at geographically dispersed test sites. The sponsor must submit to the FDA a clinical plan, or protocol, accompanied by the approval of a clinical site responsible for ongoing review of the investigation, prior to commencement of each clinical trial. The FDA or a clinical site may order the temporary or permanent discontinuation of a clinical trial at any time, if the trial is not being conducted in accordance with FDA or clinical site requirements or presents a danger to its subjects.

The sponsor must submit to the FDA the results of the pre-clinical and clinical trials, together with, among other data, detailed information on the manufacture and composition of the product, in the form of a new drug application or, in the case of a biologic, a biologics license application. The FDA is regulating our therapeutic vaccine product candidates as biologics and, therefore, we must submit biologics license applications, or BLA, to the FDA to obtain approval of our products. The clinical trial process generally takes several years, and the FDA reviews the BLA and, when and if it decides that adequate data is available to show that the new compound is both safe and effective and that all other applicable requirements have been met, the FDA approves the drug or biologic for marketing. The amount of time taken for this approval process is a function of a number of variables, including the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question, and the workload at the FDA. It is possible that our product candidates will not successfully proceed through this approval process or that the FDA will not approve them in any specific period of time.

The FDA may, during its review of a new drug application or biologics license application, ask for additional test data. If the FDA does ultimately approve a product, it may require post-marketing testing, including potentially expensive Phase IV studies, and surveillance to monitor the safety and effectiveness of the drug. In addition, the FDA may in some circumstances impose restrictions on the use of an approved drug, which may be difficult and expensive to administer, and may require prior approval of promotional materials.

Before approving a new drug application or biologics license application, the FDA also will inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facilities are in compliance with guidelines for the manufacture, holding and distribution of a product. Following approval, the FDA periodically inspects drug and biologic manufacturing facilities to ensure continued compliance with manufacturing guidelines. Manufacturers must continue to expend time, money and effort in the areas of production, quality control, record keeping and reporting to ensure full compliance with those requirements. The labeling, advertising, promotion, marketing and distribution of a drug or biologic product must also be in compliance with FDA regulatory requirements. Failure to comply with applicable requirements can lead to the FDA demanding that production and shipment cease, and, in some cases, that the manufacturer recall products, or to FDA enforcement actions that can include seizures, injunctions and criminal prosecution. These failures can also lead to FDA withdrawal of marketing approval for the product.

We and our partners are also subject to regulation by the Occupational Safety and Health Administration, the Environmental Protection Agency, the Nuclear Regulatory Commission and other foreign, federal, state and local agencies under various regulatory statutes, and may in the future be subject to other environmental, health and safety regulations that may affect our research, development and manufacturing programs. We are unable to predict whether any agency will adopt any regulation which could limit or impede on our operations.

Sales of pharmaceutical products outside the United States are subject to foreign regulatory requirements that vary widely from country to country. Whether or not we have obtained FDA approval, we must obtain approval of a product by comparable regulatory authorities in foreign countries prior to the commencement of marketing the product in those countries. The time required to obtain this approval may be longer or shorter than that required for FDA approval. The foreign regulatory approval process includes all the risks associated with FDA regulation set forth above, as well as country-specific regulations.

Employees

The Company employs four full-time employees, as of March 28, 2011. The Company’s internal staff is supplemented by more than two dozen external staff on a contract services basis, and by consultants. Each of our employees has signed a confidentiality and invention assignment agreement, and none are covered by a collective bargaining agreement. We have never experienced employment-related work stoppages and consider our employee relations to be positive.

Available Information

We are subject to the informational requirements of the Exchange Act and, accordingly, file Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K, proxy statements and other information with the SEC. You may read and copy this Annual Report on Form 10-K and the other reports and information we file with the SEC at the SEC’s Public Reference Room at 100 F Street, N.E., Washington, DC 20549. You may obtain information on the operation of the public reference room by calling the SEC at 1-800-SEC-0330. The SEC maintains a web site at http://www.sec.gov that contains reports, proxy and information statements and other information regarding registrants that file electronically with the SEC.

Our website address is www.nwbio.com. The information available on or through our website is not part of this Annual Report on Form 10-K.

Item 1A. Risk Factors

Our business, operations and financial condition are subject to various risks and uncertainties, including those described below and elsewhere in this Annual Report on Form 10-K. This section discusses factors that, individually or in the aggregate, we think could cause our actual results to differ materially from expected and historical results. Our business, operations or financial condition could be materially adversely affected by the occurrence of any of these risks.

We will need to raise additional capital, which may not be available.

As of March 31, 2011, we had approximately $1,065,000 of cash on hand. We will need additional capital to support and fund the research, development and commercialization of our product candidates and to fund our other operating activities. We are negotiating additional financing with several other parties, which we hope to complete later this year. There can be no assurance that we will be able to complete any of the financings, or that the terms for such financings will be attractive. If we are unable to obtain additional funds on a timely basis or on acceptable terms, we may be required to curtail or cease certain of our operations. We may raise additional funds by issuing additional common stock or securities (equity or debt) convertible into shares of common stock, in which case, the ownership interest of our stockholders will be diluted. Any financing, if available, is likely to include restrictive covenants that could limit our ability to take certain actions. Further, we may seek funding from Toucan Capital or Toucan Partners or their affiliates or other third parties. Such parties are under no obligation to provide us any additional funds, and any such funding may be dilutive to stockholders and may contain restrictive covenants. If we are unable to obtain sufficient additional capital in the near term, we may cease operations at any time.

We are likely to continue to incur substantial losses, and may never achieve profitability.

We have incurred net losses every year since our formation in March 1996 and had a deficit accumulated during the development stage of approximately $218.9 million as of December 31, 2010. We expect that these losses will continue and anticipate negative cash flows from operations for the foreseeable future. We will need additional funding, and over the medium term we will need to generate revenue sufficient to cover operating expenses, clinical trial expenses and some research and development costs to achieve profitability. We may never achieve or sustain profitability.

Our auditors have issued a “going concern” audit opinion.

Our independent auditors have indicated in their report on our December 31, 2010 financial statements that there is substantial doubt about our ability to continue as a going concern. A “going concern” opinion indicates that the financial statements have been prepared assuming we will continue as a going concern and 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. Therefore, you should not rely on our consolidated balance sheet as an indication of the amount of proceeds that would be available to satisfy claims of creditors, and potentially be available for distribution to stockholders, in the event of liquidation.

As a company in the early stage of development with an unproven business strategy, our limited history of operations makes an evaluation of our business and prospects difficult.

We have had a limited operating history and we are at an early stage of development. We may not be able to achieve revenue growth in the future. We have generated the following limited revenues: $529,000 in 2003; $390,000 in 2004; $124,000 in 2005; $80,000 in 2006; $10,000 in 2007; $10,000 in 2008; $10,000 in 2009 and $10,000 in 2010. We have derived most of these limited revenues from the sale of research products to a single customer, contract research and development for related parties, research grants and royalties from licensing fees generated from a licensing agreement. Our limited operating history makes it difficult to assess our prospects for generating revenues.

We may not be able to retain existing personnel.

We employ four full-time employees. The uncertainty of our business prospects and the volatility in the price of our common stock may create anxiety and uncertainty, which could adversely affect employee morale and cause us to lose employees whom we would prefer to retain. To the extent that we are unable to retain existing personnel, our business and financial results may suffer.

We may not be able to attract expert personnel.

In order to pursue our product development and marketing plans, we will need additional management personnel and personnel with expertise in clinical testing, government regulation, manufacturing and marketing. Attracting and retaining qualified personnel, consultants and advisors will be critical to our success. There can be no assurance that we will be able to attract personnel on acceptable terms given the competition for such personnel among biotechnology, pharmaceutical and healthcare companies, universities and non-profit research institutions. The failure to attract any of these personnel could impede the achievement of our development objectives.

We must rely at present on a single relationship with a third-party contract manufacturer, which will limit our ability to control the availability of our product candidates in the near-term.

We rely upon a single contract manufacturer, Cognate. The majority owner of Cognate is Toucan Capital, one of our majority stockholders. Cognate provides consulting services and is the manufacturer of our product candidates. We have an agreement in place with Cognate pursuant to which Cognate has agreed to provide manufacturing and other services in connection with our Phase II clinical trial for DCVax-Brain. The agreement requires us to make minimum monthly payments to Cognate irrespective of whether any DCVax products are manufactured. The agreement does not extend to providing services in respect of commercialization of the DCVax-Brain product, nor for other clinical trials or commercialization of any of our other product candidates. If and to the extent we wish to engage Cognate to manufacture our DCVax-Brain for commercialization or any of our other product candidates (including DCVax-Prostate) for clinical trials or commercialization, we will need to enter into a new agreement with Cognate or another third-party manufacturer which might not be feasible on a timely or favorable basis. The failure to timely enroll patients in our clinical trials will have an adverse impact on our financial results due, in part, to the minimum monthly payments that we make to Cognate.

Problems with our contract manufacturer’s facilities or processes could result in a failure to produce, or a delay in production, of adequate supplies of our product candidates. Any prolonged interruption in the operations of our contract manufacturer’s facilities could result in cancellation of shipments or a shortfall in availability of a product candidate. A number of factors could cause interruptions, including the inability of a supplier to provide raw materials, equipment malfunctions or failures, damage to a facility due to natural disasters, changes in FDA regulatory requirements or standards that require modifications to our manufacturing processes, action by the FDA or by us that results in the halting or slowdown of production of components or finished products due to regulatory issues, the contract manufacturer going out of business or failing to produce product as contractually required or other similar factors. Because manufacturing processes are highly complex and are subject to a lengthy FDA approval process, alternative qualified production capacity may not be available on a timely basis or at all. Difficulties or delays in our contract manufacturer’s manufacturing and supply of components could delay our clinical trials, increase our costs, damage our reputation and, if our product candidates are approved for sale, cause us to lose revenue or market share if it is unable to timely meet market demands.

Our success partly depends on existing and future collaborators.

We work with scientists and medical professionals at academic and other institutions, including UCLA, among others, some of whom have conducted research for us or have assisted in developing our research and development strategy. We do not employ these scientists and medical professionals. They may have commitments to, or contracts with, other businesses or institutions that limit the amount of time they have available to work with us. We have little control over these individuals. We can only expect that they devote time to us as required by our license, consulting and sponsored research agreements. In addition, these individuals may have arrangements with other companies to assist in developing technologies that may compete with our products. If these individuals do not devote sufficient time and resources to our programs, or if they provide substantial assistance to our competitors, our business could be seriously harmed.

The success of our business strategy may partially depend upon our ability to develop and maintain our collaborations and to manage them effectively. Due to concerns regarding our ability to continue our operations or the commercial feasibility of our personalized DCVax product candidates, these third parties may decide not to conduct business with us or may conduct business with us on terms that are less favorable than those customarily extended by them. If either of these events occurs, our business could suffer significantly.

We may have disputes with our collaborators, which could be costly and time consuming. Failure to successfully defend our rights could seriously harm our business, financial condition and operating results. We intend to continue to enter into collaborations in the future. However, we may be unable to successfully negotiate any additional collaboration and any of these relationships, if established, may not be scientifically or commercially successful.

Clinical trials for our product candidates are expensive and time consuming and their outcome is uncertain.

The process of obtaining and maintaining regulatory approvals for new therapeutic products is expensive, lengthy and uncertain. It can vary substantially, based upon the type, complexity and novelty of the product involved. Accordingly, any of our current or future product candidates could take a significantly longer time to gain regulatory approval than we expect or may never gain approval, either of which could reduce our anticipated revenues and delay or terminate the potential commercialization of our product candidates.

We have limited experience in conducting and managing clinical trials.

We rely on third parties to assist us in managing and monitoring all our clinical trials. Our reliance on these third parties may result in delays in completing, or failure to complete, these trials if the third parties fail to perform under the terms of our agreements with them. We may not be able to find a sufficient alternative supplier of these services in a reasonable time period, or on commercially reasonable terms, if at all. If we were unable to obtain an alternative supplier of these services, we might be forced to curtail our Phase II clinical trial for DCVax -Brain.

Our product candidates will require a different distribution model than conventional therapeutic products.

The nature of our product candidates means that different systems and methods will need to be followed for the distribution and delivery of the products than is the case for conventional therapeutic products. The personalized nature of these products, the need for centralized storage, and the requirement to maintain the products in frozen form may mean that we are not able to take advantage of distribution networks normally used for conventional therapeutic products. If our product candidates are approved, it may take time for hospitals and physicians to adapt to the requirements for handling and storage of these products, which may adversely affect our sales.

We lack sales and marketing experience and as a result may experience significant difficulties commercializing our research product candidates.

The commercial success of any of our product candidates will depend upon the strength of our sales and marketing efforts. We do not have a sales force and have no experience in sales, marketing or distribution. To fully commercialize our product candidates, we will need a substantial marketing staff and sales force with technical expertise and the ability to distribute these products. As an alternative, we could seek assistance from a third party with a large distribution system and a large direct sales force. We may be unable to put either of these plans in place. In addition, if we arrange for others to market and sell our products, our revenues will depend upon the efforts of those parties. Such arrangements may not succeed.

Even if one or more of our product candidates is approved for marketing, if we fail to establish adequate sales, marketing and distribution capabilities, independently or with others, our business will be seriously harmed.

Competition in the biotechnology and biopharmaceutical industry is intense and most of our competitors have substantially greater resources than we do.

The biotechnology and biopharmaceutical industries are characterized by rapidly advancing technologies, intense competition and a strong emphasis on proprietary products. Several companies, such as Dendreon Corporation, Celldex Therapeutics, Inc., Ark Therapeutics plc, Oxford Biomedica plc, Argos Therapeutics, Inc., Antigenics, Immunocellular Therapeutics, and others are actively involved in the research and development of immunotherapies or cell-based cancer therapeutics. Of these companies, we believe that only Dendreon and Ark Therapeutics have completed Phase III clinical trials with a cell-based therapy. To our knowledge no DC-based therapeutic product is currently approved for commercial sale, although it is expected that Dendreon’s Provenge product will be approved soon. Additionally, several companies, such as Medarex, Inc., Amgen, Inc., Agensys, Inc., and Genentech, Inc., are actively involved in the research and development of monoclonal antibody-based cancer therapies. Currently, at least seven antibody-based products are approved for commercial sale for cancer therapy. Genentech is also engaged in several Phase III clinical trials for additional antibody-based therapeutics for a variety of cancers, and several other companies are in early stage clinical trials for such products. Many other third parties compete with us in developing alternative therapies to treat cancer, including: biopharmaceutical companies; biotechnology companies; pharmaceutical companies; academic institutions; and other research organizations.

Most of our competitors have significantly greater financial resources and expertise in research and development, manufacturing, pre-clinical testing, conducting clinical trials, obtaining regulatory approvals and marketing than we do. In addition, many of these competitors are actively seeking patent protection and licensing arrangements in anticipation of collecting royalties for use of technology they have developed. Smaller or early-stage companies may also prove to be significant competitors, particularly through collaborative arrangements with large and established companies. These third parties compete with us in recruiting and retaining qualified scientific and management personnel, as well as in acquiring technologies complementary to our programs.

We expect that our ability to compete effectively will be dependent upon our ability to: obtain additional funding; successfully complete clinical trials and obtain all requisite regulatory approvals; maintain a proprietary position in our technologies and products; attract and retain key personnel; and maintain existing or enter into new partnerships.

Our competitors may develop more effective or affordable products, or achieve earlier patent protection or product marketing and sales. As a result, any products developed by us may be rendered obsolete and non-competitive.

Our intellectual property rights may not provide meaningful commercial protection for our research products or product candidates, which could enable third parties to use our technology, or very similar technology, and could reduce our ability to compete in the market.

We rely on patent, copyright, trade secret and trademark laws to limit the ability of others to compete with us using the same or similar technology in the United States and other countries. However, as described below, these laws afford only limited protection and may not adequately protect our rights to the extent necessary to sustain any competitive advantage we may have. The laws of some foreign countries do not protect proprietary rights to the same extent as the laws of the United States, and we may encounter significant problems in protecting our proprietary rights in these countries.

We have 76 issued patents (11 in the United States and 65 in other jurisdictions) and 96 patent applications pending (10 in the United States and 86 in other jurisdictions) which cover the use of dendritic cells in DCVax as well as targets for either our dendritic cell or fully human monoclonal antibody therapy candidates. The issued patents expire at various dates from 2015 to 2026.

We will only be able to protect our technologies from unauthorized use by third parties to the extent that they are covered by valid and enforceable patents or are effectively maintained as trade secrets. The patent positions of companies developing novel cancer treatments, including our patent position, generally are uncertain and involve complex legal and factual questions, particularly concerning the scope and enforceability of claims of such patents against alleged infringement. Recent judicial decisions in the United States are prompting a reinterpretation of the limited case law that exists in this area, and historical legal standards surrounding questions of infringement and validity may not apply in future cases. A reinterpretation of existing U.S. law in this area may limit or potentially eliminate our patent position and, therefore, our ability to prevent others from using our technologies. The biotechnology patent situation outside the United States is even more uncertain. Changes in either the patent laws or the interpretations of patent laws in the United States and other countries may, therefore, diminish the value of our intellectual property.

We own or have rights under licenses to a variety of issued patents and pending patent applications. However, the patents on which we rely may be challenged and invalidated, and our patent applications may not result in issued patents. Moreover, our patents and patent applications may not be sufficiently broad to prevent others from using our technologies or from developing competing products. We also face the risk that others may independently develop similar or alternative technologies or design around our patented technologies.

We have taken security measures to protect our proprietary information, especially proprietary information that is not covered by patents or patent applications. These measures, however, may not provide adequate protection for our trade secrets or other proprietary information. We seek to protect our proprietary information by entering into confidentiality agreements with employees, partners and consultants. Nevertheless, employees, collaborators or consultants may still disclose our proprietary information, and we may not be able to protect our trade secrets in a meaningful way. In addition, others may independently develop substantially equivalent proprietary information or techniques or otherwise gain access to our trade secrets.

Our success will depend substantially on our ability to operate without infringing or misappropriating the proprietary rights of others.

Our success will depend to a substantial degree upon our ability to develop, manufacture, market and sell our research products and product candidates without infringing the proprietary rights of third parties and without breaching any licenses entered into by us regarding our product candidates.

There is a substantial amount of litigation involving patent and other intellectual property rights in the biotechnology and biopharmaceutical industries generally. Infringement and other intellectual property claims, with or without merit, can be expensive and time-consuming to litigate and can divert management’s attention from our core business. For example, Lonza Group AG filed a complaint against us in the United States District Court for the District of Maryland alleging patent infringement. The case was groundless, and NWBT succeeded in getting all claims withdrawn by Lonza, with no payment of any consideration (more detailed description under Legal Proceedings). However, the defense of the case used up substantial amounts of management time and Company resources. In addition, we may be exposed to future litigation by third parties based on claims that our products infringe their intellectual property rights. This risk is exacerbated by the fact that there are numerous issued and pending patents in the biotechnology industry and the fact that the validity and breadth of biotechnology patents involve complex legal and factual questions for which important legal principles remain unresolved.

Competitors may assert that our products and the methods we employ are covered by U.S. or foreign patents held by them. In addition, because patents can take many years to issue, there may be currently pending applications, unknown to us, which may later result in issued patents that our products may infringe. There could also be existing patents of which we are not aware that one or more of our products may inadvertently infringe.

If we lose a patent infringement claim, we could be prevented from selling our research products or product candidates unless we can obtain a license to use technology or ideas covered by such patent or we are able to redesign our products to avoid infringement. A license may not be available at all or on terms acceptable to us, or we may not be able to redesign our products to avoid infringement. If we are not successful in obtaining a license or redesigning our products, we may be unable to sell our products and our business could suffer.

We may not receive regulatory approvals for our product candidates or there may be a delay in obtaining such approvals.

Our products and our ongoing development activities are subject to regulation by governmental and other regulatory authorities in the countries in which we or our collaborators and distributors wish to test, manufacture or market our products. For instance, the FDA will regulate the product in the U.S. and equivalent authorities, such as the European Medicines Agency (“EMEA”), will regulate in other jurisdictions. Regulatory approval by these authorities will be subject to the evaluation of data relating to the quality, efficacy and safety of the product for its proposed use.

The time taken to obtain regulatory approval varies between countries. Different regulators may impose their own requirements and may refuse to grant, or may require additional data before granting, an approval, notwithstanding that regulatory approval may have been granted by other regulators. Regulatory approval may be delayed, limited or denied for a number of reasons, including insufficient clinical data, the product not meeting safety or efficacy requirements or any relevant manufacturing processes or facilities not meeting applicable requirements.

Further trials and other costly and time-consuming assessments of the product may be required to obtain or maintain regulatory approval.

Medicinal products are generally subject to lengthy and rigorous pre-clinical and clinical trials and other extensive, costly and time-consuming procedures mandated by regulatory authorities. We may be required to conduct additional trials beyond those currently planned, which could require significant time and expense. For example, the field of cancer treatment is evolving, and the standard of care for a particular cancer could change while we are in the process of conducting the clinical trials for our product candidates. Such a change in standard of care could make it necessary for us to conduct additional clinical trials, which could delay our opportunities to obtain regulatory approval of our product candidates.

As for all biological products, we may need to provide pre-clinical and clinical data evidencing the comparability of products before and after any changes in manufacturing process both during and after product approval. Regulators may require that we generate data to demonstrate that products before or after any change are of comparable safety and efficacy if we are to rely on studies using earlier versions of the product. DCVax -Brain has been the subject of process changes during the early clinical phase of its development and regulators may require comparability data unless they are satisfied that changes in process do not affect the quality, and hence efficacy and safety, of the product.

We plan to rely on our current DCVax -Brain Phase II clinical trial as a single study in support of regulatory approval. While under certain circumstances, both EMEA and the FDA will accept a Phase II study as a single study in support of approval, it is not yet known whether they will do so in this case. If the regulators do not consider the Phase II study adequate on its own to support a finding of efficacy, we may be required to perform additional clinical trials in DCVax -Brain. There is some possibility that changes requested by the FDA could complicate the licensing application process.

Only the data for DCVax -Brain has been discussed with European regulators. On an informal basis, a number of European national regulators have indicated that additional pre-clinical and clinical data could be required before the DCVax -Brain product would be approved. However, it is not clear whether such data will be required until formal scientific advice is sought from the EMEA, which is the regulator that will ultimately review any application for approval of this product. Unless the EMEA grants a deferral or a waiver, we may also be obliged to generate clinical data in pediatric populations.

The Company’s plan for a 600-patient Phase III clinical trial was cleared by the FDA in January 2005. However, it is likely that we will split this single 600-patient Phase III trial into two separate 300-patient Phase III trials. These revisions in trial design may cause delay in the development process for DCVax -Prostate. It is not yet known whether the FDA will consider the two-trial design sufficient for marketing approval, or whether the agency will require us to design and carry out additional studies. If, after the Phase III studies are carried out, the FDA is not satisfied that its concerns have been adequately addressed, additional clinical studies could be required at that time.

Any delay in completing sufficient trials or other regulatory requirements will delay our ability to generate revenue from product sales and we may have insufficient capital resources to support its operations. Even if we do have sufficient capital resources, our ability to generate meaningful revenues or become profitable may be delayed.

Regulatory approval may be withdrawn at any time.

After regulatory approval has been obtained for medicinal products, the product and the manufacturer are subject to continual review and there can be no assurance that such approval will not be withdrawn or restricted. Regulators may also subject approvals to restrictions or conditions, or impose post-approval obligations on the holders of these approvals, and the regulatory status of such products may be jeopardized if we do not comply. Extensive post-approval safety studies are likely to be a condition of the approval and will commit us to significant time and expense.

We may fail to comply with regulatory requirements.

Our success will be dependent upon our ability, and our collaborative partners’ abilities, to maintain compliance with regulatory requirements, including regulators’ current good manufacturing practices (“cGMP”) and safety reporting obligations. The failure to comply with applicable regulatory requirements can result in, among other things, fines, injunctions, civil penalties, total or partial suspension of regulatory approvals, refusal to approve pending applications, recalls or seizures of products, operating and production restrictions and criminal prosecutions.

We may not obtain or maintain orphan drug status and the associated benefits, including marketing exclusivity.

We may not receive the benefits associated with orphan drug designation. This may result from a failure to achieve or maintain orphan drug status, or result from the development of a competing product that has an orphan designation for the same indication. In Europe, the orphan status of DCVax-Brain will be reassessed shortly prior to the product receiving any regulatory approval. The EMEA will need to be satisfied that there is evidence that DCVax-Brain offers a significant benefit relative to existing therapies for the treatment of glioma if DCVax-Brain is to maintain its orphan drug status.

New legislation may have an adverse effect on our business.

Changes in applicable legislation and/or regulatory policies or discovery of problems with the product, production process, site or manufacturer may result in delays in bringing products to market, the imposition of restrictions on the product’s sale or manufacture, including the possible withdrawal of the product from the market, or may otherwise have an adverse effect on our business.

The availability and amount of reimbursement for our product candidates and the manner in which government and private payers may reimburse for our potential products is uncertain.

In many of the markets where we intend to operate, the prices of pharmaceutical products are subject to direct price controls (by law) and to drug reimbursement programs with varying price control mechanisms.

We expect that many of the patients in the United States who may seek treatment with our products that may be approved for marketing will be eligible for coverage under Medicare, the federal program that provides medical coverage for the aged and disabled. Other patients may be covered by private health plans or may be uninsured. The Medicare program is administered by the Centers for Medicare & Medicaid Services (“CMS”), an agency within the U.S. Department of Health and Human Services. Coverage and reimbursement for products and services under Medicare are determined pursuant to regulations promulgated by CMS and pursuant to CMS’s subregulatory coverage and reimbursement determinations. It is difficult to predict how CMS will apply those regulations and subregulatory determinations to novel products such as ours.

Moreover, the methodology under which CMS makes coverage and reimbursement determinations is subject to change, particularly because of budgetary pressures facing the Medicare program. For example, the Medicare Prescription Drug, Improvement, and Modernization Act (the “Medicare Modernization Act”), enacted in 2003, provided for a change in reimbursement methodology that has reduced the Medicare reimbursement rates for many drugs, including oncology therapeutics. Even if our product candidates are approved for marketing in the U.S., if we are unable to obtain or retain coverage and adequate levels of reimbursement from Medicare or from private health plans, our ability to successfully market such products in the U.S. will be adversely affected. The manner and level at which the Medicare program reimburses for services related to our product candidates (e.g., administration services) also may adversely affect our ability to market or sell any of our product candidates that may be approved for marketing in the U.S.

In the U.S., efforts to contain or reduce health care costs have resulted in many legislative and regulatory proposals at both the federal and state level, and it is difficult to predict which, if any, of these proposals will be enacted, and, if so, when. Cost control initiatives by governments or third party payers could decrease the price that we receive for any one or all of our potential products or increase patient coinsurance to a level that makes our product candidates unaffordable for patients. In addition, government and private health plans are more persistently challenging the price and cost-effectiveness of therapeutic products. If third-party payers were to determine that one or more of our product candidates is not cost-effective, this could result in refusal to cover those products or in coverage at a low reimbursement level. Any of these initiatives or developments could prevent us from successfully marketing and selling any of our potential products.

In the E.U., governments influence the price of pharmaceutical products through their pricing and reimbursement rules and control of national health care systems that fund a large part of the cost of such products to consumers. The approach taken varies from member state to member state. Some jurisdictions operate positive and/or negative list systems under which products may only be marketed once a reimbursement price has been agreed. Other member states allow companies to fix their own prices for medicines, but monitor and control company profits. The downward pressure on health care costs in general, particularly prescription drugs, has become very intense. As a result, increasingly high barriers are being erected to the entry of new products, as exemplified by the role of the National Institute for Health and Clinical Excellence in the U.K. which evaluates the data supporting new medicines and passes reimbursement recommendations to the government. In addition, in some countries cross-border imports from low-priced markets (parallel imports) exert commercial pressure on pricing within a country.

DCVax is our only technology in clinical development.

Unlike many pharmaceutical companies that have a number of products in development and which utilize many technologies, we are dependent on the success of our DCVax platform and, potentially, our CXCR4 antibody technology. While DCVax technology has a number of potentially beneficial uses, if that core technology is not commercially viable, we would have to rely on the CXCR4 technology, which is at an early pre-clinical stage of development, for our success. If the CXCR4 technology also fails, we currently do not have other technologies to fall back on and our business could fail.

We may be prevented from using the DCVax name in Europe.

The EMEA has indicated that DCVax may not be an acceptable name because of the suggested reference to a vaccine. Failure to obtain the approval for the use of the DCVax name in Europe would require us to market our potential products in Europe under a different name which could impair the successful marketing of our product candidates and may have a material adverse effect on our results of operations and financial condition.

Competing generic medicinal products may be approved.

In the E.U., there exists a process for the approval of generic biological medicinal products once patent protection and other forms of data and market exclusivity have expired. If generic medicinal products are approved, competition from such products may reduce sales of our products. Other jurisdictions, including the U.S., are considering adopting legislation that would allow the approval of generic biological medicinal products.

We may be exposed to potential product liability claims, and insurance against these claims may not be available to us at a reasonable rate in the future, if at all.

Our business exposes us to potential product liability risks that are inherent in the testing, manufacturing, marketing and sale of therapeutic products. Our insurance coverage may not be adequate to cover claims against us or may not be available to us at an acceptable cost, if at all. Regardless of their merit or eventual outcome, product liability claims may result in decreased demand for a product, injury to our reputation, withdrawal of clinical trial volunteers and loss of revenues. Thus, whether or not we are insured, a product liability claim or product recall may result in losses that could be material.

We store, handle, use and dispose of controlled hazardous, radioactive and biological materials in our business. Our current use of these materials generally is below thresholds giving rise to burdensome regulatory requirements. Our development efforts, however, may result in our becoming subject to additional requirements, and if we fail to comply with applicable requirements we could be subject to substantial fines and other sanctions, delays in research and production, and increased operating costs. In addition, if regulated materials were improperly released at our current or former facilities or at locations to which we send materials for disposal, we could be liable for substantial damages and costs, including cleanup costs and personal injury or property damages, and incur delays in research and production and increased operating costs.

Insurance covering certain types of claims of environmental damage or injury resulting from the use of these materials is available but can be expensive and is limited in its coverage. We have no insurance specifically covering environmental risks or personal injury from the use of these materials and if such use results in liability, our business may be seriously harmed.

Toucan Capital and Toucan Partners beneficially own a majority of our shares of common stock and, as a result, the trading price for our common stock may be depressed and these stockholders can take actions that may be adverse to the interests of other investors.

As of March 31, 2011, Toucan Capital, its affiliates, Toucan Partners and its managing member, Ms. Linda Powers, who also serves as our Chairperson of the Board of Directors, collectively beneficially owned an aggregate of 23,077,015 shares of our common stock, representing approximately 32.0 percent of our issued and outstanding common stock. In addition, as of March 7, 2011, Toucan Capital may acquire an aggregate of approximately 14.7 million shares of common stock upon exercise of warrants and Toucan Partners may acquire an aggregate of approximately 11.6 million shares of common stock upon the exercise of warrants which may adversely affect the trading price of our common stock because investors often perceive disadvantages in owning stock in companies with controlling stockholders. Toucan Capital has the ability to exert substantial influence over all matters requiring approval by our stockholders, including the election and removal of directors and any proposed merger, consolidation or sale of all or substantially all of our assets. In addition, a managing member of Toucan Capital is a member of the Board. In light of the foregoing, Toucan Capital can significantly influence the management of our business and affairs. This concentration of ownership could have the effect of delaying, deferring or preventing a change in control, or impeding a merger or consolidation, takeover or other business combination that could be favorable to investors.

Our Certificate of Incorporation and Bylaws and stockholder rights plan may delay or prevent a change in our management.

Our Seventh Amended and Restated Certificate of Incorporation, as amended (the “Certificate of Incorporation”), Third Amended and Restated Bylaws (the “Bylaws”) and stockholder rights plan contain provisions that could delay or prevent a change in our management team. Some of these provisions:

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authorize the issuance of preferred stock that can be created and issued by the Board without prior stockholder approval, commonly referred to as “blank check” preferred stock, with rights senior to those of the common stock;

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allow the Board to call special meetings of stockholders at any time but restrict the stockholders from calling special meetings;

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authorize the Board to issue dilutive common stock upon certain events; and

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provide for a classified Board.

These provisions could allow our Board to affect the rights of an investor since the Board can make it more difficult for holders of common stock to replace members of the Board. Because the Board is responsible for appointing the members of the management team, these provisions could in turn affect any attempt to replace the current management team.

There may not be an active, liquid trading market for our common stock.

Our common stock is currently listed on the Over-The-Counter Bulletin Board, or OTCBB which are generally recognized as being less active markets than NASDAQ, the stock exchange on which our common stock previously was listed. You may not be able to sell your shares at the time or at the price desired. There may be significant consequences associated with our stock trading on the OTCBB rather than a national exchange. The effects of not being able to list our securities on a national exchange include:

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limited release of the market price of our securities;

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limited news coverage;

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limited interest by investors in our securities;

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volatility of our stock price due to low trading volume;

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increased difficulty in selling our securities in certain states due to “blue sky” restrictions; and

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limited ability to issue additional securities or to secure additional financing.

Because our common stock is subject to “penny stock” rules, the market for the common stock may be limited.

Because our common stock is subject to the SEC’s “penny stock” rules, broker-dealers may experience difficulty in completing customer transactions and trading activity in our securities may be adversely affected. Under the “penny stock” rules promulgated under the Exchange Act, broker-dealers who recommend such securities to persons other than institutional accredited investors must:

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make a special written suitability determination for the purchaser;

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receive the purchaser’s written agreement to a transaction prior to sale;

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provide the purchaser with risk disclosure documents which identify certain risks associated with investing in “penny stocks” and which describe the market for these “penny stocks” as well as a purchaser’s legal remedies; and

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obtain a signed and dated acknowledgment from the purchaser demonstrating that the purchaser has actually received the required risk disclosure document before a transaction in a “penny stock” can be completed.

As a result of these rules, broker-dealers may find it difficult to effectuate customer transactions and trading activity in our common stock may be adversely affected. As a result, the market price of our common stock may be depressed, and stockholders may find it more difficult to sell our common stock.

The price of our common stock may be highly volatile.

The share price of publicly traded biotechnology and emerging pharmaceutical companies, particularly companies without earnings and consistent product revenues, can be highly volatile and are likely to remain highly volatile in the future. The price at which our common stock is quoted and the price which investors may realize in sales of their shares of our common stock will be influenced by a large number of factors, some specific to us and our operations and some unrelated to our operations. These factors could include the performance of our marketing programs, large purchases or sales of the shares, currency fluctuations, legislative changes and general economic conditions. In the past, shareholder class action litigation has often been brought against companies that experience volatility in the market price of their shares. Whether or not meritorious, litigation brought against us following fluctuations in the trading price of our common stock could result in substantial costs, divert management’s attention and resources and harm our financial condition and results of operations.

Our business could be adversely affected by animal rights activists.

Our business activities have involved animal testing. These types of activities have been the subject of controversy and adverse publicity. Some organizations and individuals have attempted to stop animal testing by pressing for legislation and regulation in these areas. To the extent the activities of such groups are successful, our business could be adversely affected. Negative publicity about us, our pre-clinical trials and our product candidates could have an adverse impact on our sales and profitability.

The requirements of the Sarbanes-Oxley Act of 2002 and other U.S. securities laws reporting requirements impose cost and operating challenges on us.

We are subject to certain of the requirements of the Sarbanes-Oxley Act of 2002 in the U.S. and the reporting requirements under the Exchange Act. These laws require, among other things, filing of annual reports on Form 10-K, quarterly reports on Form 10-Q and periodic reports on Form 8-K following the happening of certain material events.

Our management has identified significant internal control deficiencies, which management and our independent auditor believe constitute material weaknesses.

In connection with the preparation of our financial statements for the year ended December 31, 2010, certain significant internal control deficiencies became evident to management that, in the aggregate, represents material weaknesses, including:

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lack of a sufficient number of independent directors on our audit committee;

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lack of a financial expert on our audit committee

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insufficient segregation of duties in our finance and accounting function due to limited personnel;

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insufficient corporate governance policies; and

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inadequate approval and control over transactions and commitments made on our behalf by related parties.

As part of the communications by our independent auditors with our audit committee with respect to audit procedures for the year ended December 31, 2010, our independent auditors informed the audit committee that these deficiencies constituted material weaknesses, as defined by Auditing Standard No. 5, “An Audit of Internal Control Over Financial Reporting that is Integrated with an Audit of Financial Statements and Related Independence Rule and Conforming Amendments,” established by the Public Company Accounting Oversight Board, or PCAOB. We intend to take appropriate and reasonable steps to make the necessary improvements to remediate these deficiencies but we cannot be certain that we will have the necessary financing to address these deficiencies or that we will be able to attract qualified individuals to serve on our Board and to take on key management roles within the Company. Our failure to successfully remediate these issues could lead to heightened risk for financial reporting mistakes and irregularities and a loss of public confidence in our internal controls that could harm the market price of our common stock.

Item 1B. Unresolved Staff Comments

Not required for smaller reporting companies.

Item 2. Properties

On November 30, 2009, the Company terminated a Sublease Agreement for the space the Company used as its headquarters at 7600 Wisconsin Avenue, Suite 750, Bethesda, Maryland. In connection with the termination, the Company will incur a partial payout of less than $5,000 per month during 2011. On March 17, 2010, the Company entered into a non-cancelable operating lease for 7,097 square feet of office space in Bethesda, Maryland, which expires in September 2012. Future minimum lease payments under the lease are $163,475 and $126,027 in 2011 and 2012, respectively. Rent expense for the years ended December 31, 2009 and 2010 amounted to $0 and $100,085, respectively. The Company expects to lease part of this space to Toucan and proceeds of this sublease will be offset against the minimum lease payments specified above.

Item 3. Legal Proceedings

On March 1, 2011, the Company entered into a transaction under Section 3(a)(10) of the Securities Act of 1933, as amended with Socius CG II, Ltd. (“Socius”). Pursuant to this initial 3(a)(10) transaction, Socius purchased certain claims for payment totaling $1,650,000 from Cognate. Thereafter, Socius elected to convert the claims into shares of the Company’s common stock. The conversion was effected through a settlement agreement between Socius and the Company. The settlement agreement was then the subject of a court proceeding (nominally brought by Socius against the Company, but handled on a cooperative basis through a Joint Stipulation by both parties) in order to obtain court approval of the settlement in accordance with the requirements of Section 3(a)(10). That Court approval was obtained on March 1, 2011. Pursuant to the settlement, the full amount of the $1,650,000 debt will be converted into shares of common stock at a conversion price equal to a thirty percent discount from the market price, with the market price being determined over a reference period of up to twenty (20) trading days from the date hereof (the “Reference Period”). In addition, the settlement provided that an equal amount of shares of common stock are to be delivered by the Company to Socius on a temporary basis, as a form of security during the Reference Period. At the end of the Reference Period, a true-up mechanism will be applied to confirm the final number of conversion shares based on the market price. As of March 31, 2010 The Company had issued 6,852,228 shares of the Company’s common stock to Socius in settlement of the Socius claims.

From time to time, we are involved in claims and suits that arise in the ordinary course of our business. At present, the Company is not involved in any suits other than an action by a creditor with respect to certain disputed amounts. Although management currently believes that resolving any such claims against us will not have a material adverse impact on our business, financial position or results of operations, these matters are subject to inherent uncertainties and management’s view of these matters may change in the future.

Item 4. (Removed and Reserved).

PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information and Price Range of Common Stock

Our common stock is quoted on the OTCBB under the symbol “NWBO.OB” The following table summarizes our common stock’s high and low sales prices for the periods indicated as reported by the OTCBB. Quotations on the OTCBB reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

	2009				2010
	High		Low		High		Low
4th Quarter	$	1.79	$	0.65	$	0.85	$	0.65
3rd Quarter		1.00		0.55		1.35		0.67
2nd Quarter		1.69		0.45		1.60		0.70
1st Quarter		0.85		0.32		0.95		0.72

As of March 31, 2011 there were approximately 215 holders of record of our common stock. Such holders include any broker or clearing agencies as holders of record but exclude the individual stockholders whose shares are held by brokers or clearing agencies.

Dividend Policy

We have never declared or paid cash dividends on our capital stock. We currently intend to retain future earnings, if any, to fund the development and growth of our business and do not currently anticipate paying any cash dividends in the foreseeable future. The payment of future dividends, if any, will be determined by our Board.

Recent Sales of Unregistered Securities

On January 16, 2009 we entered into a securities purchase agreement for $700,000 with Al Rajhi Holdings who purchased 1,000,000 shares of our common stock at $0.70 per share.

During March 2009, we entered into loan agreements with a group of private lenders for $760,000 for a term of two years at 6% per annum.

On March 27, 2009, we sold approximately 1.4 million shares of common stock at a purchase price of $0.53 per share and raised aggregate gross proceeds of approximately $0.7 million in a closed equity financing with unrelated investors.

In July 2009 we entered into a loan agreement with Toucan Partners for $1,300,000 with a term of two years at 6% interest.

In August and September 2009 we entered into a series of small loan agreements with a group of Private Investors for an aggregate of $580,000 with a term of two years at 6% interest.

In October through December 2009 we entered into a series of small loan agreements with a group of private investors for an aggregate of $720,000 with a term of two years at 6% interest.

Between February 22, 2010 and March 31, 2010, the Company sold 1,451,666 shares of common stock at $0.75 per share for net proceeds of $1,088,750.

During the three months ended June 30, 2010, the Company sold to private investors 2,333,333 shares of common stock at $0.75 per share for net proceeds of $1,750,000. In connection with this private placement, the Company issued warrants to purchase 233,333 shares of common stock, as described below.

On July 2, 2010, the Company completed execution of a Conversion and Extension Agreement with SDS Capital (“SDS”) for the conversion or extension of all outstanding debt held by SDS, and new investment of two hundred and fifty thousand dollars ($250,000) in restricted Common Stock. Prior to this Agreement, SDS was the second largest holder of investment debt of the Company. The largest holder of investment debt is the Al Rajhi Group. As previously reported, the Company already entered into an agreement with the Al Rajhi Group in March, 2010, for partial conversion into Common Stock and partial extension of the maturity of the debt held by Al Rajhi.

The Conversion and Extension Agreement with SDS Capital relates to investment debt of $2 million plus accumulated interest. In October 2008, SDS loaned the Company $1 million, with an original maturity of six months and an annual interest rate of twelve percent. In November 2008, SDS loaned the Company an additional $1 million, also with an initial maturity of six months and an annual interest rate of twelve percent. SDS previously agreed to extend the maturity of the two loans on terms to be negotiated with the Company.

Under the terms of a conversion and extension agreement, SDS converted $1,060,000, representing principal and accrued interest on an unsecured 12% loan made in November 2008 into 5,300,000 shares of common stock during May 2010 and December 2010. The value of the stock issued to SDS in excess of the carrying amount of the loan principal and accrued interest payable that was converted was $4,673,000. This amount was charged to loan conversion inducement expense in the consolidated statements of operations during the quarters ended June 30, 2010 and December 31, 2010.

In July 2010, the Company sold to Toucan Partners 866,667 shares of common stock at $0.75 per share for net proceeds of $650,000. In connection with this private placement, the Company issued warrants to purchase 86,667 shares of common stock, as described below.

On October 19, 2010, we sold approximately 200,000 shares of common stock at a purchase price of $0.75 per share and raised aggregate gross proceeds of approximately $150,000 in a closed equity financing with an unrelated investor.

On December 16, 2010, the Company entered into an agreement to potentially borrow up to $3,050,000 in tranches from a non affiliated third party (the “Lender”). As of December 31, 2010 formal agreements have been closed for a borrowing of $1,450,000. Under this arrangement, the Lender provides secured collateralized promissory notes to the Company for the funding tranches ("Lender Notes"). The notes are secured by certain assets of the Lender, which makes the funding eligible for certain securities law treatment for the Lender (the Lender investment is a recourse loan to the Company) which the Lender considers beneficial. When the Lender advances a tranche of funding under a Lender Note to the Company, that funding becomes a repayment obligation of the Company, which is embodied in a convertible promissory note from the Company to the Lender (the "Company Note"). The Company may repay any advance from the Lender at any time with either cash, surrender of the collateral, or surrender of the Company Note which would terminate the Company’s obligation under such Lender Notes.

As of December 31, 2010, the Lender had executed Lender Notes to the Company with principal amounts of $950,000 and $500,000. These Lender Notes carry a one-time interest charge equal to 11 percent of the principal payable at maturity. The Lender Notes have a maturity date of December 16, 2013. In the event that the Lender fails to meet its obligations under its notes, the Company has recourse to liquidate the security collateralizing the loan. The proceeds generated from liquidating the collateral will also be treated as Lender Note.

As of December 31, 2010 $350,000 had been advanced against the $950,000 Lender Note.

As of December 31, 2010, the Company had executed corresponding Company Notes, payable to the Lender, with principal amounts of $1,050,000 (reflecting the $950,000 principal amount in the Lender’s note, plus an original issue discount of $100,000) and $550,000 (reflecting the $500,000 principal amount in the Lender’s note, plus original issue discount of $50,000). The Company Notes also carry a one-time interest charge of 10 percent payable at maturity. The Company Notes have a maturity date of December 16, 2013. As noted above, the Company Notes may be surrendered to terminate the Company’s obligation under the Lender Notes. The Company has not incurred an obligation under the Company Notes until they are surrendered.

As of December 31, 2010, SDS sold a promissory note in the original principal amount of $1,000,000 to three non-affiliated, third parties. The Company exchanged the note for amended convertible notes with the following terms:

(1)

A convertible note in the amount of $370,000. The note matures on December 20, 2011 and carries a one-time interest charge payable at maturity of $37,000. The note is convertible into shares of the Company’s stock at a conversion price equal to 70 percent of the average daily closing bid price for the ten trading day period preceding the date of the conversion notice which was $0.47 on the date the note was issued.

(2)

A convertible note in the amount of $130,000. The note matures on June 2, 2011 and carries zero interest. The note is convertible into shares of the Company’s stock at a conversion price equal to 80 percent of the average of the five lowest closing prices in the 25 days previous to the conversion date which was $0.54 on the date the note was issued. Any amount that is still outstanding at maturity is repayable in cash.

(3)

A convertible note in the amount of $500,000. The note matures on June 2, 2011 and carries zero interest. The note is convertible into shares of the Company’s stock at a conversion price equal to the lesser of (i) the average of the closing prices for the ten trading days preceding the issue date of this note which was $0.67, or (ii) seventy percent of the volume weighted average price for the fifteen trading days prior to a conversion date. The conversion price is adjustable for down rounds as long as any amount due is outstanding under the note, subject to substantial exceptions.

On December 31, 2010, the Company received $790,000 from an existing investor, SDS Capital (“SDS”), as of December 31, 2010 in the form of a Note with a maturity of July 2011, and an annual interest rate of twelve percent (12%). SDS also received ten percent (10%) warrant coverage. The warrants have an exercise period of five years, and an exercise price of seventy-five cents ($0.75) per share.

Except as noted above, the sales of the securities identified above were made pursuant to privately negotiated transactions that did not involve a public offering of securities and, accordingly, we believe that these transactions were exempt from the registration requirements of the Securities Act pursuant to Section 4(2) of the Securities Act and Rule 506 of Regulation D and Regulation S promulgated thereunder. The agreements executed in connection with this sale contain representations to support the Registrant’s reasonable belief that the Investor had access to information concerning the Registrant’s operations and financial condition, the Investor acquired the securities for their own account and not with a view to the distribution thereof in the absence of an effective registration statement or an applicable exemption from registration, and that the Investor are sophisticated within the meaning of Section 4(2) of the Securities Act and are “accredited investors” (as defined by Rule 501 under the Securities Act). In addition, the issuances did not involve any public offering; the Registrant made no solicitation in connection with the sale other than communications with the Investor; the Registrant obtained representations from the Investor regarding their investment intent, experience and sophistication; and the Investor either received or had access to adequate information about the Registrant in order to make an informed investment decision. All of the foregoing securities are deemed restricted securities for purposes of the Securities Act.

Item 6. Selected Financial Data

Not required for smaller reporting companies.

Item 7. 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 Item 8. “Financial Statements and Supplementary Data” included below in this Annual Report on Form 10-K. Operating results are not necessarily indicative of results that may occur in future periods.

This discussion and analysis contains forward-looking statements that involve a number of risks, uncertainties and assumptions. Actual events or results may differ materially from our expectations. Important factors that could cause actual results to differ materially from those stated or implied by our forward-looking statements include, but are not limited to, those set forth in Item 1A. “Risk Factors” in this Annual Report. All forward-looking statements included in this Annual Report are based on information available to us on the date of this Annual Report and, except as required by law, we undertake no obligation to update publicly or revise any forward-looking statements.

Overview

We are a development stage biotechnology company focused on discovering, developing and commercializing immunotherapy products that generate and enhance immune system responses to treat cancer. Data from our clinical trials suggest that our cancer therapies significantly extend both time to recurrence and survival, while providing a superior quality of life with no debilitating side effects when compared with current therapies. For additional information regarding our business, product candidates and the status of our clinical trials, see Item 1. “Business” in this Annual Report on Form 10-K.

Our financing activities are described below under “— Liquidity and Capital Resources”. We will need to raise additional capital to fund our operations, including our Phase II DCVax -Brain clinical trial. Depending on the trial results, we plan to seek product approval for DCVax -Brain, our leading product candidate, in both the U.S. and E.U.

We have experienced recurring losses from operations and have a deficit accumulated during the development stage of $218.3 million at December 31, 2010. In addition, our independent registered public accounting firm has indicated in its report on our financial statements included in this Annual Report on Form 10-K that there is substantial doubt about our ability to continue as a going concern.

Going Concern

Our financial statements for the year ended December 31, 2010 have been prepared on a going concern basis, which contemplates the realization of assets and the settlement of liabilities in the normal course of business. Nevertheless, we have experienced recurring losses from operations and have a deficit accumulated during the development stage of $218.9 million that raises substantial doubt about our ability to continue as a going concern and our auditors have issued an opinion, for the year ended December 31, 2010, which states that there is substantial doubt about our ability to continue as a going concern.

If we are unable to continue as a going concern, we would consider all opportunities for creating value in the Company, including investigating ways to advance our dendritic cell-based product and monoclonal antibody candidates, including pursuing potential corporate partnerships for our monoclonal antibody candidates, and other alternatives, including the possible sale of some or all of our assets.

Expenses

From our inception through December 31, 2010, we incurred costs of approximately $76.8 million associated with our research and development activities. Because our technologies are unproven, we are unable to estimate with any certainty the costs we will incur in the continued development of our product candidates for commercialization.

General and administrative expenses include salary and benefit expenses related to administrative personnel, cost of facilities, insurance, legal support, as well as amortization costs of stock options granted to employees and warrants issued to consultants for their professional services.

To date, our revenues have primarily been derived from the manufacture and sale of research materials, contract research and development services and research grants from the federal government.

Critical Accounting Policies and Estimates

Our consolidated financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. In preparing these financial statements, we make assumptions, judgments and estimates that can have a significant impact on amounts reported in our financial statements. We base our assumptions, judgments and estimates on historical experience and various other factors that we believe to be reasonable under the circumstances. Actual results could differ materially from these estimates under different assumptions or conditions. On a regular basis we evaluate our assumptions, judgments and estimates and make changes accordingly. We believe that, of the significant accounting policies discussed in Note 3 to our consolidated financial statements, the following accounting policies require our most difficult, subjective or complex judgments:

Embedded Derivative Liability

The Company evaluates financial instruments for freestanding or embedded derivatives. Derivative instruments that have been separated from the host contract and do not qualify for hedge accounting are recorded at fair value with changes in value recognized as other income (expense) in the consolidated statements of operations in the period of change.

Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. U.S. GAAP establishes a three tier fair value hierarchy which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include:

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and

Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.

Stock-Based Compensation

Compensation expense for all stock-based awards is measured at the grant date based on the fair value of the award and is recognized as an expense, on a straight-line basis, over the employee's requisite service period (generally the vesting period of the equity award). The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. Stock-based compensation expense is recognized only for those awards that are expected to vest using an estimated forfeiture rate. Estimates of pre-vesting forfeiture are periodically revised in subsequent periods if actual forfeitures differ from those estimates. To the extent that actual results differ from our estimates, such amounts will be recorded as cumulative adjustments in the period the estimates are revised.

Results of Operations

Operating costs:

Operating costs and expenses consist primarily of research and development expenses, including clinical trial expenses which increase when we are actively participating in clinical trials, and general and administrative expenses.

Research and development:

Discovery and preclinical research and development expenses include scientific personnel related salary and benefit expenses, 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 development stage company, we do not allocate research and development 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 administrative personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal support, property and equipment depreciation, amortization of stock options and warrants.

Year Ended December 31, 2009 Compared to the Year Ended December 31, 2010

We recognized a loss from operations of $15.4 million for the year ended December 31, 2010 compared to a loss from operations of $17.5 million for the year ended December 31, 2009.

Research and Development Expense. Research and development expense increased from $9.6 million for the year ended December 31, 2009 to $9.9 million for the year ended December 31, 2010. This increase which was due to recognizing a performance penalty and other unaccrued charges under the Cognate services agreement totaling $3.6 million partially offset by reduced clinical trial operations.

General and Administrative Expense. General and administrative expense decreased from $7.5 million for the year ended December 31, 2009 to $5.5 million for the year ended December 31, 2010. This decrease was primarily related to reduced legal and consulting costs.

Depreciation and Amortization. Depreciation and amortization decreased from $7,000 during the year ended December 31, 2009 to $2,000 for the year ended December 31, 2010 as a result of all assets being fully depreciated.

Loan conversion inducement. Loan conversion inducement expense decreased from $5.6 million in the year ended December 31, 2009 to $4.7 million in the year ended December 31, 2010. The transactions resulting in these charges are as follows:

In September 2009, Toucan Partners agreed to convert $1,156,718, representing principal and accrued interest (including a default penalty of 0.25% per month) outstanding on the $1.0 million loan made to the Company on August 19, 2008, and $552,738, representing principal and accrued interest (including a default penalty of 0.25% per month) outstanding on a loan made to the Company on December 22, 2008. This total of $1,709,456 was converted into 8,547,280 shares of the Company’s common stock. Additionally in connection with the conversions the Company issued Toucan Partners warrants to purchase 842,375 shares at an exercise price of $0.20 per share and warrants to purchase 513,841 shares at an exercise price of $0.41 per share. The value of the stock issued to Toucan Partners in excess of the carrying amount of the loans and accrued interest payable amounted to $4,701,004, and together with the fair value of the warrants, of $916,716, was charged to loan conversion inducement expense in the accompanying consolidated statements of operations during 2009.

Derivative valuation gain (loss). During 2010 the Company entered into convertible loan agreements and issued certain warrants with down-round protection. As a result the Company must recognize any gains or losses arising from those agreements through the statement of operations.

Asset Impairment Loss. In July 2009 the Company’s contract manufacturer, Cognate Bioservices, Inc., consolidated its operations in its newer Memphis, Tennessee manufacturing facilities and closed the Sunnyvale facility housing the Company’s clean room. As the California clean room cannot be relocated the Company provided an impairment allowance of $389,000 reducing the carrying value of the clean room to $0.

Interest Expense, Net. Interest expense increased from $3.9 million for the year ended December 31, 2009 to $7.9 million for the year ended December 31, 2010. Interest expense includes interest payable on notes payable, debt discount amortization, warrant amortization and other financing costs. Interest expense for the year ended December 31, 2009 and December 31, 2010 was $1.0 million and $3.0 million, respectively, and debt discount amortization and other costs for the year ended December 31, 2009 and December 31, 2010 was $2.9 million and $4.9 million respectively. The change in debt discount amortization and other costs was primarily due to an increase in the average balance of notes payable outstanding during 2010 compared to 2009 and higher debt discount amortization during 2010 compared to 2009.

Liquidity and Capital Resources

The change in cash for the years ended December 31, 2009 and 2010 was comprised of the following (in thousands):

	For the Years Ended December 31,
	2009			2010			Change
Net cash provided by (used in):
Operating activities	$	(4,677	)	$	(6,376	)	$	(1,699	)
Investing activities		(2	)		(41	)		(39	)
Financing activities		4,753			6,609			1,856
Effect of exchange rates on cash		(25	)		(104	)		(79	)

(Decrease) increase in cash	$	49		$	88		$	39

Operating Activities

We used $6.4 million in cash for operating activities during the year ended December 31, 2010, compared to $4.7 million for the year ended December 31, 2009. The decrease in cash used in operating activities was a result of the reductions in staff and clinical trial research and development activity due to cash constraints.

Investing Activities

We used $41,000 in cash for investing activities during the year ended December 31, 2010 compared to $2,000 used for investing activities during the year ended December 31, 2009. The cash used in 2010 and 2009 consisted of purchases of property and equipment.

Financing Activities

During 2010, our financing activities consisted of proceeds from notes payable amounting to $4.1 million and proceeds from the issuance of common stock amounting to $3.8 million. Our 2010 financing transactions also included the repayment of notes payable amounting to $1.5 million and proceeds from the sale of warrants amounting to $90,000. The 2010 financing transactions consisted of:

Between February 22, 2010 and March 31, 2010, we sold 1,451,666 shares of common stock at $0.75 per share for net proceeds of $1,088,750.

Between April and June 2010 we completed a private placement of 2.3 million shares of our common stock and received $1,750,000 and the purchase carried 10% warrants.

In July 2010 we sold 866,667 shares of our common stock and received $650,000 and the purchase carried 10% warrants.

In August 2010 we completed a private placement of 266,667 shares of our common stock and received $200,000 and the purchase carried 20% warrants.

During the three months ended September 30, 2010, the Company borrowed $1,750,000 under a series of unsecured 6% convertible Loan Agreements and Promissory Notes.

On November 2, 2010 the Company received $90,000 as proceeds of the sale of a warrant to purchase 3,250,000 shares of the Company’s common stock. The warrant has an exercise price of $1.50 per share and a term of 3 years.

In November 2010, the Company received $295,000 upon issuing unsecured convertible loan agreements and promissory notes due in May 2011 to a group of Private Lenders. The notes carried an original issue discount of 10%.

On December 16, 2010, the Company entered into a lender secured convertible loan agreement totaling $3,050,000 with a private non-affiliated investor due in December 2013. The notes carry an original issue discount of 10% in addition to a one-time interest charge of 10%. As of December 31, 2010 the Company had received $350,000 under this agreement.

On December 16, 2010, the Company received $100,000 upon issuing unsecured 10% convertible loan agreements and promissory notes due on March 17, 2011 to a private non-affiliated investor.

On December 31, 2010, the Company received $790,000 from SDS Capital, an existing investor, upon issuing two unsecured loan agreements and promissory notes due in July 2011.

During 2009, our financing activities consisted of proceeds from notes payable amounting to $3.4 million and proceeds from the issuance of common stock amounting to $1.4 million. The 2009 financing transactions consisted of:

On January 16, 2009 we entered into a securities purchase agreement for $700,000 with Al Rajhi Holdings who purchased 1,000,000 shares of our common stock at $0.70 per share.

On March 27, 2009, we completed a private placement of 1.4 million shares of our common stock and received $0.7 million.

During March 2009, the Company received $760,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in March 2011 to a group of private lenders (“Private Lenders”).

Toucan Partners loaned the Company a total of $1,300,000 on July 2, 2009 and July 17, 2009 under unsecured 6% convertible promissory notes due July 1, 2011 and July 16, 2011.

On dates between August 13, 2009 and September 24, 2009, the Company received an aggregate of $580,000 upon issuing a series of small unsecured 6% convertible loan agreements and promissory notes due in August and September 2011 to a group of Private Lenders.

On dates between October 6, 2009 and December 31, 2009, the Company received $720,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in August and September 2011 to a group of Private Lenders.

During 2009, the Company and Cognate BioServices ("Cognate") agreed that most of the accounts payable owed by the Company to Cognate, will be converted into shares of common stock instead of paid in cash. The conversion price will be no less favorable than the conversion price applied to any other creditor of the Company. The lowest conversion price applied to any other creditor of the Company to date following the agreement is $0.20 per share. Accordingly, if no lower conversion price is applied to any other creditor prior to completion of the Cognate conversion, the Cognate conversion will take place at $0.20 per share. The impact of the conversion will result in a reduction of liabilities for the amount converted. In addition, the Company will recognize the value of common stock issued in excess of the amount of accounts payable converted, if any, as a charge to operations when the conversion takes place. Initial review of the payables by both parties indicated a difference in the parties’ respective understanding of the amounts due. The parties have now agreed that as of December 31, 2010 the amount due to Cognate is $10.2 million and the Company has recognized $3.6 million in additional expense in 2010. Finalization of the conversion arrangements are in process.

During the years ending December 31,2009 and 2010, respectively, the Company recognized approximately $1.1 million and $0.9 million of general and administrative costs related to this recapitalization agreement, rent expense, as well as legal, travel and other costs incurred by Toucan Capital, Toucan Partners and Linda Powers on the Company's behalf. At December 31,2009 and 2010, accrued expenses payable to Toucan Capital amounted to $0.4 million and $1.5 million, respectively, and are included in the accompanying consolidated balance sheets.

Also during 2009, the Company agreed with Toucan Capital, Toucan Partners and Linda Powers that a portion of the accrued expenses owed by the Company to these parties for certain expense reimbursements will be converted into shares of common stock instead of paid in cash. Toucan Capital, Toucan Partners and Linda Powers have paid certain expenses on behalf of the Company. The parties agreed that these accrued expenses will be converted into common stock at a conversion rate equal to the price per share paid by unrelated investors at that time, and no less favorable than the conversion rate applied to any other creditor of the Company ($0.20 per share). The parties are in the process of determining the amounts of unbilled accrued expenses. The impact of the conversion will result in a reduction of liabilities for the amount converted. In addition, the Company will recognize the value of common stock issued in excess of the amount of the accrued expenses converted, if any, as a charge to operations when the conversion takes place. Finalization of these arrangements is in process.

We estimate that our current funding is sufficient to enable us to proceed with our current (reduced) activities under our DCVax -Brain program. Our ongoing funding requirements will depend on many factors, including the number of staff we employ, the pace of patient enrollment in our brain cancer trial, the cost of establishing clinical studies and compassionate use/named patient programs in other countries, and unanticipated developments, including potential adverse developments in pending litigation and/or regulatory matters. Without additional capital, we will not be able to proceed with significant enrollment in our DCVax -Brain clinical trial or move forward with compassionate use/named patients programs or with any of our other product candidates for which investigational new drug applications have been cleared by the FDA. We will also be constrained in developing our second generation manufacturing processes, which offer the potential for significant reduction in product costs.

Additional funding will be required in the near future and there can be no assurance that our efforts to seek such funding will be successful. If our capital raising efforts are unsuccessful, our inability to obtain additional cash as needed could have a material adverse effect on our financial position, results of operations and our ability to continue our existence. Our independent registered public accounting firm has indicated in its report on our financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2010 that there is substantial doubt about our ability to continue as a going concern. We may seek additional funds through the issuance of additional common stock or other securities (equity or debt) convertible into shares of common stock, which could dilute the ownership interest of our stockholders. We may seek funding from Toucan Capital or Toucan Partners or their affiliates or other third parties. Such parties are under no obligation to provide us any additional funds, and any such funding may be dilutive to stockholders and may contain restrictive covenants that could limit our ability to take certain actions.

Contractual Obligations

The Company has numerous contractual obligations including Synteract, Media Marketing Communications, Dr. David Filer, and others. All of these contracts have been entered into in the normal course of business and are available from numerous sources. The Company is not materially dependent on any of the parties to these contracts.

Recent Accounting Pronouncements

Refer to Note 3 to the Consolidated Financial Statements

Item 7A. Quantitative and Qualitative Disclosure about Market Risk

Not required for smaller reporting companies

Item 8. Financial Statements and Supplementary Data

Financial Statements

Our financial statements required by this item are submitted as a separate section of this Annual Report on Form 10-K. See Item 15(a)(1) for a listing of financial statements provided in the section titled “Financial Statements”.

Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

None

Item 9A. Controls and Procedures

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

Under the supervision and with the participation of our management, including our principal executive, financial and accounting officer, we conducted an evaluation of our disclosure controls and procedures, as such term is defined under Rule 13a-15(e) promulgated under the Securities Exchange Act of 1934, as amended. Based on this evaluation, our principal executive, financial and accounting officer concluded that, as of December 31, 2010, in light of the material weaknesses described below, our disclosure controls and procedures were not effective to ensure that the information required to be disclosed by us in the reports that we file or submit under the Securities Exchange Act of 1934 is accumulated and communicated to management, including our chief executive officer, financial and accounting officer, to allow timely decisions regarding required disclosure, and that such information is recorded, processed, summarized and reported within the time periods prescribed by the SEC.

Management's Report on Internal Controls Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal controls over financial reporting, as such term is defined in Exchange Act Rule 13a-15(f). Under the supervision and with the participation of our management, including our principal executive, financial and accounting officer, we conducted an evaluation of the effectiveness of our internal controls over financial reporting as of December 31, 2010. This evaluation was based on the framework in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO").

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis.

Based on management's evaluation as of December 31, 2010, our management identified the material weaknesses set forth below in our internal control over financial reporting:

(i)

The Company's process for internally reporting material information in a systematic manner to allow for timely filing of material information is ineffective, due to its inherent limitations from being a small company, and there exists material weaknesses in internal control over financial reporting that contribute to the weaknesses in our disclosure controls and procedures. These weaknesses include the lack of:

appropriate segregation of duties;

appropriate oversight and review;

internal accounting technical expertise;

preparation, review and verification of internally developed documentation;

controls in place to insure that all material developments impacting the financial statements are reflected; and

executed agreements for significant contracts.

(ii)

Lack of a sufficient number of independent directors for our board and audit committee. We currently only have one independent director on our board, which is comprised of three directors, and on our audit committee. Although we are considered a controlled company, whereby a group holds more than 50% of the voting power, and as such are not required to have a majority of our board of directors be independent. It is our intention to have an majority of independent directors in due course.

(iii)

Lack of a financial expert on our audit committee. We currently do not have an audit committee financial expert, as defined by SEC regulations on our audit committee as defined by the SEC.

(iv)

Insufficient corporate governance policies. Although we have a code of ethics which provides broad guidelines for corporate governance, our corporate governance activities and processes are not always formally documented. Specifically, decisions made by the board to be carried out by management should be documented and communicated on a timely basis to reduce the likelihood of any misunderstandings regarding key decisions affecting our operations and management.

(v)

Inadequate approval and control over transactions and commitments made on our behalf by related parties. Specifically, during the year certain related party transactions and other material transactions were not effectively communicated to all internal personnel who needed to be involved to account for and report the transaction in a timely manner. This resulted in material adjustments during the quarterly reviews and annual audit, respectively, that otherwise would have been avoided if effective communication and approval processes had been maintained.

Our company's management concluded that in light of the material weaknesses described above, our company did not maintain effective internal control over financial reporting as of December 31, 2010 based on the criteria set forth in Internal Control—Integrated Framework issued by the COSO.

This annual report does not include an attestation report of our registered public accounting firm regarding internal control over financial reporting. Management's report was not subject to attestation by our public accounting firm pursuant to rules of the SEC that permit us to provide only management's report in this annual report.

Changes in Internal Control over Financial Reporting

There has been no change in our internal controls over financial reporting that occurred during the fiscal quarter ended December 31, 2010 that has materially affected, or is reasonably expected to materially affect, our internal controls over financial reporting.

Inherent Limitations

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Item 9B. Other Information

None.

PART III

Item 10. Directors, Executive Officers and Corporate Governance

Our directors and their ages and positions, as of April 12, 2011, are included in the table below. Mr. Boynton’s, Ms. Powers’ and Mr. Farmer’s biographies follow the table.

Name	Age	Position
Alton L. Boynton, Ph.D.	66	President, Chief Executive Officer, Secretary and Director
Linda F. Powers	55	Director, Chairperson
Robert A. Farmer	72	Director

Alton L. Boynton, Ph.D. Dr. Boynton co-founded the Company, has served as Secretary since August 2001, has served as our Chief Scientific Officer and a director since our inception in 1998, was appointed our Chief Operating Officer in August 2001, was appointed President in May 2003 and was appointed Chief Executive Officer in June 2007. Dr. Boynton has also served as Director of the Department of Molecular Medicine of Northwest Hospital from 1995-2003 where he coordinated the establishment of a program centered on carcinogenesis. Prior to joining Northwest Hospital, Dr. Boynton was Associate Director of the Cancer Research Center of Hawaii, The University of Hawaii, where he also held the positions of Director of Molecular Oncology of the Cancer Research Center and Professor of Genetics and Molecular Biology. Dr. Boynton received his Ph.D. in Radiation Biology from the University of Iowa in 1972.

As a result of Dr. Boynton’s significant years of service as a director and running a number of programs focusing on oncology and cancer-related research programs, including a PhD in Radiation Biology, the Company concluded that Dr. Boynton should serve as a director and executive officer.

Linda F. Powers. Ms. Powers has served as the Chairperson of our Board of Directors since her appointment on May 17, 2007. Ms. Powers has served as managing director of Toucan Capital Corporation, a provider of venture capital since 2001. She has over 15 years experience in corporate finance and restructurings, mergers and acquisitions joint ventures and intellectual property licensing. Ms. Powers is a board member of M2GEN (an affiliate of Moffitt Cancer Center), the Trudeau Institute (well known for its specialization in immunology), the Chinese Biopharmaceutical Association, the Rosalind Franklin Society, the Genetics Policy Institute, and a Task Force of the National Academy of Sciences . She was the Chair of the Maryland Stem Cell Research Commission for the first two years of the state’s stem cell funding program, and continues to serve on the Commission. Ms. Powers has been appointed to three Governors’ commissions created to determine how to build the respective states’ biotech and other high-tech industries. For six years, Ms. Powers taught an annual internal course at the National Institutes of Health for the bench scientists and technology transfer personnel on the development and commercialization of medical products. Ms. Powers serves on the boards of six private biotechnology companies. Ms. Powers holds a B.A. from Princeton University, where she graduated magna cum laude and Phi Beta Kappa. She also earned a JD, magna cum laude, from Harvard Law School. Ms. Powers is a member of the Company’s Audit Committee, Compensation Committee and Nominations Committee.

Ms. Powers has over 15 years of experience in corporate financings and business transactions, and 10 years specializing in biotechnology investment and company building. Ms. Powers has served for a number of years on Boards of a leading immunology research institute, a large cancer center and more than half a dozen biotechnology companies. The Company believes this background and experience makes Ms. Powers well qualified to serve as a Director.

Robert A. Farmer. Mr. Farmer was appointed to the Board of Directors in December 2009. Mr. Farmer served as the national treasurer of four presidential campaigns, including John Kerry, Bill Clinton, Michael Dukakis and John Glenn. In these roles he led fund raising of over $800 million. He served under Ron Brown as treasurer of the Democratic National Committee, and served for eight years as treasurer of the Democratic Governor’s Association. President Clinton appointed Farmer as the United States Consul General to Bermuda where he served from 1994 to 1999. Mr. Farmer also had a successful career as an entrepreneur including building his own publishing company which he sold in 1983, Mr. Farmer currently serves on the Boards of Directors of International Data Group, Dale Carnegie Associates, Sober Steering Sensors, LLC, Charlesbridge Publishing, Haute Living Mr. Farmer is a graduate of Dartmouth College and Harvard Law School.

The Company concluded Mr. Farmer should serve as a director of the Company due to his previous business successes, his experience as treasurer in four presidential campaigns and his service on other boards of directors (including International Data Group, Dale Carnegie Associates, Sober Steering Sensors and Clark Ridge Publishing).

For information pertaining to our executive officers, refer to “Executive Officers of Northwest Biotherapeutics, Inc.” included in Part I, Item 1 of this Annual Report on Form 10-K.

Board of Directors

Our Board of Directors consists of one non-employee director, one director who is currently employed by us and one independent director. The Board has established the following committees:

Audit Committee

The Audit Committee has responsibility for recommending the appointment of our independent accountants, supervising our finance function (which includes, among other matters, our investment activities), reviewing our internal accounting control policies and procedures, and providing the Board such additional information and materials as it may deem necessary to make the Board aware of significant financial matters which require the attention of the Board. The Audit Committee provides the opportunity for direct contact between our independent registered public accounting firm and the Board. The Board has adopted a written charter for the Audit Committee and its current member, Linda F. Powers, is a non-employee director.

None of our directors meet the definition of an “audit committee financial expert” as defined by the SEC. We intend to recruit one or more additional non-executive directors in due course, including one person who qualifies as an audit committee financial expert but may not be able to do so.

Compensation Committee

The Compensation Committee is responsible for determining the overall compensation levels of our executive officers and administering our stock option plans. The Board has adopted a written charter for the Compensation Committee and its current member is Linda F. Powers a non-employee.

Nominations Committee

The Nominations Committee is responsible for identifying and nominating members of the Board, recommending directors to be appointed to each committee of the Board and the chair of such committees, and overseeing the evaluation of the Board. The Board has adopted a written charter for the Nominations Committee. Linda F. Powers and Robert A. Farmer are currently members of the committee. The Nominations Committee will consider nominees recommended by stockholders pursuant to the procedures outlined in the Company’s Bylaws and as set forth herein. No Nominations Committee meetings were held during the year ended December 31, 2010.

We have adopted a code of ethics meeting the definition of “Code of Ethics” as defined in Item 406 of Regulation S-K. Our Code of Ethics is applicable to the chief executive officer, the chief financial officer, the principal accounting officer or persons performing similar functions. Our code of ethics is posted on our website and may be accessed at www.nwbio.com/about_code.php. We will post to our website any amendments to our code of ethics and any waivers granted under the code to any of our directors or executive officers.

Item 11. Executive Compensation

Compensation Discussion and Analysis

Our Process

Typically, our executive compensation is comprehensively assessed and analyzed annually; however, given our limited funding since 2002, our executives have received infrequent increases in their compensation. During 2010, our executives also received equity based incentives.

Normally, the review process includes, but is not limited to, the following steps:

The Compensation Committee reviews the performance of the Chief Executive Officer and other senior executives;

The current annual compensation of senior management and long-term compensation grants made over the past few years are reviewed;

The appropriate performance metrics and attributes of annual and long-term programs for the next year are considered and discussed;

The entirety of our compensation program is considered;

For our top officers, if peer group compensation is available for their position, we use a blend of survey and peer compensation for comparison, as we compete not only in our own market, but nationally and across industries, for talent;

The compensation practices of our peer companies are reviewed, including their practices with respect to equity and other grants, benefits and perquisites;

The compensation of our management team from the standpoint of internal equity, complexity of the job, scope of responsibility and other factors is assessed; and

Management’s stock ownership is reviewed.

Management has the following involvement with the executive compensation process:

The Chief Executive Officer recommends salaries, annual and long-term incentive targets, and plan amendments and design before recommendations are submitted to the Compensation Committee for approval; and

The Chief Executive Officer is involved in establishing and recommending to the Compensation Committee financial goals for the incentive programs based on management’s operational goals and strategic plans.

Compensation Goals

Our philosophy regarding executive compensation is to attract and retain highly qualified people by paying competitive salaries, and to link the financial interests of our senior management to those of our stockholders by tying compensation to the achievement of operational and financial objectives. Our compensation package for our officers includes both short-term and long-term features in the forms of base salary and equity-based incentives in the form of stock options, which are granted periodically at the discretion of the Compensation Committee.

Elements of Executive Compensation

Base Salaries

Base salaries for all executive officers are reviewed annually. The Compensation Committee reviews the compensation of the President and Chief Executive Officer. The President and Chief Executive Officer reviews the compensation of the other executive officers. The Compensation Committee also consults with the President and Chief Executive Officer with respect to the compensation package for all other executive officers. In evaluating salaries, each officer’s individual performance during the prior year, as well as salary levels in the biotechnology industry for comparable positions are considered. In determining how the respective officer contributes to the Company, current corporate performance, as well as the potential for future performance gains, is considered. No specific weight is attributed to the foregoing for purposes of determining base salaries.

Equity-Based Incentives

We provide our executive officers with long-term incentives through our 1998 Plan, 1999 Plan, 2001 Plan, Employee Plan and beginning in 2007, our 2007 Stock Option Plan (each, as defined under “— Equity Plans” below), all described in more detail below. On June 22, 2007, we amended the 1998 Plan, 1999 Plan, 2001 Plan and Employee Plan such that no further stock option grants may be made under any of such plans. The primary objective of these plans is to provide an incentive for employees, including our executive officers, to make decisions and take actions that maximize long-term stockholder value. The plans are designed to promote this long-term focus by using discretionary grants and long-term vesting periods. Subject to the terms of the plans, the Compensation Committee determines the terms and conditions of options granted under the plans, including the exercise price, which is based on fair value of our stock on the date of grant. For various motivation and retention considerations, option awards granted subsequent to our initial public offering in December 2001 generally vest over four years. The Compensation Committee believes that stock options provide an incentive for employees, allowing us to attract and retain high quality management and staff. No stock options were issued to our executives in 2010. Stock options were issued to two employees in 2009.

Employee and Executive Benefits

Our executives participate in many of the same employee benefit programs as our other employees. The core employee benefit programs include a tax-qualified retirement plan, medical coverage, dental coverage, life insurance, disability coverage, and vacation. The tax qualified retirement plan is a 401(k) plan. We made matching contributions to each employee’s 401(k) plan account of $0.50 for each dollar contributed on the first $3,000 of compensation contributed to the plan. Our matching contribution policy was terminated effective March 2006. All of these matching contribution amounts to our Named Executive Officers are shown in the All Other Compensation footnote to the Summary Compensation Table following this section.

Perquisites

Historically, we have offered only a very limited number of perquisites to our executives as an incremental benefit to recognize their position within the Company. No perquisites of any kind were offered to executives in 2010.

Compensation of the President and Chief Executive Officer

In assembling the compensation package for our President and Chief Executive Officer, the Compensation Committee considers our annual and long-term performance, the performance of the President and Chief Executive Officer, and our cash resources and needs. Although the Committee’s overall goal is to set the President and Chief Executive Officer’s salary at the median level for competitors that are similar in industry size and performance, the actual level approved by the Committee may be higher or lower based upon the Committee’s subjective evaluation of the foregoing. Consistent with the foregoing, the Compensation Committee set the base salary for the President and Chief Executive Officer at $331,250 for fiscal 2010. The President and Chief Executive Officer did not receive an increase in salary or a bonus for 2010. In connection with our initial public offering on AIM, in December 2007, the Board of Directors granted the President and Chief Executive Officer an option to purchase shares of our common stock.

On September 28, 2009 the Company entered into a retention agreement, with our president and Chief Executive Officer Dr. Alton Boynton. Under this agreement, Dr. Boynton received a convertible note in the amounts of $75,000. The note is convertible at the discretion of Dr. Boynton during the term of the note which expires on September 29, 2011. The note for Dr. Boynton requires that he continues his employment at the Company as either the Chief Executive Officer or the Chief Scientific Officer, until at least September 30, 2010. Pursuant to the retention agreement, Dr. Boynton must elect, on or before November 1, 2009, one of three alternative structures for his convertible note: (a) payment in cash; (b) payment in common stock of the Company at the same price per share as the Private Lender Notes issued in August and September 2009 ($0.20 per share), with the taxes being paid by the recipient and the amount of the common stock being equal to the full gross amount of the retention bonus, or (c) payment in common stock of the Company at $0.20 per share with the taxes being paid by the Company and the amount of the common stock being equal to the net after-tax amount of the retention bonus. Also pursuant to the retention agreements, the Company has agreed with Dr. Boynton that he may elect to receive common stock in lieu of salary for up to a maximum of six (6) pay periods during 2009, at the same price per share as the New Funding being received by the Company ($0.20 per share). On October 31, 2009 Dr. Boynton elected to structure his convertible note to be paid in common stock of the Company at the same price per share as the Private Lender Notes issued in August and September 2009 ($0.20 per share), with the taxes being paid by the recipient and the amount of the common stock being equal to the full gross amount of the retention bonus. In December 2009 Dr. Boynton also elected to receive common stock in lieu of salary for six weeks. In December 2010, Dr Boynton elected to have four pay periods of salary paid in stock at $0.61 per share.

On August 21, 2009 Dr. Boynton was granted an option to purchase 1,430,486 shares of the Company’s stock of which 1,132,464 shares vested immediately with the balance vesting in five equal monthly installments between August 31 and December 31, 2009.

Summary Compensation Table

The following table sets forth certain information concerning compensation paid or accrued to our named executive officers (the “Named Executive Officers”) during the years ended December 31, 2010, 2009 and 2008

Name and Principal Position	Year	Salary			Bonus		Option Awards(1)		All Other Compensation(2)		Total

Alton L. Boynton, Ph.D. (3)	2010	$	359,528	(5)		—	$	—	$	—	$	359,528
President, Chief Executive	2009	$	538,281	(4)		75,000	$	768,065	$	—	$	1,426,346
Officer, Chief Scientific Officer and Secretary	2008	$	331,250			—	$	—	$	504	$	331,754

Anthony P. Deasey (6)	2010	$	—			—	$	—	$	—	$	—
Senior Vice President and Chief Financial Officer	2009	$	—			—	$	—	$	—	$	—
	2008	$	215,331			—	$	—	$	378	$	215,709

Marnix L. Bosch, Ph.D., M.B.A.	2010	$	431,652	(7)		—	$	—	$	—	$	431,652
Chief Technical Officer	2009	$	283,750			50,000	$	731,892	$	—	$	1,065,642
	2008	$	250,000			—	$	—	$	672	$	250,672

(1)

Represents the amount recognized for financial statement reporting purposes for 2010, 2009 and 2008 in respect of outstanding option awards at fair value, excluding any impact of assumed forfeiture rates. The assumptions made in valuing option awards reported in this column are discussed in Note 3, Stock-Based Compensation to our consolidated financial statements for the years ended December 31, 2010, 2009 and 2008, included elsewhere in this Annual Report on Form 10-K.

(2)	All Other Compensation for the year ended December 31, 2008 consisted of Company-paid premiums on term life insurance coverage up to 1.5 times the employee’s annual salary and earned but unpaid accrued vacation payments.

(3)	Dr. Boynton was appointed as our Chief Executive Officer in June 2007. Dr. Boynton served as our Chief Operating Officer and our principal executive officer during 2006.

(4)

In conjunction with a retention agreement between Dr. Boynton and the Company dated September 28, 2009 Dr. Boynton elected to have six weeks of salary paid in shares of the Company’s common stock. The salary payment was converted into stock at a price of $0.20 per share. The shares issued to Dr. Boynton had a market value at the issue date of $262,239.

(5)	In December 2010 Dr Boynton elected to have four pay periods of salary paid in stock at $0.61 per share. The shares issued to Dr. Boynton had a market value at the issue date of $61,543.

(6)	Effective October 1, 2007, Anthony P. Deasey was named as our Chief Financial Officer. Mr. Deasey resigned from this position effective August 12, 2008.

(7)

In conjunction with a retention agreement between Dr. Bosch and the Company dated September 28, 2009 Dr. Bosch elected to have six weeks of salary paid in shares of the Company’s common stock. The salary payment was converted into stock at a price of $0.20 per share. The shares issued to Dr. Bosch had a market value at the issue date of $105,626. In December 2010 Dr Bosch elected to have an additional two pay periods of salary paid in stock at $0.61 per share. The shares issued to Dr. Bosch had a market value at the issue date of $30,191.

Given our financial status, there are no regularly scheduled increases in compensation.

Grants of Plan-Based Awards in 2010

The following table provides information about equity awards granted to the Named Executive Officers during the years ended December 31, 2009 and 2010. We did not grant any stock options, stock appreciation rights or restricted stock to Named Executive Officers during the fiscal year ended December 31, 2010.

Name	Grant Date	All other Option Awards: Number of Securities Underlying Options			Exercise or Base Price of Option Awards		Grant Date Closing Price of Common Stock		Grant Date Value of Option Awards
Dr. Alton Boynton	08/21/09		1,430,486	(1)	$	0.55	$	0.55		786,055
Dr. Marnix Bosch	06/23/09		850,000	(2)	$	0.70	$	0.70		594,516
Dr. Marnix Bosch	08/21/09		250,000	(3)	$	0.55	$	0.55		137,376

(1)	This option was granted under the 2007 Stock Option Plan. This option grant vested over the balance of 2009 with 1,132,464 vesting on the grant date and the remainder vesting in equal installments on August 31, September 30, October 31, November 30 and December 31, 2009.

(2)	This option was granted under the 2007 Stock Option Plan. This option vests on the following schedule;

Vesting Event	# of Shares
June 23, 2009		125,000
May 31, 2010		125,000
May 31, 2011		100,000
May 31, 2012		99,996
May 31, 2013		99,996
Swiss Approval		100,000
Full Enrollment in Phase II Glioblastoma Multiforme Clinical Study		100,000
FDA Approval of NDA		100,000

(3)	This option was granted under the 2007 Stock Option Plan. This option grant vested over the balance of 2009 with 125,000 vesting on the grant date and the remainder vesting on December 31, 2009.

Outstanding Equity Awards at Fiscal Year-End

The following table shows outstanding stock option awards classified as exercisable and un-exercisable as of December 31, 2010.

	Option Awards
Name and Principal Position	Number of Securities Underlying Unexercised Options Exercisable			Number of Securities Underlying Unexercised Options Un-exercisable		Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock that Have Not Vested		Market Value of Shares or Units of Stock that Have not Vested		Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights that Have Not vested		Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares Units or Other rights that Have Not Vested
Alton L. Boynton		5,286	(1)				18.75	04/18/11		0		0		0		0
President and Chief		6,666	(1)				1.35	02/18/13
Executive Officer		125,142	(2)		41,714		0.60	12/31/11
		1,430,486	(3)				0.55	08/20/19

Marnix L. Bosch		333	(4)				18.75	09/20//11
Chief Technical		833	(4)				75.00	01/10/12
Officer		3,194	(4)		139		1.35	2/18/13
		4,000	(4)		1,333		1.80	12/01/13
		69,295	(5)		111,614		0.60	12/31/11
		308,338	(6)		541,662		0.70	06/23/19
		250,000	(7)				0.55	08/20/19

(1)

These options were granted under the 1999 Plan, the 2001 Plan and under Dr. Boynton’s previous employment agreement. Each of these option grants vests over a four year period. One-fourth of each option grant vests on the first anniversary of the grant date and the remaining three-fourths of each grant vests in equal monthly installments over the remaining three year vesting period.

(2)

This option was granted under the 2007 Stock Option Plan. This option grant vests over a three and one-half year period. Approximately 29% the option grant was vested immediately upon grant with respect to prior service performed. Approximately 17% vests on the first anniversary of the AIM offering (June 22, 2008) and the remaining portion vests in equal monthly installments over the remaining three year vesting period. These options were granted in recognition of past service to the Company and have an exercise price of $0.60 per share, which is equal to the conversion price of warrants issued to Toucan Partners under the Conversion Agreement. In accordance with Dr. Boynton’s option agreement as options to 1,430,846, 500,568 and 500,568 shares had not been exercised as of December 31, 2008, 2009 and 2010 respectively such options were forfeited.

(3)	This option was granted under the 2007 Stock Option Plan. This option grant vested over the balance of 2009 with 1,132,464 vesting on the grant date and the remainder vesting in equal installments on August 31, September 30, October 31, November 30 and December 31, 2009.

(4)

These options were granted under the 1999 Plan and the 2001 Plan. Each of these option grants vests over a four year period. One-fourth of each option grant vests on the first anniversary of the grant date and the remaining three-fourths of each grant vests in equal monthly installments over the remaining three year vesting period.

(5)

This option was granted under the 2007 Stock Option Plan. This option grant vests over a three and one-half year period. Approximately 19% of the option grant was vested immediately upon grant with respect to prior service performed. Approximately 21% vests on the first anniversary of the AIM offering (June 22, 2008) and the remaining portion vests in equal monthly installments over the remaining three year vesting period. These options were granted in recognition of past service to the Company and have an exercise price of $0.60 per share, which is equal to the conversion price of warrants issued to Toucan Partners under the Conversion Agreement. In accordance with Dr. Bosch’s option agreement as options to purchase 250,000 and 300,000 shares had not been exercised as of December 31, 2008 and 2009 respectively such options were forfeited.

(6)	This option was granted under the 2007 Stock Option Plan. This option vests on the following schedule;

Vesting Event	# of Shares
June 23, 2009		125,000
May 31, 2010		125,000
May 31, 2011		100,000
May 31, 2012		99,996
May 31, 2013		99,996
Swiss Approval		100,000
Full Enrollment in Phase II Glioblastoma Multiforme Clinical Study		100,000
FDA Approval of NDA		100,000

(7)	This option was granted under the 2007 Stock Option Plan. This option grant vested over the balance of 2009 with 125,000 vesting on the grant date and the remainder vesting on December 31, 2009.

Option Exercises and Stock Vested

No options were exercised by and no stock awards vested for the Named Executive Officers during 2010.

Pension Plans, Deferred Compensation and Severance Agreements

We do not currently offer any such plans or compensation or have any such agreements in place.

Director Compensation

The following table sets forth certain information concerning compensation paid or accrued to our non-executive directors during the year ended December 31, 2010.

Name	Year	Fees Earned or Paid in Cash			All Other Compensation(1)		Total
Linda F. Powers	2010	$	100,000		$	—	$	100,000
Robert A. Farmer	2010	$	70,613	(1)	$	—	$	—

(1) includes directors’ fees for 2009 (previously unpaid) as well as full year 2010.

Only non-employee directors receive director fees. Effective June 22, 2007, we are required to pay Linda F. Powers, as Chairperson and a non-executive member of the Board of Directors, approximately $100,000 per annum for her services. Also effective December 10, 2009 we were required to issue Robert A. Farmer, for his services as a non-executive member of the Board of Directors, 50,000 shares of the company’s common stock per annum.

Compensation Committee Interlocks and Insider Participation

From January 1, 2007 to June 22, 2007, Dr. Boynton was the sole member of our Compensation Committee and served as our President, Chief Operating Officer and Chief Scientific Officer. In addition, as discussed further under “Transactions with Related Persons” below, in 2006, Dr. Boynton exercised warrants and convertible loans covering 126,365 and 146,385 shares of our common stock, respectively. In June 2007, Dr. Boynton was replaced by Linda F. Powers and R. Steve Harris as members of the Compensation Committee. During 2008, none of our executive officers served as a member of the compensation committee (or other committee serving an equivalent function) of any other entity, one of whose executive officers served as a director on our Board or as a member of our Compensation Committee. During 2010 none of our executive officers served as (i) a director of an entity in which one of our directors served as an executive officer or (ii) a member of our Compensation Committee.

Equity Plans

Stock Option Plans

The Company’s stock option plans are administered by the Board of Directors, which determines the terms and conditions of the options granted, including exercise price, number of options granted and vesting period of such options.

Our employees, directors and consultants previously participated in the 1998 Stock Option Plan and the 1999 Executive Stock Option Plan. The 1998 Stock Option Plan and the 1999 Executive Stock Option Plan were terminated during 2008 and 2009 and no further grants may be made under the plans.

Existing stock option plans are as follows:

(a) 2001 Stock Option Plan

Under the 2001 Stock Option Plan (the “2001 Plan”), 120,000 shares of the Company’s common stock have been reserved for grant of stock options to employees and consultants. Additionally, on January 1 of each year, commencing January 1, 2002, the number of shares reserved for grant under the 2001 Plan will increase by the lesser of (i) 15% of the aggregate number of shares available for grant under the 2001 Plan or (ii) 20,000 shares. Our Board of Directors has the authority to amend or terminate this plan, but such action may not adversely affect any outstanding option previously granted under the plan. If this plan is not terminated earlier, no incentive stock options can be granted under the plan on or after the later of June 2011 or the 10th anniversary of the date when our Board of Directors adopted, subject to approval by our stockholders, the most recent increase in the number of shares available for grant under the plan.

As of December 31, 2010, net of forfeitures, a total of 162,603 shares remain available under this plan; however, effective June 22, 2007, the Company amended the 2001 Stock Option Plan, such that no further option grants may be made under the plan.

(b) 2001 Non-employee Director Stock Incentive Plan

Under the 2001 Non-employee Director Stock Incentive Plan (the “2001 Director Plan”), 13,333 shares of the Company’s common stock have been reserved for grant of stock options to non-employee directors of the Company. As of December 31, 2010, net of forfeitures, a total of 10,500 shares remain available under this plan; however, no further grants may be made under this plan.

The 2007 Stock Option Plan became effective on June 15, 2007 (the “2007 Stock Option Plan”). In April 2008, the Company increased the number of shares reserved for issuance under the 2007 Stock Option Plan by 519,132 shares of its common stock for an aggregate of 6,000,000 shares of its common stock, par value $0.001 per share, reserved for issue of options granted under the plan. In May 2010, the Company increased the number of shares reserved for issuance under the 2007 Stock Option Plan by an additional 10,000,000 shares of its common stock. The plan provides for the grant to employees of the Company, its parents and subsidiaries, including officers and employee directors, of “incentive stock options,” as defined, 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. As of December 31, 2010, net of forfeitures, a total of 10,070,528 shares remain available for issuance under this plan.

Our Board of Directors has the authority to amend or terminate this plan at any time. Amendments to the plan are subject to approval by our stockholders to the extent required by applicable law.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters

The following table presents information regarding the beneficial ownership of our common stock as of March 31, 2011 by:

each person, or group of affiliated persons, who is known by us to own beneficially 5% or more of any class of our equity securities;

our directors;

each of our named executive officers, as defined in Item 402(a)(3) of Regulation S-K; and

our directors and executive officers as a group.

The applicable percentages of ownership are based on an aggregate of 83,100,927 shares of common stock issued and outstanding on March 31, 2011. In computing the number of shares of common stock beneficially owned by a person and the percentage ownership of that person, we deemed shares of common stock subject to options, warrants, convertible preferred stock or convertible notes held by that person that are currently exercisable or exercisable within 60 days of March 31, 2011.

We have determined beneficial ownership in accordance with the rules of the SEC. Except as indicated by the footnotes below, we believe, based on the information furnished to us, that the persons and the entities named in the table have sole voting and investment power with respect to all shares of common stock that they beneficially own, subject to applicable community property laws.

Except as otherwise noted, the address of the individuals in the following table below is c/o Northwest Biotherapeutics, Inc., 4800 Montgomery Lane, Suite 800, Bethesda, MD 20814.

Name of Beneficial Owner	Number of Shares Beneficially Owned		Percentage(1)
Officers and Directors
Alton L. Boynton, Ph.D.(2)		2,017,154		2.4
Marnix L. Bosch, Ph.D., M.B.A.(3)		1,113,020		1.3
Linda F. Powers(4)		48,812,559		44.7
Robert A. Farmer		832,571		1.0
All executive officers and directors as a group (4 persons)(5)		32,730,999		29.3
5% Security Holders
Toucan Capital Fund II, L.P.(6)		27,556,383		28.2
7600 Wisconsin Avenue, Suite 700, Bethesda, MD 20814
Toucan Partners, LLC(7)		18,683,466		19.7
7600 Wisconsin Avenue, Suite 700, Bethesda, MD 20814
Regen Med Acquisition Corp (8)		9,378,660		11.3
1313 N. Market Street, Suite 5100 Wilmington, DE 19801
Al Rajhi Holdings (9)		6,353,872		7.5
Rue Maurice 3 1204 Geneve Switzerland
Al Salam Opportunities Limited		2,590,270		3.1
4th Floor Harbour Center
P.O. Box 613 George Town
Grand Cayman, British West Indies, KY1-1001

(1)	Percentage represents beneficial ownership percentage of common stock calculated in accordance with SEC rules and does not equate to voting percentages.

(2)	Includes 1,776,150 shares of common stock issuable upon exercise of options that are exercisable within 60 days of March 31, 2011.

(3)	Includes 779,003 shares of common stock issuable upon exercise of options that are exercisable within 60 days of March 31, 2011.

(4)

Includes (i) 12,866,324 shares of common stock held by Toucan Capital; (ii) 14,690,059 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Toucan Capital; (iii) 7,937,981shares of common stock held by Toucan Partners and (iv) 11,505,485 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Toucan Partners Ms. Powers is a managing member of Toucan Management, LLC, which is the manager of Toucan Capital, and is a managing member of Toucan Partners and is majority owner of Regen Med Acquisition Corp.

(5)	Includes 2,555,153 shares issuable to officers and directors upon exercise of options that are exercisable within 60 days of March 31, 2011. Excludes 20,044,305 shares of common stock as to which Ms. Powers disclaims beneficial ownership. See Note 4 above.

(6)	Includes 14,690,059 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Toucan Capital.

(7)	Includes 11,505,485 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Toucan Partners.

(8)	Includes 4,689,330 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Regen Med.

(9)	Includes 1,743,411 shares of common stock currently issuable upon exercise of warrants that are exercisable within 60 days of March 31, 2011 held by Al Rajhi.

Item 13. Certain Relationships and Related Transactions, and Director Independence

Toucan Capital and Toucan Partners

Toucan Capital Fund II, L.P. (“Toucan Capital”) loaned the Company $6.75 million during 2004 and 2005. The Board’s Chairperson is the managing director of Toucan Capital. In April 2006, the $6.75 million of notes payable plus all accrued interest were converted into shares of Series A-1 cumulative convertible Preferred Stock (the “Series A-1 Preferred Stock”). In connection with these loans the Company issued Toucan Capital a warrant to purchase 8,166,667 shares of Series A-1 Preferred Stock. The warrants to purchase Series A-1 Preferred Stock were later converted into warrants to purchase 17,256,888 shares of common stock in connection with the Conversion Agreement, described below.

On January 26, 2005, Toucan Capital purchased 32.5 million shares of Series A cumulative convertible preferred stock (the “Series A Preferred Stock”) at $0.04 per share, for a total of $1.276 million. In connection with the securities purchase agreement, the Company issued Toucan Capital a warrant to purchase 2,166,667 million shares of Series A Preferred Stock. The warrants to purchase Series A Preferred Stock were later converted into warrants to purchase 4,778,201 shares of common stock in connection with the Conversion Agreement, described below.

From November 14, 2005 through May 25, 2007, Toucan Partners, LLC (“Toucan Partners”) loaned the Company $4.825 million under various promissory note agreements. The Board’s Chairperson is the managing member of Toucan Partners. The promissory note agreements were amended and restated into the 2007 Convertible Notes. The 2007 Convertible Notes also included warrants to purchase shares of Series A-1 Preferred Stock ("2007 Warrants"). The Company repaid $5.3 million of principal and accrued interest due to Toucan Partners during 2007. The warrants to purchase Series A-1 Preferred Stock were later converted into warrants to purchase 8,832,541 shares of common stock in connection with the Conversion Agreement, described below.

Under the June 22, 2007 Conversion Agreement, Toucan Capital and Toucan Partners agreed to eliminate a number of rights, preferences and protections associated with the Series A Preferred Stock and the Series A-1 Preferred Stock and Toucan Capital received 4,287,851 shares of common stock and Toucan Partners received 2,572,710 shares of common stock. Also, Toucan Capital converted its preferred shares into 15,011,635 shares of common stock. Additionally under the conversion agreement the Company exchanged the warrants to purchase Series A-1 Preferred Stock and Series A Preferred Stock (discussed above) for warrants to purchase common stock. As a result of the conversion Toucan Capital received warrants to purchase 14,150,732 shares of Common Stock at an exercise price of $0.60 per share and warrants to purchase 7,884,357 shares of Common Stock at an exercise price of $0.15 per share and Toucan Partners received warrants to purchase 8,832,541 shares of Common Stock at an exercise price of $0.60 per share.

Toucan Partners loaned the Company $1.0 million on August 19, 2008 under the terms of an unsecured promissory note (the “Toucan Partners August Loan”) with a principal amount of $1,060,000 (reflecting an original issue discount of $60,000). On September 28, 2009, the note principal and accrued interest (including a default penalty of 0.25% per month) amounting to $1,156,718 was converted to 5,783,589 shares of common stock at a conversion price of $0.20. In connection with the conversion, the Company issued Toucan Partners a warrant to purchase 690,000 shares of common stock at an exercise price of $0.20 per share.

Toucan Partners loaned the Company $500,000 on December 22, 2008 under the terms of an unsecured 12% promissory note (the “Toucan Partners December Loan”). In connection with the promissory note, the Company issued to Toucan Partners a warrant to purchase 132,500 shares of common stock at an exercise price of $0.40 per share and a term of 5 years. On September 28, 2009, the note principal and accrued interest (including a default penalty of 0.25% per month) amounting to $552,738 was converted to 2,763,691 shares of common stock at a conversion rate of $0.20. To bring the December Loan into conformity with the SDS and Private Lender notes issued in October and November 2008, as agreed by the parties at the time of the Toucan Partners December Loan, the Company issued Toucan Partners a warrant to purchase 513,841 shares of common stock at an exercise price of $0.41 per share. In connection with the conversion, the Company issued Toucan Partners a warrant to purchase 152,375 shares of common stock at an exercise price of $0.20 per share.

Toucan Partners and the Board's Chairperson also received a total of 2,504,034 shares of common stock as compensation for services rendered during 2008 and 2009.

On July 2, 2010 the Company entered into a securities purchase agreement with Toucan Partners, under which Toucan Partners purchased 866,667 shares of common stock for $650,000. In connection with this private placement the Company issued warrants to purchase 86,667 shares of common stock at an exercise price of $0.75 per share with an exercise period of three years.

On October 1, 2010 Toucan Partners loaned the Company $900,000 by repaying a portion of the Bridge Funding Note payable to Regen Med Acquisition Corporation (“Regen Med”) originating on July 14, 2010 under a 6% convertible promissory note on the same terms and conditions as the September Notes that the Company had negotiated and executed with non-affiliated investors on September 28, 2010, secured by an interest in all the Company’s assets, due on December 1, 2010. The conversion feature of the note allows Toucan Partners to convert the principal into shares of common stock at a conversion price of $0.75. Additionally, Toucan Partners received 100% warrant coverage, on the same terms and conditions as the September Notes (including the same market formula for the warrant exercise price), at $0.82 per share. In the event of default, Toucan Partners was entitled to adjust the interest rate to 9% per annum for the default period and to be granted an additional 100% warrant coverage at $0.82 per share. The Company did not repay the loan on December 1, 2010 however Toucan waived its right to increase the interest rate and waived its right to the additional warrant. The loan was repaid in full by December 31, 2010.

In December 2010 Toucan Capital transferred 6,433,162 shares of common stock and 7,345,030 warrants to purchase shares of the Company’s common stock to Regen Med Acquisition Corp (“Regen Med”), a non-affiliate third party.

As a result of the financings described above, as of December 31, 2010 Toucan Capital held:

•

an aggregate of 12,866,324 shares of Common Stock;

•

warrants to purchase 9,433,821 shares of Common Stock at an exercise price of $0.60 per share (net of 4,716,911 transferred to Regen Med);

•

warrants to purchase 5,256,238 shares of Common Stock at an exercise price of $0.60 per share (net of 2,628,119 transferred to Regen Med);

As a result of the financings described above, and other open market transactions, as of December 31, 2010, Toucan Partners and its managing member Ms. Linda Powers held:

•

an aggregate of 10,510,691 shares of Common Stock;

•

warrants to purchase 8,832,541 shares of Common Stock at an exercise price of $0.60 per share;

•

warrants to purchase 1,097,561 shares of Common Stock at an exercise price of $0.82 per share;

•

warrants to purchase 513,841 shares of common stock at an exercise price of $0.41 per share;

•

warrants to purchase 132,500 shares of common stock at an exercise price of $0.40 per share;

•

Warrants to purchase 86,667 shares of common stock at an exercise price of $0.75 per share

•

warrants to purchase 842,375 shares of common stock at an exercise price of $0.20 per share;

As of December 31, 2010, Toucan Capital, including the holdings of Toucan Partners, held 22,377,015 shares of common stock, representing approximately 32.0% of the common stock outstanding. Further, as of December 31, 2010, Toucan Capital, including the holdings of Toucan Partners, beneficially owned (including unexercised warrants) 49,572,559 shares of common stock, representing a beneficial ownership interest of approximately 40.5%.

On March 21, 2008, the Company executed a Sublease Agreement (the “Sublease Agreement”) with Toucan Capital Corporation for the space the Company uses as its headquarters at 7600 Wisconsin Avenue, Suite 750, Bethesda, Maryland. The Sublease Agreement is effective as of July 1, 2007 and expires on October 31, 2016, unless sooner terminated according to its terms. The Company was and remains obligated to pay operating expenses allocable to the subleased premises under Toucan Capital Corporation’s master lease. Effective November 30, 2009, the Sublease was terminated in connection with termination and buyout of the overall lease of this space. (The overall lease and the Company’s Sublease had 7 years left to run at that time). The termination and buyout did not require any lump sum exit payment. Instead, it requires a partial payout over several years. During 2011the obligation for the Company is than $5,000 per month.

Cognate

On July 30, 2004, the Company entered into a service agreement with Cognate Therapeutics, Inc. (now known as Cognate BioServices, Inc., or Cognate), a contract manufacturing and services organization in which Toucan Capital has a majority interest. In addition, two of the principals of Toucan Capital are members of Cognate’s board of directors and, on May 17, 2007, the managing director of Toucan Capital was appointed to serve as a director of the Company and to serve as the non-executive Chairperson of the Company’s Board of Directors. Under the service agreement, the Company agreed to utilize Cognate’s services for an initial two-year period, related primarily to manufacturing DCVax product candidates, regulatory advice, research and development preclinical activities and managing clinical trials. The agreement expired on July 30, 2006; however, the Company continued to utilize Cognate’s services under the same terms as set forth in the expired agreement. On May 17, 2007, the Company entered into a new service agreement with Cognate pursuant to which Cognate will provide certain consulting and, when needed, manufacturing services to the Company for its DCVax -Brain Phase II clinical trial. Under the terms of the new contract, the Company paid a non-refundable contract initiation fee of $250,000 and committed to pay budgeted monthly service fees of $400,000, subject to quarterly true-ups, and monthly facility fees of $150,000. Under the terms of the contract unless the contract is terminated earlier the contract will expire at the earlier of (i) the submission of an FDA biological license application/new drug application on the Company’s brain cancer clinical trial or (ii) July 1, 2010. The Company may terminate this agreement with 180 days notice and payment of all reasonable wind-up costs and Cognate may terminate the contract in the event that the brain cancer clinical trial fails to complete enrollment by July 1, 2009. However, if such termination by the Company occurs at any time prior to the earlier of the submission of an FDA biological license application/new drug application on the Company’s brain cancer clinical trial or July 1, 2010 or, such termination by Cognate results from failure of the brain cancer clinical trial to complete patient enrollment by July 1, 2009, the Company is obligated to make an additional termination fee payment to Cognate equal to $2 million. Although the Company failed to complete enrollment the brain cancer clinical trial by July 1, 2009 Cognate reserved its rights but did not trigger the $2 million termination penalty as of December 31, 2009. Since July 1, 2009 with the mutual agreement of Cognate and the Company the agreement has continued on a month to month basis on the same terms as included in the original agreement.

Cognate has a cGMP (clean room manufacturing under current Good Manufacturing Practices) facility with a capacity for approximately 600 patients per year, which we believe will be sufficient for our Phase II clinical trial for DCVax -Brain. We have a plan with Cognate to accommodate an increase in production capacity based on demand and have detailed plans and cost analysis for additional modular expansions which should increase the capacity of the current facilities from approximately 600 patients to over 9,000 patients per year. We believe that Cognate’s current facilities are sufficient to cover additional agreements for our initial commercialization efforts

During 2009, the Company and Cognate agreed that most of the accounts payable owed by the Company to Cognate, will be converted into shares of common stock instead of paid in cash. The conversion price will be no less favorable than the conversion price applied to any other creditor of the Company. The lowest conversion price applied to any other creditor of the Company to date following the agreement is $0.20 per share. Accordingly, if no lower conversion price is applied to any other creditor prior to completion of the Cognate conversion, the Cognate conversion will take place at $0.20 per share. The impact of the conversion will result in a reduction of liabilities for the amount converted. In addition, the Company will recognize the value of common stock issued in excess of the amount of accounts payable converted, if any, as a charge to operations when the conversion takes place. Initial review of the payables by both parties indicated a difference in the parties’ respective understanding of the amounts due. The parties have now agreed that the amount due to Cognate at December 31, 2010, was $10.2 million and the Company has recognized $3.6 million in additional expense in 2010. Finalization of the conversion arrangements are in process.

Also during 2009, the Company agreed with Toucan Capital, Toucan Partners and Linda Powers (the Board’s Chairperson) that accrued expenses owed by the Company to these parties for certain expense reimbursements will be converted into shares of common stock instead of paid in cash. The parties agreed that these accrued expenses will be converted into common stock at a conversion rate equal to the price per share paid by unrelated investors at that time, and no less favorable than the conversion rate applied to any other creditor of the Company ($0.20 per share). The impact of the conversion will result in a reduction of liabilities for the amount converted. In addition, the Company will recognize the value of common stock issued in excess of the amount of the accrued expenses converted, if any, as a charge to operations when the conversion takes place. Finalization of these arrangements is in process.

During the years ending December 31, 2009 and 2010, respectively, we recognized approximately $7.8 million and $4.2 million of research and development costs related to this service agreement. As of December 31, 2009 and 2010, the Company owed Cognate approximately $5.9 million and $10.2 million, respectively. In February 2011 Cognate sold $1,650,000 of the amount due to the Company to a non-affiliated third party.

Director Independence

We have one independent director on our Board of Directors and will insure that all transactions are on terms at least as favorable to the Company as we would negotiate with unrelated third parties

Item 14. Principal Accounting Fees and Services

The following table represents aggregate fees billed to us for the fiscal years ended December 31, 2009 and 2010 by Peterson Sullivan LLP, our principal independent registered public accounting firm.

Fiscal Year Ended December 31:	2009		2010
Audit Fees	$	123,244	$	101,264
Tax Fees		4,701		5,365
Total	$	127,945	$	106,629

Audit fees primarily include services for auditing our financial statements along with reviews of our interim financial information included in our Forms 10-K and 10-Q. Peterson Sullivan’s work on these two audits was performed by full time, regular employees and partners of Peterson Sullivan. Tax fees, which includes tax consulting and tax compliance fees, in both the current year and prior year relate to the preparation of our Federal income tax return. All fees described above were approved by our Audit Committee, and the Audit Committee considers the provision of the services rendered in respect of those fees compatible with maintaining the auditor’s independence.

Item 15. Exhibits, Financial Statement Schedules

(a)(1) Index to Consolidated Financial Statements and Independent Auditors Report.

The financial statements required by this item are submitted in a separate section as indicated below.

		Page
Report of Peterson Sullivan, LLP, Independent Registered Public Accounting Firm		52
Consolidated Balance Sheets		53
Consolidated Statements of Operations		54
Consolidated Statements of Stockholders’ Equity (Deficit) and Comprehensive Loss		55
Consolidated Statements of Cash Flows		56
Notes to Consolidated Financial Statements		57

(2) Index to Financial Statement Schedules

All financial statement schedules are omitted since the required information is not applicable, not required or the required information is included in the financial statements or notes thereto.

(3) Exhibits

See Exhibit Index on page 102.

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Board of Directors and Stockholders

Northwest Biotherapeutics, Inc.

Bethesda, Maryland

We have audited the accompanying consolidated balance sheets of Northwest Biotherapeutics, Inc. and Subsidiary (a development stage company) ("the Company") as of December 31, 2010 and 2009, and the related consolidated statements of operations, stockholders' equity (deficit), and cash flows for the years then ended, and for the period from March 18, 1996 (date of inception) to December 31, 2010. These consolidated financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. The Company has determined that it is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the consolidated financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of Northwest Biotherapeutics, Inc. and Subsidiary (a development stage company) as of December 31, 2010 and 2009, and the results of their operations and their cash flows for the years then ended, and for the period from March 18, 1996 (date of inception) to December 31, 2010, in conformity with accounting principles generally accepted in the United States.

The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern. As discussed in Note 2 to the consolidated financial statements, the Company has experienced recurring losses from operations since inception, net operating cash flow deficits and has a deficit accumulated during the development stage. These conditions raise substantial doubt about the Company's ability to continue as a going concern. Management's plans regarding these matters are also described in Note 2. The consolidated financial statements do not include any adjustments that might result from the outcome of this uncertainty.

/S/ PETERSON SULLIVAN LLP

Seattle, Washington

April 21, 2011

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONSOLIDATED BALANCE SHEETS

(in thousands)

	December 31, 2009			December 31, 2010
	(In thousands)
ASSETS
Current assets:
Cash	$	65		$	153
Prepaid expenses and other current assets		36			86
Total current assets		101			239

Property and equipment:
Laboratory equipment		29			29
Office furniture and other equipment		82			123
		111			152
Less accumulated depreciation and amortization		(111	)		(113	)
Property and equipment, net		-			39
Deposit and other non-current assets		2			16
Total assets	$	103		$	294

LAIBILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable	$	3,249		$	2,835
Accounts payable, related party		6,328			10,527
Accrued expenses		1,874			2,074
Accrued expenses, related party		1,329			1,749
Notes payable		2,650			1,364
Note payable to related parties		4,000			4,000
Convertible notes payable, net		-			2,736
Embedded derivative liability		-			839
Total current liabilities		19,430			26,124

Long term liabilities:
Notes payable		-			350
Convertible notes payable, net		1,061			555
Convertible notes payable to related party, net		298			949
Total long term liabilities		1,359			1,854
Total liabilities		20,789			27,978
Stockholders’ equity (deficit):
Preferred stock, $0.001 par value; 20,000,000 shares authorized and none issued and outstanding
Common stock, $0.001 par value; 150,000,000 shares authorized, 58,877,087 and 73,118,471 shares issued and outstanding at December 31, 2009 and 2010, respectively		58			73
Additional paid-in capital		170,885			191,344
Deficit accumulated during the development stage		(191,580	)		(218,948	)
Cumulative translation adjustment		(49	)		(153	)
Total stockholders’ equity (deficit)		(20,686	)		(27,684	)
Total liabilities and stockholders’ equity (deficit)	$	103		$	294

See accompanying notes to the consolidated financial statements

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except per share data)

							Period from
							March 18,
							1996
							(Inception)
	Year Ended December 31						to December
	2009			2010			31, 2010
	(in thousands, except per share data)
Revenues:
Research material sales	$	10		$	10		$	570
Contract research and development from related parties		-			-			1,128
Research grants and other		-			-			1,061
Total revenues		10			10			2,759
Operating cost and expenses:
Cost of research material sales		-			-			382
Research and development		9,588			9,899			76,812
General and administration		7,482			5,463			61,989
Depreciation and amortization		7			2			2,353
Loss on facility sublease		-			-			895
Asset impairment loss and other (gain) loss		389			-			2,445
Total operating costs and expenses		17,466			15,364			144,876
Loss from operations		(17,456	)		(15,354	)		(142,117	)
Other income (expense):
Warrant valuation		-			-			6,759
Loan conversion inducement		(5,617	)		(4,673	)		(10,290	)
Derivative valuation gain (loss)		-			54			54
Gain on sale of intellectual property and property and equipment		-			-			3,664
Interest expense		(3,881	)		(7,884	)		(33,916	)
Interest income and other		-			489			1,707
Net loss		(26,954	)		(27,368	)		(174,139	)
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences		-			-			(12,349	)
Modification of Series A preferred stock warrants		-			-			(2,306	)
Modification of Series A-1 preferred stock warrants		-			-			(16,393	)
Series A preferred stock dividends		-			-			(334	)
Series A-1 preferred stock dividends		-			-			(917	)
Warrants issued on Series A and Series A-1 preferred stock dividends		-			-			(4,664	)
Accretion of Series A preferred stock mandatory redemption obligation		-			-			(1,872	)
Series A preferred stock redemption fee		-			-			(1,700	)
Beneficial conversion feature of Series D preferred stock		-			-			(4,274	)
Net loss applicable to common stockholders	$	(26,954	)	$	(27,368	)	$	(218,948	)
Net loss per share applicable to common stockholders — basic and diluted	$	(0.56	)	$	(0.41	)
Weighted average shares used in computing basic and diluted net loss per share		47,961			67,063

See accompanying notes to the consolidated financial statements.

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT) AND COMPREHENSIVE LOSS

																									Deficit
																									Accumulated
							Preferred Stock						Preferred Stock						Additional						During the			Cumulative			Total
	Common Stock						Series A			Series A-1									Paid-In			Deferred			Development			Translation			Stockholders’
	Shares			Amount			Shares			Amount			Shares			Amount			Capital			Compensation			Stage			Adjustment			Equity (Deficit)
	(In thousands)
Balances at March 18, 1996		—		$	—			—		$	—			—		$	—		$	—		$	—		$	—		$	—		$	—
Accretion of membership units mandatory redemption obligation		—			—			—			—			—			—			—			—			(106	)		—			(106	)
Net loss		—			—			—			—						—			—			—			(1,233	)		—			(1,233	)
Balances at December 31, 1996		—			—			—			—			—			—			—			—			(1,339	)		—			(1,339	)
Accretion of membership units mandatory redemption obligation		—			—			—			—			—			—			—			—			(275	)		—			(275	)
Net loss		—			—			—			—			—			—			—			—			(2,560	)		—			(2,560	)
Balances at December 31, 1997		—			—			—			—			—			—			—			—			(4,174	)		—			(4,174	)
Conversion of membership units to common stock		2,203			2			—			—			—			—			—			—			(2	)		—			—
Accretion of Series A preferred stock mandatory redemption obligation		—			—			—			—			—			—			—			—			(329	)		—			(329	)
Net loss		—			—			—			—			—			—			—			—			(4,719	)		—			(4,719	)
Balances at December 31, 1998		2,203			2			—			—			—			—			—			—			(9,224	)		—			(9,222	)
Issuance of Series C preferred stock warrants for services related to sale of Series C preferred shares		—			—			—			—			—			—			394			—			—			—			394
Accretion of Series A preferred stock mandatory redemption obligation		—			—			—			—			—			—			—			—			(354	)		—			(354	)
Net loss		—			—			—			—			—			—			—			—			(5,609	)		—			(5,609	)
Balances at December 31, 1999		2,203			2			—			—			—			—			394			—			(15,187	)		—			(14,791	)
Issuance of Series C preferred stock warrants in connection with lease agreement		—			—			—			—			—			—			43			—			—			—			43
Exercise of stock options for cash		2			—			—			—			—			—			1			—			—			—			1
Issuance of common stock at $0.85 per share for license rights		5			—			—			—			—			—			4			—			—			—			4
Issuance of Series D preferred stock warrants in convertible promissory note offering		—			—			—			—			—			—			4,039			—			—			—			4,039
Beneficial conversion feature of convertible promissory notes		—			—			—			—			—			—			1,026			—			—			—			1,026
Issuance of Series D preferred stock warrants for services related to sale of Series D preferred shares		—			—			—			—			—			—			368			—			—			—			368
Issuance of common stock warrants in conjunction with issuance of promissory note		—			—			—			—			—			—			3			—			—			—			3
Cancellation of common stock		(275	)		—			—			—			—			—			—			—			—			—			—
Accretion of Series A preferred stock mandatory redemption obligation		—			—			—			—			—			—			—			—			(430	)		—			(430	)
Net loss		—			—			—			—						—			—			—			(12,779	)		—			(12,779	)
Balances at December 31, 2000		1,935			2			—			—			—			—			5,878			—			(28,396	)		—			(22,516	)
Issuance of Series D preferred stock warrants in conjunction with refinancing of note payable to stockholder		—			—			—			—			—			—			225			—			—			—			225
Beneficial conversion feature of convertible promissory note		—			—			—			—			—			—			456			—			—			—			456
Beneficial conversion feature of Series D preferred stock		—			—			—			—			—			—			4,274			—			(4,274	)		—			—
Issuance of Series D preferred stock warrants for services related to the sale of Series D preferred shares		—			—			—			—			—			—			2,287			—			—			—			2,287
Exercises of stock options and warrants for cash		1,158			1			—			—			—			—			407			—			—			—			408
Issuance of common stock in initial public offering for cash, net of offering costs of $2,845		4,000			4			—			—			—			—			17,151			—			—			—			17,155
Conversion of preferred stock into common stock		9,776			10			—			—			—			—			31,569			—			—			—			31,579
Series A preferred stock redemption fee		—			—			—			—			—			—			—			—			(1,700	)		—			(1,700	)
Issuance of stock options to nonemployees for services		—			—			—			—			—			—			45			—			—			—			45
Deferred compensation related to employee stock options		—			—			—			—			—			—			1,330			(1,330	)		—			—			—
Amortization of deferred compensation		—			—			—			—			—			—			—			314			—			—			314
Accretion of Series A preferred stock mandatory redemption obligation		—			—			—			—			—			—			—			—			(379	)		—			(379	)
Net loss		—			—			—			—			—			—			—			—			(10,940	)		—			(10,940	)
Balances at December 31, 2001		16,869			17			—			—			—			—			63,622			(1,016	)		(45,689	)		—			16,934
Issuance of unregistered common stock		1,000			1			—			—			—			—			199			—			—			—			200
Issuance of common stock, Employee Stock Purchase Plan		9			—			—			—			—			—			6			—			—			—			6
Issuance of common stock warrants to Medarex		—			—			—			—			—			—			80			—			—			—			80
Issuance of restricted stock to nonemployees		8			—			—			—			—			—			34			—			—			—			34
Issuance of stock options to nonemployees for service		—			—			—			—			—			—			57			—			—			—			57
Issuance of stock options to employees		—			—			—			—			—			—			22			(22	)		—			—			—
Cancellation of employee stock options		—			—			—			—			—			—			(301	)		301			—			—			—
Exercise of stock options and warrants for cash		32			—			—			—			—			—			18			—			—			—			18
Deferred compensation related to employee restricted stock option		99			—			—			—			—			—			449			(449	)		—			—			—
Cancellation of employee restricted stock grants		(87	)		—			—			—			—			—			(392	)		392			—			—			—
Amortization of deferred compensation, net		—			—			—			—			—			—			—			350			—			—			350
Net loss		—			—			—			—			—			—			—			—			(12,804	)		—			(12,804	)
Balances at December 31, 2002		17,930			18			—			—			—			—			63,794			(444	)		(58,493	)		—			4,875
Issuance of unregistered common stock to Medarex		1,000			1			—			—			—			—			199			—			—			—			200
Issuance of unregistered common stock to Nexus		90			—			—			—			—			—			35			—			—			—			35
Issuance of common stock warrants to Medarex		—			—			—			—			—			—			80			—			—			—			80
Issuance of warrants with convertible promissory note		—			—			—			—			—			—			221			—			—			—			221
Beneficial conversion feature of convertible promissory note		—			—			—			—			—			—			114			—			—			—			114
Issuance of common stock, Employee Stock Purchase Plan		4			—			—			—			—			—			—			—			—			—			—
Exercise of stock options and warrants for cash		8			—			—			—			—			—			—			—			—			—			—
Cancellation of employee restricted stock grants		(4	)		—			—			—			—			—			(20	)		20			—			—			—
Cancellation of employee stock options		—			—			—			—			—			—			(131	)		131			—			—			—
Amortization of deferred compensation, net		—			—			—			—			—			—			—			240			—			—			240
Non-employee stock compensation		—			—			—			—			—			—			2			—			—			—			2
Net loss		—			—			—			—			—			—			—			—			(5,752	)		—			(5,752	)
Balances at December 31, 2003		19,028			19			—			—			—			—			64,294			(53	)		(64,245	)		—			15
Issuance of warrants with convertible promissory note		—			—			—			—			—			—			1,711			—			—			—			1,711
Beneficial conversion feature of convertible promissory note		—			—			—			—			—			—			1,156			—			—			—			1,156
Issuance of common stock, Employee Stock Purchase Plan		1			—			—			—			—			—			—			—			—			—			—
Cancellation of employee stock options		—			—			—			—			—			—			(5	)		5			—			—			—
Amortization of deferred compensation, net		—			—			—			—			—			—			—			41			—			—			41
Warrant valuation								—			—			—			—			368			—			—			—			368
Net loss		—			—			—			—			—			—			—			—			(8,508	)		—			(8,508	)
Balances at December 31, 2004		19,029			19			—			—			—			—			67,524			(7	)		(72,753	)		—			(5,217	)
Issuance of unregistered common stock and preferred stock to Toucan Capital		—			—			32,500			33			—			—			1,243			—			—			—			1,276
Issuance of stock options to non-employees for services		—			—			—			—			—			—			3			—			—			—			3
Issuance of warrants with convertible promissory note		—			—			—			—			—			—			1,878			—			—			—			1,878
Exercise of stock options and warrants for cash		49			—			—			—			—			—			4			—			—			—			4
Amortization of deferred compensation, net		—			—			—			—			—			—			—			7			—			—			7
Beneficial conversion feature of convertible promissory note		—			—			—			—			—			—			1,172			—			—			—			1,172
Common Stock warrant liability		—			—			—			—			—			—			(604	)		—			—			—			(604	)
Net loss		—			—			—			—			—			—			—			—			(9,937	)		—			(9,937	)
Balances at December 31, 2005		19,078			19			32,500			33			—			—			71,220			—			(82,690	)		—			(11,418	)
Issuance of common stock to PIPE Investors for cash, net of cash and non-cash offering costs of $837		39,468			39			—			—			—			—			4,649			—			—			—			4,688
Issuance of warrants to PIPE investment bankers		—			—			—			—			—			—			395			—			—			—			395
Conversion of notes payable due to Toucan Capital to Series A-1 preferred stock		—			—			—			—			4,817			5			7,702			—			—			—			7,707
Conversion of notes payable due to management to common stock		2,688			3			—			—			—			—			266			—			—			—			269
Issuance of warrants with convertible promissory notes		—			—			—			—			—			—			236			—			—			—			236
Exercise of stock options and warrants for cash		66			—			—			—			—			—			9			—			—			—			9
Exercise of stock options and warrants — cashless		3,942			4			—			—			—			—			(4	)		—			—			—			—
Stock compensation expense		—			—			—			—			—			—			19			—			—			—			19
Beneficial conversion feature of convertible promissory note		—			—			—			—			—			—			64			—			—			—			64
Common Stock warrant liability		—			—			—			—			—			—			(6,523	)		—			—			—			(6,523	)
Net loss		—			—			—			—			—			—			—			—			(1,395	)		—			(1,395	)
Balances at December 31, 2006		65,241			65			32,500			33			4,817			5			78,033			—			(84,085	)		—			(5,949	)
Conversion of common stock at par related to the reverse stock split		(60,892	)		(61	)		—			—			—			—			61			—			—			—			—
Conversion of Series A and A-1 preferred stock into common stock		15,012			15			(32,500	)		(33	)		(4,817	)		(5	)		23			—			—			—			—
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences		6,861			7			—			—			—			—			12,342			—			(12,349	)		—			—
Modification of preferred stock Series A and Series A-1 warrants		—			—			—			—			—			—			18,699			—			(18,699	)		—			—
Series A and Series A-1 preferred stock dividend payment		—			—			—			—			—			—			—			—			(1,251	)		—			(1,251	)
Warrants issued on Series A and Series A-1 preferred stock dividends		—			—			—			—			—			—			4,664			—			(4,664	)		—			—
Issuance of common stock in initial public offering on the AIM London market for cash, net of offering costs of $3,965		15,789			16			—			—			—			—			25,870			—			—			—			25,886
Remeasurement of warrants issued in connection with convertible promissory notes		—			—			—			—			—			—			4,495			—			—			—			4,495
Remeasurement of beneficial conversion feature related to convertible promissory notes		—			—			—			—			—			—			1,198			—			—			—			1,198
Exercise of warrants — cashless		335			—			—			—			—			—			—			—			—			—			—
Stock compensation expense		—			—			—			—			—			—			2,679			—			—			—			2,679
Cumulative translation adjustment		—			—			—			—			—			—			—			—			—			(4	)		(4	)
Net loss		—			—			—			—			—			—			—			—			(21,247	)		—			(21,247	)
Total comprehensive loss																																(21,251	)
Balances at December 31, 2007		42,346			42			—			—			—			—			148,064			—			(142,295	)		(4	)		5,807

Stock issuance in exchange for license option		122			—			—			—			—			—			225			—			—			—			225
Exercise of stock options — cashless		25			—			—			—			—			—			1			—			—			—			1
Stock compensation expense		—			—			—			—			—			—			3,001			—			—			—			3,001
																							—
Issuance of warrants with promissory notes		—			—			—			—			—			—			1,017			—			—			—			1,017
Cumulative translation adjustment		—			—			—			—			—			—			—			—			—			(20	)		(20	)
Net loss		—			—			—			—			—			—			—			—			(22,331	)		—			(22,331	)
Total comprehensive loss																																(22,351	)
Balances at December 31, 2008		42,493			42			—			—			—			—			152,308			—			(164,626	)		(24	)		(12,300	)

Exercise of stock options — cashless		20			—			—			—			—			—			—			—			—			—			—
Exercise of warrants — cashless		1,214			—			—			—			—			—			—			—			—			—			—
Issuance of common stock in private placements		2,378			2			—			—			—			—			1,391			—			—			—			1,393
Stock compensation expense		—			—			—			—			—			—			2,712			—			—			—			2,618
Debt Discount related to beneficial conversion		—			—			—			—			—			—			2,578			—			—			—			2,578
Warrants issued for services		—			—			—			—			—			—			1,645			—			—			—			1,645
Stock and warrants issued for services		3,662			3			—			—			—			—			2,819			—			—			—			2,916
Loan conversion		563			1			—			—			—			—			111			—			—			—			112
Loan conversion and conversion inducement		8,547			10			—			—			—			—			7,321			—			—			—			7,331

Cumulative translation adjustment		—			—			—			—			—			—			—			—			—			(25	)		(25	)
Net loss		—			—			—			—			—			—			—			—			(26,954	)		—			(26,954	)
Total comprehensive loss																																(26,979	)
Balances at December 31, 2009		58,877			58			—			—			—			—			170,885			—			(191,580	)		(49	)		(20,686	)

Stock compensation expense		—			—			—			—			—			—			2,004			—			—			—			2,004
Debt discount related to beneficial conversion and warrants		—			—			—			—			—			—			3,254			—			—			—			3,254
Stock and warrants issued for services		2,264			2			—			—			—			—			2,246			—			—			—			2,248
Interest extensions and warrant valuations		1,139			1			—			—			—			—			2,627			—			—			—			2,628
Issuance of common stock in private placements		5,118			6			—			—			—			—			3,832			—			—			—			3,838
Loan conversion and conversion inducement		5,720			6			—			—			—			—			6,406			—			—			—			6,412
Sale of warrants		—			—			—			—			—			—			90			—			—			—			90
Cumulative translation adjustment		—			—			—			—			—			—			—			—			—			(104	)		(104	)
Net loss		—			—			—			—			—			—			—			—			(27,368	)		—			(27,368	)
Total comprehensive loss																																(27,472	)
Balance at December 31, 2010		73,118		$	73		$	—		$	—		$	—		$	—		$	191,344		$	—		$	(218,948	)	$	(153	)	$	(27,684	)

See accompanying notes to the consolidated financial statements.

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

CONSOLIDATED STATEMENTS OF CASH FLOW

							Period from March 18,
							1996 (Inception) to
	Year Ended December 31,						December 31,
	2009			2010			2010
	(in thousands)
Cash Flows from Operating Activities:
Net Loss	$	(26,954	)	$	(27,368	)	$	(174,139	)
Reconciliation of net loss to net cash used in operating activities:
Depreciation and amortization		7			2			2,353
Amortization of deferred financing costs		-			-			320
Amortization debt discount		1,337			4,508			24,209
Derivative valuation (gain) loss		-			(54	)		(54	)
Accrued interest converted to preferred stock		-			-			260
Accreted interest on convertible promissory note		-			-			1,484
Stock-based compensation costs		2,618			2,004			11,414
Stock and warrants issued for services and other expenses		4,776			4,559			9,335
Loan conversion inducement		5,617			4,673			10,290
Warrant valuation		-			-			(6,759	)
Asset impairment loss and loss (gain) on sale of properties		389			-			(936	)
Loss on facility sublease		-			-			895
Increase (decrease) in cash resulting from changes in assets and liabilities:
Accounts receivable		1			-			-
Prepaid expenses and other current assets		1,031			(64	)		624
Accounts payable and accrued expenses		405			745			5,790
Related party accounts payable and accrued expenses		6,096			4,619			12,276
Accrued loss on sublease		-			-			(265	)
Deferred rent		-			-			410
Net Cash used in Operating Activities		(4,677	)		(6,376	)		(102,493	)
Cash Flows from Investing Activities:
Purchase of property and equipment, net		(2	)		(41	)		(5,044	)
Proceeds from sale of property and equipment		-			-			258
Proceeds from sale of intellectual property		-			-			1,816
Proceeds from sale of marketable securities		-			-			2,000
Refund of security deposit		-			-			(3	)
Transfer of restricted cash		-			-			(1,035	)
Net Cash used in Investing Activities		(2	)		(41	)		(2,008	)
Cash Flows from Financing Activities:
Proceeds from issuance of note payable		2,060			1,140			5,850
Proceeds from issuance of convertible notes payable to related parties		1,300			-			1,300
Proceeds from issuance of note payable to related parties		-			-			11,250
Repayment of note payable to related party		-			(900	)		(7,600	)
Proceeds from issuance of convertible promissory note and warrants, net of issuance costs		-			2,992			16,091
Repayment of convertible promissory note		-			(551)			(670	)
Borrowing under line of credit, Northwest Hospital		-			-			2,834
Repayment of line of credit, Northwest Hospital		-			-			(2,834	)
Payment on capital lease obligations		-			-			(323	)
Payments on note payable		-			-			(420	)
Proceeds from issuance preferred stock, net		-			-			28,708
Proceeds from exercise of stock options and warrants		-			-			228
Proceeds from issuance common stock, net		1,393			3,838			53,574
Proceeds for sale of stock warrant		-			90			90
Payment of preferred stock dividends		-			-			(1,251	)
Series A preferred stock redemption fee		-			-			(1,700	)
Deferred financing costs		-			-			(320	)
Net Cash provided by Financing Activities		4,753			6,609			104,807
Effect of exchange rates on cash		(25	)		(104	)		(153	)
Net increase in cash		49			88			153
Cash at beginning of period		16			65			-
Cash at end of period	$	65		$	153		$	153

Supplemental disclosure of cash flow information — Cash paid during the period for interest	$	-		$	-		$	1,879
Supplemental schedule of non-cash financing activities:
Equipment acquired through capital leases	$	-		$	-		$	285
Issuance of common stock in connection with elimination of Series A and Series A-1 preferred stock preferences		-			-			12,349
Issuance of common stock in connection conversion of notes payable and accrued interest		1,500			1,786			3,286
Modification of Series A preferred stock warrants		-			-			2,306
Modification of Series A-1 preferred stock warrants		-			-			16,393
Warrants issued on Series A and Series A-1 preferred stock dividends		-			-			4,664
Common stock warrant liability		-			-			11,841
Accretion of mandatorily redeemable Series A preferred stock redemption obligation		-			-			1,872
Debt discount on promissory notes		2,578			3,254			14,091
Conversion of convertible promissory notes and accrued interest to Series D preferred stock		-			-			5,324
Conversion of convertible promissory notes and accrued interest to Series A-1 preferred stock		-			-			7,707
Conversion of convertible promissory notes and accrued interest to common stock		-			-			269
Issuance of Series C preferred stock warrants in connection with lease agreement		-			-			43
Issuance of common stock for license rights		-			-			4
Liability for and issuance of common stock and warrants to Medarex		-			-			840
Issuance of common stock to landlord		-			-			35
Deferred compensation on issuance of stock options and restricted stock grants		-			-			759
Cancellation of options and restricted stock		-			-			849
Financing of prepaid insurance through note payable		-			-			491
Stock subscription receivable		-			-			480

See accompanying notes to the consolidated financial statements.

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

(1) Organization and Description of Business

Northwest Biotherapeutics, Inc. and its majority owned subsidiary NW Bio Europe Sarl (collectively, the “Company”, “we”, “us” and “our”) was organized to discover and develop innovative diagnostics and immunotherapies for prostate and brain cancer. During 1998, the Company incorporated as a Delaware corporation. Prior to 1998, the Company was a limited liability company, which was formed on March 18, 1996. The Company is a development stage company, has yet to generate significant revenues from its intended business purpose and has no assurance of future revenues. While in the development stage, the Company’s principal activities have included defining and conducting research programs, conducting clinical trials, raising capital and recruiting scientific and management personnel.

(2) Operations and Financing

Liquidity

The Company has experienced recurring losses from operations, and, as of December 31, 2010, had a working capital deficit of $25.9 million and a deficit accumulated during the development stage of $218.9 million. Of this $218.9 million deficit, $102.5 million (less than half) reflects cash used in operations, and the remaining $116.4 million reflects non-cash accounting measures.

Between 2004 and 2010, the Company has undergone a significant recapitalization through the transactions described below.

Toucan Capital and Toucan Partners

Toucan Partners and the Board's Chairperson also received a total of 2,504,034 shares of common stock as compensation for services rendered during 2008 and 2009.

On October 1, 2010 Toucan Partners loaned the Company $900,000 by repaying a portion of the Bridge Funding Note payable to Regen Med Acquisition Corporation (“Regen Med”) originating July 14, 2010 under a 6% convertible promissory note on the same terms and conditions as the September Notes that the Company had negotiated and executed with non-affiliated investors on September 28, 2010, secured by an interest in all the Company’s assets, due on December 1, 2010. The conversion feature of the note allows Toucan Partners to convert the principal into shares of common stock at a conversion price of $0.75. Additionally, Toucan Partners received 100% warrant coverage, on the same terms and conditions as the September Notes (including the same market formula for the warrant exercise price), at $0.82 per share. In the event of default, Toucan Partners was entitled to adjust the interest rate to 9% per annum for the default period and to be granted an additional 100% warrant coverage at $0.82 per share. The Company did not repay the loan on December 1, 2010 however Toucan Partners waived its right to increase the interest rate and waived its right to the additional warrant. The loan was repaid in full by December 31, 2010.

In December 2010 Toucan Capital transferred 6,433,162 shares of common stock and 7,345,030 warrants to purchase shares of the Company’s common stock to Regen Med, a non-affiliate third party.

As a result of the financings described above, as of December 31, 2010 Toucan Capital held:

•

an aggregate of 12,866,324 shares of Common Stock;

•

warrants to purchase 9,433,821 shares of Common Stock at an exercise price of $0.60 per share (net of 4,716,911 warrants transferred to Regen Med stockholders); and

•

warrants to purchase 5,256,238 shares of Common Stock at an exercise price of $0.15 per share (net of 2,628,119 warrants transferred to Regen Med stockholders).

As a result of the financings described above, and other open market transactions, as of December 31, 2010, Toucan Partners and its managing member Ms. Linda Powers held:

•

an aggregate of 10,510,691 shares of Common Stock;

•

warrants to purchase 8,832,541 shares of Common Stock at an exercise price of $0.60 per share;

•

warrants to purchase 1,097,561 shares of Common Stock at an exercise price of $0.82 per share;

•

warrants to purchase 132,500 shares of common stock at an exercise price of $0.40;

•

warrants to purchase 86,667 shares of common stock at an exercise price of $0.75 per share; and

•

warrants to purchase 842,375 shares of common stock at an exercise price of $0.20.

As of December 31, 2010, Toucan Capital, including the holdings of Toucan Partners, and its managing member Ms Linda Powers held 23,377,015 shares of common stock, representing approximately 32.0% of the common stock outstanding. Further, as of December 31, 2010, Toucan Capital, including the holdings of Toucan Partners, and its managing member Ms Linda Powers beneficially owned (including unexercised warrants) 49,572,559 shares of common stock, representing a beneficial ownership interest of approximately 40.5%.

Other Financings

In April 2006, the Company completed the PIPE Financing and raised approximately $5.5 million from the issuance of 2.6 million shares of common stock.

On June 22, 2007, we placed 15,789,473 shares of common stock with foreign institutional investors at a price of £0.95 per share. The gross proceeds from the placement were approximately £15.0 million, or $29.9 million, while net proceeds from the offering, after deducting commissions and expenses, were approximately £13.0 million, or $25.9 million.

On January 16, 2009 we entered into a securities purchase agreement for $700,000 with Al Rajhi Holdings who purchased 1,000,000 shares of our common stock at $0.70 per share.

On March 27, 2009, we completed a private placement of 1.4 million shares of our common stock and received $0.7 million.

Between February 22, 2010 and March 31, 2010, the Company sold 1,451,666 shares of common stock at $0.75 per share for net proceeds of $1,088,750.

During September, 2010, the Company sold to a private investor 266,667 shares of common stock at $0.75 per share for net proceeds of $200,000. In connection with this private placement, the Company issued warrants to purchase 40,000 shares of common stock.

On October 19, 2010, the Company sold approximately 200,000 shares of common stock at a purchase price of $0.75 per share and raised aggregate gross proceeds of approximately $150,000 in a closed equity financing with an unrelated investor. In connection with the private placement, the Company issued warrants to purchase 20,000 shares of common stock at an exercise price of $0.75 per share and a term of 3 years.

On November 2, 2010 the Company received $90,000 as proceeds from the sale of a warrant to purchase 3,250,000 shares of the Company’s common stock. The warrants have an exercise price of $1.50 per share and a term of 3 years.

Shareholder Loan

Al Rajhi loaned the Company $4.0 million on May 12, 2008 under the terms of an unsecured promissory note with a principal amount of $4,240,000 (reflecting an original issue discount of $240,000). The note was initially due on November 12, 2008. Al Rajhi agreed to extend the term of the note of the loan until December 31, 2009. On February 22, 2010, Al Rajhi agreed to extend the term of the note to December 31, 2010. The Company and Al Rajhi are currently negotiating new terms for the note. Additionally, Al Rajhi agreed to convert the interest accrued pursuant to the promissory note into shares of common stock. A total of $853,952 was converted into 1,138,603 shares of common stock at a conversion price of $0.75. In consideration of the extension the Company agreed to extend the term of the warrants issued to Al Rajhi to September 30, 2013.

Other Loans

On October 1, 2008, the Company entered into a $1 million unsecured 12% Loan Agreement with SDS (the “SDS Loan”). The SDS Loan was initially due April 1, 2009. On May 27, 2010 SDS agreed to extend the term of the note to June 2, 2011. In consideration of the extension the Company issued SDS a warrant to purchase 500,000 shares of the Company’s stock with an exercise price of $0.53 per share. The warrants have a five year term.

On dates between October 21, 2008 and November 6, 2008, the Company entered into unsecured 12% Loan Agreements (the “Private Investor Loans”) and Promissory Notes (the “Private Investor Promissory Notes”) with SDS and a group of private investors (the “Private Investors”). Under the Private Investor Promissory Notes, SDS loaned the Company $1 million and the Private Investors loaned the Company $650,000 for a total of $1.65 million. The Private Investor Promissory Notes were initially due in April 2009, and the Private Investors (excluding SDS) agreed to extend the maturity date to June 2010. The Private Investors agreed to further extend the maturity of the loans, maturing in June 2010, on terms that are currently being negotiated. Under the terms of a conversion and extension agreement, SDS converted $1,060,000, representing principal and accrued interest on an unsecured 12% loan made in November 2008 into 5,300,000 shares of common stock during May 2010 and December 2010. The value of the stock issued to SDS in excess of the carrying amount of the loan principal and accrued interest payable that was converted was $4,673,000. This amount was charged to loan conversion inducement expense in the consolidated statements of operations during 2010.

During March 2009, the Company received $650,000 upon issuing an unsecured 6% convertible loan agreements and promissory notes due in March 2011 to a group of private lenders (“Private Lenders”). The Company and the Private Lenders are currently negotiating new terms for the notes.

During March 2009, the Company received $110,000 upon issuing an unsecured 6% convertible loan agreement and promissory note due in March 2011 to a private lender (“Private Lender”). The Company and the Private Lenders are currently negotiating new terms for the note.

Between July and December, 2010, the Company borrowed $1,750,000 under a series of unsecured 6% convertible Loan Agreements and Promissory Notes with several affiliated and non- affiliated lenders. The notes were originally payable to Regen Med.

On December 16, 2010, the Company entered into a loan agreement totaling $3,050,000 with a private non-affiliated investor due in December 2013. The notes carry an original issue discount of 10% in addition to one-time interest charge of 10%. As of December 31, 2010 the Company had received $350,000 under this agreement.

On December 16, 2010, the Company received $100,000 upon issuing unsecured 10% convertible loan agreements and promissory notes due on March 17, 2011 to a private non-affiliated investor. The note was repaid on March 17, 2011.

In December 2010, SDS and its principals sold a promissory note issued by the Company in the principal amount of $1 million to non-affiliated third parties. As of December 31, 2010 two of these non affiliated investors had exchanged a portion of the notes for restated convertible notes in the amount of $500,000 and $407,000 inclusive of an original interest discount of $37,000 in addition to an annual interest rate of 10% and are due in June 2011 and December 2011 respectively.

On December 31, 2010, the Company received $790,000 from SDS Capital, an existing investor, upon issuing two unsecured loan agreements and promissory notes due in July 2011.

Going Concern

The Company has raised an aggregate of approximately $1.6 million in a series of small loans and stock purchases since December 31, 2010. We need to raise additional capital to fund our clinical trials and other operating activities and repay various note payable and loan agreements. The amount of additional funding required will depend on many factors, including the speed with which we are able to identify and hire people to fill key positions, the speed of patient enrollment in our DCVax®-Brain cancer trial, and unanticipated developments, including any litigation matters. However, without additional capital, we will not be able to complete our DCVax®-Brain clinical trial or move forward with any of our other product candidates for which investigational new drug applications have been cleared by the U.S. Food and Drug Administration, or FDA. We will also not be able to develop our second generation manufacturing processes, which offer substantial product cost reductions.

We will require additional funding before we achieve profitability. We are in late stage discussions with several parties in regard to additional financing transactions, which we hope to complete later in the year. There can be no assurance that our efforts to seek such funding will be successful. We may raise additional funds by issuing additional common stock or securities (equity or debt) convertible into shares of Common Stock, in which case, the ownership interest of our stockholders will be diluted. Any debt financing, if available, is likely to include restrictive covenants that could limit our ability to take certain actions. Further, we may seek funding from Toucan Capital or Toucan Partners or their affiliates or other third parties. Such parties are under no obligation to provide us any additional funds, and any such funding may be dilutive to stockholders and may contain restrictive covenants. We currently are exploring additional financings with several other parties; however, there can be no assurance that we will be able to complete any such financings or that the terms of such financings will be attractive to us. If our capital raising efforts are unsuccessful, our inability to obtain additional cash as needed could have a material adverse effect on our financial position, results of operations and our ability to continue our existence. Our independent registered public accounting firm has indicated in its report on our consolidated financial statements included in the Annual Report on Form 10-K for the year ended December 31, 2010 that there is substantial doubt about our ability to continue as a going concern.

( 3) Summary of Significant Accounting Policies

(a) References to Authoritative Accounting Literature

In June 2009, the Financial Accounting Standards Board ("FASB") issued the Accounting Standards Codification ("ASC") as the single source of authoritative U.S. GAAP recognized by the FASB to be applied by non-governmental entities in preparation of financial statements in conformity with U.S. GAAP, except for additional authoritative rules and interpretative releases issued by the SEC. While the adoption of the ASC changes how we reference accounting standards, the adoption did not have an impact on our consolidated financial statements.

(b) Principles of Consolidation and Basis of Presentation

The accompanying consolidated financial statements of the Company were prepared in accordance with U.S. GAAP and include the assets, liabilities, revenues and expenses of the Company’s majority-owned subsidiary over which the Company exercises control. Intercompany transactions and balances are eliminated in consolidation. The subsidiary was established in Switzerland during third quarter 2007. The Company contributed 95% of the initial share capital in this subsidiary and Cognate, a related party to the Company, contributed the remaining 5%. Noncontrolling interest is not material for all periods presented.

For operations outside the U.S. that prepare financial statements in currencies other than U.S. dollars, we translate the financial statements into U.S. dollars. Results of operations and cash flows are translated at average exchange rates during the period, and assets and liabilities are translated at end of period exchange rates, except for equity transactions and advances not expected to be repaid in the foreseeable future, which are translated at historical cost. The effects of exchange rate fluctuations on translating foreign currency assets and liabilities into U.S. dollars are accumulated as a separate component in other comprehensive income (loss).

(d) Use of Estimates in Preparation of Financial Statements

The preparation of financial statements in conformity with U.S. GAAP requires management 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 and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

(e) Embedded Derivative Liability

(f) Fair Value of Financial Instruments

The fair value of financial instruments other than liabilities payable to related parties approximate the recorded value based on the short term nature of these financial instruments. The fair value of liabilities payable to related parties is presently undeterminable due to the related party nature of the obligations. The fair value of derivative liabilities is estimated using a binomial model or Monte Carlo simulation depending on the complexity of the derivative being measured. See Note 4.

(g) Cash

Cash consists of checking and money market accounts. While cash held by financial institutions may at times exceed federally insured limits, management believes that no material credit or market risk exposure exists due to the high quality of the institutions. The Company has not experienced any losses on such accounts.

(h) Property and Equipment

Property and equipment are stated at cost, as adjusted for any prior impairments. Property and equipment are depreciated on a straight-line basis over the estimated useful lives which range from between three and seven years.

Expenditures for maintenance and repairs are expensed as incurred. Gains and losses from disposal representing the difference between any proceeds received from the sale of property and equipment and the recorded values of the asset disposed are recorded in total operating costs and expenses.

(i) Impairment of Long-Lived Assets

Long-lived assets including property and equipment are reviewed for possible impairment whenever significant events or changes in circumstances, including changes in our business strategy and plans, indicate that impairment may have occurred. An impairment is indicated when the sum of the expected future undiscounted net cash flows identifiable to that asset or asset group is less than its carrying value. Long-lived assets to be held and used, including assets to be disposed of other than by sale, for which the carrying amount is not recoverable are adjusted to their estimated fair value at the date an impairment is indicated, which establishes a new basis for the assets for depreciation purposes. Long-lived assets to be disposed of by sale are reported at the lower of carrying amount or fair value less cost to sell. Impairment losses are determined from actual or estimated fair values, which are based on market values, net realizable values or projections of discounted net cash flows, as appropriate.

(j) Operating Leases

The Company recognizes lease expense on a straight-line basis over the initial lease term. For leases that contain rent holidays or escalation clauses, the Company recognizes rent expense on a straight-line basis and records the difference between the rent expense and rental amount payable as deferred rent. As of December 31, 2009 and 2010, we did not have any deferred rent.

(k) Revenue Recognition

The Company has earned revenues through sale of research materials, providing research services to third parties and through research grants in the past. Revenues from sale of research materials are to multiple customers with whom there is no other contractual relationship and are recognized when shipped to the customer and title has passed.

Research contracts and grants require the Company to perform research activities as specified in each respective contract or grant on a best efforts basis, and the Company is paid based on the fees stipulated in the respective contracts and grants which approximate the costs incurred by the Company in performing such activities. The Company recognizes revenue under the research contracts and grants based on completion of performance under the respective contracts and grants where no ongoing obligation on the part of the Company exists. Direct costs related to these contracts and grants are reported as research and development expenses.

(l) Research and Development Expenses

Research and development costs are expensed as incurred. These costs include, but are not limited to, contract manufacturing costs, personnel costs, lab supplies, depreciation, amortization and other indirect costs directly related to the Company’s research and development activities.

(m) Income Taxes

We recognize income taxes on an accrual basis based on tax positions taken or expected to be taken in our tax returns. A tax position is defined as a position in a previously filed tax return or a position expected to be taken in a future tax filing that is reflected in measuring current or deferred income tax assets and liabilities. Tax positions are recognized only when it is more likely than not (i.e., likelihood of greater than 50%), based on technical merits, that the position would be sustained upon examination by taxing authorities. Tax positions that meet the more likely than not threshold are measured using a probability-weighted approach as the largest amount of tax benefit that is greater than 50% likely of being realized upon settlement. Income taxes are accounted for using an asset and liability approach that requires the recognition of deferred tax assets and liabilities for the expected future tax consequences of events that have been recognized in our financial statements or tax returns. A valuation allowance is established to reduce deferred tax assets if all, or some portion, of such assets will more than likely not be realized. Should they occur, our policy is to classify interest and penalties related to tax positions as income tax expense. Since our inception, no such interest or penalties have been incurred, however. Prior to 1998, the Company was a limited liability company and the Company’s tax losses and credits generally flowed directly to the members.

(n) Stock-Based Compensation

Compensation expense for all stock-based awards is measured at the grant date based on the fair value of the award and is recognized as an expense, on a straight-line basis, over the employee's requisite service period (generally the vesting period of the equity award). The fair value of each option award is estimated on the date of grant using a Black-Scholes option valuation model. Stock-based compensation expense is recognized only for those awards that are expected to vest using an estimated forfeiture rate. We estimate pre-vesting option forfeitures at the time of grant and reflect the impact of estimated pre-vesting option forfeitures in compensation expense recognized. For options and warrants issued to non-employees, the Company recognizes stock compensation costs utilizing the fair value methodology over the related period of benefit.

Stock-based compensation expense was as follows ($ in thousands):

	2009		2010
Research and development	$	770	$	593
General and administrative expenses		1,848		1,411
Total stock- based compensation expense	$	2,618	$	2,004

The assumptions used to estimate the fair value of awards granted for the periods presented are noted in the table below. Expected volatility is based on the separate historical volatility of the market prices of our common stock over the most recent period commensurate with the estimated expected life of the award. The risk-free rate for the expected term of the option is based on the U.S. Treasury yield curve in effect at the time of grant.

	2009			2010
Risk free interest rate		3.6	%		3.6	%
Volatility		208	%		208	%
Expected term	10 years			10 years
Expected dividends		0	%		0	%

(o) Loss per Share

Basic loss per share is computed on the basis of the weighted average number of shares outstanding for the reporting period. Diluted loss per share is computed on the basis of the weighted average number of common shares plus dilutive potential common shares outstanding using the treasury stock method. Any potentially dilutive securities are antidilutive due to the Company’s net losses. For the years presented, there is no difference between the basic and diluted net loss per share.

(p) Operating Segments

The Company is principally engaged in the discovery and development of innovative immunotherapies for cancer and has a single operating segment as management reviews all financial information together for the purposes of making decisions and assessing the financial performance of the Company.

Operating costs:

Operating costs and expenses consist primarily of research and development expenses, including clinical trial expenses which arise when we are actively participating in clinical trials, and general and administrative expenses.

Research and development:

Discovery and preclinical research and development expenses include scientific personnel related salary and benefit expenses, stock-based compensation, 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 the Company is a development stage company, it does not allocate research and development costs on a project basis. The Company adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and its limited number of financial and personnel resources. The Company’s business judgment continues to be that there is little value associated with evaluating expenditures at the project level since the Company is focusing primarily on its lead clinical trial programs as most of the Company’s expenditures relate to those programs.

For the year ended December 31, 2010, of the Company’s operating expenses of approximately $15.4 million, approximately 64% of its expended resources were apportioned to its two DCVax clinical trial programs. From its inception through December 31, 2010, the Company incurred costs of approximately $76.8 million associated with its research and development activities. Because its technologies are novel and unproven, the Company is unable to estimate with any certainty the costs it will incur in the continued development of its product candidates for commercialization.

General and administrative:

(q) Reclassifications

Certain reclassifications have been made to prior period financial statements and footnotes in order to conform to the current period's presentation.

(r) Recent and Adopted Accounting Pronouncements

From time to time new accounting guidance is issued by the FASB that the Company adopts as of an effective date. If not discussed, management believes that the impact of the new accounting guidance, which is not yet effective, will not have a material impact on the Company’s financial statements.

(4) Fair Value Measurements

Effective January 1, 2008 the Company adopted the new accounting guidance relating to fair value measurements as required by accounting guidance for financial instruments measured at fair value on a recurring basis and effective on January 1, 2009 on a non-recurring basis. The new accounting guidance defines fair value, establishes a framework for measuring fair value in accordance with U.S. GAAP and expands disclosures about fair value measurements.

Level 1, defined as observable inputs such as quoted prices for identical instruments in active markets;

Effective January 1, 2009, the Company adopted new accounting guidance for determining whether a financial instrument is indexed to its own stock. The adoption of the new accounting guidance can affect accounting for equity or debt instruments with down round-round provisions that protect holders from a decline in the stock price. For example, equity or debt instruments with such provisions will no longer be recorded in equity. Down round provisions reduce the exercise price of equity or debt instruments if a company either issues equity shares for a price that is lower than the exercise price of those instruments or issues new warrants or convertible instruments that have a lower exercise price. The Company evaluated whether any warrants or other agreements to acquire shares of the Company’s common stock contain down- round provisions based on a variable that is not an input to the fair value of a “fixed-for-fixed” option. As discussed in Note 10, the Company determined that the September Note warrants, October Note warrants and conversion feature for the $500,000 note payable issued on December 31, 2010 contained such provisions. As a result the Company concluded that the down-round provisions associated with these instruments were not indexed to the Company’s stock and are therefore recorded as derivative liabilities.

The Company recognizes the derivative liabilities at their respective fair values at inception and on each reporting date. The Company measures fair values using a binomial model adjusted for the probability of issuance using a Monte Carlo simulation.

The derivative liabilities associated with the September Note warrants were initially recorded in the consolidated balance sheet upon issuance as of September 28, 2010 at a fair value of $189,000.

The derivative liabilities associated with the warrants issued with the October 1, 2010 $900,000 note from Toucan Partners were initially recorded in the consolidated balance sheet upon issuance as of October 1, 2010 at a fair value of $329,000.

The derivative liabilities associated with the warrants issued with the October 1, 2010 $500,000 note from an unaffiliated third party were initially recorded in the consolidated balance sheet upon issuance as of October 1, 2010 at a fair value of $161,000.

The derivative liabilities associated with the conversion feature in the December 31, 2010 $500,000 note from an unaffiliated third party were initially recorded in the consolidated balance sheet upon issuance as of December 31, 2010 at a fair value of $214,000.

The derivative liabilities continue to be recorded in the consolidated balance sheet at fair value with changes in fair value also recorded in “Derivative valuation gain (loss)” in the consolidated statement of operations. As of December 31, 2010, the fair value of the derivative liabilities was $839,000 with a change in fair value during the period from issuance to December 31, 2010 of $54,000. Key assumptions for determining fair values included expected terms ranging from between 6 and 9 months, volatility ranging between 76% and 131% and risk-free interest rate of 0.25%.

The derivative liabilities are considered Level 3 liabilities on the fair value hierarchy as the determination of fair value includes various assumptions about the future activities and the Company’s stock prices and historical volatility inputs.

The table below provides a reconciliation of the beginning and ending balances for the liabilities measured using fair significant unobservable inputs (Level 3). There were no assets as of or during the year ended December 31, 2010 and no assets or liabilities as of or during the year ended December 31, 2009 measured at fair value using unobservable inputs (Level 3).

Fair Value Measurements Using Significant Unobservable Inputs (Level 3):

Balance, January 1, 2010	$	-
Fair value upon issuance, Down-round protection on September Note warrants		189,000
Fair value upon issuance, Down-round protection on October Note warrants		329,000
Fair value upon issuance, Down-round protection on October Note warrants		161,000
Fair value upon issuance, Down-round protection on note payable conversion feature		214,000
Net change in fair value of derivative liabilities (an unrealized gain)		(54,000	)
Balance at December 31, 2010	$	839,000

(5) Stock-Based Compensation Plans

Stock Option Plans

Existing stock option plans are as follows:

(a) 2001 Stock Option Plan

(b) 2001 Non-employee Director Stock Incentive Plan

The 2007 Stock Option Plan became effective on June 15, 2007 (the “2007 Stock Option Plan”). In April 2008, the Company increased the number of shares reserved for issuance by 519,132 shares for an aggregate of 6,000,000 shares of its common stock. In May 2010, the Company increased the number of shares reserved for issuance under the 2007 Stock Option Plan by an additional 10,000,000 shares of its common stock. The plan provides for the grant to employees of the Company, its parents and subsidiaries, including officers and employee directors, of “incentive stock options,” as defined, 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. As of December 31, 2010, net of forfeitures, a total of 10,070,528 shares remain available for issuance under this plan.

Stock Option Activity

A summary of activity relating to our stock options is as follows (options in thousands):

	Options			Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term (Years)		Aggregate Intrinsic Value
Outstanding as of December 31, 2009		4,108		$	0.69
Granted		100			0.75
Exercised		(99	)		0.75
Expired		(2	)		15.15
Forfeited		(851	)		0.60
Outstanding as of December 31, 2010		3,256			0.71		8.3
Exercisable as of December 31, 2010		2,305			0.71		8.5	$	—

A summary of the Company’s unvested stock option grants and changes during 2010 was as follows (options in thousands):

				Weighted-
				Average
				Grant Date
	Options			Fair Value
Outstanding at December 31, 2009		1,816		$	0.68
Granted during 2010		100			0.75
Expired/Forfeited during 2010		(2	)		15.15
Vested during 2010		(963	)		0.67
Outstanding at December 31, 2010		951			0.70

Additional information regarding stock options outstanding and exercisable at December 31, 2010 is as follows, in thousands, except option price and weighted average exercise price.

	Options Outstanding						Options Exercisable
Range of Exercise Prices	Number Outstanding		Weighted- Average Remaining Contractual Life (Years)		Weighted Average Exercise Price		Number Exercisable		Weighted Average Exercise Price

$ 0.55 - 0.60		2,237		8.37	$	0.56		1,875	$	0.56
$ 0.61 - 2.40		1,011		8.23	$	0.88		421	$	1.03
$ 2.41 - 75.00		8		1.24	$	21.43		8	$	21.43
Total		3,256		8.30	$	0.71		2,304	$	0.70

Options granted under the plans are generally priced at or above the estimated fair market value of the Company’s common stock on the date of grant and generally vest over between four and nine years. Compensation expense, if any, is charged over the period of vesting. All options, if not previously exercised or canceled, expire ten years from the date of grant, or the expiration date specified in the individual option agreement, if earlier.

During 2010 and 2009, the Company granted options to purchase 100,000 and 2,581,000, respectively, shares of common stock. The weighted average exercise price of options granted in 2010 and 2009 was $0.75 and $0.60, respectively. Stock compensation expense amounted to $2,004,000 and $2,618,000 during 2010 and 2009, respectively.

The aggregate intrinsic value of options exercised during 2010 and 2009 was $74,241 and $64,025, respectively. Our policy is to issue new shares to fulfill the requirements for options that are exercised.

The aggregate fair value of options vested during 2010 and 2009 was $1,998,778 and $2,919,671, respectively.

As of December 31, 2010 the total unrecognized compensation expense related to unvested stock option awards was $1,702,175, which is expected to be recognized over a weighted average term of approximately 9 years.

(6) Stockholders’ Equity (Deficit)

(a) Stock Purchase Warrants

Toucan Capital and Toucan Partners Warrants

The Company has issued the following warrants to Toucan Capital and Toucan Partners:

Date of Issue	Related transaction	Warrants Issued		Exercise Price		Warrants outstanding at December 31, 2010
Issued to Toucan Capital
June 2007	See Conversion Agreement in Note 2		14,150,732	$	0.60		9,433,821
June 2007	See Conversion Agreement in Note 3		7,884,357		0.15		5,256,238

Issued to Toucan Partners
June 2007	See Conversion Agreement in Note 2		8,832,541		0.60		8,832,541
December 2008	December 2008 Loan warrants		132,500		0.40		132,500
September 2009	August and December 2008 Loan Conversions		513,841		0.41		513,841
September 2009	Consulting services		842,375		0.2		842,375
July 2010	Equity Investment ($650,000)		86,667		0.75		86,667
October 2010	October $900,000 loan		1,097,561		0.82		1,097,561

Other Warrant Issues

Date of Issue	Related transaction	Warrants Issued		Exercise Price		Warrants outstanding at December 31, 2010
September 2009	Al Rajhi loan extension		1,743,111	$	0.63		1,743,111
September 2009	Loan extensions		861,520		0.20		861,520
January 2010	Consultant compensation (1)		100,000		0.75		100,000
February 2010	Consultant compensation (2)		250,000		1.00		250,000
April 2010	Private Placement		233,333		0.75		176,996
May 2010	SDS loan extension		500,000		0.53		500,000
July 2010	Regen Med July 2010 $1,750,000 Loan		2,333,333		0.75		1,949,678
July 2010	Consultant compensation (3)		300,000		0.75		300,000
September 2010	September 28, 2010 $350,000 Loan		421,687		0.83		421,687
October 2010	October 1, 2010 $500,000 Loan		609,756		0.82		609,756
October 2010	Consultant compensation (4)		20,000		0.75		20,000
November 2010	Consultant compensation (5)		75,833		0.75		75,833
November 2010	Warrant issued for cash		3,250,000		1.50		3,250,000
December 2010	December 16, 2010 $100,000 loan		133,333		0.75		133,333
December 2010	December SDS loan warrants		118,165		0.75		118,165

(1) The fair value of the warrants amounting to $72,000 was recognized as general and administrative expense.

(2) The fair value of the warrants amounting to $169,000 was recognized as general and administrative expense.

(3) The fair value of the warrants amounting to $203,000 was recognized as general and administrative expense.

(4) The fair value of the warrants amounting to $14,000 was recognized as general and administrative expense.

(5) The fair value of the warrants amounting to $48,000 was recognized as general and administrative expense.

A summary of the warrants outstanding at December 31, 2010 is as follows:

Date of Issue	Warrants Outstanding as of December 31, 2010		Exercise Price		Expiration
June 1, 2007		7,628,587	$	0.15	May 31, 2015
December 3, 2010		255,750		0.15	December 2, 2013
September 30, 2009		1,703,625		0.20	September 29, 2012
December 23, 2008		132,500		0.40	December 22, 2016
November 6, 2008		1,354,083		0.41	November 5, 2012
May 26, 2010		500,000		0.53	November 17, 2015
June 1, 2007		21,064,997		0.60	May 31, 2015
December 3, 2010		1,918,275		0.60	December 2, 2013
September 28, 2009		1,743,111		0.63	September 27, 2012
January 1, 2010		100,000		0.75	December 31, 2012
March 23, 2010 to May 26, 2010		233,329		0.75	May 25, 2013
July 7, 2010		300,000		0.75	July 6, 2013
July 2, 2010		86,667		0.75	July 1, 2013
July 14, 2010		1,949,678		0.75	July 13, 2015
October 13, 2010		80,000		0.75	October 12, 2013
November 23, 2010		75,833		0.75	November 22, 2015
December 3, 2010		383,655		0.75	December 2, 2010
December 13, 2010		133,333		0.75	December 12, 2015
December 29, 2010		118,165		0.75	December 28, 2015
November 29, 2010		36,875		0.80	November 23, 2013
October 1, 2010		1,707,317		0.82	September 30, 2015
November 29,2010		421,687		0.83	November 28, 2010
February 1, 2010		250,000		1.00	January 31, 2013
November 5, 2010		3,250,000		1.50	November 4, 2013
February 9, 2003		13,333		1.53	February 8, 2013
March 30, 2006		677,389		2.10	March 29, 2011
January 8, 2003		13,333		2.66	January 7, 2013
December 26, 2002		26,666		3.24	December 25, 2012
		46,158,188

(b) Common Stock Equivalents

The following common stock equivalents on an as-converted basis were excluded from the calculation of diluted net loss per share, as the effect would be antidilutive (in thousands):

	December 31,
	2009		2010
Common stock options		4,108		3,256
Common stock warrants		36,599		46,158
Common stock issuable on conversion of notes payable		14,177		18,606

Issuances of common stock during 2010 and 2009 were as follows:

Date	Transaction	# of Shares		Price per share		Gross Cash Proceeds
January 2009	Private Placement		1,000,000	$	0.70	$	700,000
March 2010	Consultant fees paid in stock (1)		199,661		0.69
March 2009	Private Placement		1,377,358		0.50		700,000
September 2009	Toucan Partners Loan Conversion (2)		8,547,280		0.20
September 2009	Toucan Partners consulting services (1)		2,504,034		0.75
September 2009	Consultant fees paid in stock (1)		397,500		0.75
September 2009	Note conversion		562,500		0.20
December 2009	Consultant fees paid in stock (1)		146,306		0.82
December 2009	Exercise of employee stock options and warrants (cashless basis)		1,236,055
December 2009	Stock issued in lieu of salaries (1)		413,540		0.93
Total issued in 2009			16,384,234			$	1,400,000
March 2010	Private Placement		1,451,667		0.75	$	1,088,750
March 2010	Al Rajhi interest conversion (3)		1,138,603		0.75
May 2010	SDS Loan conversion (4)		5,300,000		0.20
June 2010	Private Placement		2,333,333		0.75		1,750,000
July 2010	Private Placement		866,667		0.75		650,000
Jul;y 2010	Toucan Partners consulting fees (1)		8,466		0.20
September 2010	Private Placement		266,667		0.75		200,000
October 2010	Note conversion		58,971		0.77
December 2010	Stock issued in lieu of salaries (1)		704,752		0.73
December 2010	Consultant fees paid in stock (1)		1,559,071		0.77
December 2010	Loan conversion		353,187		0.46
December 2010	Private Placement		200,000		0.75		150,000
Total issued in 2010			14,241,384			$	3,838,750

(1) Common stock valued at closing price at date of issue.

(2) The value of the stock issued to Toucan Partners in excess of the carrying amount of the loans and accrued interest payable amounted to $4,701,004, and together with the fair value of the warrants, of $916,716, was charged to loan conversion inducement expense in the accompanying consolidated statements of operations during 2009.

(3) The fair value of the common stock issued in excess of the accrued interest payable converted into common stock amounted to $194,761 and was recorded in interest expense in the accompanying consolidated financial statements.

(4) The value of the stock issued to SDS in excess of the carrying amount of the loan principal and accrued interest payable that was converted was $4,673,568. This amount was charged to loan conversion inducement expense in the accompanying consolidated statements of operations during 2010.

(d) Employee 401(k) Plan

On August 19, 1999, the Company adopted a 401(k) Plan for certain eligible employees. Under the plan, an eligible employee may elect to contribute to the plan. In addition, the Company may elect to contribute matching contributions. Effective March 1, 2006, the Company no longer matches employee contributions.

(e) Stockholder Rights Agreement

On March 6, 2002, the Company adopted a Stockholder Rights Agreement, under which each common stockholder received a dividend of one right per share of common stock held. Each right entitles the holder to purchase one share of common stock at a price equal to $19.25 per share, subject to certain anti-dilution provisions, and is exercisable only in the event that a third party acquires beneficial ownership of, or announces a tender or exchange offer for, at least 15% of the Company’s outstanding common stock and such acquisition or offer is determined by the Board of Directors to not be in the best interests of the stockholders. If the acquisition or offer were determined by the Board of Directors to be in the best interests of the stockholders, the rights may be redeemed by the Company for $0.0001 per right. The rights will expire on February 25, 2012, unless earlier terminated in accordance with the rights agreement. The Board of Directors and Mellon Investor Services LLC, its Rights Agent, on April 26, 2004, amended the Stockholder Rights Agreement. The definition of an “Acquiring Person” was amended to exclude Toucan Capital Fund II, L.P. and other investors selected by Toucan from the definition of “Acquiring Person” for those shares of the Company’s capital stock they acquire, or are deemed to beneficially own, in connection with the Recapitalization Agreement.

(7) Related Party Transactions

(a) Notes Payable to Related Parties

Convertible promissory notes have been issued to Toucan Capital and Toucan Partners. As of December 31, 2010 all of the notes issued prior to December 31, 2008 have either been converted or repaid.

In June and July 2009 we entered into Loan Agreements and Promissory Notes with Toucan Partners for an aggregate of $1,300,000 with a term of two years at 6% interest.

In September 2010 we entered into Convertible Loan Agreements and Promissory Notes with Toucan Partners for an aggregate of $900,000 with a term of sixty days at 6% interest. The loan was repaid in 2010.

Notes payable to related parties are more fully described in Notes (2) and (10).

(b) Cognate Agreement

On July 30, 2004, the Company entered into a service agreement with Cognate Therapeutics, Inc. (now known as Cognate BioServices, Inc., or Cognate), a contract manufacturing and services organization in which Toucan Capital has a majority interest. In addition, two of the principals of Toucan Capital are members of Cognate’s board of directors and, on May 17, 2007, the managing director of Toucan Capital was appointed to serve as a director of the Company and to serve as the non-executive Chairperson of the Company’s Board of Directors. Under the service agreement, the Company agreed to utilize Cognate’s services for an initial two-year period, related primarily to manufacturing DCVax product candidates, regulatory advice, research and development preclinical activities and managing clinical trials. The agreement expired on July 30, 2006; however, the Company continued to utilize Cognate’s services under the same terms as set forth in the expired agreement. On May 17, 2007, the Company entered into a new service agreement with Cognate pursuant to which Cognate will provide certain consulting and, when needed, manufacturing services to the Company for its DCVax -Brain Phase II clinical trial. Under the terms of the new contract, the Company paid a non-refundable contract initiation fee of $250,000 and committed to pay budgeted monthly service fees of $400,000, subject to quarterly true-ups, and monthly facility fees of $150,000. Under the terms of the contract unless the contract is terminated earlier the contract will expire at the earlier of (i) the submission of an FDA biological license application/new drug application on the Company’s brain cancer clinical trial or (ii) July 1, 2010. The Company may terminate this agreement with 180 days notice and payment of all reasonable wind-up costs and Cognate may terminate the contract in the event that the brain cancer clinical trial fails to complete enrollment by July 1, 2009. However, if such termination by the Company occurs at any time prior to the earlier of the submission of an FDA biological license application/new drug application on the Company’s brain cancer clinical trial or July 1, 2010 or, such termination by Cognate results from failure of the brain cancer clinical trial to complete patient enrollment by July 1, 2009, the Company is obligated to make an additional termination fee payment to Cognate equal to $2 million. Although the Company failed to complete enrollment of the brain cancer clinical trial by July 1, 2009, Cognate reserved its rights but did not trigger termination as of December 31, 2010. Since July 1, 2009 with the mutual agreement of Cognate and the Company the agreement has continued on a month to month basis on the same terms as included in the original agreement.

If and to the extent we wish to engage Cognate to manufacture any of our product candidates for clinical trials or commercialization, we will need to enter into a new agreement with Cognate or another third-party manufacturer which might not be feasible on a timely or favorable basis. Cognate’s facility in Memphis, Tennessee has the capacity for approximately 600 patients per year, which we believe will be sufficient for our Phase II clinical trial for DCVax -Brain. We have a plan with Cognate to accommodate an increase in production capacity based on demand and have detailed plans and cost analysis for additional modular expansions which should increase the capacity of the current facilities from approximately 600 patients to over 9,000 patients per year.

During the years ending December 31, 2009 and 2010, respectively, the Company recognized approximately $7.3 million and $7.8 million of research and development costs related to these service agreements. As of December 31, 2009 and 2010, the Company owed Cognate approximately $5.9 and $10.2 million, respectively.

During 2009, the Company and Cognate agreed that most of the accounts payable owed by the Company to Cognate, will be converted into shares of common stock instead of paid in cash. The conversion price will be no less favorable than the conversion price applied to any other creditor of the Company. The lowest conversion price applied to any other creditor of the Company to date following the agreement is $0.20 per share. Accordingly, if no lower conversion price is applied to any other creditor prior to completion of the Cognate conversion, the Cognate conversion will take place at $0.20 per share. The impact of the conversion will result in a reduction of liabilities for the amount converted. In addition, the Company will recognize the value of common stock issued in excess of the amount of accounts payable converted, if any, as a charge to operations when the conversion takes place. Initial review of the payables by both parties indicated a difference in the parties’ respective understanding of the amounts due. The parties have now agreed that as of December 31, 2010 the amount due to Cognate is $10.2 million, and the Company has recognized $3.6 million in additional expense in 2010. Finalization of the conversion arrangements are in process.

In accordance with a recapitalization agreement dated April 26, 2004 between the Company and Toucan Capital, as amended and restated on July 30, 2004 and further amended ten times between October 22, 2004 and November 14, 2005, pursuant to which Toucan Capital agreed to recapitalize the Company by making loans to the Company, the Company accrued and paid certain legal and other administrative costs on Toucan Capital’s behalf. Pursuant to the terms of the Conversion Agreement discussed above, the recapitalization agreement was terminated on June 22, 2007. Subsequent to the termination of the recapitalization agreement, Toucan Capital continues to incur costs on behalf of the Company. These costs primarily relate to consulting costs and travel expenses incurred in support of the Company’s international expansion efforts. In addition, since July 1, 2007 the Company has accrued and recorded rent expense due to Toucan Capital Corp. an affiliate of Toucan Capital for its office space in Bethesda, Maryland.

During the years ending December 31, 2009 and 2010, respectively, the Company recognized approximately $1.1 million and $0.9 million of general and administrative costs related to this recapitalization agreement, rent expense, as well as legal, travel and other costs incurred by Toucan Capital, Toucan Partners and Linda Powers on the Company’s behalf. At December 31, 2009 and 2010, accrued expenses payable to Toucan Capital and related parties amounted to $0.4 million and $1.5 million, respectively, and are included as part of accounts payable to related parties in the accompanying consolidated balance sheets.

On March 21, 2008, the Company executed a Sublease Agreement (the “Sublease Agreement”) with Toucan Capital for the space the Company uses as its headquarters at 7600 Wisconsin Avenue, Suite 750, Bethesda, Maryland. The Sublease Agreement is effective as of July 1, 2007 and expires on October 31, 2016, unless sooner terminated according to its terms. The Company was and remains obligated to pay operating expenses allocable to the subleased premises under Toucan Capital master lease. Effective November 30, 2009, the Sublease was terminated in connection with termination and buyout of the overall lease of this space. (The overall lease and the Company’s Sublease had 7 years left to run at that time). The termination and buyout did not require any lump sum exit payment. Instead, it requires a partial payout over several years. The obligation for the Company will be less than $5,000 per month during 2011.

(8) Income Taxes

There was no income tax benefit attributable to net losses for 2010 and 2009. The difference between taxes computed by applying the U.S. federal corporate rate of 34% and the actual income tax provisions in 2010 and 2009 is primarily the result of establishing a valuation allowance on the Company’s deferred tax assets arising primarily from tax loss carry forwards.

The tax effects of temporary differences and tax loss and credit carry forwards that give rise to significant portions of deferred tax assets and liabilities at December 31 are comprised of the following (in thousands):

	2009			2010
Net operating loss carry forwards	$	36,666		$	41,175
Research and development credit carry forwards		2,549			2,821
Other		165			25
Gross deferred tax assets		39,380			44,021
Less valuation allowance		(39,380	)		(44,021	)
Net deferred tax assets	$	—		$	—

The increase in the valuation allowance for deferred tax assets for 2010 and 2009 of $4.6 million and $5.0 million, respectively, was due to the inability to utilize net operating losses and research and development credits.

At December 31, 2010, the Company had net operating loss carry forwards for income tax purposes of approximately $121.1 million and unused research and development tax credits of approximately $2.8 million available to offset future taxable income and income taxes, respectively, expiring beginning 2019 through 2030. The Company’s ability to utilize net operating loss and credit carry forwards is limited pursuant to the Tax Reform Act of 1986, due to cumulative changes in stock ownership in excess of 50% such that some net operating losses may never be utilized. The tax years 2007 through 2010 remain open to examination by federal agencies and other jurisdictions in which the Company operates.

(10) Commitments and Contingencies

(a) Lease Obligations

The Company terminated its lease with Toucan Capital Corporation on December 31, 2009. The Company is obligated to pay monthly payments of approximately $5,000 per month during 2011 under the terminated lease.

On March 17, 2010, the Company entered into a non-cancelable operating lease for 7,097 square feet of office space in Bethesda, Maryland, which expires in September 2012. Future minimum lease payments under the lease are $163,475, $126,027, in 2011 and 2012, respectively. Rent expense for the years ended December 31, 2009 and 2010 amounted to $0 and $100,085, respectively. The Company expects to lease part of this space to Toucan and proceeds of this sublease will be offset against the minimum lease payments specified above.

(9) Notes Payable

Toucan Partners Loans

Toucan Partners loaned the Company a total of $1,300,000 on June 30, 2009, July 2, 2009 and July 17, 2009 under unsecured 6% convertible promissory notes due June 29, 2011, July 1, 2011 and July 16, 2011. The conversion feature of the notes allows Toucan Partners to receive shares of common stock, at a conversion price of $0.20. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $1,300,000 which was recorded as a debt discount to be amortized over the term of the notes.

On October 1, 2010 the Company entered into unsecured 6% Loan Agreements and Promissory Notes (the “October Note”) with Toucan Partners in the amount of $900,000 when Toucan Partners partially repaid the Regen Med Notes. The terms of the October Note and related warrants conformed to the terms of the September Notes previously negotiated by the Company with unrelated investors, and executed by the Company with such investors prior to these October Notes with Toucan Partners. Accordingly, the October Notes had a term of 60 days and were convertible into shares of the Company’s common stock at $0.75 per share. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $285,366 which was recorded as a debt discount to be amortized over the term of the notes. The notes also carried 100% warrant coverage with an exercise price, based on the same market formula as the September Notes, of $0.82 per share. The warrants also provided the same price protection as in the September Notes, in that if the Company issues stock or warrants at a price lower than the $0.82 per share during the 1-year period following the effective date of these notes, the price of the warrants will be reset to such lower price (other than on issuances, if any, pursuant to arrangements entered into reported prior to the effective date). In the event that lower priced stock or warrants are issued during the protected period all the warrants pursuant to the October Note will be re-priced but no additional warrants will be due. The Company determined that the warrants should be accounted for as an embedded derivative. The derivate was valued at $329,000 using a binomial model and accounted for as an embedded derivative liability with the offsetting charge booked as debt discount.

Other

On dates between October 21, 2008 and November 6, 2008, the Company entered into unsecured 12% Loan Agreements (the “Private Investor Loans”) and Promissory Notes (the “Private Investor Promissory Notes”) with SDS and a group of private investors (the “Private Investors”). Under the Private Investor Promissory Notes, SDS loaned the Company $1 million and the Private Investors loaned the Company $650,000 for a total of $1.65 million. The Private Investor Promissory Notes were initially due in April 2009, and the Private Investors (excluding SDS) agreed to extend the maturity date to June 2010. The Private Investors agreed to further extend the maturity of the loans, maturing in June 2010, on terms that are currently being negotiated. Under the terms of a conversion and extension agreement, SDS converted the November 2008 $1 million unsecured 12% loan and accrued interest payable into 5,024,400 shares of common stock during May 2010. The value of the stock issued to SDS in excess of the carrying amount of the loan principal and accrued interest payable that was converted was $4,521,960. This amount was charged to loan conversion inducement expense in the accompanying consolidated statements of operations during 2010.

During March 2009, the Company received $650,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in March 2011 to a group of private lenders (“Private Lenders”). The Company and the Private Lenders are currently negotiating new terms for the notes. The conversion feature allows the holders to receive shares of common stock only, and not cash or other consideration, at a conversion price of $0.63. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $73,000 which was recorded as a debt discount to be amortized over the term of the notes.

During March 2009, the Company received $110,000 upon issuing a unsecured 6% convertible loan agreement and promissory note due on March 25, 2011 to a Private Lender. The Company and Private lender are currently negotiating new terms for the note. Upon receiving a request for conversion, the Company may elect to settle the instrument in cash or pay the total principal and accrued interest in shares of common stock, at a conversion price of $0.63. The Company has assessed the note and concluded that the amount of the loan attributable to equity is immaterial. The intrinsic value of the note did not result in a material beneficial conversion feature.

On dates between August 13, 2009 and September 24, 2009, the Company received $580,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in August and September 2011 to a group of Private Lenders. The conversion feature allows the holders to receive shares of common stock at a conversion price of $0.20. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $580,000 which was recorded as a debt discount to be amortized over the term of the notes.

On dates between October 6, 2009 and December 31, 2009, the Company received $215,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in August and September 2011 to a group of Private Lenders. The conversion feature allows the holders to receive shares of common stock at a conversion price of $0.20. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $205,000 which was recorded as a debt discount to be amortized over the term of the notes.

On dates between October 6, 2009 and December 31, 2009, the Company received $505,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due in August and September 2011 to a group of Private Lenders. The conversion feature allows the holders to receive shares of common stock at a conversion price of $0.50. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $295,000 which was recorded as a debt discount to be amortized over the term of the notes.

On dates between January 8, 2010 and March 29, 2010, the Company received $875,000 upon issuing unsecured 6% convertible loan agreements and promissory notes due between January and March 2012 to a group of Private Lenders. The conversion feature allows the holders to elect in their discretion to receive shares of common stock at a conversion price of $0.50. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $579,000 which was recorded as a debt discount to be amortized over the term of the notes.

On July 14, 2010, the Company entered into unsecured 6% Loan Agreements and Convertible Promissory Notes with Regen Med. Under these Notes, Regen Med provided bridge funding (“Bridge Funding”) to the Company in the amount of $1,750,000. The Bridge Funding carried an interest rate of 6% with a term of 60 days maturing on September 14, 2011 and was convertible at the discretion of the lender at a conversion price of at $0.75 per share. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $844,667 which was recorded as a debt discount which was expensed during 2010. The Bridge Funding carried 100% warrant coverage at $0.75 per share. The $1,750,000 proceeds from the issuance of the Bridge Funding Notes and warrants were allocated on a relative fair value basis. The relative fair value of the promissory notes was estimated to be $844,667. The relative fair value of the warrants was estimated to be $905,333, which was expensed during 2010. On the maturity date, September 14, 2010, the term of the Bridge Funding was extended to October 1, 2010. On September 28, 2010 $350,000 of the principal was repaid directly by the holders of the notes described below. On October 1, 2010, Toucan Partners and the holder of the note also described below repaid the remaining $1,400,000 payable to Regen Med.

On September 28, 2010 the Company entered into unsecured 6% Loan Agreements and Promissory Notes (the “September Notes”) with private lenders in the amount of $350,000 and used the proceeds to partially repay the Bridge Funding. The notes had a term of 60 days and were convertible into shares of the Company’s common stock at $0.75 per share. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $161,000 which was recorded as a debt discount to be amortized over the term of the notes. The September Notes also carried 100% warrant coverage with an exercise price, pursuant to a market formula, of $0.83 per share. The warrants also featured price protection in that if the Company issues stock or warrants at a price lower than the $0.83 per share during the 1-year period following the effective date of these notes, the price of the September Note warrants will be reset to such lower price (other than on issuances, if any, pursuant to arrangements entered into and reported prior to the effective date). In the event that lower priced stock or warrants are issued during the protected period all the September Note warrants will be priced but no additional warrants will be due. The Company determined that the warrants should be accounted for as an embedded derivative. The derivate was valued at $189,000 using a binomial model and accounted for as an embedded derivative liability with the offsetting charge booked as debt discount

On October 1, 2010 the Company entered into unsecured 6% Loan Agreements and Promissory Notes (the “Additional October Note”) with an unrelated third party in the amount of $500,000, on the same terms and conditions as the September Notes with non-affiliated investors, and used the proceeds to partially repay the Bridge Funding. The notes had a term of 60 days and were convertible into shares of the Company’s common stock at $0.75 per share. The intrinsic value of the convertible notes resulted in a beneficial conversion feature amounting to $137,000 which was recorded as a debt discount to be amortized over the term of the notes. The notes also carried 100% warrant coverage with an exercise price, based on the same market formula as in the September Notes of the non-affiliated investors, of $0.82 per share. The warrants also featured price protection in that if the Company issues stock or warrants at a price lower than the $0.82 per share during the 1-year period following the effective date of these notes, the price of the warrants will be reset to such lower price (other than on issuances, if any, pursuant to arrangements entered into reported prior to the effective date). In the event that lower priced stock or warrants are issued during the protected period, all of the Additional October Note warrants will be priced but no additional warrants will be due. The Company determined that the warrants should be accounted for as an embedded derivative. The derivate was valued at $161,000 using a binomial model and accounted for as an embedded derivative liability with the offsetting charge booked as a debt discount. The Company repaid $201,000 of this note during 2010.

On November 29, 2010 the Company received $295,000 upon issuing unsecured 10% convertible loan agreements and promissory notes due on May 29, 2011 to a group of non-affiliated investors. The terms promissory notes have a principal amount of $324,500 (reflecting an original issue discount of $29,500). The notes are convertible at the same price per share as equity issued on the closing of a sale of newly issued, unregistered common stock of the Company equal to $1 million including the value of the notes issued in this offering. Warrants to purchase 36,875 shares of common stock at an exercise price of $0.80 per share were issued with the loan agreements The $295,000 proceeds from the issuance of the promissory notes and warrants were allocated on a relative fair value basis. The relative fair value of the promissory notes was estimated to be $272,663. The relative fair value of the warrants was estimated to be $22,337, which was recorded as a debt discount to be amortized over the term of the notes.

On December 31, 2010, SDS sold a promissory note issued to SDS in October 2008 in the original principal amount of $1,000,000 to three non-affiliated, third parties. The Company exchanged the note for amended convertible notes with the following terms:

(1)

(2)

(3)

On December 31, 2010, the Company entered into a $790,000 unsecured 12% Loan Agreement with SDS (the “SDS Loan”) due June 2, 2011. In connection with this loan the Company issued SDS a warrant to purchase 118,165 shares of the Company’s stock with an exercise price of $0.75 per share. The $790,000 proceeds from the issuance of the promissory notes and warrants were allocated on a relative fair value basis. The relative fair value of the promissory notes was estimated to be $713,944. The relative fair value of the warrants was estimated to be $76,056, which was recorded as a debt discount to be amortized over the term of the notes.

As of December 31, 2010 $350,000 had been advanced against the $950,000 Lender Note.

On December 16, 2010 the Company entered into a $100,000 unsecured 10% convertible loan agreement with a non affiliated party due March 17, 2011. Warrants to purchase 133,333 shares of common stock at an exercise price of $0.75 per share were issued with the loan agreements. The $100,000 proceeds from the issuance of the promissory notes and warrants were allocated on a relative fair value basis. The relative fair value of the promissory notes was estimated to be $53,454. The relative fair value of the warrants was estimated to be $46,546 which was recorded as a debt discount to be amortized over the term of the notes. The note was repaid on March 17, 2011.

Notes payable to related parties at December 31, 2009 and December 31, 2010 (in thousands):

	December 31, 2009			December 31, 2010
12% note payable to Al Rajhi	$	4,000		$	4,000
6% unsecured convertible note payable to Toucan Partners, due July, 2011 and November, 2011 (net of discount related to beneficial conversion feature $1,002 in 2009 and $351 in 2010)		298			949
Total notes payable (net)		4,298			4,949

Less current portion		(4,000	)		(4,000	)
Long-term notes payable to related parties (net)	$	298		$	949

Notes payable consist of the following at December 31, 2009 and December 31, 2010 (in thousands):

	December 31, 2009			December 31, 2010
12% unsecured note payable to SDS	$	1,000		$	-
12% unsecured note payable to SDS (net of warrant related discount $76 in 2010)		-			714
12% unsecured notes payable to SDS and Private Investors,		1,650			650
6% unsecured convertible notes payable to Private Lenders, due in August and September 2011, (net of discount related to beneficial conversion feature $ 485 in 2009 and $195 in 2010)		95			385
6% unsecured convertible notes payable to Private Lenders, due March 25, 2011, (net of discount related to beneficial conversion feature $46 in 2009 and $9 in 2010)		604			641
6% unsecured convertible notes payable to Private Lenders, due October, 2011, (net of discount related to beneficial conversion feature $194 in 2009 and $87 in 2010)		21			128
6% unsecured convertible notes payable to Private Lenders, due October and December 2011, (net of discount related to beneficial conversion feature $274 in 2009 and $133 in 2010)		231			372
6% unsecured convertible note payable to Private Lender, due March 25, 2011		110			110
6% secured convertible note payable to Private Lender due November 27, 2010		–			300
6% unsecured convertible notes payable to Private Lenders, due March 2012, (net of discount related to beneficial conversion feature $321 in 2010)		–			555
0% unsecured convertible note to Private Lender due December 20, 2011 (net of discount related to beneficial conversion feature of $143 in 2010)		–			102
0% unsecured convertible note to Private Lender due June 2, 2011(net of discount related to beneficial conversion feature $214 in 2010)		–			286
11% unsecured convertible note to Private Lender due June 2, 2011 (net of discount related to beneficial conversion feature of $56 in 2010)		–			74
20% unsecured convertible note to Private Lender due December 14, 2013		–			350
10% unsecured convertible note to Private Lender due March 17, 2011 (net of discount related to beneficial conversion feature $37 in 2010)		–			63
10% unsecured convertible note to Private Investors due May 29, 2011 (net of discount related to beneficial conversion feature $20 in 2010)		–			275
		3,711			5,005
Less current portion		(2,650	)		(4,100	)
Total long-term debt (net)	$	1,061		$	905

The current portion of notes payable at December 31, 2010, is reported in the accompanying consolidated balance sheet as follows (in thousands):

Notes payable	$	1,364
Convertible notes payable		2,736
	$	4,100

The long-term portion of notes payable at December 31, 2010, is reported in the accompanying consolidated balance sheet as follows (in thousands):

Notes payable	$	350
Convertible notes payable		555
	$	905

(11) Unaudited Quarterly Financial Information (in thousands, except loss per share data)

The following table contains selected unaudited statement of operations information for each of the quarters in 2010 and 2009. The Company believes that the following information reflects all adjustments, consisting of only normal recurring adjustments, necessary for a fair presentation of the information for the periods presented. The operating results for any quarter are not necessarily indicative of results for any future period.

	First Quarter 2010			Second Quarter 2010			Third Quarter 2010			Fourth Quarter 2010
Total revenues	$	—		$	—		$	10		$	—
Net loss applicable to common stockholders	$	(5,845	)	$	(8,727	)	$	(5,381	)	$	(7,415	)
Net loss per share applicable to common stockholders — basic and diluted	$	(0.10	)	$	(0.14	)	$	(0.08	)	$	(0.09	)
Weighted average shares used in computing basic and diluted loss per share		59,928			63,853			70,413			72,028

	First Quarter 2009			Second Quarter 2009			Third Quarter 2009			Fourth Quarter 2009
Total revenues	$	—		$	—		$	10		$	—
Net loss applicable to common stockholders	$	(4,620	)	$	(4,095	)	$	(13,837	)	$	(4,402	)
Net loss per share applicable to common stockholders — basic and diluted	$	(0.11	)	$	(0.09	)	$	(0.31	)	$	(0.05	)
Weighted average shares used in computing basic and diluted loss per share		43,385			45,069			45,276			57,966

(12) Subsequent Events

In January 2011, the Company received $50,000 upon issuing unsecured 10% convertible loan agreement and promissory note due in April 2011 to a private, non-affiliated investors. Warrants to purchase 66,667 shares of common stock at an exercise price of $0.75 per share were issued with the loan agreement. The $50,000 proceeds from the issuance of the promissory note and warrant were allocated on a relative fair value basis. The relative fair value of the promissory note was estimated to be $25,011. The relative fair value of the warrant was estimated to be $24,989, which was recorded as a debt discount to be amortized over the term of the note.

In January 2011 the Company entered into securities purchase agreements with two non-affiliated investors, under which the investors purchased 280,000 shares of common stock for $210,000. In connection with this private placement the Company issued warrants to purchase 262,500 shares of common stock at an exercise price of $0.80 per share with an exercise period of five years. Additionally, one of the investors purchased a warrant to acquire 93,750 shares of common stock at a price of $0.80 per share for $3,750.

On January 18, 2011 the Company received $100,000 as a second advance under the $950,000 facility agreement entered into on December 14, 2010 which is fully described in Note 10 above.

On January 20, 2011, the Company entered into a $130,000 unsecured 12% Loan Agreement with SDS (the “SDS Loan”) due June 2, 2011. In connection with this loan the Company issued SDS a warrant to purchase 17,333 shares of the Company’s stock with an exercise price of $0.75 per share. The $130,000 proceeds from the issuance of the promissory notes and warrants were allocated on a relative fair value basis. The relative fair value of the promissory notes was estimated to be $120,024. The relative fair value of the warrants was estimated to be $9,976, which was recorded as a debt discount to be amortized over the term of the notes.

On January 19, 2011, the Company entered into an agreement to borrow up to $2,220,000 from a non affiliated third party (the “Investor”). Under the Agreement the Company entered into two secured and collateralized promissory notes with principal amounts of $1,120,000 and $1,100,000. The $1,120,000 note carries an original issue discount of ten percent and annual interest of nine percent per annum, payable at maturity on June 30, 2012, and the $1,100,000 note carries an original issue discount of ten percent and annual interest of six percent per annum, payable at maturity on December 31, 2013. Both notes are convertible into shares of the Company’s common stock, at a conversion price equal to 80% of the average of the daily volume weighted price of the Company’s common stock. The notes have down-round protection upon the occurrence of specified events. The proceeds of Note 1 were received at closing on January 21, 2011. The proceeds of Note 2 will be received in four equal monthly tranches starting on July 19, 2011.

On January 21, 2011, The Company consummated a Note Purchase Agreement with a single investor in the aggregate amount of $2,220,000 for the purchase and sale of two Secured Convertible Promissory Notes (the “Notes”).

During the quarter ended March 31, 2011 the Company issued 2,930,228 shares in addition to the share issuances described above. Approximately 1,521,000 the shares were issued in settlement of loan conversions and 1,408,000 were issued in respect of consulting and other services rendered.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Bethesda, State of Maryland, on April 21, 2011.

	NORTHWEST BIOTHERAPEUTICS, INC.

	By:	/s/ ALTON L. BOYNTON
		Name: Alton L. Boynton
		Title: President and Chief Executive Officer (Principal Executive Officer) (Principal Executive Accounting Officer and Financial

	By:	/s/ LINDA M. POWERS
		Name: Linda M. Powers
		Title: Director, Chairperson

	By:	/s/ ROBERT FARMER
		Name: Robert Farmer
		Title: Director

NORTHWEST BIOTHERAPEUTICS, INC.

(A Development Stage Company)

EXHIBIT INDEX

Exhibit Number		Description

3.1		Seventh Amended and Restated Certificate of Incorporation.(3.1)(22)

3.2		Third Amended and Restated Bylaws of the Company.(3.1)(29)

3.3		Amendment to Seventh Amended and Restated Certificate of Incorporation.(3.2)(29)

3.4		Amendment to Seventh Amended and Restated Certificate of Incorporation.(3.4)(33)

4.1		Form of common stock certificate.(4.1)(2)

4.2		Northwest Biotherapeutics, Inc. Stockholders Rights Agreement dated February 26, 2002 between the Company and Mellon Investors Services, LLC.(4.2)(3)

4.3		Form of Rights Certificate.(4.1)(3)

4.4		Amendment to Northwest Biotherapeutics, Inc. Stockholders Rights Agreement dated April 26, 2004.(4.2)(4)

10.1		Amended and Restated Loan Agreement and 10% Promissory Note dated November 14, 2005 in the principal amount of $400,000 as amended and restated on April 14, 2007 between the Company and Toucan Partners, LLC.(10.1)(23)

10.2		Second Amended and Restated Loan Agreement and 10% Promissory Note originally dated December 30, 2005, and amended and restated on April 17, 2006 and April 14, 2007 in the principal amount of $250,000 between the Company and Toucan Partners, LLC.(10.2)(23)

10.3		Second Amended and Restated Loan Agreement and 10% Promissory Note originally dated March 9, 2006, and as amended and restated on April 17, 2006 and April 14, 2007 in the principal amount of $300,000 between the Company and Toucan Partners, LLC.(10.3)(23)

10.4		Form of Loan Agreement and 10% Convertible, Promissory Note between the Company and Toucan Partners, LLC.(10.4)(23)

10.5		Amended and Restated Investor Rights Agreement dated April 17, 2006.(10.4)(18)

10.6		Second Amended and Restated Investor Rights Agreement dated June 22, 2007 between the Company and Toucan Capital Fund II, LLP.(10.3)(29)

10.7		Securities Purchase Agreement, dated March 30, 2006 by and among the Company and the Investors identified therein.(10.1)(6)

10.8		Form of Warrant.(10.2)(6)

10.9		Warrant to purchase securities of the Company dated April 26, 2004 issued to Toucan Capital Fund II, L.P.(10.9)(7)

10.10		Warrant to purchase securities of the Company dated June 11, 2004 issued to Toucan Capital Fund II, L.P.(10.8)(7)

10.11		Warrant to purchase securities of the Company dated July 30, 2004 issued to Toucan Capital Fund II, L.P.(10.7)(7)

10.12		Warrant to purchase securities of the Company dated October 22, 2004 issued to Toucan Capital Fund II, L.P.(10.3)(8)

10.13		Warrant to purchase securities of the Company dated November 10, 2004 issued to Toucan Capital Fund II, L.P.(10.3)(9)

10.14		Warrant to purchase securities of the Company dated December 27, 2004 issued to Toucan Capital Fund II, L.P.(10.3)(10)

10.15		First Amendment to Warrants between Northwest Biotherapeutics, Inc. and Toucan Capital Fund II, L.P. dated January 26, 2005.(10.5)(1)

10.16		Warrant to purchase Series A Preferred Stock dated January 26, 2005 issued to Toucan Capital Fund II, L.P.(10.2)(1)

10.17		Warrant to purchase securities of the Company dated April 12, 2005 issued to Toucan Capital Fund II, L.P.(10.39)(11)

10.18		Warrant to purchase securities of the Company dated May 13, 2005 issued to Toucan Capital Fund II, L.P.(10.3)(12)

10.19		Warrant to purchase securities of the Company dated June 16, 2005 issued to Toucan Capital Fund II, L.P.(10.3)(13)

10.20		Warrant to purchase securities of the Company dated July 26, 2005 issued to Toucan Capital Fund II, L.P.(10.3)(14)

10.21		Warrant to purchase securities of the Company dated September 7, 2005 issued to Toucan Capital Fund II, L.P.(10.3)(15)

10.22		Amended Form of Warrant to purchase securities of the Company dated November 14, 2005 and April 17, 2006, as amended April 14, 2007, issued to Toucan Partners, LLC.(10.21)(23)

10.23		Form of Warrant to purchase securities of the Company dated April 14, 2007 issued to Toucan Partners, LLC.(10.22)(23)

10.24		Loan Agreement and 10% Convertible Promissory Note in the principal amount of $100,000 between the Company and Toucan Partners, LLC, dated April 27, 2007.(10.1)(24)

10.25		Warrant to purchase securities of the Company issued to Toucan Partners, LLC, dated April 27, 2007. (10.2)(24)

10.26		Form of Toucan Partners Loan Agreement and 10% Convertible Note, dated as of June 1, 2007.(10.1)(27)

10.27		Form of Toucan Partners Warrant, dated as of June 1, 2007.(10.2)(27)

10.28		Amended and Restated Warrant to purchase Series A Preferred Stock issued to Toucan Capital Fund II, L.P., dated as of June 1, 2007.(10.3)(27)

10.29		Warrant to purchase Series A-1 Preferred Stock issued to Toucan Capital Fund II, L.P., dated as of June 1, 2007.(10.4)(27)

10.30		Warrant to purchase Series A-1 Preferred Stock issued to Toucan Capital Fund II, L.P., dated as of June 1, 2007.(10.5)(27)

10.31		Northwest Biotherapeutics, Inc. $225,000 Demand Note dated June 13, 2007.(10.1)(28)

10.32		Conversion Agreement dated June 15, 2007 and effective June 22, 2007 between the Company and Toucan Capital Fund II, LLP.(10.1)(29)

10.33		Termination Agreement dated June 22, 2007 between the Company and Toucan Capital Fund II, LLP.(10.2)(29)

10.34		NOMAD Agreement dated June 15, 2007 and effective June 22, 2007 between the Company and Collins Stewart Europe Limited.(10.4)(29)

10.35***		Employment Agreement dated June 18, 2007 between Dr. Alton L. Boynton and the Company. (10.6)(29)

10.36***		Employment Agreement dated October 1, 2007 between Anthony P. Deasey and the Company.(10.1)(30)

10.37***		Letter of Appointment for Linda F. Powers.(10.8)(29)

10.38***		Letter of Appointment for R. Steve Harris.(10.9)(29)

10.39		Form of Warrant to purchase common stock of the Company, as amended.(10.27)(18)

10.40**		Northwest Biotherapeutics DCVax — Brain Services Agreement with Cognate BioServices, Inc. dated May 17, 2007.(10.1)(25)

10.41***		1998 Stock Option Plan.(10.15)(2)

10.42***		1999 Executive Stock Option Plan.(10.16)(2)

10.43***		2001 Stock Option Plan.(10.17)(2)

10.44***		2001 Nonemployee Director Stock Incentive Plan.(10.18)(2)

10.45***		Employee Stock Purchase Plan.(10.19)(2)

10.46***		2007 Stock Option Plan.(10.5)(29)

10.47***		Form of Stock Option Agreement under the 2007 Stock Option Plan.(10.2)(31)

10.48		Lease Agreement.(10.34)(18)

10.49		Lease Extension between the Company and the International Union of Operating Engineers Local 302, dated May 31, 2007(10.1)(26).

10.50		Clinical Study Agreement between the Company and the Regents of the University of California dated February 14, 2006.(10.35)(18)

10.51***		Employment Agreement dated June 18, 2007, by and between Jim Johnston and the Company.(10.7)(29)

10.52***		Form of Stock Option Agreement, dated December 31, 2007, by and between Dr. Alton L. Boynton and the Company.(99.1)(32)

10.53***		Form of Stock Option Agreement, dated December 31, 2007, by and between Dr. Marnix Bosch and the Company.(99.2)(32)

10.54		Sublease Agreement, dated as of March 21, 2008, between the Company and Toucan Capital Corporation.(10.1)(34)

10.55		Loan Agreement and Promissory Note, dated May 9, 2008 between the Company and Al Rajhi Holdings WLL (4.5)(36)

10.56		Loan Agreement and Promissory Note, dated August 19, 2008 between the Company and Toucan Partners LLC (10.1)(37)

10.57		Loan Agreement and Promissory Note, dated October 1, 2008 between the Company and SDS Capital Group SPC, Ltd (10.2)(38)

10.58		Warrant, dated October 1, 2008, between the Company and SDS Capital Group SPC, Ltd (10.3)(38)

10.59		Loan Agreement and Promissory Note, dated October 21, 2008, between the Company and SDS Capital Group SPC, Ltd (10.4)(39)

10.60		Form of Loan Agreement and Promissory Note, dated November 6, 2008, between the Company and a Group of Private Investors (10.5)(39)

10.61		Form of Warrant, dated November 6, 2008, between the Company and SDS Capital Group SPC. Ltd and a Group of Private Investors (10.5)(39)

10.62		Loan Agreement and Promissory Note, dated December 22, 2008, between the Company and Toucan Partners LLC (10.62)(40)

10.63		Form of Warrant, dated December 22, 2008, between the Company and Toucan Partners LLC (10.62)(40)

10.64		Form of Securities Purchase Agreement, dated January 16, 2009, by and among the Company and Al Rajhi Holdings (10.62)(40)

10.65		Securities Purchase Agreement, dated March 27, 2009 by and among the Company and a Group of Equity Investors (10.62)(40)

10.66		Form of Warrant, dated March 27,2009, between the Company and a Group of Equity Investors (10.62)(40)

10.67		Form of Loan Agreement and Promissory Note, dated March 27 2009, between the Company and a Group of Private Lenders (10.62)(40)

10.68		Conversion Agreement effective September 28, 2009 between the Company and Toucan Partners, LLC (10.1) (41)

10.69		Form of Loan Extension Agreement dated September 28, 2009 (10.2) (42)

10.70***		Retention Agreement between Dr. Alton L. Boynton and the Company dated September 28, 2009 (10.3) (42)

10.71		Lease Agreement (43)

11		Computation of net loss per share included within the Northwest Biotherapeutics, Inc. audited financial statements for the year ended December 31, 2008 included in this Annual Report on Form 10-K.

21		Subsidiary of the registrant.(21.1)(35)

23*		Consent of Peterson Sullivan LLP, Independent Registered Public Accounting Firm.

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.

32.2*		Certification of Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

*	Filed or furnished herewith.

**	Portions of this exhibit have been omitted and filed separately with the Securities and Exchange Commission pursuant to a request for confidential treatment.

***	Denotes management contract or compensation plan or arrangement.

(1)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K, February 1, 2005.

(2)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Amendment No. 3 to the Registration Statement on Form S-1 (Registration No. 333-67350) on November 14, 2001.

(3)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Registration Statement on Form 8-A on July 8, 2002.

(4)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Form 10-K on May 14, 2004.

(5)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on November 14, 2005.

(6)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on March 31, 2006.

(7)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on August 6, 2004.

(8)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on October 28, 2004.

(9)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on November 16, 2004.

(10)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on December 30, 2004.

(11)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Annual Report on Form 10-K on April 15, 2005.

(12)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8- K on May 18, 2005.

(13)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 21, 2005.

(14)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on August 1, 2005.

(15)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on September 9, 2005.

(16)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on November 14, 2003.

(17)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on August 5, 2005.

(18)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 10-K on April 18, 2006.

(19)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on April 26, 2006.

(20)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Form 10-K/A on June 30, 2006.

(21)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant Registration Statement on Form S-1 (File No. 33-134320) on May 19, 2006.

(22)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Amendment No. 1 to the Registration Statement on Form S-1(File No. 333-134320) on July 17, 2006.

(23)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Form 10-K on April 17, 2007.

(24)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on May 3, 2007.

(25)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on May 21, 2007.

(26)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 4, 2007.

(27)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 7, 2007.

(28)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 18, 2007.

(29)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on June 22, 2007.

(30)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on October 2, 2007.

(31)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Registration Statement on Form S-8 on November 21, 2007.

(32)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on January 3, 2008.

(33)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Post-Effective Amendment No. 2 to the Registrant’s Registration Statement on Form S-1 on January 28, 2008.

(34)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on March 24, 2008.

(35)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Post-Effective Amendment No. 1 to the Registrant’s Registration Statement on Form S-1 on December 17, 2007.

(36)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on May 15, 2008.

(37)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on August 19, 2008.

(38)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on October 6, 2008.

(39)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Current Report on Form 8-K on November 11, 2008.

(40)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Form 10-K on April 15, 2009.

(41)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on August 14, 2009.

(42)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on November 23, 2009.

(43)	Incorporated by reference to the exhibit shown in the preceding parentheses filed with the Registrant’s Quarterly Report on Form 10-Q on May 21, 2010.