Northwest Biotherapeutics, Inc. (OTCMKTS:NWBO) Files An 8-K Entry into a Material Definitive AgreementItem 1.01.
Convertible Notes Issued for Loans Made By Chief Executive Officer
On March 14, 2018, Northwest Biotherapeutics, Inc. (the “Company”) and its Chief Executive Officer, Linda F. Powers, entered into a note and loan agreement for a loan of $4.0 million by Ms. Powers to the Company. The Note is convertible into Series B Preferred Stock at $2.30 for one share of Series B Preferred Stock and ten Class D-2 Warrants (the “Note”), with the Class D-2 Warrants on 50% of the principal due and issuable when the loan was provided, and Class D-2 Warrants on the other 50% of the principal and on all of the accrued interest due on a proportional basis in the event of conversion of some or all of the Note. Accordingly, the Company is issuing 8,695,652 Class D-2 Warrants to Ms. Powers now. The Note bears interest at a rate of 10% per annum, and is repayable upon 15 days' notice from the holder (and no later than five years from the date of the Note). Each share of Series B Preferred Stock is convertible into 10 shares of common stock when shares of common stock are authorized and available. The Class D-2 Warrants are not currently exercisable, will expire five years after they become exercisable and have an exercise price of $0.30.
On March 19, 2018, the Company and Ms. Powers entered into an additional note and loan agreement for an additional loan of $400,000 by Ms. Powers to the Company. This additional note is convertible into Series B Preferred Stock and Class D-2 Warrants on the same terms as the Note issued on March 14, 2018.
The convertible notes were issued to the exemption from the registration requirements afforded by Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”).
| Item 2.03. | Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant. |
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 2.03.
| Item 3.02. | Unregistered Sales of Equity Securities. |
The information contained above in Item 1.01 is hereby incorporated by reference into this Item 3.02.
Regulation D Offering and Additional Sales of Series B Preferred Stock
Subsequent to the completion of Company’s Regulation D offering of Series B Preferred Stock and Class D-2 Warrants in December 2017, as reported in the Company’s Form 8-K filed on January 4, 2018, the Company has made additional sales of Series B Preferred Stock and Class D-2 Warrants to investors from March 15, 2018 through March 19, 2018. During such period, the Company has issued an aggregate of 73,500 shares of Series B Preferred Stock, convertible into 735,000 shares of common stock, and Class D-2 Warrants to acquire an aggregate of up to 735,000 additional shares of common stock for a subscription price of approximately $170,000, on the same terms as in December 2017.
The Series B Preferred Stock is subject to restrictions, under which it is not currently convertible and will not become convertible into common stock until common stock is available therefor or after 6 months following issuance. When sufficient shares of common stock are available for issuance upon conversion, each share of Series B Preferred Stock will be convertible at the option of the holder, at any time, into 10 shares of common stock, par value $0.001 per share, for a total of 735,000 shares of common stock (the equivalent of a conversion price of $0.23 per share of common stock). Shares of the Series B Preferred Stock will only receive dividends if the common stock receives dividends, and such dividends would be in the same amount, on an as-converted basis. In case of a liquidation event, if the Series B Preferred Stock is still outstanding at that time, each holder will, with respect to each Series B Preferred share owned by such holder, be entitled to a liquidation preference of either the amount paid for the Series B Preferred share or the amount that the holder of such Series B Preferred share would have received if it had converted such share to common stock immediately prior to the liquidation event.
The Class D-2 Warrants are not currently exercisable and will become exercisable only when shares of common stock are available for issuance upon exercise.
In connection with these issuances of Series B Preferred Stock and Class D-2 Warrants, the Company entered into voting agreements with certain investors.
The Series B Preferred Stock and Class D-2 Warrants described in this Item 3.02 were offered and sold in reliance upon exemptions from registration to Rule 506(c) of Regulation D promulgated under Section 4(a)(2) under the Securities Act. Each of the offerings was made to an “accredited investor” (as defined by Rule 501 under the Securities Act).
Other Events
As of March 20, 2018, approximately 6,927,817 previously issued and outstanding shares of Series A Preferred Stock and 432,326 shares of Series B Preferred Stock have been converted by investors into an aggregate of 73,601,430 shares of common stock. As of the date of this filing, the Company has issued and outstanding, 414,665,188 shares of common stock, 3,486,302 shares of Series A Preferred Stock and 6,355,696 shares of Series B Preferred Stock. To the extent applicable, the common stock issued upon conversion was issued to the exemption from the registration requirements afforded by Section 3(a)(9) of the Securities Act.
About Northwest Biotherapeutics, Inc. (OTCMKTS:NWBO)
Northwest Biotherapeutics, Inc. is a biotechnology company. The Company is focused on developing immunotherapy products to treat cancer. One of the product lines (DCVax-L) is designed to cover all solid tumor cancers in which the tumors can be surgically removed. Another product line (DCVax-Direct) is designed for all solid tumor cancers. The Company’s lead product, DCVax-L, is in an ongoing Phase III trial for diagnosed Glioblastome multiforme (GBM), with over 60 trial sites. Its second product, DCVax-Direct, is being studied in a 60-patient Phase I/II trial for all types of inoperable solid tumors. The 40-patient Phase I stage of the trial has been completed. The Company is working on preparations for Phase II trials of DCVax-Direct. The Company’s platform technology, DCVax, uses activated dendritic cells to mobilize a patient’s own immune system, including T cells, B cells and antibodies and natural killer cells, among others to attack cancer cells to attack their cancer.
