Form 10-Q NORTHWEST BIOTHERAPEUTIC For: Mar 31
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarterly period ended
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the transition period from ______to _______
Commission File Number:
(Exact name of registrant as specified in its charter)
(State or Other Jurisdiction of Incorporation or Organization) | (I.R.S. Employer Identification No.) |
(Address of principal executive offices) (Zip Code)
(
(Registrant’s telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer |
| ☐ | Accelerated filer |
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| ☒ | Smaller reporting company |
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| Emerging growth company |
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Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Title of each class | Trading Symbol | Name of each exchange on which registered |
As of May 13, 2026, the total number of shares of common stock, par value $0.001 per share, outstanding was
NORTHWEST BIOTHERAPEUTICS, INC.
FORM 10-Q
TABLE OF CONTENTS
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Item 1. | Condensed Consolidated Interim Financial Statements (Unaudited) | |
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Condensed Consolidated Balance Sheets as of March 31, 2026 and December 31, 2025 | 3 | |
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Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 | 6 | |
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22 | |
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PART I - FINANCIAL INFORMATION
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| March 31, | | December 31, | |||
2026 | 2025 | |||||
ASSETS |
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Current assets: |
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Cash and cash equivalents | $ | | $ | | ||
Prepaid expenses and other current assets |
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Loan receivable | — | | ||||
Total current assets |
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Non-current assets: |
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Property, plant and equipment, net |
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Right-of-use asset, net | | | ||||
Intangible assets, net | | | ||||
Goodwill | | | ||||
Other assets |
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Total non-current assets |
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TOTAL ASSETS | $ | | $ | | ||
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LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT |
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Current liabilities: |
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Accounts payable and accrued expenses | $ | | $ | | ||
Convertible notes, net |
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Convertible notes at fair value | | | ||||
Notes payable, net |
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Contingent payable derivative liability | — | | ||||
Investor advances | | | ||||
Share payable | | | ||||
Lease liabilities | | | ||||
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Total current liabilities |
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Non-current liabilities: |
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Convertible notes, net of current portion | | | ||||
Convertible notes at fair value, net of current portion | | | ||||
Notes payable, net of current portion, net |
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Lease liabilities, net of current portion | | | ||||
Contingent payment obligation | | | ||||
Deferred tax liability | | | ||||
Total non-current liabilities |
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Total liabilities |
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COMMITMENTS AND CONTINGENCIES (Note 13) |
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Mezzanine equity: |
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Series C Convertible Preferred Stock, | | | ||||
Stockholders’ deficit: |
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Preferred stock ($ | ||||||
Common stock ($ |
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Treasury stock, | ( | ( | ||||
Additional paid-in capital |
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Stock subscription receivable |
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Accumulated deficit |
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Accumulated other comprehensive loss |
| ( |
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Total stockholders’ deficit |
| ( |
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TOTAL LIABILITIES, MEZZANINE EQUITY AND STOCKHOLDERS’ DEFICIT | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
3
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE LOSS
(in thousands, except per share amounts)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
| | 2026 | | 2025 | ||
Revenues: | ||||||
$ | | $ | | |||
Total revenues | | | ||||
Operating costs and expenses: | ||||||
Research and development | | | ||||
General and administrative | | | ||||
Total operating costs and expenses | | | ||||
Loss from operations | ( | ( | ||||
Other income (expense): | ||||||
Settlement gain | | — | ||||
Change in fair value of derivative liabilities | | | ||||
Change in fair value of share payable | | ( | ||||
Change in fair value of convertible notes | | | ||||
Loss from extinguishment of debt | ( | ( | ||||
Loss from issuance of debt | ( | — | ||||
Inducement expense | ( | — | ||||
Interest expense | ( | ( | ||||
Foreign currency transaction gain (loss) | ( | | ||||
Total other income (expense) | | ( | ||||
Net loss | ( | ( | ||||
Deemed dividend related to warrant modifications | ( | ( | ||||
Net loss attributable to common stockholders | $ | ( | $ | ( | ||
Other comprehensive income (loss) | ||||||
Foreign currency translation adjustment | | ( | ||||
Total comprehensive loss | $ | ( | $ | ( | ||
Net loss per share applicable to common stockholders | ||||||
Basic and diluted | $ | ( | $ | ( | ||
Weighted average shares used in computing basic and diluted loss per share | | | ||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
4
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ DEFICIT
(in thousands)
(Unaudited)
For the Three Months Ended March 31, 2026 | ||||||||||||||||||||||||||||||||
Mezzanine equity | Accumulated | |||||||||||||||||||||||||||||||
Series C Convertible | Additional | Other | Total | |||||||||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Treasury Stock | Subscription | Accumulated | Comprehensive | Stockholders’ | |||||||||||||||||||||||||
| Shares | | Amount | | | Shares | | Par value | | Capital | | Shares | Par value | | Receivable | | Deficit | | Income (Loss) | | Deficit | |||||||||||
Balances at January 1, 2026 | | $ | | | $ | | $ | | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | |||||||||||||
Series C convertible preferred stock conversion |
| ( | ( | | | | — | — | — | — | — | | ||||||||||||||||||||
Issuance of common stock for cash, net |
| — | — | | | | — | — | — | — | — | | ||||||||||||||||||||
Warrants exercised for cash |
| — | — | | — |
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Cashless warrant exercise | — | — | | — | — | — | — | — | — | — | — | |||||||||||||||||||||
Issuance of common stock for conversion of debt and accrued interest | — | — | | | | — | — | — | — | — | | |||||||||||||||||||||
Stock-based compensation |
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Warrant modifications |
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Deemed dividend related to warrant modifications | — | — | — | — | ( | — | — | — | — | — | ( | |||||||||||||||||||||
Net loss | — | — | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||||||
Cumulative translation adjustment | — | — | — | — | — | — | — | — | — | | | |||||||||||||||||||||
Balances at March 31, 2026 |
| | $ | | | $ | | $ | | ( | $ | ( | $ | ( | $ | ( | $ | ( | $ | ( | ||||||||||||
For the Three Months Ended March 31, 2025 | ||||||||||||||||||||||||||
Mezzanine equity | Accumulated | |||||||||||||||||||||||||
Series C Convertible | Additional | Other | Total | |||||||||||||||||||||||
Preferred Stock | Common Stock | Paid-in | Subscription | Accumulated | Comprehensive | Stockholders’ | ||||||||||||||||||||
| Shares | | Amount | | | Shares | | Par value | | Capital | | Receivable | | Deficit | | Income (Loss) | | Deficit | ||||||||
Balances at January 1, 2025 | | $ | | | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | ||||||||||
Series C convertible preferred stock conversion |
| ( | ( | | | | — | — | — | | ||||||||||||||||
Issuance of common stock for cash, net |
| — | — | | | | — | — | — | | ||||||||||||||||
Warrants exercised for cash |
| — | — | | — | | — | — | — | | ||||||||||||||||
Issuance of common stock for conversion of debt and accrued interest | — | — | | | | — | — | — | | |||||||||||||||||
Stock-based compensation |
| — | — | | — | | — | — | — | | ||||||||||||||||
Net loss | — | — | — | — | — | — | ( | — | ( | |||||||||||||||||
Warrant modifications | — | — | — | — | | — | — | — | | |||||||||||||||||
Deemed dividend related to warrant modifications |
| — | — | — |
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| ( |
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Cumulative translation adjustment |
| — | — | — |
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Balances at March 31, 2025 |
| | $ | | | $ | | $ | | $ | ( | $ | ( | $ | | $ | ( | |||||||||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Cash Flows from Operating Activities: |
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Net loss | $ | ( | $ | ( | ||
Reconciliation of net loss to net cash used in operating activities: | ||||||
Depreciation and amortization | | | ||||
Amortization of debt discount | | | ||||
Change in fair value of derivatives | ( | ( | ||||
Change in fair value of share payable | ( | | ||||
Change in fair value of convertible notes | ( | ( | ||||
Loss from extinguishment of debt | | | ||||
Loss from issuance of debt | | — | ||||
Inducement expense | | — | ||||
Amortization of operating lease right-of-use asset | | | ||||
Stock-based compensation for services | | | ||||
Allowance for credit loss | | — | ||||
Subtotal of non-cash charges | ( | | ||||
Changes in operating assets and liabilities: | ||||||
Prepaid expenses and other current assets | ( | | ||||
Other non-current assets | | | ||||
Accounts payable and accrued expenses | | | ||||
Related party accounts payable and accrued expenses | ( | | ||||
Lease liabilities | ( | ( | ||||
Net cash used in operating activities | ( | ( | ||||
Cash Flows from Investing Activities: | ||||||
Purchase of equipment and construction in progress | ( | ( | ||||
Net cash used in investing activities | ( | ( | ||||
Cash Flows from Financing Activities: | ||||||
Proceeds from issuance of common shares | | | ||||
Proceeds from exercise of warrants | | | ||||
Proceeds from issuance of notes payable, net | — | | ||||
Proceeds from issuance of convertible notes payable, net | | | ||||
Repayment of notes payable | — | ( | ||||
Repayment of convertible notes payable | ( | ( | ||||
Payment of purchase consideration to related party | ( | — | ||||
Net cash provided by financing activities | | | ||||
Effect of exchange rate changes on cash and cash equivalents | | ( | ||||
Net (decrease) increase in cash and cash equivalents | ( | | ||||
Cash and cash equivalents, beginning of the period | | | ||||
Cash and cash equivalents, end of the period | $ | | $ | | ||
Supplemental disclosure of cash flow information | ||||||
Interest payments on notes payable | $ | — | $ | ( | ||
Interest payments on convertible notes payable | $ | ( | $ | — | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
6
NORTHWEST BIOTHERAPEUTICS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(Unaudited)
For the three months ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Supplemental schedule of non-cash activities: |
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Issuance of common stock for conversion of debt and accrued interest | $ | | $ | | ||
Series C convertible preferred stock conversions | $ | | $ | | ||
Capital expenditures included in accounts payable | $ | | $ | | ||
Deemed dividend related to warrant modifications | $ | | $ | | ||
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements.
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1. Organization and Description of Business
Northwest Biotherapeutics, Inc. and its wholly owned subsidiaries Flaskworks, Northwest Biotherapeutics Limited (formerly known as Aracaris Ltd), Northwest Biotherapeutics Capital Limited (formerly known as Aracaris Capital Limited), Northwest Biotherapeutics B.V., NW Bio GmbH, Advent BioServices Ltd. (“Advent”) (collectively, the “Company”, “we”, “us” and “our”) were organized to discover and develop innovative immunotherapies for cancer. The Company has developed DCVax® platform technologies for both operable and inoperable solid tumor cancers. The Company has wholly owned subsidiaries in Boston, the U.K., the Netherlands and Germany.
The Company’s subsidiaries include Advent BioServices, which provides product and process development services, manufacturing, controlled storage and distribution services for the Company’s DCVax products. The Company acquired Advent on October 24, 2025, as previously reported. Advent was founded in 2016 and is based in Sawston (Cambridge) in the U.K.
The Company has completed a Phase 3 clinical trial of its DCVax®-L product for glioblastoma brain cancer, has publicly reported the results in a peer reviewed publication in a medical journal as well as at a medical conference, and submitted a Marketing Authorization Application (MAA) for regulatory approval by the Medicines and Healthcare Products Regulatory Agency (MHRA) in the U.K. in December 2023. The MAA is in the process of undergoing MHRA review.
2. Financial Condition, Going Concern and Management Plans
The Company has incurred annual net operating losses since its inception. The Company had a net loss of $
The Company does not expect to generate material revenue in the near future from the sale of products and is subject to all of the risks and uncertainties that are typically faced by biotechnology companies that devote substantially all of their efforts to research and development (“R&D”) and clinical trials and do not yet have commercial products. The Company expects to continue incurring annual losses for the foreseeable future. The Company’s existing liquidity is not sufficient to fund its operations, anticipated capital expenditures, working capital and other financing requirements until the Company reaches significant revenues. Until that time, the Company will need to obtain additional equity and/or debt financing, especially if the Company experiences downturns in its business that are more severe or longer than anticipated, or if the Company experiences significant increases in expense levels resulting from being a publicly-traded company or from expansion of operations. If the Company attempts to obtain additional equity or debt financing, the Company cannot assume that such financing will be available to the Company on favorable terms, or at all.
Because of recurring operating losses and operating cash flow deficits, there is substantial doubt about the Company’s ability to continue as a going concern for at least one year from the date of this filing. The consolidated financial statements have been prepared assuming that the Company will continue as a going concern, however, they do not include any adjustments to reflect the possible future effects on the recoverability and classification of assets, or the amounts and classification of liabilities that may result from the outcome of this uncertainty.
3. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated interim financial statements include the accounts of the Company and its subsidiaries. All intercompany balances and transactions have been eliminated. Certain immaterial reclassifications have been made to prior period amounts to conform to the current period presentation.
The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with the accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information and pursuant to the instructions to Form 10-Q and Article 8 of Regulation S-X of the Securities and Exchange Commission (“SEC”) and on the same basis as the Company uses to prepare its annual audited consolidated financial statements. The condensed consolidated balance sheet as of March 31, 2026, condensed consolidated statements of operations and comprehensive loss for the three months ended March 31, 2026 and 2025, condensed consolidated statement of stockholders’ deficit for the three months ended March 31, 2026 and 2025, and the
8
condensed consolidated statements of cash flows for the three months ended March 31, 2026 and 2025 are unaudited, but include all adjustments, consisting only of normal recurring adjustments, which the Company considers necessary for a fair presentation of the financial position, operating results and cash flows for the periods presented. The results for the three months ended March 31, 2026 are not necessarily indicative of results to be expected for the year ending December 31, 2025 or for any future interim period. The condensed consolidated balance sheet at December 31, 2025 has been derived from audited financial statements; however, it does not include all of the information and notes required by U.S. GAAP for complete financial statements. The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements for the year ended December 31, 2025 and notes thereto included in the Company’s annual report on Form 10-K (the “2025 Annual Report”), which was filed with the SEC on April 15, 2026.
Use of Estimates
In preparing condensed consolidated financial statements in conformity with U.S. GAAP, management is required to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements, as well as the reported amounts of expenses during the reporting period. Due to inherent uncertainty involved in making estimates, actual results reported in future periods may be affected by changes in these estimates.
On an ongoing basis, the Company evaluates its estimates and judgments, including valuing equity securities in share-based payment arrangements, estimating the fair value of financial instruments recorded as derivative liabilities, useful lives of depreciable assets, and whether impairment charges may apply. The Company bases its estimates on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.
Segment Information
The Company operates in
Significant Accounting Policies
There have been no material changes in the Company’s significant accounting policies from those previously disclosed in the 2025 Annual Report.
Recently Adopted Accounting Standards
In November 2024, the FASB issued ASU 2024-04, Debt-Debt with Conversion and Other Options (Subtopic 470-20): Induced Conversions of Convertible Debt Instruments. This standard clarifies the requirements for determining whether certain settlements of convertible debt instruments should be accounted for as an induced conversion and the application of the induced conversion guidance to a conversion debt instrument. It also clarifies that the incorporation, elimination, or modification of a daily volume-weighted average price (“VWAP”) formula does not automatically cause a settlement to be accounted for as an extinguishment. This standard will become effective on a prospective or retrospective basis for interim reporting periods and annual periods beginning after December 15, 2025. Early adoption is permitted. The Company adopted this guidance effective January 1, 2026 on a prospective basis. The adoption of this standard did not have a material impact on the Company’s financial position, results of operations, or cash flows.
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Recently Issued Accounting Standards Not Yet Adopted
In November 2024, the FASB issued ASU No. 2024-03 (“ASU 2024-03”), Disaggregation of Income Statement Expenses (DISE) which requires disaggregated disclosure of income statement expenses for public business entities. The standard requires public business entities to disclose disaggregated information about specific natural expense categories underlying certain income statement expense line items that are considered relevant. The FASB also issued ASU No. 2025-01 (“ASU 2025-01”), Clarifying the Effective Date, which clarifies the adoption date of ASU 2024-03 as annual reporting periods beginning after December 15, 2026, and interim periods within annual reporting periods beginning after December 15, 2027. The Company is currently evaluating the potential effect of this accounting standard update on its consolidated financial statements and related disclosures.
In September 2025, the FASB issued ASU No. 2025 - 06, Intangibles - Goodwill and Other - Internal - Use Software (“ASU 2025 – 06”), which amends the guidance for accounting for software costs to reflect current software development practices, including iterative and agile methodologies, by removing references to development stages. It also clarifies the criteria for capitalization, which begins when both of the following occur: (1) management has authorized and committed to funding the software project and (2) it is probable that the project will be completed and the software will be used to perform the function intended. ASU 2025 - 06 is effective for fiscal years beginning after December 15, 2027, and interim periods within those fiscal years. Early adoption is permitted. The amendments may be applied either prospectively, retrospectively, or utilizing a modified transition approach. The Company is currently assessing the impact of ASU 2025 - 06 on its condensed consolidated financial statements and disclosures.
In September 2025, the FASB issued ASU 2025-07. This update clarifies the application of derivative accounting to certain contracts and refines the guidance for share-based noncash consideration received from customers. Specifically, ASU 2025-07 introduces a scope exception for contracts that are not exchange-traded and whose underlying is tied to operations or activities specific to one party. It also clarifies that share-based noncash consideration from a customer should initially be accounted for under Topic 606 until the right to receive or retain such consideration becomes unconditional, at which point financial instruments guidance may apply. The effective date for the standard is for fiscal years beginning after December 15, 2026 and interim periods within those fiscal years. Early adoption is permitted. The amendments in ASU 2025-07 should be applied either prospectively or by utilizing a modified retrospective approach. The Company is currently assessing the impact on its condensed consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-11, Interim Reporting (Topic 270): Narrow-Scope Improvements. This update clarifies interim disclosure requirements and centralizes such requirements within Topic 270. Among other changes, ASU 2025-11 introduces a disclosure principle requiring entities to provide information about significant events or changes since the end of the last annual reporting period that have a material impact, clarifies when duplicative annual disclosures may be omitted from interim reports, and aligns interim reporting requirements with applicable SEC guidance for registrants. This guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. Early adoption is permitted. The amendments in ASU 2025-11 should be applied prospectively. The Company is currently assessing the impact on its condensed consolidated financial statements and disclosures.
In December 2025, the FASB issued ASU 2025-12, Codification Improvements. This update addresses shareholder suggestions on the Accounting Standards Codification and makes other incremental improvements to U.S. GAAP. The amendments make codification updates to a broad range of topics arising from technical corrections, unintended application of the codification, clarifications and other minor improvements. This guidance is effective for annual reporting periods beginning after December 15, 2026 and interim reporting periods within those annual periods. Early adoption is permitted and may be elected on an issue-by-issue basis. The amendments in ASU 2025-12 are to be applied prospectively. The Company is currently assessing the impact on its condensed consolidated financial statements and disclosures.
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4. Fair Value Measurements
In accordance with ASC 820 (Fair Value Measurements and Disclosures), the Company uses various inputs to measure the fair value of liabilities related to certain embedded conversion feature associated with its warrant liability, convertible debt, share payable, and contingent payable to Cognate BioServices on a recurring basis to determine the fair value of these liabilities. The Company has also elected the fair value option (the “FVO”) for certain financial instruments, such as convertible notes.
ASC 820 establishes a hierarchy categorizing inputs into three levels used to measure and disclose fair value. The hierarchy gives the highest priority to quoted prices available in active markets and the lowest priority to unobservable inputs. An explanation of each level in the hierarchy is described below:
Level 1 - Unadjusted quoted prices in active markets for identical instruments that are accessible by the Company on the measurement date.
Level 2 - Quoted prices in markets that are not active or inputs which are either directly or indirectly observable.
Level 3 - Unobservable inputs for the instrument requiring the development of assumptions by the Company.
The following table classifies the Company’s liabilities measured at fair value on a recurring basis into the fair value hierarchy as of March 31, 2026 and December 31, 2025 (in thousands):
Fair value measured at March 31, 2026 | ||||||||||||
| | Quoted prices in active | | Significant other | | Significant | ||||||
| Fair value at | markets | observable inputs | unobservable inputs | ||||||||
March 31, 2026 | | (Level 1) | | (Level 2) | | (Level 3) | ||||||
Convertible notes at fair value | $ | |
| — |
| — | $ | | ||||
Share payable | | — | — | | ||||||||
Total fair value | $ | | $ | — | $ | — | $ | | ||||
Fair value measured at December 31, 2025 | ||||||||||||
| | Quoted prices in active | | Significant other | | Significant | ||||||
Fair value at | markets | observable inputs | unobservable inputs | |||||||||
| December 31, 2025 | | (Level 1) | | (Level 2) | | (Level 3) | |||||
Contingent payable derivative liability | $ | | — | — | $ | | ||||||
Convertible notes at fair value | | — | — | | ||||||||
Share payable |
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| — |
| — |
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Total fair value | $ | | $ | — | $ | — | $ | | ||||
11
There were
The following table presents changes in Level 3 liabilities measured at fair value for the three-month period ended March 31, 2026. Both observable and unobservable inputs were used to determine the fair value of positions that the Company has classified within the Level 3 category. Unrealized gains and losses associated with liabilities within the Level 3 category include changes in fair value that were attributable to both observable (e.g., changes in market interest rates) and unobservable (e.g., changes in unobservable long- dated volatilities) inputs (in thousands).
Convertible | ||||||||||||
Contingent Payable | Share | Notes | ||||||||||
| Derivative Liability | | Payable | | At Fair Value | | Total | |||||
Balance - January 1, 2026 | $ | | $ | | $ | | $ | | ||||
Additional share payable | — | | — | | ||||||||
Issuance of convertible notes at fair value | — | — | | | ||||||||
Redemption of share payable | — | ( | — | ( | ||||||||
Additions from debt extinguishment | — | — | | | ||||||||
Debt repayment | — | — | ( | ( | ||||||||
Debt conversion | — | — | ( | ( | ||||||||
( | ( | ( | ( | |||||||||
Balance - March 31, 2026 | $ | — | (1) | $ | | $ | | $ | | |||
| (1) | The fair value of the contingent payable derivative liability was reduced to |
A summary of the weighted average (in aggregate) significant unobservable inputs (Level 3 inputs) used in measuring the Company’s share payable that are categorized within Level 3 of the fair value hierarchy as of March 31, 2026 and December 31, 2025 is as follows. The liability relates to the remaining redemption feature which, like the convertible notes at fair value, includes discount factors that are unobservable inputs and proprietary in nature.
Share Payable | |||||||
For the three months ended | |||||||
March 31, | |||||||
| 2026 | | 2025 | ||||
Strike price | $ | | $ | | |||
Contractual term (years) |
| |
| | |||
Volatility (annual) |
| | % | | % | ||
Risk-free rate |
| | % | | % | ||
Dividend yield (per share) |
| | % | | % | ||
As of March 31, 2026 | As of December 31, 2025 | ||||||
| Share Payable | | Share Payable | ||||
Strike price | $ | | $ | | |||
Contractual term (years) |
| |
| | |||
Volatility (annual) |
| | % |
| | % | |
Risk-free rate |
| | % |
| | % | |
Dividend yield (per share) |
| | % |
| | % | |
12
5. Stock-based Compensation
For the three months ended | ||||||
March 31, | ||||||
| 2026 | | 2025 | |||
Research and development | $ | | $ | | ||
General and administrative |
| — | | |||
Total stock-based compensation expense | $ | | $ | | ||
The total unrecognized stock compensation cost (primarily for consultants) was approximately $
Stock Options
The following table summarizes stock option activity during the three months ended March 31, 2026 (amount in thousands, except per share number):
| | | Weighted Average | | ||||||
Remaining | ||||||||||
Weighted Average | Contractual Life (in | |||||||||
Number of Options | Exercise Price | years) | Total Intrinsic Value | |||||||
Outstanding as of January 1, 2026 |
| | $ | |
| $ | | |||
Granted - external consultants (1) |
| |
| |
|
| — | |||
Cancelled - employees and board of directors (2) |
| ( |
| |
| — | — | |||
Outstanding as of March 31, 2026 |
| | $ | |
| $ | — | |||
Options vested (3) |
| | $ | |
| $ | — | |||
| (1) | During the three months ended March 31, 2026, the Company granted |
| (2) | On March 16, 2026, an aggregate of |
| (3) | Not all of the vested options are currently exercisable. |
13
The Black-Scholes option pricing model is used to estimate the fair value of stock options granted. The weighted average assumptions used in calculating the fair values of stock options that were granted during the three months ended March 31, 2026 and 2025:
| For the three months ended | ||||||
March 31, | |||||||
2026 | | 2025 | |||||
Exercise price | $ | | $ | | |||
Expected term (years) |
| ||||||
Expected stock price volatility |
| | % | | % | ||
Risk-free rate |
| | % | | % | ||
Dividend yield (per share) |
| | % | | % | ||
6. Intangible Assets, Net
Intangible assets as of March 31, 2026 and December 31, 2025 consisted of the following (in thousands):
| March 31, | | December 31, | | Estimated | |||
2026 | 2025 | Useful Life | ||||||
In-process research and development | $ | | $ |
| Indefinite | |||
License |
| |
| |
| Indefinite | ||
Trade names |
| |
| |
| |||
Accumulated amortization |
| ( |
| ( |
| | ||
Trade names net carrying value |
| |
| |
| | ||
Customer relationships |
| |
| |
| |||
Accumulated amortization |
| ( |
| ( |
| | ||
Customer relationships net carrying value |
| |
| |
| | ||
Total intangible assets, net | $ | | $ | |
| |||
The amortization expense related to the finite-lived intangibles was approximately $
As of March 31, 2026, the Company’s estimate of amortization for finite-lived intangibles for each of the five succeeding fiscal years and thereafter was as follows:
Remaining period in 2026 | | $ | |
Year ended December 31, 2027 |
| | |
Year ended December 31, 2028 |
| | |
Year ended December 31, 2029 |
| | |
Year ended December 31, 2030 |
| | |
Thereafter |
| | |
$ | |
14
7. Property, Plant and Equipment
Property, plant and equipment consist of the following at March 31, 2026 and December 31, 2025 (in thousands):
| March 31, | | December 31, | | Estimated | |||
2026 | 2025 | Useful Life | ||||||
Leasehold improvements | $ | | $ | |
| |||
Office furniture and equipment |
| |
| |
| |||
Computer and manufacturing equipment and software |
| |
| |
| |||
Land in the United Kingdom |
| |
| |
| NA | ||
| |
| |
| NA | |||
Less: accumulated depreciation |
| ( |
| ( |
| | ||
Total property, plant and equipment, net | $ | | $ | |
| | ||
Depreciation expense was approximately $
8. Outstanding Debt
The following two tables summarize outstanding debt as of March 31, 2026 and December 31, 2025, respectively (amount in thousands, except per share amounts):
| | Stated | | | | | Fair | | ||||||||||||
Interest | Conversion | Remaining | Value | Carrying | ||||||||||||||||
Maturity Date | Rate | Price | Face Value | Debt Discount | Adjustment | Value | ||||||||||||||
Short term convertible notes payable |
| |
| |
| |
| |
| |
| |
| | ||||||
|
| | % | $ | $ | | $ | — | $ | — | $ | | ||||||||
| % | $ | | | — | | ||||||||||||||
| | — | | |||||||||||||||||
Short term convertible notes at fair value | ||||||||||||||||||||
| % | Variable | | — | | | ||||||||||||||
| % | $ | | — | ( | | ||||||||||||||
| % | $ | | — | ( | | ||||||||||||||
| — | ( | | |||||||||||||||||
Short term notes payable |
| |
| |
| |
|
|
| |
|
| | |||||||
| % | N/A | | — | — | | ||||||||||||||
|
| | % |
| N/A |
| |
| ( |
| — |
| | |||||||
|
| | % |
| N/A |
| |
| — |
| — |
| | |||||||
| |
| ( |
|
| — | | |||||||||||||
Long term convertible notes payable | ||||||||||||||||||||
| % | $ | | — | — | | ||||||||||||||
| — | — | | |||||||||||||||||
Long term convertible notes at fair value | ||||||||||||||||||||
| % | Variable | | — | | | ||||||||||||||
| % | $ | | — | ( | | ||||||||||||||
| — | ( | | |||||||||||||||||
Long term notes payable | ||||||||||||||||||||
|
| | % |
| N/A |
| |
| ( |
| — |
| | |||||||
Ending balance as of March 31, 2026 | $ | | $ | ( | $ | ( | $ | | ||||||||||||
15
| | Stated | | | | | Fair | | ||||||||||||
Interest | Conversion | Remaining | Value | Carrying | ||||||||||||||||
Maturity Date | Rate | Price | Face Value | Debt Discount | Adjustment | Value | ||||||||||||||
Short term convertible notes payable |
| |
| |
| |
| |
| |
| |
| | ||||||
|
| % | $ | $ | | $ | — | $ | — | $ | | |||||||||
| % | $ | | — |
| — |
| | ||||||||||||
| — | — | | |||||||||||||||||
Short term convertible notes at fair value | ||||||||||||||||||||
% | Variable | | — | | ||||||||||||||||
% | $ | | — | ( | | |||||||||||||||
% | $ | | — | ( | | |||||||||||||||
| — | ( | | |||||||||||||||||
Short term notes payable |
| |
| |
| |
| |
| |
| |
| | ||||||
% | N/A | | — | — | | |||||||||||||||
|
| % |
| N/A |
| |
| ( |
| — |
| | ||||||||
|
| % |
| N/A |
| |
| — |
| — |
| | ||||||||
| |
| ( |
|
| — | | |||||||||||||
Long term convertible notes payable | ||||||||||||||||||||
% | $ | | — | — | | |||||||||||||||
| — | — | | |||||||||||||||||
Long term convertible notes at fair value |
| |
| |
| |
| |
| |
| |
| | ||||||
|
| % | $ |
| |
| — |
| |
| | |||||||||
| | — | | | ||||||||||||||||
Long term notes payable | ||||||||||||||||||||
% | N/A | | ( | — | | |||||||||||||||
Ending balance as of December 31, 2025 | $ | | $ | ( | $ | ( | $ | | ||||||||||||
Notes Payable
During the three months ended March 31, 2026, the Company issued approximately
Convertible Notes
During the three months ended March 31, 2026, the Company entered into a
During the three months ended March 31, 2026, the Company modified a convertible note that was originally issued in February 2024 by extending the maturity date. The modification was accounted for as a debt extinguishment. As a result, the Company recognized approximately $
During the three months ended March 31, 2026, the Company converted $
Convertible Notes at Fair Value
On January 26, 2026, the Company entered into a
16
into common shares at $
On March 4, 2026, the Company entered into several convertible note agreements (the “March Convertible Notes”) with various commercial lenders (the “March Holders”) for an aggregate principal amount of $
The Company elected the FVO to fair value the January Convertible Note and the March Convertible Notes (collectively the “Convertible Notes at Fair Value”) on the issuance date and will subsequently remeasure at end of each reporting period. The estimated fair value of the Convertible Notes at Fair Value on the issuance date was approximate $
During the three months ended March 31, 2026, the Company modified certain existing convertible notes by (i) extending the maturity dates; (ii) modifying the holder’s right to purchase additional note in the future, (iii) reducing the conversion price, and (iv) modifying the principal amount. The modifications were accounted for as a debt extinguishment as the conversion feature of the amended notes were substantially different from the original terms. As a result, the Company recognized approximately $
During the three months ended March 31, 2026, the Company converted $
For the three months ended March 31, 2026 and 2025, interest expense related to outstanding debt totaled approximately $
9. Net Loss per Share Applicable to Common Stockholders
Basic loss per common share is computed by dividing net loss by the weighted average number of common shares outstanding during the reporting period. Diluted loss per common share would be computed similar to basic loss per common share except that it reflects the potential dilution that could occur if dilutive securities or other obligations to issue common stock were exercised or converted into common stock. Because of the net loss from operations for each period, inclusion of such securities in the computation of loss per share would be anti-dilutive and thus they are excluded. Potentially dilutive weighted average common shares include common stock potentially issuable under the Company’s convertible notes and preferred stock, warrants and vested and unvested stock options.
The following securities were not included in the diluted net loss per share calculation because their effect was anti-dilutive as of the periods presented (in thousands):
For the three months ended | ||||
March 31, | ||||
| 2026 | | 2025 | |
Series C convertible preferred stock | | | ||
Common stock options | | | ||
Common stock warrants - equity classified | | | ||
Common stock warrants - liability classified | — | | ||
Convertible notes and accrued interest | |
| | |
Potentially dilutive securities | | | ||
17
10. Related Party Transactions
As previously reported, the Company entered into an agreement to acquire Advent on August 27, 2025, and closed on the acquisition on October 24, 2025. Prior to the acquisition, Advent was wholly owned by Toucan Holdings LLC (“Seller”). The Company’s Chairperson and Chief Executive Officer, Linda Powers, was the controlling member of the Seller. Following the acquisition, Advent is now a wholly owned subsidiary of the Company.
The consideration for the acquisition will be paid in installments over
During the three months ended March 31, 2026, the Company made aggregate payments of approximately $
11. Preferred Stock
Series C Convertible Preferred Stock
During the three months ended March 31, 2026, approximately
The Company determined that the Series C Shares contain contingent redemption provisions allowing redemption by the holder upon certain defined events (“deemed liquidation events”). As the event that may trigger the redemption of the Series C Shares is not solely within the Company’s control, the Series C Shares are classified as mezzanine equity (temporary equity) in the Company’s condensed consolidated balance sheets.
12. Stockholders’ Deficit
Common Stock
During the three months ended March 31, 2026, the Company received $
Stock Purchase Warrants
The following is a summary of warrant activity for the three months ended March 31, 2026 (dollars in thousands, except per share data):
| Number of | | Weighted Average | | Remaining | ||
Warrants | Exercise Price | Contractual Term | |||||
Outstanding as of January 1, 2026 |
| | $ | |
| ||
Warrants exercised for cash |
| ( |
| |
| — | |
Cashless exercise |
| ( |
| |
| — | |
Warrants expired and cancellation |
| ( |
| |
| — | |
Outstanding as of March 31, 2026 (1) |
| | $ | |
| ||
| (1) | At March 31, 2026, of the approximately |
18
Warrant Modifications
During the three months ended March 31, 2026, the Company amended certain warrants whereby the maturity dates were extended for an additional 3-6 months. The fair value of these modifications was calculated using the Black-Scholes-Merton option pricing model based on the following weighted average assumptions:
| Post-modification | | Pre-modification | ||||
Exercise price | $ | | $ | | |||
Expected term (in years) |
|
| |||||
Volatility |
| | % |
| | % | |
Risk-free interest rate |
| | % |
| | % | |
Dividend yield |
| | % |
| | % | |
The incremental fair value attributable to the modified warrants compared to the original warrants immediately prior to the modification was calculated to be $
13. Commitments and Contingencies
Operating Lease- Lessee Arrangements
The Company has operating leases for corporate offices in the U.S. and U.K., and for manufacturing facilities in the U.K. Leases with an initial term of 12 months or less are not recorded in the balance sheet. The Company has elected the
The Company’s prior office lease in the U.K. expired in July 2025. In January 2025, the Company entered into an agreement for a new office lease in the U.K. to begin in late May 2025 (the “2025 U.K. Office Lease”). An additional document, involving a reconstitution schedule, was required in order to complete the lease arrangement. However, the Company decided not to take the space and the parties did not reach agreement on the reconstitution schedule. The Company entered into a side letter with the landlord on July 30, 2025 to finalize the lease exit terms. The Company is required to pay $
At March 31, 2026, the Company had operating lease liabilities of approximately $
19
The following summarizes quantitative information about the Company’s operating leases (amount in thousands):
For the three months ended | |||||||||
March 31, 2026 | |||||||||
| U.K | | U.S | | Total | ||||
Lease cost | |||||||||
Operating lease cost | $ | | $ | | $ | | |||
Short-term lease cost | | | | ||||||
Variable lease cost | | | | ||||||
Total | $ | | $ | | $ | | |||
|
|
| |||||||
Other information |
|
|
| ||||||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | |||
Weighted-average remaining lease term – operating leases | — | ||||||||
Weighted-average discount rate – operating leases | | % | | % | — | ||||
For the three months ended | |||||||||
March 31, 2025 | |||||||||
| U.K | | U.S | | Total | ||||
Lease cost |
| |
| |
| | |||
Operating lease cost | $ | | $ | | $ | | |||
Short-term lease cost |
| |
| — |
| | |||
Variable lease cost |
| — |
| — |
| — | |||
Sub-lease income | ( | — | ( | ||||||
Total | $ | | $ | | $ | | |||
Other information |
|
|
|
|
|
| |||
Operating cash flows from operating leases | $ | ( | $ | ( | $ | ( | |||
Weighted-average remaining lease term – operating leases |
|
|
| — | |||||
Weighted-average discount rate – operating leases |
| | % |
| | % |
| — | |
The Company recorded lease costs as a component of general and administrative expense during the three months ended March 31, 2026 and 2025, respectively.
Maturities of our operating leases, excluding short-term leases and sublease agreement, are as follows:
Remaining periods in 2026 | | $ | |
Year ended December 31, 2027 | | ||
Year ended December 31, 2028 | | ||
Year ended December 31, 2029 | | ||
Year ended December 31, 2030 | | ||
Thereafter | | ||
Total | | ||
Less present value discount | ( | ||
Operating lease liabilities included in the condensed consolidated balance sheet at March 31, 2026 | $ | |
German Tax Matter
There has been no material update to the disclosure in our Form 10-K filed on April 15, 2026.
20
Other Contingent Payment Obligation
As of March 31, 2026, the Company had contingent payment obligations of $
14. Subsequent Events
The Company entered into a Commercial Loan Agreement with a commercial lender as of May 12, 2026 for funding of $
21
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our unaudited condensed consolidated financial statements and the notes to those statements included with this report. In addition to historical information, this report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the “Securities Act”), and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). Such forward-looking statements are subject to certain risks and uncertainties that could cause actual results to differ materially from those projected. The words “believe,” “expect,” “intend,” “anticipate,” and similar expressions are used to identify forward-looking statements, but some forward-looking statements are expressed differently. Many factors could affect our actual results, including those factors described under “Risk Factors” in our Form 10-K for the year ended December 31, 2025 and in Part II Item 1A of this report. These factors, among others, could cause results to differ materially from those presently anticipated by us. You should not rely upon on these forward-looking statements.
Overview
We are a biotechnology company focused on developing personalized immune therapies for cancer. We have developed a platform technology, DCVax®, which uses activated dendritic cells to mobilize a patient’s own immune system to attack their cancer.
Our lead product, DCVax®-L, is designed to treat solid tumor cancers in which the tumor can be surgically removed. We have completed a 331-patient international Phase III trial of DCVax-L for Glioblastoma multiforme brain cancer (GBM), published the results in the JAMA Oncology peer reviewed journal, and on December 20, 2023 we submitted a Marketing Authorization Application (MAA) for commercial approval in the U.K. We plan to conduct clinical trials of DCVax-L for other solid tumor cancers in the future, when resources permit. Our second product, DCVax®-Direct, is designed to treat inoperable solid tumors. A 40-patient Phase I trial has been completed, and included treatment of a diverse range of more than a dozen types of cancers. We plan to work on preparations for Phase II trials of DCVax-Direct as resources permit.
During the first three months of 2026, the Company continued its progress on multiple fronts, including the following:
MAA Application. Much of the Company’s time and resources continued to be devoted to active engagement in the MAA review process during the first quarter. The Company continued to work with large teams of consultants on this process. As is typical, and as the Company has previously stated, the Company does not plan to make any interim announcements while its MAA is going through the regulatory process. The Company plans to announce the results when the regulatory review and decision-making is finished.
UK Strategic Advisor. As previously reported, the Company engaged a new Strategic Advisor, Dr. Annalisa Jenkins. Dr. Jenkins has extensive experience in big pharma, biotech and medical innovation, and is a key opinion leader in the UK and globally. Dr. Jenkins will advise and help the Company advance the development of its DCVax cancer vaccines. The Company believes that Dr. Jenkins’ experience, advice and involvement will be a valuable resource.
UK Clinic. As also previously reported, the Company’s pursuit of clinic arrangements or collaborations in the UK culminated in the Company establishing a clinic arrangement with the London Welbeck Hospital in the Harley Street medical district in London. During the first quarter, the Company secured a contractor and proceeded with buildout. The clinic includes two leukapheresis units, each of which can conduct two procedures per day for a total of 4 patients per day. The clinic may also offer extended hours and weekend operations. There is a general shortage of leukapheresis capacity in the UK, and such procedures are needed for T cell products as well as for dendritic cell products. The buildout is anticipated to be completed by June and the Company is pursuing applications for the required licenses.
Development of the Sawston, UK Facility. The Company and Advent continued the development process for the initial Grade C lab in the Sawston facility. The Company and Advent worked with advisers and the construction firm to modify the C lab design so as to increase its capacity and enable faster pace of certain operations. The development activity involving construction work was paused; the engineering work was ongoing.
Secondary Manufacturing in the UK. The Company continued discussions for a collaboration that could potentially lead to a second DCVax production operation in another region of the UK, using an existing established GMP facility with training of the personnel to be conducted by Advent. Since this secondary facility would not require buildout and is located in a relatively low-cost area, the
22
Company anticipates that it could be brought online rapidly and economically. The Company is pursuing planning discussions with the party in charge of the facility.
Manufacturing in the US – DCVax Products and Kalinski aDC1 Products. The Company has been pursuing separate parallel tracks to develop manufacturing in the US of the Company’s DCVax-L products and of the aDC1 products pursuant to the technologies of Dr. Kalinski that the Company has in-licensed. For the production of DCVax-L products, during the first quarter the Company completed the selection of a US company, contract negotiations and entered into a technology transfer agreement for development of DCVax-L manufacturing capacity by the US company. The Standard Operating Procedures (SOPs) used in the UK are being adapted to the US facilities and operations, and training began during the first quarter. The Company anticipates that the required engineering runs and validations will be completed during the summer.
For the production of Kalinski aDC1 products, the Company is working primarily to develop its own GMP manufacturing operation in the US, although it is also in discussions with a contractor for such production as an alternative. The Company has been in ongoing negotiations since last year to secure lease arrangements for a suitable GMP facility. In the meantime, during the first quarter the Company completed the lengthy recruitment process and hired the key manager to lead the aDC1 manufacturing operations.
Development Activity With In-Licensed Technologies. An updated trial design and IND package for an initial clinical trial of the Kalinski technology involving the Company were completed during the first quarter. The lead medical institution for the clinical trial has been determined and the IND package has been submitted to the Institutional Review Board (IRB) there. The Company anticipates submission to the FDA in the second quarter.
UK Property Development. The Company owns a 17-acre parcel of land on the edge of Sawston, UK which is located across the road from the Company’s manufacturing facility and adjacent to existing residential neighborhoods. The Company owns unencumbered fee title to the land. There is a pressing shortage of housing in the region and the Local Council is conducting a review of the land and zoning in the area. The Company’s property is not currently zoned for housing development despite its location on the edge of the town and adjacent to other residential areas. If zoned for residential development, the Company has been advised that its property would be extremely valuable. During the first quarter, the Company worked with a team of advisers to develop an application for rezoning of its property and submitted the application as part of the Local Council review process.
Litigation Progress. The Company continued vigorously pursuing documents and information both from the defendants and from third parties in the discovery stage of its litigation in New York against certain market makers. On April 30, 2026, the Company and one of the lesser defendants agreed to resolve the Company’s case against that defendant by settlement. The parties so notified the Court. The settlement is confidential. The funds are being held in escrow while the Company pursues discussions with other lesser defendants about resolution of the case against them. The Company anticipates that the funds will be released from escrow when the discussions with the lesser defendants have been completed. See Part II Item 1, Legal Proceedings, below.
Critical Accounting Policies and Estimates
Our discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with U.S. GAAP. The preparation of these financial statements requires us to make estimates and judgments that affect our reported amounts of assets, liabilities, revenues and expenses.
On an ongoing basis, we evaluate our estimates and judgments, including those related to derivative liabilities, accrued expenses and stock-based compensation. We based our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities and the reported amounts of revenues and expenses that are not readily apparent from other sources. Actual results could differ from those estimates.
Our critical accounting policies and significant estimates are detailed in our Annual Report on Form 10-K for the year ended December 31, 2025. Our critical accounting policies and significant estimates have not changed substantially from those previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2025.
23
Results of Operations
Operating costs:
Our operating costs and expenses consist primarily of research and development (R&D) expenses. R&D expenses include clinical trial expenses, and increased costs after completion of a Phase III trial, especially for the extensive preparations, and teams of expert consultants, required for an application for product approval and required for ongoing interaction with the regulatory agency while the application undergoes review.
In addition to clinical trial and post-trial costs, our operating costs may include ongoing work relating to our DCVax products, including R&D, product characterization, manufacturing process development, quality control process development, and related matters. Additional substantial costs relate to the development and expansion of manufacturing capacity.
Our operating costs also include the costs of preparations for the launch of new or expanded clinical trial programs, such as our anticipated trials of combination treatment regimens. The preparation costs include payments to regulatory consultants, lawyers, statisticians, sites and others, evaluation of potential investigators, the clinical trial sites and the CROs managing the trials and other service providers, and expenses related to institutional approvals, clinical trial agreements (business contracts with sites), training of medical and other site personnel, trial supplies and other.
Our operating costs also include legal and accounting costs in operating the Company.
The foregoing operating costs include the costs for Flaskworks’ ongoing operations and intellectual property filings, and the operations of our subsidiaries in the U.K., the Netherlands and Germany.
Research and development:
R&D expenses include costs for substantial external scientific personnel, technical and regulatory advisers, and others, costs of laboratory supplies used in our internal research and development projects, travel, regulatory compliance, and expenditures for preclinical and clinical trial operation and management when we are actively engaged in clinical trials.
Because we are a pre-revenue company, we do not allocate R&D costs on a project basis. We adopted this policy, in part, due to the unreasonable cost burden associated with accounting at such a level of detail and our limited number of financial and personnel resources.
General and administrative:
General and administrative expenses include personnel related salary and benefit expenses, cost of facilities, insurance, travel, legal services, property and equipment and amortization of stock options and warrants.
Three Months Ended March 31, 2026 and 2025
We recognized a net loss of $3.1 million and $19.3 million for the three months ended March 31, 2026 and 2025, respectively.
Research and Development Expense
For the three months ended March 31, 2026 and 2025, research and development expenses were $4.9 million and $8.4 million, respectively. The decrease in 2026 was primarily related to a decrease in the costs related to the MAA application at the MHRA, a decrease in stock based compensation to external consultants and the acquisition of Advent in the 4th quarter in 2025.
General and Administrative Expense
For the three months ended March 31, 2026 and 2025, general and administrative expenses were $6.5 million and $9.3 million, respectively. The decrease was mainly related to a reduction in legal costs.
24
Settlement Gain
During the three months ended March 31, 2026, the Company recognized a $2.25 million gain related to the Delaware litigation settlement.
Change in Fair Value of Derivatives
We recognized a non-cash gain on the change in fair value of derivatives of $9.4 million and $1.3 million for the three months ended March 31, 2026 and 2025, respectively. The non-cash gain of $9.4 million for the three months ended March 31, 2026, resulted from a fair value adjustment to the contingent note payable. Based on current assessments, the achievement of the underlying performance conditions required for payment is not probable prior to the note’s expiration on May 21, 2026. Consequently, the fair value of the liability was reduced to zero as of March 31, 2026. The gain in the three months ended March 31, 2025 was mainly due to the non-cash revaluation gain for certain warrants that were reclassified as liabilities as of December 2024.
Change in Fair Value of Share Payable
We recognized a non-cash gain of $0.2 million and a non-cash loss of $23,000 from the change in fair value of share payable during the three months ended March 31, 2026 and 2025, respectively. The fluctuations were mainly due to the movement of our stock price.
Change in Fair Value of Convertible Notes
We recognized a non-cash gain of $5.2 million and $3.7 million for the change in fair value of the convertible notes during the three months ended March 31, 2026 and 2025, respectively. The non-cash gains resulted from the decrease of the Company’s stock price. In addition, the increased gain during the three months ended March 31, 2026 was also attributable to a change in certain assumptions used in the valuation of the convertible notes.
Debt Extinguishment
We recognized approximately $4.8 million and $7.3 million debt extinguishment loss during the three months ended March 31, 2026 and 2025, respectively, from debt redemptions and debt amendments. The decrease during the three months ended March 31, 2026 compared to last year in the same period was due to less volume of debt amendments.
Loss from Issuance of Debt
We recognized approximately $0.7 million loss from issuance of certain convertible notes, which we elected to account for under the FVO during the three months ended March 31, 2026. The loss was calculated as the difference between the principal amount and the fair value of these convertible notes.
Inducement expense
We recognized an inducement expense of $87,000 related a convertible note that had an inducement conversion during the three months ended March 31, 2026.
Interest Expense
During the three months ended March 31, 2026 and 2025, we recognized interest expense of $2.3 million and $1.6 million, respectively. The increase in interest expense in 2026 was mainly related to the issuance costs related to certain convertible notes issued in March 2026, which we elected to account for under the FVO.
Foreign currency transaction gain (loss)
During the three months ended March 31, 2026 and 2025, we recognized foreign currency transaction loss of $1.3 million and a gain of $1.9 million, respectively. The loss was due to the strengthening of the U.S. dollar relative to British pound sterling and vice versa for the loss.
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Liquidity and Capital Resources
We have experienced recurring losses from operations since inception. We have not yet established an ongoing source of revenues and must cover our operating expenses through debt and equity financings to allow us to continue as a going concern. Our ability to continue as a going concern depends on the ability to obtain adequate capital to fund operating losses until we generate adequate cash flows from operations to fund our operating costs and obligations. If we are unable to obtain adequate capital, we could be forced to cease operations.
We depend upon our ability, and will continue to attempt, to secure equity and/or debt financing. We cannot be certain that additional funding will be available on acceptable terms, or at all. Our management determined that there was substantial doubt about our ability to continue as a going concern for at least one year after the annual consolidated financial statements were issued, and management’s concerns about our ability to continue as a going concern within the year following this report persist.
Cash Flows
Operating Activities
During the three months ended March 31, 2026 and 2025, total operating costs and expenses were approximately $11.4 million and $17.7 million, respectively. Net cash outflows from operations were approximately $12.5 million (including payments for prior periods’ accounts payables) and $9.4 million, respectively. The increase in cash used in operating activities was primarily attributable to the strengthening of the British Pound relative to the U.S. Dollar.
Investing Activities
During the three months ended March 31, 2026 and 2025, cash used in investing activities were approximately $0.1 million and $0.1 million, respectively.
Financing Activities
We received approximately $2.9 million and $5.1 million of cash from issuance of common shares during the three months ended March 31, 2026 and 2025, respectively.
We received approximately $7.5 million and $2.2 million of cash from issuance of convertible notes to individual lenders during the three months ended March 31, 2026 and 2025, respectively.
We received approximately $5.0 million of cash from the issuance of a loan from a commercial lender during the three months ended March 31, 2025.
We received approximately $6,000 and $17,000 of cash from the exercise of warrants during the three months ended March 31, 2026 and 2025, respectively.
We made aggregate debt payments of $0.5 million and $0.6 million during the three months ended March 31, 2026 and 2025, respectively.
We made aggregate payments of approximately $0.7 million to the seller in connection with the Advent acquisition in October 2025 during the three months ended March 31, 2026.
Other factors affecting our ongoing funding requirements include the number of staff we employ, the number of sites, number of patients and amount of activity in our clinical trial programs, the costs of further product and process development work relating to our DCVax products, the costs of preparations for Phase II trials, the costs of expansion of manufacturing, and unanticipated developments. The extent of resources available to us will determine which programs can move forward and at what pace.
Off-Balance Sheet Arrangements
Since our inception, we have not engaged in any off-balance sheet arrangements, as defined in the rules and regulations of the SEC.
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Item 3. Quantitative and Qualitative Disclosures About Market Risk
Market risk represents the risk of loss that may result from the change in value of financial instruments due to fluctuations in its market price. Market risk is inherent in all financial instruments. Market risk may be exacerbated in times of trading illiquidity when market participants refrain from transacting in normal quantities and/or at normal bid-offer spreads. Our exposure to market risk is directly related to derivatives, debt and equity linked instruments related to our financing activities.
Our assets and liabilities are overwhelmingly denominated in U.S. dollars. We do not use foreign currency contracts or other derivative instruments to manage changes in currency rates. We do not now, nor do we plan to, use derivative financial instruments for speculative or trading purposes. However, these circumstances might change.
The primary quantifiable market risk associated with our financial instruments is sensitivity to changes in interest rates. Interest rate risk represents the potential loss from adverse changes in market interest rates. We use an interest rate sensitivity simulation to assess our interest rate risk exposure. For purposes of presenting the possible earnings effect of a hypothetical, adverse change in interest rates over the 12-month period from our reporting date, we assume that all interest rate sensitive financial instruments will be impacted by a hypothetical, immediate 100 basis point increase in interest rates as of the beginning of the period. The sensitivity is based upon the hypothetical assumption that all relevant types of interest rates that affect our results would increase instantaneously, simultaneously and to the same degree. We do not believe that our cash and equivalents have significant risk of default or illiquidity.
The sensitivity analyses of the interest rate sensitive financial instruments are hypothetical and should be used with caution. Changes in fair value based on a 1% or 2% variation in an estimate generally cannot be extrapolated because the relationship of the change in the estimate to the change in fair value may not be linear. Also, the effect of a variation in a particular estimate on the fair value of financial instruments is calculated independent of changes in any other estimate; in practice, changes in one factor may result in changes in another factor, which might magnify or counteract the sensitivities. In addition, the sensitivity analyses do not consider any action that we may take to mitigate the impact of any adverse changes in the key estimates.
Based on our analysis, as of March 31, 2026, the effect of a 100+/- basis point change in interest rates on the value of our financial instruments and the resultant effect on our net loss are considered immaterial.
Item 4. Controls and Procedures
Evaluation of Disclosure Controls and Procedures
Under the supervision and with the participation of our management, including our principal executive officer and principal financial officer, we conducted an evaluation as of March 31, 2026, of the design and operation of our disclosure controls and procedures, as such terms are defined in Exchange Act Rules 13a-15(e) and 15d-15(e). Based on this evaluation, management concluded that, as of such date, our disclosure controls and procedures are effective to ensure that information required to be disclosed by us in our Exchange Act reports is recorded, processed, summarized, and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.
Changes in Internal Control over Financial Reporting
No change in internal control over financial reporting occurred during the most recent quarter with respect to our operations, which materially affected, or is reasonably likely to materially affect, our internal controls over financial reporting.
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Part II - Other Information
Item 1. Legal Proceedings
On December 1, 2022, we filed a Complaint in the United States District Court for the Southern District of New York against certain market makers. The Complaint alleges that the defendants engaged in manipulation of the Company’s stock, in violation of the Securities Exchange Act of 1934 and common law fraud, over a period of years. On March 20, 2023, the defendants filed a Motion to Dismiss the Complaint. On April 10, 2023 we filed an Amended Complaint against Canaccord Genuity LLC, Citadel Securities LLC, G1 Execution Services LLC, GTS Securities LLC, Instinet LLC, Lime Trading Corp., and Virtu Americas LLC (Northwest Biotherapeutics Inc. v. Canaccord, et al., No. 1:22-cv-10185-GHW-GWG).
Following defendants’ filing of a new Motion to Dismiss (MTD) and various filings on both sides, an oral argument on defendants’ latest Motion to Dismiss was held on November 14, 2023. The Magistrate Judge issued an 85-page Recommendation and Results Opinion (R&R) for review by the Senior Judge. The Magistrate Judge found that the Company had adequately pled all of the elements of its claim of market manipulation, with the exception of producing enough details for calculating actual damages, known as loss causation. On that basis, he granted defendant’s motion to dismiss without prejudice, subject to the Company’s right to re-plead on just the question of loss causation, finding that such a filing would “not be futile”.
On February 14, 2024, the Senior Judge issued an opinion accepting all the recommendations and findings of the R&R, and gave the Company 30 days to file this limited repleading amendment on loss causation and damages no later than March 15, 2024. On March 15, 2024, the Company filed their more detailed repleading on loss causation and damages. At the end of March, defendants asked for the right to object to the Judge’s findings against them on December 29, 2023 and February 14, 2024. This motion was denied. The defendants then asked for leave to file a new MTD. That motion was granted with a 30-day filing requirement for defendants and a 30-day response time for the Company.
On May 1, 2024, the defendants’ filed a new MTD the Company’s amended re-pleading complaint, containing the new section on loss causation and damages. On May 31, 2024, the Company responded to the defendants’ new MTD, supporting the Magistrate Judge’s and Senior Judge’s previous opinions, and rejecting the defendants’ objections to the Company’s loss causation repleading and damage formulae.
On June 14, 2024, the defendants filed their last response to the Company’s comments on May 31, 2024, concerning the defendant’s latest MTD. They also asked the Court to schedule an oral argument on the issues raised by these last two filings. The Court never answered the defendants’ request for an oral argument. On January 31, 2025, the Magistrate Judge issued his second R&R dismissing in part the defendants latest MTD on the basis of plaintiff’s having met the requirements of dismissal based on short-term damages but did not approve it based on the pleadings to date based on longer-term damages.
On February 14, 2025, both Plaintiffs and Defendants filed their respective comments on this latest R&R from the Magistrate Judge and on February 28, 2025, each party filed comments on the other parties February 14, 2025 filings. On March 5, 2025, defendants once again filed a motion seeking an oral argument on the most recent issues raised in the Magistrate Judge’s R&R, and on March 6, 2025, Senior Judge Woods denied the motion in writing without prejudice.
On March 26, 2025, Senior Judge Woods issued his opinion adopting Magistrate Stein’s R&R. On April 4, 2025 the Court granted an extension to the defendants to respond to plaintiffs Second Amended Complaint by April 25, 2025.
This was followed on April 23, 2025 by an Initial Case Management Conference Order for June 5, 2025, requiring the submission of a Joint Proposed Case Management Plan no later than one week prior to the scheduled Conference. The Case Management Plan was approved by the Court and the parties proceeded into the discovery stage of the case.
Since that time, the parties have been engaged in fact discovery, including both document production and answers to Interrogatory questions. The current fact discovery deadline is August 28, 2026. The Court has not set a trial date.
The Company is continuing to vigorously pursue documents and information both from the defendants and from third parties in the discovery process. On April 30, 2026, the Company and one of the lesser defendants agreed to resolve the Company’s case against that defendant by settlement. The parties so notified the Court. The settlement is confidential. The funds are being held in escrow while the Company pursues discussions with other lesser defendants about resolution of the case against them. The Company anticipates that the funds will be released from escrow when the discussions with the lesser defendants have been completed.
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Item 1A. Risk Factors
Applicable risk factors are set forth in the Company’s report on Form 10-K for the fiscal year ended December 31, 2025.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Mine Safety Disclosures
Not applicable.
Item 5. Other Information
Item 6. Exhibits
21.1 | | |
21.2 | ||
31.1 | ||
32.1 | ||
101.INS | Inline XBRL Instance Document. | |
| ||
101.SCH | Inline XBRL Schema Document. | |
| ||
101.CAL | Inline XBRL Calculation Linkbase Document. | |
| ||
101.DEF | Inline XBRL Definition Linkbase Document. | |
| ||
101.LAB | Inline XBRL Label Linkbase Document. | |
| ||
101.PRE | Inline XBRL Presentation Linkbase Document. | |
104 | The cover page from the Company’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2026, formatted in Inline XBRL (included as Exhibit 101). |
* Filed herewith
** Furnished herewith
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
NORTHWEST BIOTHERAPEUTICS, INC | |||
Dated: May 15, 2026 | By: | /s/ Linda F. Powers | |
Name: | Linda F. Powers | ||
Title: | President and Chief Executive Officer | ||
Principal Executive Officer | |||
Principal Financial and Accounting Officer | |||
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ATTACHMENTS / EXHIBITS