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Item 1.01.
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Entry into a Material Definitive Agreement.
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Equity Financing
On
March 17, 2017, Northwest Biotherapeutics, Inc. (the “Company”) entered into a Securities Purchase Agreement (the
“Agreement”) with certain institutional investors (the “Purchasers”), for a registered direct offering
(the “Offering”) of
18,843,692
shares of the Company’s common stock, par
value $0.001 per share (the “Common Stock”), at the purchase price of $0.26 per share (the “Shares”).
Additionally, the investors will receive five-year Class A warrants to purchase up to 21,632,769 shares of Common Stock at an
exercise price of $0.26 per share (the “Class A Warrants”) and 3-month Class B Common Stock Purchase Warrants to purchase
up to 21,632,769 shares of Common Stock at an exercise price of $1.00 per share (the “Class B Warrants”). Both the
Class A Warrants and the Class B Warrants are exercisable immediately,
subject to the 4.99% (or, at election of holder,
9.99%) beneficial ownership limit
.
In
order to insure that the beneficial ownership of the Purchasers (together with their affiliates and certain related parties)
does not exceed 4.99% of the Company’s Common Stock, certain investors purchased pre-funded Class C Warrants to
purchase up to 10,000,000 shares of common stock in lieu of shares.
The pre-funded Class C warrants are
exercisable immediately, subject to the 4.99% beneficial ownership limit. The full exercise price of these Class C Warrants
is $0.26 per share, of which $0.25 per share will be prepaid at the closing, with $0.01 per share payable upon exercise
of each Class C Warrant.
The aggregate gross
proceeds of the offering are expected to be approximately $7.5 million (excluding proceeds receivable upon the exercise of the
Class A and Class B Warrants). Additionally net proceeds, after deducting the Placement Agent Fee (described below) and other
estimated offering expenses payable by the Company, are expected to be approximately $6.7 million. The Company intends
to use the net proceeds from the Offering for general corporate purposes, costs related to preparing for and initiating Phase
II clinical trials, and working capital.
The
offer and sale of the securities in the Offering were registered under the Securities Act of 1933, as amended (the “Securities
Act”), pursuant to the Company’s shelf registration statement on Form S-3, as amended (File No. 333-213777), which
became effective on October 18, 2016. Pursuant to Rule 424(b) under the Securities Act, the Company will file a prospectus supplement
in connection with the Offering. The Securities may only be offered by means of a prospectus. Copies of the prospectus and prospectus
supplement can be obtained directly from the Company and at the SEC’s website at
www.sec.gov
.
In
connection with the Offering, the Company engaged Rodman & Renshaw, a unit of H.C. Wainwright & Co., LLC (the “Placement
Agent”), to act as its exclusive placement agent. The Company agreed to pay the Placement Agent a cash placement fee equal
to 7% of the aggregate purchase price for the securities sold in the registered offering, plus a non-accountable expense allowance
equal to $35,000. The Placement Agent will also receive Common Stock purchase warrants (the “Compensation Warrants”)
to purchase up to
2,019,230
shares of Common Stock, or 7% of the aggregate number
of shares of common Stock sold in the registered offering, at an exercise price of $0.325, or 125% of the public offering price
per share in the registered offering, which are not exercisable for six months following March 16, 2017, subject to certain exceptions,
and expire on March 16, 2022.
The
foregoing is only a summary of the material terms of the documents related to the Offering. The foregoing description of the Agreement
is qualified in its entirety by reference to the Agreement, the form of which is filed as Exhibit 10.1 to this Current Report
on Form 8-K, which is incorporated herein by reference. The foregoing description of the Warrants is qualified in its entirety
by reference to the Class A Common Stock Purchase Warrant, Class B Common Stock Purchase Warrant and Class C Common Stock Purchase
Warrant, forms of which are filed respectively as Exhibits 10.2, 10.3 and 10.4 to this Current Report on Form 8-K, which are incorporated
herein by reference. The foregoing description of the compensation to the Placement Agent is qualified in its entirety by reference
to the Engagement Agreement dated March 7, 2017 (the “Engagement Agreement”) with Rodman & Renshaw which is filed
as Exhibit 10.5 to this Current Report on Form 8-K which is incorporated herein by reference.
On
March 17, 2017, the Company issued a press release announcing the registered offering and the concurrent private placement. A
copy of the press release is filed as Exhibit 99.1 hereto and is incorporated herein by reference.