Northwest Biotherapeutics, Inc (NASDAQ:NWBO) Is In a Real Mess, But Are There Better Days To Come?

Northwest Biotherapeutics, Inc (NASDAQ:NWBO) is down more than 85% year to date, and even when looked at in context of the oft-uncertain development stage biotech space, is in a real quandary.The company's lead, and only real noteworthy, candidate is halted from enrolling in an ongoing phase III, and has been that way for coming up a full year, but management refuses to tell markets exactly why the halt a) came about in the first place and b) is still in place.To make things worse, the decline has seen its bid trade below the minimum $1 threshold to maintain a NASDAQ listing, and it's now well into a 180-day grace period during which it must raise it's price back above the threshold or risk delisting.And even if the price threshold doesn’t cause a NASDAQ knock-off, what seems like shady financial operations between it and an affiliate (as defined by SEC framework) entity, run by its CEO and her husband, have drawn a NASDAQ investigation.What's next?For those not familiar with Northwest Biotherapeutics, it was once a promising biotech junior with what looked to be a revolutionary brain cancer treatment in late stage development. The treatment in question is DCVax, and it's part of a wave of new generation oncology treatments, collectively referred to as called cancer immunotherapy. Essentially, they mobilize a patient's immune system to target and attack cancer cells. This means that in cancers like brain cancer (and specifically, GBM, which is the most lethal and common form of brain cancer), which are difficult to treat because of location and spread factor, treatment can be far more selective and targeted. It's a concept that has made waves in the oncology space for nearly a decade, and we've seen companies pick up billion dollar valuations on the back of their candidates being positioned in a similar stage of development as Northwest Biotherapeutics' candidate.So why is Northwest Biotherapeutics struggling to break a $60 million market cap? Trust issues, delays, you name it. The company hasn’t really offered anything in the form of progress reports for the last year, primarily because it's not seen any progress since the hold, and management has essentially stopped interacting with the investment community.CEO Linda Powers has revealed she spent a number of years issuing stock in lieu of cash to what is essentially the company's marketing partner (Cognate), but also that this marketing partner is a subsidiary of her own fund.There are few quicker ways to dilute a base of shares than to start paying invoices in fresh issue, and we now know that the issues didn’t even comply with NASDAQ listing rules – the root of the second above mentioned delisting driver.Here's the company's own interpretation:

In November 2014, the company approved the issuance of adjustment shares under the most favored nation provision as a result of transactions done with unrelated investors. The approval and the plan to issue the adjustment shares was reported in the company’s SEC filings at that time and subsequently, but the shares were not actually issued until October 2015, when completion of that issuance was required as a pre-condition of a $30 million financing the company entered into.

And NASDAQ's:

Although Ms. Powers never received any of the shares issued by the Company to Cognate, the Nasdaq Staff determined that because the Company recorded its issuances of common stock to Cognate as equity compensation under U.S. GAAP, and because of Ms. Powers’ role in regard to Cognate, this rule should apply to the stock issuances made by the Company to Cognate. As result, the Nasdaq Staff determined that those issuances were not in compliance with this rule.

Want more reason to worry? Here's the latest release:

… today announced that it has entered into definitive agreements with two new institutional investors for a registered direct offering with gross proceeds of $3.7 million.

7.4 million shares, $0.50 a share. Not terrible, but here's the kicker – the investors will also pick up warrants to purchase a further 3.7 million shares at exercises of $0.60 and five years.Things don't look good, and NWBO is essentially uninvestable-in until it gets itself sorted with NASDAQ and reestablishes its lead trial. When will this happen? Who knows. We don't even know if it will.We'll keep an eye on things so you don't have to. Sign up below and we'll bring you updates as they happen.Disclosure: We have no position in NWBO and have not been compensated for this article.