Attached files

file filename
EX-10.6 - OFFICE LEASE (REGENT BUSINESS CENTERS) - ImmunoCellular Therapeutics, Ltd.dex106.htm
EX-10.4 - AGREEMENT (DR. JOHN YU) - ImmunoCellular Therapeutics, Ltd.dex104.htm
EX-32.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 906 - ImmunoCellular Therapeutics, Ltd.dex322.htm
EX-31.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 302 - ImmunoCellular Therapeutics, Ltd.dex311.htm
EX-10.5 - AGREEMENT (DR. ELMA HAWKINS) - ImmunoCellular Therapeutics, Ltd.dex105.htm
EX-10.3 - EMPLOYMENT AGREEMENT (DR. MANISH SINGH) - ImmunoCellular Therapeutics, Ltd.dex103.htm
EX-10.1 - EMPLOYMENT AGREEMENT (DAVID FRACTOR) - ImmunoCellular Therapeutics, Ltd.dex101.htm
EX-32.1 - CERTIFICATION OF PRINCIPAL EXECUTIVE OFFICER PURSUANT TO SECTION 906 - ImmunoCellular Therapeutics, Ltd.dex321.htm
EX-10.2 - EMPLOYMENT AGREEMENT (DR. JAMES BENDER) - ImmunoCellular Therapeutics, Ltd.dex102.htm
EX-31.2 - CERTIFICATION OF PRINCIPAL FINANCIAL OFFICER PURSUANT TO SECTION 302 - ImmunoCellular Therapeutics, Ltd.dex312.htm
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

FORM 10-Q

 

 

(Mark One)

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

For the quarterly period ended June 30, 2011

 

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

Commission file number 033-17264-NY

 

 

 

ImmunoCellular Therapeutics, Ltd.

(Exact name of registrant as specified in its charter)

 

 

 

DELAWARE   93-1301885
(State or other jurisdiction of
incorporation or organization)
  (IRS Employer
Identification No.)

21900 Burbank Boulevard, 3rd Floor

Woodland Hills, California 91367

(Address of principal executive offices)

(818) 992-2907

(Registrant’s telephone number, including area code)

 

 

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

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

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

 

Large accelerated filer   ¨    Accelerated filer   ¨
Non-accelerated filer   ¨    Smaller reporting company   x

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

The Issuer had 28,589,468 shares of its common stock outstanding as of August 10, 2011.

 

 

 


Table of Contents

ImmunoCellular Therapeutics, Ltd.

FORM 10-Q

Table of Contents

 

          Page  

PART I FINANCIAL INFORMATION

     1   

Item 1.

 

Financial Statements

     1   

Item 2.

 

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

     18   

Item 3.

 

Quantitative and Qualitative Disclosures About Market Risk

     22   

Item 4.

 

Controls and Procedures

     23   
PART II OTHER INFORMATION      24   

Item 1.

 

Legal Proceedings

     24   

Item 1A.

 

Risk Factors

     24   

Item 2.

 

Unregistered Sales of Equity Securities and Use of Proceeds

     24   

Item 3.

 

Defaults Upon Senior Securities

     24   

Item 4.

 

Removed and Reserved

     24   

Item 6.

 

Exhibits

     24   

SIGNATURES

       26   

EXHIBIT LIST

     27   


Table of Contents

PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Balance Sheets

 

      December 31,
2010
    June 30,
2011
 
           (unaudited)  

Assets

    

Current assets:

    

Cash and cash equivalents

   $ 5,319,776      $ 10,147,636   

Other assets

     24,033        40,259   
  

 

 

   

 

 

 

Total current assets

     5,343,809        10,187,895   

Fixed assets, net

     12,367        42,276   

Other assets

     8,974        8,974   
  

 

 

   

 

 

 

Total assets

   $ 5,365,150      $ 10,239,145   
  

 

 

   

 

 

 

Liability and Shareholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 171,065      $ 62,651   

Accrued liabilities

     276,384        488,065   
  

 

 

   

 

 

 

Total current liabilities

     447,449        550,716   
  

 

 

   

 

 

 

Warrant Liability

     2,581,871        5,827,556   
  

 

 

   

 

 

 

Commitments and contingencies

     0        0   

Shareholders’ equity:

    

Common stock, $0.0001 par value; 74,000,000 shares authorized; 22,213,602 shares and 28,358,506 shares issued and outstanding as of December 31, 2010 and June 30, 2011, respectively

     2,221        2,836   

Additional paid in capital

     25,341,679        31,120,921   

Promissory note

     (54,282     0   

Deficit accumulated during the development stage

     (22,953,788     (27,262,884
  

 

 

   

 

 

 

Total shareholders’ equity

     2,335,830        3,860,873   
  

 

 

   

 

 

 

Total liabilities and shareholders’ equity

   $ 5,365,150      $ 10,239,145   
  

 

 

   

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

1


Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Operations

(unaudited)

 

      For the Three
Months
Ended
June 30, 2010
    For the Three
Months
Ended
June 30, 2011
    For the Six
Months
Ended
June 30, 2010
    For the Six
Months
Ended
June 30, 2011
    February 25,
2004
(Inception) to
June 30, 2011
 

Revenues

   $ 0      $ 0        0      $ 0      $ 300,000   

Expenses:

          

Research and development

     509,261        858,183        688,956        1,775,397        7,335,664   

Merger costs

     0        0        0        0        73,977   

Stock based compensation

     201,161        391,858        332,244        633,839        7,663,711   

General and administrative

     640,441        579,889        1,091,638        1,133,610        7,678,333   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Total expenses

     1,350,863        1,829,930        2,112,838        3,542,846        22,751,685   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before other income (expense) and income taxes

     (1,350,863     (1,829,930     (2,112,838     (3,542,846     (22,451,685

Interest income

     1,087        1,009        1,560        2,645        337,434   

Change in fair value of warrant liability

     (316,730     278,096        (323,690     (768,895     (3,056,133
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss before income taxes

     (1,666,506     (1,550,825     (2,434,968     (4,309,096     (25,170,384

Income taxes

     0        0        0        0        0   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss

     (1,666,506     (1,550,825     (2,434,968     (4,309,096     (25,170,384

Deemed dividend on redemption of preferred stock

     (954,750     0        (954,750     0        (2,092,500
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Net loss attributable to common stock

   $ (2,621,256   $ (1,550,825   $ (3,389,718   $ (4,309,096   $ (27,262,884
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Weighted average number of shares:

          

Basic and diluted

     19,156,571        28,326,854        17,070,206        26,331,081        10,504,056   
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Loss per share:

          

Basic and diluted

   $ (0.14   $ (0.05   $ (0.20   $ (0.16   $ (2.60
  

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

2


Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Shareholders’ Equity

(unaudited)

 

    

 

Preferred Stock

    

 

Common Stock

    Additional
Paid-In
Capital
    Promissory
Note
    Deficit
Accumulated
During the
Development
Stage
    Total  
   Shares     Amount      Shares     Amount          

Initial capitalization at $0.00002 per share

     0      $ 0         6,256,500      $ 10      $ 87      $ 0      $ 0      $ 97   

Common stock issued for cash during 2004 at $0.00078 per share

     0        0         193,500        15        135        0        0        150   

Net loss

     0        0         0        0        0        0        (11,741     (11,741
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2004

     0        0         6,450,000        25        222        0        (11,741     (11,494

Common stock issued for cash during 2005 at $0.19 per share

     0        0         387,000        659        74,341        0        0        75,000   

Common stock issued for cash during 2005 at $0.32 per share

     0        0         154,800        16        49,984        0        0        50,000   

Common stock issued for research and development during 2005 at $0.99 per share

     0        0         154,800        15        152,745        0        0        152,760   

Net loss

     0        0         0        0        0        0        (246,004     (246,004
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2005

     0        0         7,146,600        715        277,292        0        (257,745     20,262   

Common stock issued for services during 2006 at $0.50 per share

     0        0         73,093        7        36,539        0        0        36,546   

Common stock issued for cash during 2006 in private placements at $1.00 per share, net of redemptions

     0        0         1,510,000        151        549,249        0        0        549,400   

Common stock issued for research and development during 2006 at $1.00 per share

     0        0         694,000        69        693,931        0        0        694,000   

Shares issued in connection with reverse merger

     0        0         825,124        83        (83     0        0        0   

Shares cancelled in connection with the sale of Optical Molecular Imaging, Inc.

     0        0         (2,059,100     (206     (64,794     0        0        (65,000

Exercise of stock options

     0        0         10,062        1        3,521        0        0        3,522   

Stock based compensation (options)

     0        0         0        0        4,103,645        0        0        4,103,645   

Net loss

     0        0         0        0        0        0        (5,152,713     (5,152,713
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2006

     0        0         8,199,779        820        5,599,300        0        (5,410,458     189,662   

Common stock issued for cash during 2007 in private placements at $1.50 per share

     0        0         3,531,603        353        4,892,133        0        0        4,892,486   

Exercise of stock options

     0        0         51,111        5        (5     0        0        0   

Reclassification of warrant derivative liability

     0        0         0        0        2,233,600        0        0        2,233,600   

Stock based compensation (options)

     0        0         0        0        1,296,714        0        0        1,296,714   

Net loss

     0        0         0        0        0        0        (3,614,753     (3,614,753
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2007

     0        0         11,782,493        1,178        14,021,742        0        (9,025,211     4,997,709   

Common stock issued for research and development during 2008 at $0.53 per share

     0        0         800,000        80        423,920        0        0        424,000   

Common stock issued for research and development during 2008 at $0.65 per share

     0        0         100,000        10        64,990        0        0        65,000   

Stock based compensation (options)

     0        0         0        0        513,357        0        0        513,357   

Net loss

     0        0         0        0        0        0        (3,059,730     (3,059,730
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2008

     0        0         12,682,493        1,268        15,024,009        0        (12,084,941     2,940,336   

Exercise of warrants

     0        0         1,970,992        197        462,551        0        0        462,748   

Exercise of stock options

     0        0         214,357        22        64,460        (52,668     0        11,814   

Stock based compensation (options)

     0        0         0        0        308,302        0        0        308,302   

Net loss

     0        0         0        0        0        0        (2,626,205     (2,626,205
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2009

     0        0         14,867,842        1,487        15,859,322        (52,668     (14,711,146     1,096,995   

Common stock and warrants issued for cash during 2010 at $1.00 per share, net of offering costs

     0        0         4,230,910        423        3,248,315        0        0        3,248,738   

Preferred stock and warrants issued for cash during 2010 at $10,000 per share, net of offering costs

     400        0         0        0        0        0        0        0   

Exercise of warrants in exchange for promissory note

     0        0         2,700,000        270        5,399,730        (5,400,000     0        0   

Redemption of preferred stock for repayment of promissory note

     (400     0         0        0        0        5,400,000        (2,092,500     3,307,500   

Exercise of stock options

     0        0         50,000        5        26,495        0        0        26,500   

Cashless exercise of stock options

     0        0         297,156        30        (30     0        0        0   

Common stock issued for services during 2010 at $0.90 per share

     0        0         60,000        6        53,994        0        0        54,000   

Common stock issued for services during 2010 at $1.06 per share

     0        0         7,694        0        8,156        0        0        8,156   

Stock based compensation

     0        0         0        0        745,697        0        0        745,697   

Interest on promissory note

     0        0         0        0        0        (1,614     0        (1,614

Net loss

     0        0         0        0        0        0        (6,150,142     (6,150,142
  

 

 

   

 

 

    

 

 

   

 

 

   

 

 

   

 

 

   

 

 

   

 

 

 

Balance at December 31, 2010

     0        0         22,213,602        2,221        25,341,679        (54,282     (22,953,788     2,335,830   

 

3


Table of Contents
     

 

Preferred Stock

    

 

Common Stock

     Additional
Paid-In
Capital
    Promissory
Note
    Deficit
Accumulated
During the
Development
Stage
    Total  
   Shares      Amount      Shares      Amount           

Common stock and warrants issued for cash during 2011 at $1.55 per share, net of offering costs

     0         0         5,219,768         522         4,982,816        0        0        4,983,338   

Exercise of stock options

     0         0         176,000         18         162,662        0        0        162,680   

Cashless exercise of stock options

     0         0         652,599         65         (65     0        0        0   

Stock based compensation

     0         0         96,537         10         633,829        0        0        633,839   

Interest on promissory note

     0         0         0         0         0        (352     0        (352

Redemption of promissory note

     0         0         0         0         0        54,634        0        54,634   

Net loss

     0         0         0         0         0        0        (4,309,096     (4,309,096
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

Balance at June 30, 2011

     0         0         28,358,506       $ 2,836       $ 31,120,921      $ 0      $ (27,262,884   $ 3,860,873   
  

 

 

    

 

 

    

 

 

    

 

 

    

 

 

   

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these condensed financial statements.

 

4


Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Cash Flows

(unaudited)

 

     For the Six Months
Ended June 30,
2010
    For the Six Months
Ended June 30,
2011
    February 25, 2004
(Inception) to
June 30, 2011
 

Cash flows from operating activities:

      

Net loss

   $ (2,434,968   $ (4,309,096   $ (25,170,384

Adjustments to reconcile net loss to net cash used in operating activities:

      

Depreciation and amortization

     1,817        8,016        17,121   

Interest (accrued) paid on promissory note

     (916     1,264        0   

Change in fair value of warrant liability

     323,690        768,895        3,056,133   

Stock-based compensation

     332,244        633,839        7,601,205   

Common stock issued for services

     0        0        98,703   

Common stock issued for research and development

     0        0        1,335,760   

Changes in assets and liabilities:

      

Other assets

     (97,689     (16,226     (79,514

Accounts payable

     (143,214     (108,414     62,651   

Accrued liabilities

     207,695        211,681        488,065   
  

 

 

   

 

 

   

 

 

 

Net cash used in operating activities

     (1,811,341     (2,810,041     (12,590,260
  

 

 

   

 

 

   

 

 

 

Cash flows from investing activities:

      

Purchase of property and equipment

     0        (37,925     (99,397

Cash paid for sale of Optical Molecular Imaging, Inc.

     0        0        (25,000
  

 

 

   

 

 

   

 

 

 

Net cash used in investing activities

     0        (37,925     (124,397
  

 

 

   

 

 

   

 

 

 

Cash flows from financing activities:

      

Exercise of stock options

     0        162,679        204,513   

Exercise of warrants

     0        0        462,748   

Payments on promissory note receivable

     0        53,018        53,018   

Proceeds from issuance of common stock and warrants under private placements, net of offering costs

     4,370,994        7,460,129        18,237,609   

Proceeds from issuance of preferred stock and warrants, net of offering costs

     3,779,158        0        3,779,158   

Proceeds from issuance of common stock

     0        0        125,247   
  

 

 

   

 

 

   

 

 

 

Net cash provided by financing activities

     8,150,152        7,675,826        22,862,293   
  

 

 

   

 

 

   

 

 

 

Increase in cash and cash equivalents

     6,338,811        4,827,860        10,147,636   

Cash and cash equivalents at beginning of period

     1,407,256        5,319,776        0   
  

 

 

   

 

 

   

 

 

 

Cash and cash equivalents at end of period

   $ 7,746,067      $ 10,147,636      $ 10,147,636   
  

 

 

   

 

 

   

 

 

 

Supplemental cash flows disclosures:

      

Interest expense paid

   $ 0      $ 0      $ 0  
  

 

 

   

 

 

   

 

 

 

Income taxes paid

   $ 0      $ 0      $ 0   
  

 

 

   

 

 

   

 

 

 

Supplemental non-cash financing disclosures:

      

Exercise of warrants in exchange for promissory note

   $ 3,350,000      $ 0      $ 3,350,000   
  

 

 

   

 

 

   

 

 

 

Redemption of preferred stock for repayment of promissory note

   $ 3,350,000      $ 0      $ 3,350,000   
  

 

 

   

 

 

   

 

 

 

Deemed dividend on redemption of preferred stock

   $ 954,750      $ 0      $ 2,092,500   
  

 

 

   

 

 

   

 

 

 

The accompanying notes are an integral part of these unaudited condensed financial statements.

 

5


Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements

1. Nature of Organization and Development Stage Operations

ImmunoCellular Therapeutics, Ltd. (the Company) is a development stage company that is seeking to develop and commercialize new therapeutics to fight cancer using the immune system.

Since the Company’s inception on February 25, 2004, the Company has been primarily engaged in the acquisition of certain intellectual property, together with development of its product candidates and the recent clinical testing activities for one of its vaccine product candidates, and has not generated any recurring revenues. As a result, the Company has incurred operating losses and, as of June 30, 2011, the Company had an accumulated deficit of $27,262,884. The Company expects to incur significant research, development and administrative expenses before any of its products can be launched and recurring revenues generated.

Interim Results

The accompanying condensed financial statements at June 30, 2011 and for the three and six month periods ended June 30, 2010 and 2011 and for the period February 25, 2004 (inception) to June 30, 2011 are unaudited, but include all adjustments, consisting of normal recurring entries, which the Company’s management believes to be necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2010 have been derived from our audited financial statements as of that date.

The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted pursuant to such rules and regulations. Certain prior year amounts have been reclassified to conform to the 2010 financial statement presentation. The financial statements should be read in conjunction with the Company’s audited financial statements in its Form 10-K for the year ended December 31, 2010. The Company’s operating results will fluctuate for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

2. Summary of Significant Accounting Policies

Development Stage Enterprise—The Company is a development stage enterprise as defined by Financial Accounting Standard Board’s Topic 915, “Accounting and Reporting by Development Stage Enterprises.” The Company is devoting substantially all our present efforts to research and development. All losses accumulated since inception are considered part of the Company’s development stage activities.

Liquidity—As of June 30, 2011, the Company had working capital of $9,637,179, compared to working capital of $4,896,360 as of December 31, 2010. The estimated cost of completing the development of either of our current vaccine product candidates and of obtaining all required regulatory approvals to market either of those product candidates is substantially greater than the amount of funds the Company currently has available. However, the Company believes that its existing cash balances its currently planned level of operations for at least the next twelve months, although there is no assurance that such proceeds will be sufficient for this purpose.

 

6


Table of Contents

Cash and cash equivalents—The Company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. As of December 31, 2010 and June 30, 2011, the Company had approximately $4,500,000 and $4,000,000, respectively, of certificates of deposit. These securities were fully covered by FDIC insurance and mature within the next six months. They are classified as held-to-maturity and under ASC Topic 320, “Investments – Debt and Equity Securities”, are measured at cost since the Company has the intent and ability to hold these securities to maturity.

Property and Equipment—Property and equipment are stated at cost and depreciated using the straight-line methods based on the estimated useful lives (generally three to five years) of the related assets. Computer and computer equipment are depreciated over 3 years. Management continuously monitors and evaluates the realizability of recorded long-lived assets to determine whether their carrying values have been impaired. The Company records impairment losses on long-lived assets used in operations when events and circumstances indicate that the assets might be impaired and the nondiscounted cash flows estimated to be generated by those assets are less than the carrying amount of those assets. Any impairment loss is measured by comparing the fair value of the asset to its carrying amount. Repairs and maintenance costs are expensed as incurred.

Research and Development Costs—Research and development expenses consist of costs incurred for direct research and development and are expensed as incurred.

Stock Based Compensation—Financial Accounting Standards Board (FASB) ASC Topic 718, “Compensation – Stock Based” requires that the expense resulting for all share-based payment transactions be recognized in the Company’s condensed financial statements.

Stock option grants issued prior to March 31, 2011 to employees and officers and directors were valued using the Black-Scholes pricing model. Stock option grants made subsequent to March 31, 2011 were valued using the binomial lattice simulation model. The following assumptions were used to value the grants:

 

      Six
Months
Ended
June 30,
2011
    Six Months
Ended
June 30,
2010
 

Risk-free interest rate

     2.43     1.44

Expected dividend yield

     None        None   

Expected life

     6.8 years        3.56 years   

Expected volatility

     57.9     102.0

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2010 and 2011 was $0.70 and $1.02, respectively.

The risk-free interest rate used in the valuation is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. The Company has not declared or paid any dividends and does not currently expect to do so in the future. The expected term of options represents the period that our stock-based awards are expected to be outstanding and was determined based on projected holding periods for the remaining unexercised shares. Consideration was given to the contractual terms of our stock-based awards, vesting schedules and expectations of future employee behavior. Expected volatility is based on market prices of traded options for comparable entities within our industry.

The Company’s stock price volatility and option lives involve management’s best estimates, both of which impact the fair value of the option and, ultimately, the expense that will be recognized over the life of the option. The Company used market comparables to estimate volatility during the period in which the Company’s stock was thinly traded. Company specific information was used to establish volatility when the Company’s trading volume increased and sufficient historical data was established.

 

7


Table of Contents

When options are exercised, our policy is to issue previously unissued shares of common stock to satisfy share option exercises. As of June 30, 2011, the Company had approximately 45.7 million shares of authorized but unissued common stock.

No tax benefits were attributed to the stock-based compensation expense because a valuation allowance was maintained for substantially all net deferred tax assets.

Income Taxes — The Company accounts for federal and state income taxes in accordance with ASC Topic 740, “Income Taxes”. Under the liability method, a deferred tax asset or liability is determined based on the difference between the financial statement and tax basis of assets and liabilities, as measured by the enacted tax rates. The Company’s provision for income taxes represents the amount of taxes currently payable, if any, plus the change in the amount of net deferred tax assets or liabilities. A valuation allowance is provided against net deferred tax assets if recoverability is uncertain on a more likely than not basis. ASC 740 clarifies the accounting for uncertainty in income tax positions (“tax positions”). The provisions of ASC 740 require the Company to recognize in its financial statements the impact of a tax position if the position will more likely than not be sustained upon examination by a taxing authority, based on the technical merits of the position. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company is not currently under examination by any taxing authority nor has it been notified of an impending examination.

The Company recognizes interest and penalties for uncertain tax positions in income tax expense. Upon adoption and as of June 30, 2011, the Company had no interest and penalty accrual or expense.

Fair Value of Financial Instruments—The carrying amounts reported in the condensed balance sheets for cash, cash equivalents, short-term investments and accounts payable approximate their fair values due to their quick turnover.

Use of Estimates—The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires management to make certain estimates and assumptions about the future outcome of current transactions which may affect the reporting and disclosure of these transactions. Accordingly, actual results could differ from those estimates used in the preparation of these financial statements.

Basic and Diluted Loss per Common Share—Basic and diluted loss per common share are computed based on the weighted average number of common shares outstanding. Common share equivalents (which consist of options and warrants) are excluded from the computation of diluted loss per share since the effect would be antidilutive. Common share equivalents which could potentially dilute basic earnings per share in the future, and which were excluded from the computation of diluted loss per share, totaled 39,973,169 shares and 41,655,680 shares at June 30, 2010 and 2011, respectively.

Recently Issued Accounting StandardsIn May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-4, which amends the Fair Value Measurements Topic of the Accounting Standards Codification (ASC) to help achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. ASU No. 2011-4 does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The ASU is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. The ASU will affect the Company’s fair value disclosures, but will not likely affect the Company’s results of operations, financial condition or liquidity.

In June 2011, the FASB issued ASU No. 2011-5, which amends the Comprehensive Income Topic of the ASC. The ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, and instead requires consecutive presentation of the statement of net income and other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-5 is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. It will have likely have no affect on the Company’s results of operations, financial condition or liquidity.

 

8


Table of Contents

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force), the AICPA, and the Securities Exchange Commission (the “SEC”) did not or are not believed by management to have a material impact on the Company's present or future condensed financial statements.

3. Property and Equipment

Property and equipment consist of the following:

 

      December 31,
2010
    June 30,
2011
 

Computers

   $ 10,900      $ 10,900   

Research equipment

     10,572        48,497   
  

 

 

   

 

 

 
     21,472        59,397   

Less accumulated depreciation

     (9,105     (17,121
  

 

 

   

 

 

 
   $ 12,367      $ 42,276   
  

 

 

   

 

 

 

Depreciation expense was $909 and $3,603 for the three months ended June 30, 2010 and June 30, 2011, respectively. Depreciation expense was $1,817 and $8,016 for the six months ended June 30, 2010 and June 30, 2011, respectively. Depreciation expense was $17,121 for the period from February 25, 2004 (date of inception) to June 30, 2011.

4. Related-Party Transactions

Cedars-Sinai Medical Center License Agreement

In November 2006, the Company entered into a license agreement with Cedars-Sinai Medical Center (“Cedars-Sinai”) under which the Company acquired an exclusive, worldwide license to its technology for use as cellular therapies, including cancer stem cell and dendritic cell-based vaccines for neurological disorders that include brain tumors and neurodegenerative disorders and other cancers. This technology is covered by a number of pending U.S. and foreign patent applications, and the term of the license will be until the last to expire of any patents that are issued covering this technology.

As an upfront licensing fee, the Company issued Cedars-Sinai 694,000 shares of its common stock and paid Cedars-Sinai $62,000. Additional specified milestone payments will be required to be paid to Cedars-Sinai when the Company initiates patient enrollment in its first Phase III clinical trial and when it receives FDA marketing approval for its first product.

The Company has agreed to pay Cedars-Sinai specified percentages of all of its sublicensing income and gross revenues from sales of products based on the licensed technology, subject to a reduction if it must make any payments to any third party whose proprietary rights would be infringed by sale of the products. To maintain its rights to the licensed technology, the Company must meet certain development and funding milestones. These milestones include, among others, commencing a Phase I clinical trial for a product candidate by March 31, 2007 and raising at least $5,000,000 in funding from equity or other sources by December 31, 2008. The Company satisfied the foregoing funding requirement in 2007 and commenced a Phase I clinical trial in May 2007, which was within the applicable cure period for the milestone requirement. Through December 31, 2009, the Company has paid Cedars-Sinai a total of $166,660 in connection with the Phase I clinical trial. The Company also was required to commence a Phase II clinical trial for a product candidate by December 31, 2008 and a waiver of this requirement was obtained from Cedars-Sinai (see Second Amendment below).

 

9


Table of Contents

On June 16, 2008, the Company entered into a First Amendment to Exclusive License Agreement (the “Amendment”) with Cedars-Sinai. The Amendment amended the License Agreement to include in the Company’s exclusive license from Cedars-Sinai under that agreement an epitope to CD133 and certain related intellectual property. Management believes this technology will be covered by a U.S. patent application that will be filed by the parties. Pursuant to the Amendment, the Company issued Cedars-Sinai 100,000 shares of the Company’s common stock as an additional license fee for the licensed CD133 epitope technology, which will be subject to the royalty and other terms of the License Agreement.

On July 22, 2009, the Company entered into a Second Amendment to Exclusive License Agreement (the “Second Amendment”) with Cedars-Sinai to become effective August 1, 2009. The Second Amendment amended the License Agreement to revise the milestones set forth in the License Agreement that the Company must achieve in order to maintain its license rights under that agreement. The revised milestones include the replacement of a milestone that required commencement of a Phase II clinical trial for the Company’s first product candidate by no later than December 31, 2008 with milestones that require commencement of a Phase I clinical trial for the Company’s second product candidate by no later than June 30, 2010 and commencement of a Phase II clinical trial for one of the Company’s product candidates by no later than March 31, 2012.

Effective March 23, 2010, the Company entered into a Third Amendment to Exclusive License Agreement (the “Third Amendment”) with Cedars-Sinai. The Third Amendment amended the License Agreement to revise the milestones set forth in the License Agreement that the Company must achieve in order to maintain its license rights under that agreement. The revised milestones include the replacement of a milestone that required commencement of a Phase I clinical trial for the Company’s second product candidate by no later than June 30, 2010 and commencement of a Phase II clinical trial for one of the Company’s product candidates by no later than March 31, 2012 with a requirement that the Company by September 30, 2011 either commence a Phase II clinical trial for its dendritic cell vaccine candidate or a Phase I clinical trial for its cancer stem cell vaccine candidate. The amendment also added a requirement that the Company obtain certain defined forms of equity or other funding in the amount of at least $2,500,000 by December 31, 2010 and a total of at least $5,000,000 by September 30, 2011. These funding requirements were fully satisfied as of June 30, 2011.

5. Commitments and Contingencies:

Employment Agreement with Dr. Manish Singh

On May 10, 2011, the Company entered into an Employment Agreement, effective as of February 18, 2011, with Dr. Manish Singh pursuant to which Dr. Singh will continue to serve on a full-time basis as the Company’s President and Chief Executive Officer for a one-year term commencing February 18, 2011. The Company is required under the Employment Agreement to use its commercially reasonable efforts to have Dr. Singh continue to serve as a member of the Company’s Board of Directors during the term of the Employment Agreement. The Employment Agreement automatically renews on the one-year anniversary date of the effective date of February 18, 2011 of each year thereafter for successive one-year terms unless terminated by either party.

The Employment Agreement provides for an annual base salary of $315,000. In addition, provided that Dr. Singh continues to serve as the Company’s President and Chief Executive Officer for the entire one-year term of the Employment Agreement, the Company will pay Dr. Singh a discretionary cash bonus of up to $100,000 upon the attainment of certain corporate goals.

The Employment Agreement also provides Dr. Singh a seven-year incentive stock option grant to purchase 270,000 shares of common stock under the Company’s 2006 Equity Incentive Plan (the “Plan”) at an exercise price of $2.25 per share, which was the closing price of the Company’s common stock on the date of grant. The option will vest as follows; (i) 20,000 shares on February 17, 2012, (ii) 50,000 shares on February 17, 2013, (iii) 50,000 shares on February 17, 2014, (iv) 50,000 shares upon the Company attaining a

 

10


Table of Contents

market capitalization of at least $100 million for ten consecutive trading dates, (v) 50,000 shares upon the Company attaining a market capitalization of at least $150 million for ten consecutive trading days and (vi) 50,000 shares upon the Company attaining a market capitalization of at least $200 million for ten consecutive trading days. The option may be exercised during the term that Dr. Singh provides services to the Company and for twelve months after termination for any reason except termination for cause by the Company, provided that such exercise is within the seven-year term of the option.

In the event that the Company terminates the Employment Agreement without cause, then (i) the Company upon such termination will be required to make a lump sum payment to Dr. Singh equal to six months of his base annual salary, (ii) any stock options granted to Dr. Singh, to the extent vested, will be retained by Dr. Singh and will be exercisable on the terms described above, and (3) the vesting of an additional number of shares subject to all options granted to Dr. Singh equal to 50% of all shares subject to such options that vest based solely on the passage of time and that have not already vested will immediately accelerate and will be exercisable on the terms described above. If Dr. Singh terminates his employment for “good reason” as defined in the Employment Agreement, he will receive the severance benefits described in the preceding sentence, except that 100% of his options will vest if his employment terminates for good reason following a merger or similar corporate transaction in which the Company is not the surviving entity and the surviving entity does not offer Dr. Singh an executive position at a compensation level at least equal to his then compensation under the Employment Agreement.

Employment Agreement with David Fractor

On April 4, 2011 the Company entered into an Employment Agreement with David Fractor pursuant to which Mr. Fractor will serve as the Company’s Treasurer and Chief Financial Officer on a part-time basis for a three-year term, subject to termination by either party on 30 days notice. Under this agreement, Mr. Fractor receives a monthly salary of $6,000 and was granted a seven-year option to purchase 42,000 shares of the Company’s common stock at a price of $2.25 per share, with such option to vest in equal monthly installments over the three-year term of the agreement.

Employment Agreement with Dr. James Bender

On May 10, 2011, the Company entered into an Employment Agreement, effective as of February 1, 2011, with Dr. James Bender pursuant to which Dr. Bender will continue to serve on a full-time basis as the Company’s Vice President – Product Development and Manufacturing for a one-year term commencing February 1, 2011. The Employment Agreement automatically renews on the one-year anniversary date of the effective date of February 1, 2011 of each year thereafter for successive one-year terms unless terminated by either party.

The Employment Agreement provides for an annual base salary of $175,000. In addition, provided that Dr. Bender continues to serve as the Company’s Vice President – Product Development and Manufacturing for the entire one-year term of the Employment Agreement, the Company will pay Dr. Bender a discretionary cash bonus of up to $35,000 upon the attainment of certain corporate goals.

The Employment Agreement also provides Dr. Bender a seven-year incentive stock option grant to purchase 120,000 shares of common stock under the Plan at an exercise price of $2.25 per share, which was the closing price of the Company’s common stock on the date of grant. The option will vest as to (i) 60,000 shares in three annual installments of 20,000 shares each, with the first installment to vest on January 31, 2012; (ii) 20,000 shares upon the Company attaining a market capitalization of at least $100 million for ten consecutive trading dates; (iii) 20,000 shares upon the Company attaining a market capitalization of at least $150 million for ten consecutive trading dates; and (iv) 20,000 shares upon the Company attaining a market capitalization of at least $200 million for ten consecutive trading dates. The option may be exercised during the term that Dr. Bender provides services to the Company and for twelve months after termination for any reason except termination for cause by the Company, provided that such exercise is within the seven-year term of the option.

 

11


Table of Contents

In the event that the Company terminates the Employment Agreement without cause, then (i) the Company upon such termination will be required to make a lump sum payment to Dr. Bender equal to six months of his base annual salary, (ii) any stock options granted to Dr. Bender, to the extent vested, will be retained by Dr. Bender and will be exercisable on the terms described above, and (iii) the vesting of an additional number of shares subject to all options granted to Dr. Bender equal to 50% of all shares subject to such options that vest solely on the passage of time and that have not already vested will immediately accelerate and will be exercisable on the terms described above. If Dr. Bender terminates his employment for “good reason” as defined in the Employment Agreement, he will receive the severance benefits described in the preceding sentence, except that 100% of his options will vest if his employment terminates for good reason following a merger or similar corporate transaction in which the Company is not the surviving entity and the surviving entity does not offer Dr. Bender an executive position at a compensation level at least equal to his then compensation under the Employment Agreement.

Agreement with Dr. John Yu

On May 10, 2011, the Company entered into an Agreement, effective as of March 1, 2011, with Dr. John Yu pursuant to which Dr. Yu will continue to serve as the Company’s Chief Scientific Officer for a one-year term commencing March 1, 2011. The term of this Agreement will automatically renew on the one-year anniversary date of the Agreement each year after March 1, 2011 for successive one-year terms unless either party terminates. Dr. Yu may also terminate the Agreement at any time upon 60 days notice.

The Agreement provides for an annual base salary of $70,000. In addition, Dr. Yu will receive a bonus of $15,000 each (a maximum total of $30,000) upon and provided that the Company achieves each of the following milestones within one year from the March 1, 2011: (i) enrollment of 75 patients in the Phase II trial of ICT-107 and (ii) filing of an IND for either a new indication for ICT-107 or for another product candidate of the Company.

The Agreement also provides Dr. Yu a seven-year incentive stock option grant to purchase 50,000 shares of common stock under the Plan at an exercise price of $1.95 per share, which was the closing price of the Company’s common stock on the date of grant. The option will vest in three equal annual installments, with the first vesting date to be February 29, 2012. The option may be exercised during the term that Dr. Yu provides services to the Company and for twelve months after termination for any reason except termination without cause by Dr. Yu or termination for cause by the Company, provided that such exercise is within the seven-year term of the option. All of the options granted to Dr. Yu will vest if his services terminate following a merger or similar corporate transaction in which the Company is not the surviving entity and the surviving entity does not offer Dr. Yu an executive position at a compensation level at least equal to his then compensation level under the Agreement.

Research and Development

In connection with the Cedars-Sinai Medical Center License Agreement, the Company has certain commitments as described in Note 4.

6. Shareholders’ Equity

Common Stock

In March 2010, the Company raised $1,654,686 (after commissions and offering expenses) from the sale of 1,740,000 shares of common stock and warrants to purchase 696,000 shares of common stock at an exercise price of $1.15 per share, to various investors in a private placement. (See “Warrants and Warrant Liabilities” below.)

 

12


Table of Contents

In May 2010, the Company raised $2,716,308 (after commissions and offering expenses) from the sale of 2,490,910 shares of common stock and warrants to purchase 1,245,455 shares of common stock at an exercise price of $1.50 per share, to various investors in a private placement. (See “Warrants and Warrant Liabilities” below)

In February 2011, the Company raised $7,460,119 (after commissions and offering expenses) from the sale of 5,219,768 shares of common stock and warrants to purchase 2,609,898 shares of common stock at an exercise price of $2.25 per share, to various investors in a private placement. (See “Warrants and Warrant Liabilities” below)

Preferred Stock

On December 3, 2009, the Company entered into a Preferred Stock Purchase Agreement dated as of December 3, 2009 (the “Preferred Stock Agreement”) with Socius Capital Group, LLC, a Delaware limited liability company d/b/a Socius Life Sciences Capital Group, LLC (the “Investor”). Pursuant to the Preferred Stock Agreement, the Company will issue to the Investor up to $10,000,000 of the Company’s newly created Series A Preferred Stock (the “Preferred Stock”). The purchase price of the Preferred Stock is $10,000 per share. The shares of Preferred Stock that are issued to the Investor will bear a cumulative dividend of 10.0% per annum, payable in shares of Preferred Stock, will be redeemable under certain circumstances and will not be convertible into shares of the Company’s common stock. Subject to the terms and conditions of the Preferred Stock Agreement, the Company has the right to determine (1) the number of shares of Preferred Stock that it will require the Investor to purchase from the Company, up to a maximum purchase price of $10,000,000, (2) whether it will require the Investor to purchase Preferred Stock in one or more traunches, and (3) the timing of such required purchase or purchases of Preferred Stock.

The terms of the Preferred Stock are set forth in a Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock that the Company filed with the Delaware Secretary of State on December 3, 2009.

Pursuant to the Preferred Stock Agreement, the Company agreed to pay the Investor a commitment fee of $500,000 (the “Commitment Fee”), with $250,000 payable when the Company makes its first election to require the Investor to purchase shares of Preferred Stock and with the remaining $250,000 payable when the aggregate amount of Preferred Stock purchased by the Investor equals at least $5,000,000; provided, however, that the first $250,000 portion of the Commitment Fee will be due and payable on the six-month anniversary of the effective date of the registration statement described below even if no sales of Preferred Stock to the Investor have occurred by that date. The Company has the right to elect to pay each installment of the Commitment Fee in immediately available funds or by issuance of shares of common stock. In January 2010, the Company accrued $250,000 in commitment fees associated with the Preferred Stock Agreement.

Concurrently with its execution of the Preferred Stock Agreement, the Company issued to the Investor a warrant (the “Warrant”) to purchase shares of common stock with an aggregate exercise price of up to $13,500,000 depending upon the amount of Preferred Stock that is purchased by the Investor. Each time that the Company requires the Investor to purchase shares of Preferred Stock, a portion of the Warrant will become exercisable by the Investor over a five-year period for a number of shares of common stock equal to (1) the aggregate purchase price payable by the Investor for such shares of Preferred Stock multiplied by 135%, with such amount divided by (2) the per share Warrant exercise price. The initial exercise price under the Warrant is $1.04 per share of common stock. Thereafter, the exercise price for each portion of the Warrant that becomes exercisable upon the Company’s election to require the Investor to purchase Preferred Stock will equal the closing price of the common stock on the date that the Company delivers its election notice. The Investor is entitled to pay the Warrant exercise price in immediately available funds, by delivery of a secured promissory note or, if a registration statement covering the resale of the common stock subject to the Warrant is not in effect, on a cashless basis.

 

13


Table of Contents

Pursuant to the Preferred Stock Agreement, the Company agreed to file with the Securities and Exchange Commission a registration statement covering the resale of the shares of common stock that are issuable to the Investor under the Warrant and in satisfaction of the Commitment Fee. The registration statement was deemed effective on January 22, 2010. The 1.2 million shares of common stock registered for the Commitment Fee are held in escrow by the Company.

On May 2, 2010, the Company issued and sold 400 shares of the Preferred Stock to Socius Capital Group, LLC pursuant to the terms of the Preferred Stock Agreement. The aggregate purchase price for the Preferred Stock was $4,000,000 (less $220,842 in Commitment Fees and offering expenses). Under the terms of the Preferred Stock Agreement, Socius remains obligated, from time to time until December 3, 2012, to purchase up to an additional 600 shares of Preferred Stock at a purchase price of $10,000 per share upon notice from the Company to Socius, and subject to the satisfaction of certain conditions, as set forth in the Preferred Stock Agreement.

In connection with the foregoing transaction, a portion of the warrants held by an affiliate of Socius became vested and exercisable covering 2,700,000 shares of the Company’s common stock for a five-year period at an exercise price of $2.00 per share under the terms of the Preferred Stock Agreement. In consideration of Socius agreeing to grant the Company certain waivers under the Preferred Stock Agreement, this affiliate also became entitled to purchase up to an additional 1,350,000 shares of the Company’s common stock at an exercise price of $2.50 per share. On May 2, 2010, the affiliate of Socius exercised a portion of its warrant for 1,675,000 shares and paid the $3,350,000 exercise price for these shares by delivering a four-year full recourse promissory note for this amount, as permitted by the Preferred Stock Agreement. The Company immediately thereafter redeemed approximately 248 shares of the Preferred Stock by offsetting the $3,350,000 redemption price for these shares against the $3,350,000 owed to the Company under the note. On December 2, 2010, the affiliate of Socius exercised the remaining portion of its warrant for 1,025,000 shares and paid the $2,050,000 exercise price for these shares by delivering a four-year full recourse promissory note for this amount, as permitted by the Preferred Stock Agreement. The Company immediately thereafter redeemed approximately 152 shares of the Preferred Stock by offsetting the $2,050,000 redemption price for these shares against the $2,050,000 owed to the Company under the note. (See “Warrants” and “Warrant Liabilities” below.)

Stock Options

In February 2005, the Company adopted an Equity Incentive Plan (“Plan”). Pursuant to the Plan, a committee appointed by the Board of Directors may grant, at its discretion, qualified or nonqualified stock options, stock appreciation rights and may grant or sell restricted stock to key individuals, including employees, nonemployee directors, consultants and advisors. Option prices for qualified incentive stock options (which may only be granted to employees) issued under the plan may not be less than 100% of the fair market value of the common stock on the date the option is granted (unless the option is granted to a person who, at the time of grant, owns more than 10% of the total combined voting power of all classes of stock of the Company; in which case the option price may not be less than 110% of the fair market value of the common stock on the date the option is granted). Option prices for nonqualified stock options issued under the Plan are at the discretion of the committee and may be equal to, greater or less than fair market value of the common stock on the date the option is granted. The options vest over periods determined by the Board of Directors and are exercisable no later than ten years from date of grant (unless they are qualified incentive stock options granted to a person owning more than 10% of the total combined voting power of all classes of stock of the Company, in which case the options are exercisable no later than five years from date of grant). As of June 30, 2011, the Company has reserved 6,000,000 shares of common stock for issuance under the Plan and options to purchase 3,480,404 common shares have been granted under the Plan that are currently outstanding.

 

14


Table of Contents

The following is a summary of stock option grants issued outside the Plan:

In January 2007, the Company granted an option to purchase 1,500,000 shares of its common stock at an exercise price of $1.10 per share to the Chairman of the Company’s Scientific Advisory Board.

In November 2006, the Company granted an option to purchase 300,000 shares of its common stock at an exercise price of $1.00 per share to an affiliate of the Company’s then Chairman of the Board.

In November 2006, the Company granted an option to purchase 5,933,424 shares of its common stock at an exercise price of $1.00 per share to a Board member in connection with the Cedars-Sinai license acquisition.

The following table summarizes stock option activity for the Company during the six months ended June 30, 2011:

 

      Options     Weighted
Average
Exercise
Price
     Weighted
Average
Remaining
Contractual
Term
     Aggregate
Intrinsic
Value
 

Outstanding December 31, 2010

     11,094,845      $ 0.94         

Granted

     692,000      $ 2.24         

Exercised

     (1,036,267   $ 0.54         

Forfeited or expired

     (28,000   $ 0.73         
  

 

 

   

 

 

    

 

 

    

 

 

 

Outstanding June 30, 2011

     10,722,578      $ 1.06         5.25       $ 12,257,231   
  

 

 

   

 

 

    

 

 

    

 

 

 

Vested or expected to vest at June 30, 2011

     9,999,783      $ 0.98         5.22       $ 12,156,178   
  

 

 

   

 

 

    

 

 

    

 

 

 

As of June 30, 2011, the total unrecognized compensation cost related to unvested stock options amounted to $964,925, which will be amortized over the weighted-average remaining requisite service period of less than one year.

Warrants

In connection with the March 2010 common stock private placement, the Company issued to the investors warrants to purchase 696,000 shares of the Company’s common stock at $1.15 per share. The warrants have a term of 26 months from the date of issuance. On June 30, 2011, warrants to purchase 696,000 shares of the Company’s common stock were outstanding related to this private placement. (see Warrant Liabilities below)

In connection with the May 2010 common stock private placement, the Company issued to the investors warrants to purchase 1,245,455 shares of the Company’s common stock at $1.50 per share. The warrants have a term of 36 months from the date of issuance. On June 30, 2011, warrants to purchase 1,245,455 shares of the Company’s common stock were outstanding related to this private placement. (see Warrant Liabilities below)

In connection with the May 2010 Preferred Stock sale, the Company issued warrants to purchase 2,700,000 shares of common stock at an exercise price of $2.00 held by an affiliate of Socius. The warrants have a term of five-year from the date of issuance. In consideration of Socius agreeing to grant the Company certain waivers under the Preferred Stock Purchase Agreement, this affiliate also became entitled to purchase

 

15


Table of Contents

up to an additional 1,350,000 shares of the Company’s common stock at an exercise price of $2.50 per share. In May 2010, the affiliate of Socius exercised a portion of its warrant for 1,675,000 shares and paid the $3,350,000 exercise price for these shares by delivering a four-year full recourse promissory note for this amount, as permitted by the Preferred Stock Purchase Agreement. The Company immediately thereafter redeemed approximately 248 shares of the Preferred Stock by offsetting the $3,350,000 redemption price for these shares against the $3,350,000 owed to the Company under the note. In December 2010, the affiliate of Socius exercised the remaining portion of its warrant for 1,025,000 shares and paid the $2,050,000 exercise price for these shares by delivering a four-year full recourse promissory note for this amount, as permitted by the Preferred Stock Purchase Agreement. The Company immediately thereafter redeemed approximately 152 shares of the Preferred Stock by offsetting the $2,050,000 redemption price for these shares against the $2,050,000 owed to the Company under the note. As of June 30, 2011, no warrants to purchase of the Company’s common stock at $2.00 were outstanding and warrants to purchase 1,350,000 shares of the Company’s common stock at $2.50 were outstanding related to this private placement. (See “Warrant Liabilities” below.)

In connection with an investor relations agreement in December 2010, the Company issued a two-year warrant to purchase 50,000 shares of the Company’s common stock at an exercise price of $1.60.

In connection with the February 2011 common stock private placement, the Company issued to the investors warrants to purchase 2,609,898 shares of the Company’s common stock at $2.25 per share. The warrants have a five-year term from the date of issuance. As of March 31, 2011, warrants to purchase 2,609,898 shares of the Company’s common stock were outstanding related to this private placement. (See “Warrant Liabilities” below.)

Warrant Liability

In connection with the March 2010 common stock private placement, the Company issued to the investors warrants to purchase 696,000 shares of the Company’s common stock at $1.15 per share. Of the total proceeds from the March 2010 common stock private placement, $257,520 was allocated to the freestanding warrants associated with the units based upon the fair value of the warrants determined under the Black Scholes option pricing model. The warrants contain a provision whereby the warrant exercise price would be decreased in the event that future common stock issuances are made at a price less than $1.00. Due to the potential variability of their exercise price, these warrants do not qualify for equity treatment, and therefore are recognized as a liability. The warrant liability is adjusted to fair value each reporting period, and any change in value is recognized in the statement of operations. Prior to 2011, the Company concluded that Black-Scholes method of valuing the price adjustment feature does not materially differ from the valuation of such warrants using the Monte Carlo or lattice simulation models, and therefore, the use of the Black-Scholes valuation model was considered a reasonable method to value the warrants. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (i) dividend yield of 0%; (ii) expected volatility of 102%, (iii) risk-free interest rate of 1.00%, and (iv) contractual life of 26 months. For the six months ended June 30, 2010, the Company recorded a charge to other income for the change in fair value of warrant liability of $125,280. During the six months ended June 30, 2011, the Company determined that it was more appropriate to value the warrants using a binomial lattice simulation model. The lattice simulation model used by the Company at June 30, 2011, assumed (i) dividend yield of 0%; (ii) expected volatility of 69%; (iii) risk free rate of 0.18% and (iv) expected term of .92 years. Based upon this model, the Company recorded a charge to other expense of $261,000 and $180,960 for the three and six months ended June 30, 2011 respectively. . As of June 30, 2011, the carrying value of the warrant liability is $654,240.

In connection with the May 2010 common stock private placement, the Company issued to the investors warrants to purchase 1,245,455 shares of the Company’s common stock at $1.50 per share. Of the total proceeds from the May 2010 common stock private placement, $834,455 was allocated to the freestanding warrants associated with the units based upon the fair value of the warrants determined under the Black Scholes option pricing model. The warrants contain a provision whereby the warrant exercise price

 

16


Table of Contents

would be decreased in the event that future common stock issuances are made at a price less than $1.00. Due to the potential variability of their exercise price, these warrants do not qualify for equity treatment, and therefore are recognized as a liability. The warrant liability is adjusted to fair value each reporting period, and any change in value is recognized in the statement of operations. Prior to 2011, the Company concluded that the Black-Scholes method of valuing the price adjustment feature does not materially differ from the valuation of such warrants using the Monte Carlo or binomial lattice simulation models, and therefore, the use of the Black-Scholes valuation model was considered a reasonable method to value the warrants. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (i) dividend yield of 0%; (ii) expected volatility of 102%, (iii) risk-free interest rate of 1.375%, and (iv) contractual life of 36 months. During 2011, the Company determined that it was more appropriate to value the warrants using a binomial lattice simulation model. The lattice simulation model used by the Company at June 30, 2011, assumed (i) dividend yield of 0%; (ii) expected volatility of 68%; (iii) risk free rate of 0.43% and (iv) expected term of 1.92 years. Based upon this model, the Company recorded a credit to other expense of $14,945 during the three months ended June 30, 2011 and a charge to other expense for $169,372for the six months ended June 30, 2011. As of June 30, 2011, the carrying value of the warrant liability is $1,103,473.

In connection with the May 2010 Preferred Stock sale, the Company vested warrants to purchase 2,700,000 shares of common stock at an exercise price of $2.00 held by an affiliate of Socius and issued warrants to purchase an additional 1,350,000 shares of the Company’s common stock at an exercise price of $2.50 per share. Of the total proceeds from the May 2010 preferred stock sale, $5,710,500 was allocated to the freestanding warrants associated with the units based upon the fair value of these warrants determined under the Black Scholes option pricing model. The excess of the value of the freestanding warrants over the net proceeds of $1,931,342 was charged to change in fair value of warrant liability in the statement of operations. The warrants contain a provision whereby the warrant may be settled for cash in connection with a change of control with a private company. Due to the potential variability of their exercise price, these warrants do not qualify for equity treatment, and therefore are recognized as a liability. The warrant liability is adjusted to fair value each reporting period and any change in value is recognized in the statement of operations. Prior to 2011 the Company concluded that the Black-Scholes method of valuing the price adjustment feature does not materially differ from the valuation of such warrants using the Monte Carlo or binomial lattice simulation models, and therefore, the use of the Black-Scholes valuation model was considered a reasonable method to value the warrants. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (i) dividend yield of 0%; (ii) expected volatility of 102%, (iii) risk-free interest rate of 2.50%, and (iv) contractual life of 60 months. During 2011, the Company determined that it was more appropriate to value the warrants using a binomial lattice simulation model. The lattice simulation model used by the Company at June 30, 2011, assumed (i) dividend yield of 0%; (ii) expected volatility of 71%; (iii) risk free rate of 1.25% and (iv) expected term of 3.92 years. Based upon this model, the Company recorded a credit to other expense of $163,350 during the three months ended June 30, 2011 and a charge to other expense of $51,300 for the six months ended June 30, 2011. As of June 30, 2011, the carrying value of the warrant liability is $1,225,800. In May 2010, the affiliate of Socius exercised a portion of its $2.00 warrants for 1,675,000 shares, which reduced warrant liabilities by $2,395,250. In December 2010, the affiliate of Socius exercised a portion of its $2.00 warrants for 1,025,000 shares, which reduced warrant liabilities by $912,250 and eliminated the remaining liability associated with the $2.00 warrants.

In connection with the February 2011 common stock private placement, the Company issued to the investors warrants to purchase 2,609,898 shares of the Company’s common stock at $2.25 per share. Of the total proceeds from the February 2011 common stock private placement, $2,476,790 was allocated to the freestanding warrants associated with the units based upon the fair value of the warrants determined under the Binomial lattice model. The warrants contain a provision whereby the warrant exercise price would be decreased in the event that certain future common stock issuances are made at a price less than $1.55. Due to the potential variability of their exercise price, these warrants do not qualify for equity treatment, and therefore are recognized as a liability. The warrant liability is adjusted to fair value each reporting period, and any change in value is recognized in the statement of operations. The Company initially valued these warrants using a binomial lattice simulation model assuming (i) dividend yield of 0%; (ii) expected volatility of 146%;

 

17


Table of Contents

(iii) risk free rate of 1.96% and (iv) expected term of 5 years. Based upon those calculations, the Company calculated the initial valuation of the warrants to be $2,476,790. As of June 30, 2011, the Company revalued the warrants using the lattice simulation model assuming (i) dividend yield of 0%; (ii) expected volatility of 69%; (iii) risk free rate of 1.59% and (iv) expected term of 4.65 years. For the three months ended June 30, 2011, the Company recorded a credit to other expense of $360,790 and for the six months ended June 30, 2011, the Company recorded a charge to other expense of $367,263. As of June 30, 2011, the carrying value of the warrant liability is $2,844,043.

 

     Warrant
Liabilities
 

Balance – December 31, 2010

   $ 2,581,871   

Issuance of warrants

     2,476,790   

Exercise of warrants

     —     

(Gain) or Loss included in earnings

     768,895   

Transfers in and/or out of Level 3

     —     
  

 

 

 

Balance – June 30, 2011

   $ 5,827,556   
  

 

 

 

Promissory Note

In October 2009, the Company’s former President exercised stock options for 150,479 shares of common stock and as provided under the stock option agreement provided the Company with a full recourse five-year promissory note bearing interest of 2.59% per annum. The promissory note is secured by a pledge of shares being acquired with all proceeds of any sale to be applied first to retire in full the promissory note. The Company recorded the promissory note as an offset against shareholders’ equity. This note plus accrued interest was paid in full during the six months ended June 30, 2011. For the six months ended June 30, 2010, and 2011 the Company recorded interest income of $916 and $352 respectively.

7. Comprehensive Loss

For the six months ended June 30, 2010 and 2011, there was no other comprehensive loss and, accordingly, a Statement of Other Comprehensive Loss has not been presented. Comprehensive income would normally include: foreign currency translation adjustments, a change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value, a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost, and unrealized holding gains and losses on available-for-sale securities.

8. Subsequent Events

In July 2011, the Company renewed its lease at a monthly rental rate of $3,493 through June 30, 2012.

 

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Throughout this Quarterly Report on Form 10-Q, the terms “we,” “us,” “our,” and “our company” refer to ImmunoCellular Therapeutics, Ltd., a Delaware corporation.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which reflect the views of our management with respect to future events and financial performance. These forward-looking statements are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements. Forward-looking statements are identified by words such as “anticipates,” “believes,” “estimates,” “expects,” “plans,” “projects,” “targets” and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which are based on the information available to management at

 

18


Table of Contents

this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. For a discussion of some of the factors that may cause actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information in the “Risk Factors” section in our Form 10-K for the year ended December 31, 2010. The identification in this Quarterly Report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Overview

On January 31, 2006, we completed a merger pursuant to which Spectral Molecular Imaging, Inc. became our wholly owned subsidiary. At the time of the merger, we had virtually no assets or liabilities, and we had not conducted any business operations for several years. In connection with the merger, we changed our name from Patco Industries, Ltd. to Optical Molecular Imaging, Inc. and replaced our officers and directors with those of Spectral Molecular Imaging. Although we acquired Spectral Molecular Imaging in the merger, for accounting purposes the merger was treated as a reverse merger since the stockholders of Spectral Molecular Imaging acquired a majority of our outstanding shares of common stock and the directors and executive officers of Spectral Molecular Imaging became our directors and executive officers. Accordingly, our financial statements contained in this Report and the description of our results of operations and financial condition reflect the operations of Spectral Molecular Imaging through September 2006, when we sold that subsidiary and all of its operations to a third party.

In November 2006, we acquired an exclusive, worldwide license from Cedars-Sinai Medical Center for certain cellular-based therapy technology that we are developing for the potential treatment of brain tumors and other forms of cancer and neurodegenerative disorders. We recently completed a Phase I clinical trial of a vaccine product candidate for the treatment of glioblastoma multiforme based on this technology.

In February 2008, we acquired certain monoclonal antibody related technology owned by Molecular Discoveries LLC. This technology consists of (1) a platform technology referred to by Molecular Discoveries as DIAAD for the potentially rapid discovery of targets (antigens) and monoclonal antibodies for diagnosis and treatment of diverse human diseases and (2) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers.

Plan of Operation

We are a development stage company that is seeking to develop and commercialize new therapeutics to fight cancer using the immune system.

Since our company’s inception on February 25, 2004, we have been primarily engaged in the acquisition of certain intellectual property, together with the recent clinical testing activities for one of our vaccine product candidates, and have not generated any recurring revenues. As a result, we have incurred operating losses and, as of June 30, 2011, we had an accumulated deficit of $27,262,884. We expect to incur significant research, development and administrative expenses before any of our products can be launched and recurring revenues, if ever, are generated.

Critical Accounting Policies

Management’s discussion and analysis of our financial condition and results of operations are based on our financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates,

 

19


Table of Contents

including those related to impairment of long-lived assets, including finite lived intangible assets, accrued liabilities and certain expenses. We base 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 that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are summarized in Note 2 of our financial statements for the period from February 25, 2004 to June 30, 2011. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Development Stage Enterprise

We are a development stage enterprise as defined by FASB ASC Topic 915, “Development Stage Enterprises.” We are devoting substantially all of our present efforts to research and development. All losses accumulated since inception are considered as part of our development stage activities.

Research and Development Costs

Although we believe that our research and development activities and underlying technologies have continuing value, the amount of future benefits to be derived from them is uncertain. Research and development costs are therefore expensed as incurred rather than capitalized. During the six months ended June 30, 2010 and 2011, we recorded an expense of $688,956 and $1,775,397, respectively, related to research and development activities.

Stock-Based Compensation

FASB ASC Topic 718, “Compensation-Stock Based” require that the cost resulting from all share-based payment transactions be recognized in our condensed financial statements.

We adopted the fair value recognition provisions of ASC Topic 718 utilizing the modified-prospective-transition method. Under this transition method, compensation cost recognized during the twelve months ended December 31, 2006 includes: (a) compensation cost for all share-based payments granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated, and (b) compensation expense for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated. Under the modified-prospective-transition method, results for the prior periods have not been restated.

Results of Operations

Three months ended June 30, 2010 and 2011

Revenues

We had no revenues during the three months ended June 30, 2010 and 2011. We do not expect to generate any operating revenues during 2011.

Expenses

General and administrative expenses for the three months ended June 30, 2010 and 2011 were $640,441 and $579,889, respectively. The decrease in general and administrative expenses is primarily due to decreases in business development expenses and employee bonus accruals partially offset by higher professional fees.

 

20


Table of Contents

Research and development expenses for the three months ended June 30, 2010 and 2011 were $509,261 and $858,183, respectively. The increase in research and development expenses reflects the increased expenses associated with entering the Phase II clinical study for our dendritic cell based cancer vaccine product candidate for the treatment of glioblastoma.

We had $518,800 of non-cash expense for the three months ended June 30, 2010, consisting of $201,161 of stock based compensation, $316,730 of change in fair value of warrant derivatives, and $909 of depreciation expense. During the three months ended June 30, 2011, we had non-cash expenses of $395,461 consisting of $391,858 of stock based compensation and $3,603 of depreciation expense. During the three months ended June 30, 2011, we also received a benefit for the change in the fair value of the warrant derivatives in the amount of $278,096.

Loss

We incurred a net loss of $1,666,506 and $1,550,825 for the three months ended June 30, 2010 and 2011, respectively.

Six months ended June 30, 2010 and 2011

Revenues

We had no revenues during the six months ended June 30, 2010 and 2011. We do not expect to generate any operating revenues during 2011.

Expenses

General and administrative expenses for the six months ended June 30, 2010 and 2011 were $1,091,638 and $1,133,610, respectively. The increase in general and administrative expenses is primarily due to higher professional fees partially offset by decreases in employee bonus accruals.

Research and development expenses for the six months ended June 30, 2010 and 2011 were $688,956 and $1,775,397, respectively. The increase in research and development expenses reflects the increased expenses associated with entering the Phase II clinical study for our dendritic cell based cancer vaccine product candidate for the treatment of glioblastoma.

We had $657,751 of non-cash expense for the six months ended June 30, 2010, consisting of $332,244 of stock based compensation, $323,690 of change in fair value of warrant derivatives and $1,817 of depreciation expense, compared to $1,410,750 of non-cash expense for the six months ended June 30, 2011, consisting of $633,839 of stock based compensation, $768,895 of change in fair value of warrant derivatives, and $8,016 of depreciation expense.

Loss

We incurred a net loss of $2,434,968 and $4,309,096 for the six months ended June 30, 2010 and 2011, respectively. We incurred a net loss attributable to our common stock of $3,389,718 and $4,309,096 for the six months ended June 30, 2010 and 2011, respectively.

Liquidity and Capital Resources

As of June 30, 2011, we had working capital of $9,637,179, compared to working capital of $4,896,360 as of December 31, 2010.

 

21


Table of Contents

We do not currently anticipate that we will derive any revenues from either product sales or licensing during the foreseeable future. We do not have any bank credit lines and have financed all of our prior operations through the sale of securities.

The estimated cost of completing the development of either of our current vaccine product candidates and of obtaining all required regulatory approvals to market either of those product candidates is substantially greater than the amount of funds we currently have available. We believe that our existing cash balances will be sufficient to fund our currently planned level of operations for at least the next twelve months. We will seek to obtain additional funds through various financing sources, including possible sales of our securities, and in the longer term through strategic alliances with other pharmaceutical or biopharmaceutical companies.

In December 2009, we entered into an agreement with Socius Capital under which Socius Capital has agreed to purchase from us from time to time an aggregate of up to $10 million of our preferred stock and we sold them $4 million of these shares in May 2010. However, Socius Capital’s obligation to purchase the remaining $6 million of shares of our preferred stock is subject to our satisfying certain conditions at that time. There is no assurance that we will be able to satisfy those conditions if we wish to sell shares of our preferred stock to Socius Capital or that Socius Capital will have ability to complete these purchases. If we are unsuccessful or only partly successful in our efforts to secure additional funding, we may find it necessary to suspend or terminate some or all of our product development and other activities.

As of June 30, 2011, we had no long-term debt obligations, no capital lease obligations, no material purchase obligations or other similar long-term liabilities. In addition, we have no financial guarantees, debt or lease agreements or other arrangements that could trigger a requirement for an early payment or that could change the value of our assets, and we do not engage in trading activities involving non-exchange traded contracts.

Cash Flows

We used $1,811,341 of cash in our operations for the six months ended June 30, 2010, compared to $2,810,041 for the six months ended June 30, 2011. During the six months ended June 30, 2011, we greatly expanded our research and development expense and incurred greater non-cash charges related for our stock based compensation.

We used no cash from our investing activities for the six months ended June 30, 2010. During the six months ended June 30, 2011, we purchased $37,925 of machinery to support our research and development activities.

We received $8,150,152 from our private placements of our securities that we completed during the six months ended June 30, 2010. During the six months ended June 30, 2011, we received $7,460,129 from the issuance of common stock and warrants. Additionally, during the six months ended June 30, 2011, we received $162,679 from the exercise of stock options and $53,018 from the redemption of a promissory note receivable.

Inflation and changing prices have had no effect on our net sales and revenues or on our income from continuing operations over our two most recent fiscal years.

 

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not Applicable.

 

22


Table of Contents
Item 4. Controls and Procedures

As of the end of the fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, regarding the effectiveness of the design and operation of our disclosure controls and procedures pursuant to SEC Rule 15d-15(b) of the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that, as of June 30, 2011, (i) our disclosure controls and procedures were effective to ensure that information that is required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported or submitted within the time period specified in the rules and forms of the SEC and (ii) our disclosure controls and procedures were effective to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Exchange Act was accumulated and communicated to our management as appropriate to allow timely decisions regarding required disclosure. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

We do not expect that our disclosure controls and procedures and internal control over financial reporting will prevent all error and all fraud. A control system, no matter how well conceived and operated, can provide only reasonable, not absolute, assurance that the objectives of the control system are met. Because of the inherent limitations in all control systems, no evaluation of controls can provide absolute assurance that all control issues and instances of fraud, if any, within our company have been detected. The design of any system of controls also is based in part upon assurance that any design will succeed in achieving its stated goals under all potential future conditions. However, controls may become inadequate because of changes in conditions or the degree of compliance with the policies or procedures may deteriorate. Because of the inherent limitations in a cost-effective control system, misstatements due to error or fraud may occur and not be detected.

 

23


Table of Contents

PART II

OTHER INFORMATION

 

Item 1. Legal Proceedings

None.

 

Item 1A. Risk Factors

Not applicable.

 

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None

 

Item 3. Defaults Upon Senior Securities

None.

 

Item 4. Removed and Reserved

 

Item 5. Other Information

 

Item 6. Exhibits

 

Exhibit

No.

   Description
10.1    Employment Agreement dated as of April 4, 2011 between David Fractor and ImmunoCellular Therapeutics, Ltd.*
10.2    Employment Agreement dated as of May 10, 2011 between Dr. James Bender and ImmunoCellular Therapeutics, Ltd.*
10.3    Employment Agreement dated as of May 10, 2011 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.*
10.4    Agreement dated as of May 13, 2011 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.*
10.5    Agreement dated as of May 10, 2011 between Dr. Elma Hawkins and ImmunoCellular Therapeutics, Ltd.*
10.6    Office Lease dated July 1, 2011 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd.
31.1    Certification of the Registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of the Registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.

 

24


Table of Contents

Exhibit

No.

   Description
32.1    Certification of the Registrant’s Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of the Registrant’s Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

* Indicates a management contract or compensatory plan or arrangement

 

25


Table of Contents

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.

 

Dated: August 18, 2011     IMMUNOCELLULAR THERAPEUTICS, LTD.
    By:   /s/    Manish Singh, Ph.D.
      Name: Manish Singh, Ph.D.
     

Title: President and Chief Executive Officer

(Principal Executive Officer)

 

26


Table of Contents

EXHIBIT INDEX

IMMUNOCELLULAR THERAPEUTICS, LTD.

FORM 10-Q FOR QUARTER ENDED JUNE 30, 2011

 

Exhibit

No.

   Description
10.1    Employment Agreement dated as of April 4, 2011 between David Fractor and ImmunoCellular Therapeutics, Ltd.*
10.2    Employment Agreement dated as of May 10, 2011 between Dr. James Bender and ImmunoCellular Therapeutics, Ltd.*
10.3    Employment Agreement dated as of May 10, 2011 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.*
10.4    Agreement dated as of May 13, 2011 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.*
10.5    Agreement dated as of May 10, 2011 between Dr. Elma Hawkins and ImmunoCellular Therapeutics, Ltd.*
10.6    Office Lease dated July 1, 2011 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd.
31.1    Certification of the Registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2    Certification of the Registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1    Certification of the Registrant’s Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.
32.2    Certification of the Registrant’s Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

 

* Indicates a management contract or compensatory plan or arrangement

 

27