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EOM Pharmaceutical Holdings, Inc. - Quarter Report: 2010 June (Form 10-Q)

Form 10-Q
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, 2010

 

¨ 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 21,649,211 shares of its common stock outstanding as of August 10, 2010.

 

 

 


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    21

Item 4.

   Controls and Procedures    22

PART II OTHER INFORMATION

   23

Item 1.

   Legal Proceedings    23

Item 1A.

   Risk Factors    23

Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds    23

Item 3.

   Defaults Upon Senior Securities    23

Item 4.

   Removed and Reserved    23

Item 6.

   Exhibits    23

SIGNATURES

   25

EXHIBIT LIST

   26

 

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PART I

FINANCIAL INFORMATION

 

Item 1. Financial Statements

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Balance Sheets

 

     December 31,
2009
    June 30,
2010
 
           (unaudited)  

Assets

    

Current assets:

    

Cash and short-term investments

   $ 1,407,256      $ 7,746,067   

Other assets

     21,903        52,092   
                

Total current assets

     1,429,159        7,798,159   

Fixed assets, net

     5,428        3,611   

Deferred financing costs

     30,282        67,500   

Other assets

     7,847        7,847   
                

Total assets

   $ 1,472,716      $ 7,877,117   
                

Liability and Shareholders’ Equity

    

Current liabilities:

    

Accounts payable

   $ 225,601      $ 82,387   

Accrued liabilities

     150,120        357,815   
                

Total current liabilities

     375,721        440,202   
                

Warrant Liability

     —          2,799,573   
                

Commitments and contingencies

     —          —     

Shareholders’ equity:

    

Preferred stock $0.0001 par value, 1,000,000 shares authorized; none and 152 shares outstanding as of December 31, 2009 and June 30, 2010, respectively

     —          —     

Common stock, $0.0001 par value; 74,000,000 shares authorized; 14,867,842 shares and 21,049,211 shares issued and outstanding as of December 31, 2009 and June 30, 2010, respectively

     14,868        21,049   

Additional paid in capital

     15,845,941        22,770,741   

Promissory note

     (52,668     (53,584

Deficit accumulated during the development stage

     (14,711,146     (18,100,864
                

Total shareholders’ equity

     1,096,995        4,637,342   
                

Total liabilities and shareholders’ equity

   $ 1,472,716      $ 7,877,117   
                

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

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Operations

(unaudited)

 

     For the Three
Months Ended
June 30,

2009
    For the Three
Months Ended
June 30,

2010
    For the Six
Months Ended
June 30,

2009
    For the Six
Months Ended
June 30,

2010
    February 25,
2004
(Inception) to
June 30,

2010
 

Revenues

   $ —        $ —        $ —        $ —        $ 300,000   

Expenses:

          

Research and development

     334,615        509,261        492,459        688,956        3,964,593   

Merger costs

     —          —          —          —          73,977   

Stock based compensation

     51,614        201,161        128,979        332,244        6,554,263   

General and administrative

     414,066        640,441        793,814        1,091,638        5,592,835   
                                        

Total expenses

     800,295        1,350,863        1,415,252        2,112,838        16,185,668   
                                        

Loss before other income (expense) and income taxes

     (800,295     (1,350,863     (1,415,252     (2,112,838     (15,885,668

Interest income

     4,195        1,087        19,569        1,560        332,244   

Change in fair value of warrant liability

     —          (316,730     —          (323,690     (1,592,690
                                        

Loss before income taxes

     (796,100     (1,666,506     (1,395,683     (2,434,968     (17,146,114

Income taxes

     —          —          —          —          —     
                                        

Net loss

     (796,100     (1,666,506     (1,395,683     (2,434,968     (17,146,114

Deemed dividend on redemption of preferred stock

     —          (954,750     —          (954,750     (954,750
                                        

Net loss attributable to common stock

   $ (796,100   $ (2,621,256   $ (1,395,683   $ (3,389,718   $ (18,100,864
                                        

Weighted average number of shares:

          

Basic and diluted

     12,682,493        19,156,571        12,682,493        17,070,206        10,504,056   
                                        

Loss per share:

          

Basic and diluted

   $ (0.06   $ (0.14   $ (0.11   $ (0.20   $ (1.72
                                        

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

 

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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

  —        $ —     6,256,500      $ 97      $ —        $ —        $ —        $ 97   

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

  —          —     193,500        150        —          —          —          150   

Net loss

  —          —     —          —          —          —          (11,741     (11,741
                                                         

Balance at December 31, 2004

  —          —     6,450,000        247        —          —          (11,741     (11,494

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

  —          —     387,000        6,590        68,410        —          —          75,000   

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

  —          —     154,800        155        49,845        —          —          50,000   

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

  —          —     154,800        155        152,605        —          —          152,760   

Net loss

  —          —     —          —          —          —          (246,004     (246,004
                                                         

Balance at December 31, 2005

  —          —     7,146,600        7,147        270,860        —          (257,745     20,262   

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

  —          —     73,093        73        36,473        —          —          36,546   

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

  —          —     1,510,000        1,510        547,890        —          —          549,400   

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

  —          —     694,000        694        693,306        —          —          694,000   

Shares issued in connection with reverse merger

  —          —     825,124        825        (825     —          —          —     

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

  —          —     (2,059,100     (2,059     (62,941     —          —          (65,000

Exercise of stock options

  —          —     10,062        10        3,512        —          —          3,522   

Stock based compensation (options)

  —          —     —          —          4,103,645        —          —          4,103,645   

Net loss

  —          —     —          —          —          —          (5,152,713     (5,152,713
                                                         

Balance at December 31, 2006

  —          —     8,199,779        8,200        5,591,920        —          (5,410,458     189,662   

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

  —          —     3,531,603        3,531        4,888,955        —          —          4,892,486   

Exercise of stock options

  —          —     51,111        51        (51     —          —          —     

Reclassification of warrant derivative liability

  —          —     —          —          2,233,600        —          —          2,233,600   

Stock based compensation (options)

  —          —     —          —          1,296,714        —          —          1,296,714   

Net loss

  —          —     —          —          —          —          (3,614,753     (3,614,753
                                                         

Balance at December 31, 2007

  —          —     11,782,493        11,782        14,011,138        —          (9,025,211     4,997,709   

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

  —          —     800,000        800        423,200        —          —          424,000   

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

  —          —     100,000        100        64,900        —          —          65,000   

Stock based compensation (options)

  —          —     —          —          513,357        —          —          513,357   

Net loss

  —          —     —          —          —          —          (3,059,730     (3,059,730
                                                         

Balance at December 31, 2008

  —          —     12,682,493        12,682        15,012,595        —          (12,084,941     2,940,336   

Exercise of warrants

  —          —     1,970,992        1,971        460,777        —          —          462,748   

Exercise of stock options

  —          —     214,357        215        64,267        (52,668     —          11,814   

Stock based compensation (options)

  —          —     —          —          308,302        —          —          308,302   

Net loss

  —          —     —          —          —          —          (2,626,205     (2,626,205
                                                         

Balance at December 31, 2009

  —          —     14,867,842        14,868        15,845,941        (52,668     (14,711,146     1,096,995   

Common stock issued for cash during 2010 at $1.00 per share, net of offering costs (unaudited)

  —          —     4,230,910        4,231        3,244,506        —          —          3,248,737   

Preferred stock issued for cash during 2010 at $10,000 per share, net of offering costs (unaudited)

  400        —     —          —          —          —          —          —     

Exercise of warrants in exchange for promissory note (unaudited)

  —          —     1,675,000        1,675        3,348,325        (3,350,000     —          —     

Redemption of preferred stock for repayment of promissory note (unaudited)

  (248     —     —          —          —          3,350,000        (954,750     2,395,250   

Cashless exercise of stock options (unaudited)

  —          —     275,459        275        (275     —          —          —     

Stock based compensation (options) (unaudited)

  —          —     —          —          332,244        —          —          332,244   

Interest on promissory note (unaudited)

  —          —     —          —          —          (916     —          (916

Net loss (unaudited)

  —          —     —          —          —          —          (2,434,968     (2,434,968
                                                         

Balance at June 30, 2010 (unaudited)

  152      $ —     21,049,211      $ 21,049      $ 22,770,741      $ (53,584   $ (18,100,864   $ 4,637,342   
                                                         

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

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Cash Flows

(unaudited)

 

     For the Six Months
Ended June 30,
2009
    For the Six Months
Ended June 30,
2010
    February 25,
2004 (Inception) to
June 30,2010
 

Cash flows from operating activities:

      

Net loss

   $ (1,395,683   $ (2,434,968   $ (17,146,114

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

      

Depreciation and amortization

     1,681        1,817        7,289   

Interest accrued on promissory note

     —          (916     (916

Change in fair value of warrant liability

     —          323,690        1,592,690   

Stock-based compensation

     128,979        332,244        6,554,263   

Common stock issued for services

     —          —          36,546   

Common stock issued for research and development

     —          —          1,335,760   

Changes in assets and liabilities:

      

Other assets

     (197,929     (97,689     (157,720

Accounts payable

     90,959        (143,214     82,387   

Accrued liabilities

     71,662        207,695        357,815   
                        

Net cash used in operating activities

     (1,300,331     (1,811,341     (7,338,000
                        

Cash flows from investing activities:

      

Purchase of property and equipment

     —          —          (50,900

Cash paid for sale of Optical Molecular Imaging, Inc.

     —          —          (25,000
                        

Net cash used in investing activities

     —          —          (75,900
                        

Cash flows from financing activities:

      

Exercise of stock options

     —          —          15,334   

Exercise of warrants

     462,748        —          462,748   

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

     —          4,370,994        10,777,480   

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

     —          3,779,158        3,779,158   

Proceeds from issuance of common stock

     —          —          125,247   
                        

Net cash provided by financing activities

     462,748        8,150,152        15,159,967   
                        

Increase (decrease) in cash and short-term investments

     (837,583     6,338,811        7,746,067   

Cash and short-term investments at beginning of period

     3,085,290        1,407,256        —     
                        

Cash and short-term investments at end of period

   $ 2,247,707      $ 7,746,067      $ 7,746,067   
                        

Supplemental cash flows disclosures:

      

Interest expense paid

   $ —        $ —        $ —     
                        

Income taxes paid

   $ —        $ —        $ —     
                        

Supplemental non-cash financing disclosures:

      

Exercise of warrants in exchange for promissory note

   $ —        $ 3,350,000      $ 3,350,000   
                        

Redemption of preferred stock for repayment of promissory note

   $ —        $ 3,350,000      $ 3,350,000   
                        

Deemed dividend on redemption of preferred stock

   $ —        $ 954,750      $ 954,750   
                        

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

 

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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, 2010, the Company had an accumulated deficit of $18,100,864. 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, 2010 and for the three and six month periods ended June 30, 2009 and 2010 and for the period February 25, 2004 (inception) to June 30, 2010 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, 2009 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, 2009. 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

Cash and Short-Term Investments - 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, 2009 and June 30, 2010, the Company had $1,075,903 and $532,546, 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.

 

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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

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 cost resulting for all share-based payment transactions be recognized in the Company’s condensed financial statements.

Fair value was estimated at the date of grant using the Black-Scholes pricing model, with the following weighted average assumptions:

 

     Six Months
Ended June 30,
2009
  Six Months
Ended June 30,
2010

Risk-free interest rate

   1.38%   1.44%

Expected dividend yield

   None   None

Expected life

   3.78 years   3.56 years

Expected volatility

   118.0%   102.0%

The weighted-average grant-date fair value of options granted during the six months ended June 30, 2009 and 2010 was $0.13 and $0.70, respectively.

The risk-free interest rate used in the Black-Scholes valuation method 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 calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option.

When options are exercised, our policy is to issue previously unissued shares of common stock to satisfy share option exercises. As of June 30, 2010, the Company had 53.0 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. In the initial year of adoption, ASC 740 provided that the cumulative effect of this change in accounting principle, if any, be recorded as an adjustment to opening retained earnings. The Company adopted

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

the provisions of ASC 740 effective January 1, 2007. The adoption of the provisions of ASC 740 had no effect on the Company’s financial statements. 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, 2010, 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 10,701,334 shares and 39,973,169 shares at June 30, 2009 and 2010, respectively.

Recently Issued Accounting Standards - In June 2009, the FASB, issued the FASB Accounting Standards Codification. All existing accounting standard documents were superceded by the Codification and the Codification became the source of all authoritative generally accepted accounting principles, or GAAP, except for rules and interpretive releases from the SEC, which are still sources of authoritative GAAP for SEC registrants. All guidance contained in the Codification carries an equal level of authority. All other non-grandfathered, non-SEC accounting literature not included in the Codification has become nonauthoritative. The Codification is effective for interim or annual periods ending after September 15, 2009, and the Company is using the new guidelines and numbering systems prescribed by the Codification when referring to GAAP in these condensed financial statements for the period ended June 30, 2010. As the Codification was not intended to change or alter existing GAAP, it did not have any impact on the Company’s financial position or results of operations.

On January 1, 2009, the Company adopted ASC Topic 805, “Business Combinations,” to require that assets and liabilities assumed in a business combination that arise from contingencies be recognized at fair value if fair value can be reasonably estimated. The adoption of this provision did not have a material impact on the Company’s financial statements.

3. Property and Equipment

As of December 31, 2009 and June 30, 2010, $10,900 of equipment had been placed into service. Depreciation expense was $841 and $909 for the three months ended June 30, 2009 and June 30, 2010, respectively. Depreciation expense was $1,681 and $1,817 for the six months ended June 30, 2009 and June 30, 2010, respectively. Depreciation expense was $7,289 for the period from February 25, 2004 (date of inception) to June 30, 2010.

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

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).

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

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

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, 2010.

Legal Costs

As of December 31, 2009 and June 30, 2010, the Company was indebted to TroyGould PC, a shareholder, for legal services of $81,708 and $87,624, respectively, which are included in accrued expenses and accounts payable on the accompanying balance sheets. Legal services provided by the shareholder for the period from February 25, 2004 (date of inception) to June 30, 2010 were approximately $1,297,000.

5. Commitments and Contingencies:

Operating Lease

Effective March 1, 2010, the Company renewed its lease through March 31, 2011 at a monthly rental rate of $2,779. In May 2010, the Company amended its lease at a monthly rental rate of $2,320 for three months and at a monthly rental rate of $2,894 for the remaining months through June 30, 2011.

Employment Agreement with Dr. Manish Singh

On March 4, 2010, the Company entered into an Employment Agreement, effective as of February 18, 2010, 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, 2010. 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 may be extended for an additional one-year period upon the mutual agreement of the Company and Dr. Singh.

The Employment Agreement provides for an annual base salary of $300,000. 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 $50,000 upon completion of the one-year term.

The Employment Agreement dated as of February 18, 2009 between the Company and Dr. Singh (the “Prior Agreement”) provides that Dr. Singh is entitled to receive cash milestone bonuses, not to exceed an aggregate amount of $200,000, of (1) $50,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at least $2,500,000 of net proceeds (after commissions) during the term of the Prior Agreement, (2) $100,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at least $5,000,000 of net proceeds (after commissions) during the term of the Prior Agreement, or (3) $200,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at least $10,000,000 of net proceeds (after commissions) during the term of the Prior Agreement. The Prior Agreement also provides that an option granted to Dr. Singh to purchase 200,000 shares of the Company’s common stock will vest if the Company’s working capital is at least $8,000,000 at the end of the term of the Prior Agreement.

The Employment Agreement amends the Prior Agreement to provide that the milestones described in the preceding paragraph may be satisfied by including the net proceeds received by the Company at any time prior to August 17, 2010 from (1) a financing by the Socius Capital Group or (2) any private placement financing that is covered by a signed term sheet that was entered into by the Company prior to February 18, 2010 or from another source at the same or better terms as contemplated by such signed term sheet. Also, for

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

purposes of determining whether the $8,000,000 working capital milestone in the preceding paragraph has been satisfied, the Employment Agreement provides that working capital will be calculated as of the date of the Company’s receipt of the proceeds that are being included to satisfy the milestone. This funding milestone was fully satisfied as of June 30, 2010.

Pursuant to the Employment Agreement, the Company granted to Dr. Singh a 7-year incentive stock option under the Company’s 2006 Equity Incentive Plan (the “Plan”), or a new qualified option plan, to purchase 600,000 shares of the Company’s common stock at an exercise price equal to $0.90 per share, which was the closing market price of the common stock on the option grant date. The option grant is subject to the approval by the Company’s stockholders of an increase in the authorized number of shares under the Plan and an increase in the number of shares that may be granted to any individual during a 12-month period. The option may be exercised during the period that Dr. Singh provides services to the Company and for 24 months after termination for any reason except termination for cause by the Company, provided that such exercise is within the 7-year term of the option.

The option granted to Dr. Singh under the Employment Agreement will vest (1) as to 360,000 shares, in 12 equal monthly installments of 30,000 shares each over the 12-month period from and immediately following the grant date, (2) as to 30,000 shares, if the Company achieves during the term of the Employment Agreement a volume-weighted average trading price for its common stock of greater than $1.60 for any consecutive 15-day trading period during the term of the agreement on average daily trading volume of at least 20,000 shares, (3) as to 90,000 shares, if the Company achieves during the term of the Employment Agreement a volume-weighted average trading price for its common stock of greater than $2.00 for any consecutive 15-day trading period during the term of the agreement on average daily trading volume of at least 20,000 shares, (4) as to 30,000 shares, upon treating the first patient in a Phase II clinical trial, and (5) as to 90,000 shares, if during the term of the Employment Agreement the Company completes a financing, a strategic alliance or a licensing agreement with upfront licensing payments to the Company or a merger or acquisition that generates at least $5,000,000 of net proceeds (after commissions) for the Company beyond the $10,000,000 achieved by August 17, 2010, with any financing proceeds received by the Company during the first 6 months of the Employment Agreement that are used to satisfy milestones under the Prior Agreement not being included as proceeds to satisfy the milestones described in this paragraph.

In the event that the Company terminates the Employment Agreement without cause or does not extend the Employment Agreement upon its expiration for an additional one-year term, then (1) the Company upon such termination will be required to make a lump sum payment to Dr. Singh equal to 6 months of his base annual salary, (2) 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 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.

Employment Agreement with Dr. James Bender

On March 4, 2010, the Company entered into an Employment Agreement, effective as of February 1, 2010, with Dr. James Bender pursuant to which Dr. Bender will serve on a full-time basis as the Company’s Vice President – Product Development and Manufacturing for a one-year term commencing February 18, 2010. Prior to February 1, 2010, Dr. Bender had been serving on a part-time basis as the Company’s Vice President – Clinical Development pursuant to an Agreement dated as of September 1, 2009, as amended on September 14, 2009 (the “Prior Agreement”).

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

The Employment Agreement provides for an annual base salary of $170,000. Pursuant to the Employment Agreement, the Company granted to Dr. Bender a 7-year incentive stock option under the Company’s Plan to purchase 150,000 shares of the Company’s common stock at an exercise price equal to $0.90 per share, which was the closing market price of the common stock on the option grant date. The option grant is subject to the approval by the Company’s stockholders of an increase in the authorized number of shares under the Plan.

The option granted to Dr. Bender under the Employment Agreement will vest at the rate of 6,250 shares per month over the term of the Employment Agreement as to 75,000 shares. The option will vest as to the remaining 75,000 shares upon the Company’s attainment of the following development milestones, and Dr. Bender will also be entitled to receive the following cash bonuses upon attainment of these milestones: (1) completion by September 30, 2010 of the technology transfer to a contract manufacturer for the Company’s ICT-107 product will result in a $10,000 cash bonus and the vesting of 25,000 option shares; (2) completion by December 31, 2010 of FDA acceptance of a Phase II clinical trial plan for ICT-107 will result in a $10,000 cash bonus and the vesting of 25,000 option shares; and (3) completion by December 31, 2010 of the enrollment of the first patient into the Phase II clinical trial for ICT-107 will result in a $10,000 bonus and the vesting of 25,000 option shares.

The Employment Agreement provides that all of the rights and obligations of the Company and Dr. Bender under the Prior Agreement (including Dr. Bender’s right to work for another organization) terminated as of January 31, 2010, except that Dr. Bender’s right under the Prior Agreement to receive cash bonuses and the vesting of options upon the Company’s achievement of specified development milestones will remain in effect.

The Employment Agreement provides that, except as described in the following sentence, if Dr. Bender’s employment terminates prior to the expiration of the one-year term, Dr. Bender will not have any right to receive further compensation under the Employment Agreement other than compensation that was accrued as of his employment termination date. If the Company terminates Dr. Bender’s employment without “cause” as defined in the Employment Agreement, 50% of any unvested options held by Dr. Bender as of the employment termination date will vest, and he will also have the right to receive any compensation that was accrued as of the employment termination date.

Agreement with Dr. John Yu

Effective March 1, 2010, the Company entered into an Agreement with Dr. Yu under which he agreed to serve on a part-time basis as the Company’s Chief Scientific Officer for a one-year term. The Agreement provides for an annual base salary of $70,000 and for cash bonuses of $15,000 each if prior to December 31, 2010 (i) the FDA has accepted a Phase II clinical trial plan for ICT-107 and (ii) a Physicians Investigator IND submission for one of the Company’s specified product candidates has been accepted by the FDA.

Pursuant to the Agreement, the Company granted to Dr. Yu a seven-year nonqualified stock option under the Company’s 2006 Equity Incentive Plan to purchase 125,000 shares of the Company’s common stock at an exercise price equal to $0.90 per share, which was the closing market price of the common stock on the option grant date. The option grant is subject to the approval by the Company’s stockholders of an increase in the authorized number of shares under the Plan. The option may be exercised during the period that Dr. Yu provides services to the Company and for 24 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.

The option granted to Dr. Yu under the Agreement will vest (i) as to 75,000 shares in four equal quarterly installments following the date of grant and (ii) as to the remaining 50,000 shares, 25,000 shares shall each vest upon timely satisfying the two milestones described above for the payment of cash bonuses to Dr. Yu.

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

Agreement with C. Kirk Peacock

Effective as of October 30, 2008, the Company renewed, under similar terms, the consulting agreement with C. Kirk Peacock under which Mr. Peacock agreed to serve as Chief Financial Officer for a one-year term, subject to earlier termination by the Company or Mr. Peacock on 30 days notice. Mr. Peacock will provide his services to the Company on a part-time basis. Under the agreement with Mr. Peacock, Mr. Peacock will be paid $8,000 per month and was granted an option to purchase 50,000 shares of common stock, which will vest monthly over a one-year period, and exercisable within its term during the period Mr. Peacock provides services to the Company and for 24 months after the grantee ceases providing services for any reason other than termination by the Company for cause. Effective May 2009, the consulting agreement dated October 30, 2008 with C. Kirk Peacock was amended to reduce the amount to be paid to $6,000 per month. No other terms of the agreement were changed.

Effective October 30, 2009, the Company renewed the Consulting Agreement with Mr. Peacock under which he will continue to serve on a part-time basis as the Company’s Chief Financial Officer for a one-year term. Under this agreement, Mr. Peacock receives a monthly salary of $6,000 and was granted a seven-year non-qualified option to purchase 56,000 shares of the Company’s common stock at a price of $0.80 per share, with 50,000 shares covered by such option to vest in equal monthly installments over the one-year term of the agreement and with 50% of any those then unvested option shares to become vested if Mr. Peacock’s services are terminated by the Company without cause.

Provided that by October 29, 2010, all of the Company’s internal documentation and internal testing necessary to subsequently complete the Company’s Sarbanes-Oxley Section 404 audit has been finished, the Company will pay Mr. Peacock an additional $6,000 and a further 6,000 of his option shares will become vested. All vested shares covered by the option will be exercisable for 24 months after termination of Mr. Peacock’s services for any reason other than termination by the Company for cause.

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)

In May 2010, the Company raised $2,686,026 (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)

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

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

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, included in accrued liabilities in the accompanying balance sheet.

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.

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 non-convertible, redeemable Series A preferred stock to Socius Capital Group, LLC pursuant to the terms of a Preferred Stock Purchase Agreement between the Company and Socius dated as of December 3, 2009. The aggregate purchase price for the Series A preferred stock was $4,000,000 (less $220,842 in commitment fees and offering expenses). Under the terms of the Purchase Agreement, Socius remains obligated, from time to time until December 3, 2012, to purchase up to an additional 600 shares of Series A 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 Purchase Agreement.

 

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Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

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 Purchase Agreement. In consideration of Socius agreeing to grant the Company certain waivers under the Purchase 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 Purchase Agreement. The Company immediately thereafter redeemed approximately 248 of the preferred shares by offsetting the $3,350,000 redemption price for these shares against the $3,350,000 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, 2010, the Company has reserved 3,400,000 shares of common stock for issuance under the Plan and options to purchase 2,349,072 common shares have been granted under the Plan that are currently outstanding. The Company has granted options to purchase 1,327,500 common shares that are contingent on approval by the Company’s stockholders of an increase in the total number shares of common stock reserved for issuance under the Plan.

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.

 

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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

The following table summarizes stock option activity for the Company during the six months ended June 30, 2010:

 

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

Outstanding December 31, 2009

   10,555,927      $ 0.92      

Granted

   1,057,500      $ 0.91      

Exercised

   (331,181   $ 0.25      

Forfeited or expired

   (272,250   $ 1.08      
                        

Outstanding June 30, 2010

   11,009,996      $ 0.94    6.01    $ 1,681,453
                        

Vested or expected to vest at June 30, 2010

   9,759,881      $ 0.96    6.32    $ 1,279,704
                        

As of June 30, 2010, the total unrecognized compensation cost related to unvested stock options amounted to $448,509, which will be amortized over the weighted-average remaining requisite service period of less than one year.

During the quarter ended June 30, 2010, 331,181 options were exercised on a cashless basis, as allowable under the Plan. At the dates of exercise, these options had an aggregate intrinsic value of $415,996, resulting in a net share issuance upon exercise of 275,459 shares.

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, 2010, 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, 2010, 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 vested 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 Purchase 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. 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 Purchase Agreement. The Company immediately thereafter redeemed approximately 248 of the preferred shares by offsetting the $3,350,000 redemption price for these shares against the $3,350,000 owed to the Company under the note. On June 30, 2010, warrants to purchase 1,675,000 shares of the Company’s common stock at $2.00 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 January 2009, the Company delivered notice to warrant holders in connection with the reduction from $2.50 to $0.25 per share of the exercise price of warrants to purchase a total of 6,112,583 shares of the Company’s common stock and in connection with the extension of the expiration date of warrants to purchase a total of 6,412,583 shares of the Company’s common stock from earlier dates in 2009 to June 30, 2009. The Company valued the warrant modification at $611,258, using the Black-Scholes pricing model and the

 

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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

following assumptions: contractual term of 0.45 years, an average risk-free interest rate of 0.29% a dividend yield of 0% and volatility of 118%. In the footnotes to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the Company disclosed that it anticipated taking a non-cash charge of approximately $500,000 in the first quarter of 2009. In the first quarter 2009, the Company determined that the warrant modification should be treated as a dividend in-kind and not a non-cash charge, and since the Company was in a deficit position at the time of the modification, no dividend was recorded.

On June 30, 2009, the Company issued 1,970,992 shares of its common stock to 58 purchasers upon their exercise of warrants. The exercise price of 1,670,992 shares was $0.25 per share, and the exercise price of 300,000 shares was $0.15 per share. The Company received an aggregate purchase price of $462,748, and the Company did not pay any underwriting discounts or commissions in the transaction.

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.

Under ASC 815 “Derivatives and Hedging”, the March 2010 warrants do not qualify for equity treatment due to the potential variability of their exercise price, and therefore are recognized as a liability. The warrant liability will be adjusted to fair value each reporting period, and any changes in value will be recognized in the statement of operations. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (1) dividend yield of 0%; (2) expected volatility of 102%, (3) risk-free interest rate of 1.00%, and (4) contractual life of 26 months. For the six months ended June 30, 2010, the Company recorded an other expense charge for the change in fair value of warrant liability of $125,280, with a carrying value of $382,800 at June 30, 2010.

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 would be decreased in the event that future common stock issuances are made at a price less than $1.00.

Under ASC 815 “Derivatives and Hedging”, the May 2010 warrants do not qualify for equity treatment due to the potential variability of their exercise price, and therefore are recognized as a liability. The warrant liability will be adjusted to fair value each reporting period, and any changes in value will be recognized in the statement of operations. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (1) dividend yield of 0%; (2) expected volatility of 102%, (3) risk-free interest rate of 1.375%, and (4) contractual life of 36 months. For the six months ended June 30, 2010, the Company recorded an other income charge for the change in fair value of warrant liability of $87,182, with a carrying value of $747,273 at June 30, 2010.

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.

 

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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements—(Continued)

 

Under ASC 815 “Derivatives and Hedging”, the May 2010 Preferred Stock warrants do not qualify for equity treatment, and are recognized as a liability. The warrant liability will be adjusted to fair value each reporting period, and any changes in value will be recognized in the statement of operations. The assumptions used in the Black Scholes model for determining the initial fair value of the warrants were as follows: (1) dividend yield of 0%; (2) expected volatility of 102%, (3) risk-free interest rate of 2.50%, and (4) contractual life of 60 months. For the six months ended June 30, 2010, the Company recorded an other income charge for the change in fair value of warrant liability of $1,645,750, with a carrying value of $1,669,500 at June 30, 2010.

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. For the six months ended June 30, 2010, the Company recorded interest income of $916.

7. Comprehensive Loss

For the six months ended June 30, 2009 and 2010, 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 August 2010, the Company entered into a letter of intent with Averion International Corporation, a clinical research contract organization (“Averion”), pursuant to which it is contemplated Averion will provide us with services in connection with our planned Phase II clinical study for our dendritic cell-based cancer vaccine product candidate for the treatment of glioblastoma at an estimated total cost for such services during the course of the trial of approximately $3.5 million. The letter of intent is subject to the parties signing a definitive agreement covering the clinical trial services and provides for the payment by us for the services it provides during the period pending execution of the definitive agreement.

In August 2010, the Company amended its lease at a monthly rental rate of $3,140 for September 2010 and at a monthly rental rate of $3,493 for the remaining months through June 30, 2011.

 

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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 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, 2009. 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, 2010, we had an accumulated deficit of $18,100,864. 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.

 

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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, 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, 2010. 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, 2009 and 2010, we recorded an expense of $492,459 and $688,956, 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, 2009 and 2010

Revenues

We had no revenues during the three months ended June 30, 2009 and 2010. We do not expect to generate any operating revenues during 2010.

 

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Expenses

General and administrative expenses for the three months ended June 30, 2009 and 2010 were $414,066 and $640,441, respectively. The increase in general and administrative expenses is primarily due to increased personnel costs and investor relations expenditures.

Research and development expenses for the three months ended June 30, 2009 and 2010 were $334,615 and $509,261, respectively. The increase in research and development expenses is primarily due to increased costs associated with the preparation of our planned Phase II clinical study for our dendritic cell based cancer vaccine product candidate for the treatment of glioblastoma during the second half of 2010.

We had $52,455 of non-cash expense for the three months ended June 30, 2009, consisting of $51,614 of stock based compensation and $841 of depreciation expense, compared to $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.

Loss

We incurred a net loss of $796,100 and $1,666,506 for the three months ended June 30, 2009 and 2010, respectively. We incurred a net loss attributable to our common stock of $796,100 and $2,621,256 for the three months ended June 30, 2009 and 2010, respectively.

Six months ended June 30, 2009 and 2010

Revenues

We had no revenues during the six months ended June 30, 2009 and 2010. We do not expect to generate any operating revenues during 2010.

Expenses

General and administrative expenses for the six months ended June 30, 2009 and 2010 were $793,814 and $1,091,638, respectively. The increase in general and administrative expenses is primarily due to increased personnel costs and investor relations expenditures.

Research and development expenses for the six months ended June 30, 2009 and 2010 were $492,459 and $688,956, respectively. The increase in research and development expenses is primarily due to increased costs associated with the preparation of our planned Phase II clinical study for our dendritic cell based cancer vaccine product candidate for the treatment of glioblastoma during the second half of 2010.

We had $130,660 of non-cash expense for the six months ended June 30, 2009, consisting of $128,979 of stock based compensation and $1,681 of depreciation expense, compared to $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.

Loss

We incurred a net loss of $1,395,683 and $2,434,968 for the six months ended June 30, 2009 and 2010, respectively. We incurred a net loss attributable to our common stock of $1,395,683 and $3,389,718 for the six months ended June 30, 2009 and 2010, respectively.

 

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Liquidity and Capital Resources

As of June 30, 2010, we had working capital of $7,357,957, compared to working capital of $1,053,438 as of December 31, 2009.

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, 2010, 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 $1,300,331 of cash in our operations for the six months ended June 30, 2009, compared to $1,811,341 for the six months ended June 30, 2010, as the non-cash portion of our net loss for 2009 was $130,660 and the non-cash portion of our net loss for the 2010 period was $657,751.

We used no cash from our investing activities for the six months ended June 30, 2009 and June 30, 2010.

We received $462,748 from the exercise of warrants during the six months ended June 30, 2009 and $8,150,152 from our private placements of our securities that we completed during the six months ended June 30, 2010.

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.

 

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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, 2010, (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.

 

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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

In May 2010, we granted to Dr. Zvi Ram a five -year option to purchase 10,000 shares of our common stock at $1.20 per share under our 2006 Equity Incentive Plan as consideration for his services on our Scientific Advisory Board. In June 2010, we granted to Dr. Rahul Singhvi a seven-year option to purchase 12,500 shares of our common stock at $1.14 per share under our 2006 Equity Incentive Plan as consideration for his services as a director. In June 2010, we granted to Dr. John Boockvar a five-year option to purchase 10,000 shares of our common stock at $1.10 per share under our 2006 Equity Incentive Plan as consideration for his services on our Scientific Advisory Board. All of these securities were issued by us in reliance upon an exemption from registration under Section 4(2) of the Securities Act.

 

Item 3. Defaults Upon Senior Securities

None.

 

Item 4. Removed and Reserved

 

Item 5. Other Information

In August 2010, the Company entered into a letter of intent with Averion International Corporation, a clinical research contract organization (“Averion”), pursuant to which it is contemplated Averion will provide us with services in connection with our planned Phase II clinical study for our dendritic cell based cancer vaccine product candidate for the treatment of glioblastoma at an estimated total cost for such services during the course of the trial of approximately $3.5 million. The letter of intent is subject to the parties signing a definitive agreement covering the clinical trial services and provides for the payment by us for the services it provides during the period pending execution of the definitive agreement.

 

Item 6. Exhibits

 

Exhibit
No.

  

Description

3.1

   Amended Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock dated May 3, 2010. (2)

4.1

   Form of Warrant issued to participants in the March 2010 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (2)

4.2

   Warrant dated May 2, 2010 for 1,350,000 shares issued by ImmunoCellular Therapeutics, Ltd. to Socius CG II, Ltd.. (2)

4.3

   Form of Warrant issued to participants in the May 2010 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (3)

 

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Exhibit
No.

  

Description

10.1

   Agreement dated as of March 4, 2010 between Dr. Elma Hawkins and ImmunoCellular Therapeutics, Ltd.*(2)

10.2

   Third Amendment dated March 26, 2010 to Exclusive License Agreement dated as of November 1, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (2)

10.3

   Form of Registration Rights Agreement dated as of March 29, 2010 between participants in the March 2010 private placement and ImmunoCellular Therapeutics, Ltd. (2)

10.4

   Office Lease dated April 1, 2010 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd. (2)

10.5

   Modification Agreement dated May 2, 2010 among Socius CG II, Ltd., Socius Life Sciences Capital Group, LLC (2)

10.6

   Office Lease dated May 7, 2010 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd. (3)

10.7

   Securities Purchase Agreement dated May 12, 2010 between participants in the May 2010 private placement and ImmunoCellular Therapeutics, Ltd. (3)

10.8

   Form of Registration Rights Agreement between participants in the May 2010 private placement and ImmunoCellular Therapeutics, Ltd. (3)

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
(1) Previously filed by us on March 31, 2010 as an exhibit to our Annual Report on Form 10-K and incorporated herein by reference.
(2) Previously filed by us on May 12, 2010 as an exhibit to our Registration Statement on Form S-1 and incorporated herein by reference.
(3) Previously filed by us on May 18, 2010 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

 

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

Dated: August 16, 2010   IMMUNOCELLULAR THERAPEUTICS, LTD.
  By:  

/S/    MANISH SINGH        

  Name:   Manish Singh, Ph.D.
  Title:  

President and Chief Executive Officer

(Principal Executive Officer)

 

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EXHIBIT INDEX

IMMUNOCELLULAR THERAPEUTICS, LTD.

FORM 10-Q FOR QUARTER ENDED JUNE 30, 2010

 

Exhibit
No.

  

Description

  3.1

   Amended Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock dated May 3, 2010. (2)

  4.1

   Form of Warrant issued to participants in the March 2010 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (2)

  4.2

   Warrant dated May 2, 2010 for 1,350,000 shares issued by ImmunoCellular Therapeutics, Ltd. to Socius CG II, Ltd. (2)

  4.3

   Form of Warrant issued to participants in the May 2010 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (3)

10.1

   Agreement dated as of March 4, 2010 between Dr. Elma Hawkins and ImmunoCellular Therapeutics, Ltd.*(2)

10.2

   Third Amendment dated March 26, 2010 to Exclusive License Agreement dated as of November 1, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (2)

10.3

   Form of Registration Rights Agreement dated as of March 29, 2010 between participants in the March 2010 private placement and ImmunoCellular Therapeutics, Ltd. (2)

10.4

   Office Lease dated April 1, 2010 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd. (2)

10.5

   Modification Agreement dated May 2, 2010 among Socius CG II, Ltd., Socius Life Sciences Capital Group, LLC (2)

10.6

   Office Lease dated May 7, 2010 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd. (3)

10.7

   Securities Purchase Agreement dated May 12, 2010 between participants in the May 2010 private placement and ImmunoCellular Therapeutics, Ltd. (3)

10.8

   Form of Registration Rights Agreement between participants in the May 2010 private placement and ImmunoCellular Therapeutics, Ltd. (3)

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.

 

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Exhibit
No.

  

Description

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
(1) Previously filed by us on March 31, 2010 as an exhibit to our Annual Report on Form 10-K and incorporated herein by reference.
(2) Previously filed by us on May 12, 2010 as an exhibit to our Registration Statement on Form S-1 and incorporated herein by reference.
(3) Previously filed by us on May 18, 2010 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

.

 

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