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 September 30, 2009
¨ | 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, 3 rd Floor
Woodland Hills, California 91367
(Address of principal executive offices)
(818) 992-2907
(Registrants 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 14,697,235 shares of its common stock outstanding as of November 3, 2009.
ImmunoCellular Therapeutics, Ltd.
FORM 10-Q
Table of Contents
Page | ||||||
1 | ||||||
Item 1. |
Financial Statements | 1 | ||||
Condensed Balance Sheets as of December 31, 2008 and September 30, 2009 (unaudited) |
1 | |||||
2 | ||||||
3 | ||||||
4 | ||||||
5 | ||||||
Item 2. |
Managements Discussion and Analysis of Financial Condition and Results of Operations | 12 | ||||
Item 3. |
Quantitative and Qualitative Disclosures About Market Risk | 16 | ||||
Item 4. |
Controls and Procedures | 16 | ||||
18 | ||||||
Item 1. |
Legal Proceedings | 18 | ||||
Item 1A. |
Risk Factors | 18 | ||||
Item 2. |
Unregistered Sales of Equity Securities and Use of Proceeds | 18 | ||||
Item 3. |
Defaults Upon Senior Securities | 18 | ||||
Item 4. |
Submission of Matters to a Vote of Security Holders | 18 | ||||
Item 5. |
Other Information | 19 | ||||
Item 6. |
Exhibits | 19 | ||||
20 | ||||||
21 |
i
FINANCIAL INFORMATION
Item 1. | Financial Statements |
ImmunoCellular Therapeutics, Ltd.
(A Development Stage Company)
Condensed Balance Sheets
December 31,
2008 |
September 30,
2009 |
|||||||
(unaudited) | ||||||||
Assets |
||||||||
Current assets: |
||||||||
Cash and short-term investments |
$ | 3,085,290 | $ | 1,669,794 | ||||
Other receivables |
| 300,000 | ||||||
Other assets |
27,642 | 51,163 | ||||||
Total current assets |
3,112,932 | 2,020,957 | ||||||
Fixed assets, net |
8,012 | 5,490 | ||||||
Other assets |
7,438 | 7,687 | ||||||
Total assets |
$ | 3,128,382 | $ | 2,034,134 | ||||
Liability and Shareholders Equity (Deficit) |
||||||||
Current liabilities: |
||||||||
Accounts payable |
$ | 132,949 | $ | 71,826 | ||||
Accrued liabilities |
55,097 | 133,320 | ||||||
Total current liabilities |
188,046 | 205,146 | ||||||
Commitments and contingencies |
| | ||||||
Shareholders equity (deficit): |
||||||||
Common stock, $0.0001 par value; 74,000,000 shares authorized; 12,682,493 shares and 14,672,235 shares issued and outstanding as of December 31, 2008 and September 30, 2009, respectively |
12,682 | 14,672 | ||||||
Preferred stock $0.0001 par value, 1,000,000 shares authorized; 0 shares outstanding as of December 31, 2008 and September 30, 2009 |
| | ||||||
Additional paid in capital |
15,012,595 | 15,671,864 | ||||||
Deficit accumulated during the development stage |
(12,084,941 | ) | (13,857,548 | ) | ||||
Total shareholders equity |
2,940,336 | 1,828,988 | ||||||
Total liabilities and shareholders equity |
$ | 3,128,382 | $ | 2,034,134 | ||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
1
ImmunoCellular Therapeutics, Ltd.
(A Development Stage Company)
Condensed Statements of Operations
(unaudited)
For the Three
Months Ended September 30, 2008 |
For the Three
Months Ended September 30, 2009 |
For the Nine
Months Ended September 30, 2008 |
For the Nine
Months Ended September 30, 2009 |
February 25,
2004 (Inception) to September 30, 2009 |
||||||||||||||||
Revenues |
$ | | $ | 300,000 | $ | | $ | 300,000 | $ | 300,000 | ||||||||||
Expenses: |
||||||||||||||||||||
Research and development |
130,065 | 192,139 | 1,068,159 | 684,598 | 2,989,709 | |||||||||||||||
Merger costs |
| | | | 73,977 | |||||||||||||||
Stock based compensation |
104,086 | 64,470 | 394,443 | 193,449 | 6,107,165 | |||||||||||||||
General and administrative |
355,293 | 421,890 | 1,013,337 | 1,215,704 | 4,047,480 | |||||||||||||||
Total expenses |
589,444 | 678,499 | 2,475,939 | 2,093,751 | 13,218,331 | |||||||||||||||
Loss before other income and income taxes |
(589,444 | ) | (378,499 | ) | (2,475,939 | ) | (1,793,751 | ) | (12,918,331 | ) | ||||||||||
Interest income |
25,293 | 1,575 | 112,687 | 21,144 | 329,783 | |||||||||||||||
Change in fair value of warrant liability |
| | | | (1,269,000 | ) | ||||||||||||||
Loss before income taxes |
(564,151 | ) | (376,924 | ) | (2,363,252 | ) | (1,772,607 | ) | (13,857,548 | ) | ||||||||||
Income taxes |
| | | | | |||||||||||||||
Net loss |
$ | (564,151 | ) | $ | (376,924 | ) | $ | (2,363,252 | ) | $ | (1,772,607 | ) | $ | (13,857,548 | ) | |||||
Weighted average number of shares: |
||||||||||||||||||||
Basic and diluted |
12,682,493 | 14,657,400 | 12,492,383 | 13,350,462 | 9,729,387 | |||||||||||||||
Loss per share: |
||||||||||||||||||||
Basic and diluted |
$ | (0.04 | ) | $ | (0.03 | ) | $ | (0.19 | ) | $ | (0.13 | ) | $ | (1.42 | ) | |||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
2
ImmunoCellular Therapeutics, Ltd.
(A Development Stage Company)
Condensed Statements of Shareholders Equity (Deficit)
(unaudited)
Common Stock |
Additional
Paid In Capital |
Deficit
Accumulated During the Development Stage |
Total | ||||||||||||||||
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 (unaudited) |
1,970,992 | 1,971 | 460,777 | | 462,748 | ||||||||||||||
Exercise of stock options (unaudited) |
18,750 | 19 | 5,043 | | 5,062 | ||||||||||||||
Stock based compensation (options) (unaudited) |
| | 193,449 | | 193,449 | ||||||||||||||
Net loss (unaudited) |
| | | (1,772,607 | ) | (1,772,607 | ) | ||||||||||||
Balance at September 30, 2009 (unaudited) |
14,672,235 | $ | 14,672 | $ | 15,671,864 | $ | (13,857,548 | ) | $ | 1,828,988 | |||||||||
The accompanying notes are an integral part of these condensed financial statements.
3
ImmunoCellular Therapeutics, Ltd.
(A Development Stage Company)
Condensed Statements of Cash Flows
(unaudited)
For the Nine
Months Ended September 30, 2008 |
For the Nine
Months Ended September 30, 2009 |
February 25,
2004 (Inception) to September 30, 2009 |
||||||||||
Cash flows from operating activities : |
||||||||||||
Net loss |
$ | (2,363,252 | ) | $ | (1,772,607 | ) | $ | (13,857,548 | ) | |||
Adjustments to reconcile net loss to net cash used in operating activities: |
||||||||||||
Depreciation and amortization |
1,300 | 2,522 | 4,597 | |||||||||
Change in fair value of warrant liability |
| | 1,269,000 | |||||||||
Stock-based compensation |
394,443 | 193,449 | 6,107,165 | |||||||||
Common stock issued for services |
| | 36,546 | |||||||||
Common stock issued for research and development |
489,000 | | 1,335,760 | |||||||||
Changes in assets and liabilities: |
||||||||||||
Other assets |
(48,772 | ) | (323,770 | ) | (358,850 | ) | ||||||
Accounts payable |
(4,702 | ) | (61,123 | ) | 71,826 | |||||||
Accrued liabilities |
9,339 | 78,223 | 133,320 | |||||||||
Net cash used in operating activities |
(1,522,644 | ) | (1,883,306 | ) | (5,258,184 | ) | ||||||
Cash flows from investing activities: |
||||||||||||
Purchase of property and equipment |
(8,511 | ) | | (50,087 | ) | |||||||
Cash paid for sale of Optical Molecular Imaging, Inc. |
| | (25,000 | ) | ||||||||
Net cash used in investing activities |
(8,511 | ) | | (75,087 | ) | |||||||
Cash flows from financing activities: |
| |||||||||||
Exercise of stock options |
| 5,062 | 8,584 | |||||||||
Exercise of warrants |
| 462,748 | 462,748 | |||||||||
Proceeds from issuance of common stock under private placements |
| | 6,406,486 | |||||||||
Proceeds from issuance of common stock |
| | 125,247 | |||||||||
Net cash provided by financing activities |
| 467,810 | 7,003,065 | |||||||||
Increase (decrease) in cash and short-term investments |
(1,531,155 | ) | (1,415,496 | ) | 1,669,794 | |||||||
Cash and short-term investments at beginning of period |
5,040,824 | 3,085,290 | | |||||||||
Cash and short-term investments at end of period |
$ | 3,509,669 | $ | 1,669,794 | $ | 1,669,794 | ||||||
Supplemental cash flows disclosures: |
||||||||||||
Interest expense paid |
$ | | $ | | $ | | ||||||
Income taxes paid |
$ | | $ | | $ | | ||||||
The accompanying notes are an integral part of these unaudited condensed financial statements.
4
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 our companys inception on February 25, 2004, we have been primarily engaged in the acquisition of certain intellectual property, together with development of our product candidates and 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 September 30, 2009, we had an accumulated deficit of $13,857,548. We expect to incur significant research, development and administrative expenses before any of our products can be launched and recurring revenues generated.
Interim Results
The accompanying condensed financial statements at September 30, 2009 and for the three and nine month periods ended September 30, 2008 and 2009 are unaudited, but include all adjustments, consisting of normal recurring entries, which the Companys 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, 2008 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 2009 financial statement presentation. The financial statements should be read in conjunction with the Companys audited financial statements in its Form 10-K for the year ended December 31, 2008. The Companys 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, 2008 and September 30, 2009, the Company had $3,000,000 and $1,525,002, 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 Statement of Financial Accounting Standards (SFAS) No. 115, as codified in ASC 320, Investments in Debt Securities, are measured at cost since the Company has the intent and ability to hold these securities to maturity.
Other Receivables As of September 30, 2009, the Company had a $300,000 receivable in connection with a research and license option agreement regarding its ICT-69 antibody with Roche Group. Under the terms of the agreement, the Company has licensed to Roche the rights to investigate the potential of ICT-69 in the diagnosis and treatment of multiple myeloma and ovarian cancer for an upfront payment. Upon completion of the evaluation period, Roche has the right to acquire for a specified option fee for the commercial license of ICT-69 from the Company. The commercial license could also result in certain development and royalty payments in the event that developmental milestones are met.
5
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. 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.
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 In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS 123R, as codified in ASC 718, Share Based Payment: An Amendment of FASB Statements No. 123 and 95 (SFAS 123R). This statement requires that the cost resulting for all share-based payment transactions be recognized in the Companys consolidated financial statements. In addition, in March 2005 the SEC released SEC Staff Accounting Bulletin (SAB) No. 107, as codified in ASC 718, Share-Based Payment (SAB 107). SAB 107 provides the SECs staffs position regarding the application of SFAS 123R and certain SEC rules and regulations, and also provides the staffs views regarding the valuation of share-based payment arrangements for public companies. Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values.
Fair value was estimated at the date of grant using the Black-Scholes pricing model, with the following weighted average assumptions:
Nine Months
Ended September 30, 2008 |
Nine Months
Ended September 30, 2009 |
|||||
Risk-free interest rate |
2.80 | % | 1.41 | % | ||
Expected dividend yield |
None | None | ||||
Expected life |
4.0 years | 3.79 years | ||||
Expected volatility |
92.0 | % | 118.0 | % |
The weighted-average grant-date fair value of options granted during the nine months ended September 30, 2008 and 2009 was $0.36 and $0.31, 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 Companys stock price volatility and option lives involve managements 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 September 30, 2009, the Company had 59.3 million shares of authorized but unissued common stock.
6
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 SFAS No. 109, as codified in ASC 740, Accounting for Income Taxes. Under the liability method specified by SFAS No. 109, 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 Companys 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. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, as codified in ASC 740, Accounting for Uncertainty in Income Taxes (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an entitys financial statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, FIN 48 provides guidance on derecognition, classification, interest and penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 on January 1, 2007. The adoption of FIN 48 did not have a material impact on the Companys financial position or results of operations. Upon adoption of FIN 48 and as of December 31, 2007, the Company had no unrecognized tax benefits recorded.
The Company recognizes interest and penalties for uncertain tax positions in income tax expense. Upon adoption and as of September 30, 2009, the Company had no interest and penalty accrual or expense.
Fair Value of Financial Instruments The carrying amounts reported in the balance sheets for cash, cash equivalents and short-term investments approximate their fair values.
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 16,053,917 shares and 10,990,406 shares as of September 30, 2008 and September 30, 2009, respectively.
Recently Issued Accounting Standards In June 2009, the FASB, issued the FASB Accounting Standards Codification, or 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 we are using the new guidelines and numbering systems prescribed by the Codification when referring to GAAP in these financial statements for the period ended September 30, 2009. As the Codification was not intended to change or alter existing GAAP, it did not have any impact on our financial position or results of operations.
7
Statement of Financial Accounting Standards, or SFAS, No. 165, as codified in ASC 855, Subsequent Events, established general standards of accounting for and disclosure of events that occur after the balance sheet date but before the financial statements are issued or are available to be issued. In addition, SFAS 165 requires the disclosure of the date through which an entity has evaluated subsequent events and whether that date represents the date the financial statements were issued or were available to be issued. SFAS 165 is effective for annual and interim periods ending after June 15, 2009 and should be applied prospectively. We have evaluated subsequent events through November 10, 2009, the issuance date of our financial statements.
On April 1, 2009, the Financial Accounting Standards Board, or FASB, issued Staff Position FAS 141(R)-1, Accounting for Assets Acquired and Liabilities Assumed in a Business Combination that Arises from Contingencie s, as codified in ASC 805, Business Combinations, which is effective January 1, 2009 and amends the guidance in SFAS No. 141(R), also codified as ASC 805, 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 our financial statements.
Reclassifications Certain prior year items have been reclassified to conform to current year presentation.
3. Property and Equipment
As of December 31, 2008 and September 30, 2009, $10,087 of equipment had been placed into service. Depreciation expense was $1,330 and $2,522 for the nine months ended September 30, 2008 and September 30, 2009, respectively. Depreciation expense was $4,597 for the period from February 25, 2004 (date of inception) to September 30, 2009.
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 September 30, 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).
8
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 Companys exclusive license from Cedars-Sinai under that agreement an epitope to CD133 and certain related intellectual property. 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 Companys 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 Companys first product candidate by no later than December 31, 2008 with milestones that require commencement of a Phase I clinical trial for the Companys second product candidate by no later than June 30, 2010 and commencement of a Phase II clinical trial for one of the Companys product candidates by no later than March 31, 2012.
Legal Costs
As of December 31, 2008 and September 30, 2009, the Company was indebted to TroyGould PC, a shareholder, for legal services of $36,987 and $25,688 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 September 30, 2009 were approximately $991,000.
5. Commitments and Contingencies:
Operating Lease
In January 2009, the Company renewed its one-year lease through February 28, 2010 at a monthly rental rate of $2,894.
Employment Agreements
Effective as of February 18, 2009, the Company entered into an employment agreement with Dr. Manish Singh pursuant to which Dr. Singh will continue to serve on a full-time basis as the Companys President and Chief Executive Officer for a one-year term commencing February 18, 2009. 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 Companys Board of Directors during the term of the Employment Agreement.
The Employment Agreement provides for an annual base salary of $250,000, payable bi-weekly, and cash bonuses of (1) $50,000 if the Company completes a financing, a strategic alliance or a merger or acquisition that generates at least $2,500,000 of net proceeds (after commissions) during the term of the agreement; (2) $100,000 if the Company completes a financing, a strategic alliance or a merger or acquisition that generates at least $5,000,000 of net proceeds (after commissions) during the term of the agreement; or (3) $200,000 if the Company completes a financing, a strategic alliance or a merger or acquisition that generates at least $10,000,000 of net proceeds (after commissions) during the term of the agreement. The total cash bonus payable shall not exceed $200,000. Pursuant to the Employment Agreement, the Company granted Dr. Singh a seven-year nonqualified stock option on February 18, 2009 under the Companys Equity Plan (the Plan) to purchase 700,000 shares of the Companys common stock at an exercise price of $0.15 per share. The option shall vest (i) as to 300,000 shares in twelve equal monthly installments of 25,000 shares
9
each over the twelve-month period from and immediately following the grant date, (ii) as to 200,000 shares if the Company achieves during term of the agreement either (a) a volume weighted average trading price for its common stock of greater than $1.00 for any 30-day period during the term of the agreement on average daily trading volume of at least 10,000 shares, or (b) working capital at the end of the term of the agreement of at least $5,000,000; and (iii) as to 200,000 shares if the Company achieves during term of the agreement either (a) a volume weighted average trading price for its common stock of greater than $1.50 for any 30-day period during the term of the agreement on average daily trading volume of at least 10,000 shares or (b) working capital at the end of the term of the agreement of at least $8,000,000. 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 seven-year term of the option.
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 or Dr. Singh terminates the Employment Agreement due to (1) his principal place of work for the Company being relocated by more than 50 miles, (2) a material change in his duties, (3) a failure by the Company to pay him any of his contractual compensation, or (4) a constructive termination of Dr. Singh or unlawful harassment or retaliation against him, then the Company upon such termination will be required to make a lump sum payment to Dr. Singh equal to six months of his base annual salary and 50% of the shares covered by his option (or 100% of all such shares if the Company is not the surviving entity in a Corporate Transaction, as defined by the Plan, that have not yet vested will immediately become vested.
In the event the Company completes a merger in which Dr. Singh is offered an executive position with the Company or surviving corporation for at least a one-year term, with an annual base salary of $250,000 and a cash bonus and option compensation package having an aggregate value of at least $75,000 (as determined in good faith by the Company or surviving corporation), Dr. Singh will not be entitled to terminate the Employment Agreement based on a change in duties and responsibilities or a location change.
Consulting Agreements
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 September 1, 2009, the Company entered into a consulting agreement with James Bender, Ph.D. under which Dr. Bender agreed to serve as Vice President Clinical Development for a one-year term, subject to earlier termination by the Company or Dr. Bender on 15 days notice. Dr. Bender will provide his services to the Company on a part-time basis. For these services, the Company (i) will pay $6,000 per month, (ii) issued Dr. Bender a seven-year option under the Companys stock option plan to purchase 66,000 shares of the Companys common stock at a purchase price of $0.95 per share (the closing price of the Companys common stock on the grant date), with such option to vest at the rate of 3,000 shares each month during the term of the consulting agreement and with 30,000 shares to vest if Dr. Bender is able achieve certain development milestones, and (iii) will pay cash bonuses of up to $30,000 if Dr. Bender is able achieve certain development milestones.
10
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 (Deficit)
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 September 30, 2009, the Company has reserved 3,400,000 shares of common stock for issuance under the Plan and options to purchase 3,236,982 common shares have been granted under the Plan that are currently outstanding. On September 14, 2009, options to purchase 270,000 common shares were granted and are contingent on shareholders approval 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 Companys 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 a Board member.
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.
11
The following table summarizes stock option activity for the Company during the nine months ended September 30, 2009:
Options |
Weighted
Average Exercise Price |
Weighted
Average Remaining Contractual Term |
Aggregate
Intrinsic Value |
||||||||
Outstanding December 31, 2008 |
9,701,334 | $ | 0.99 | ||||||||
Granted |
1,438,822 | $ | 0.41 | ||||||||
Exercised |
(18,750 | ) | $ | 0.27 | |||||||
Forfeited or expired |
(131,000 | ) | $ | 0.93 | |||||||
Outstanding September 30, 2009 |
10,990,406 | $ | 0.91 | 6.5 | $ | 3,064,572 | |||||
Vested or expected to vest at September 30, 2009 |
9,980,925 | $ | 0.96 | 6.9 | $ | 2,382,832 | |||||
As of September 30, 2009, the total unrecognized compensation cost related to unvested stock options amounted to $342,468, which will be amortized over the weighted-average remaining requisite service period of less than one year. During 2005 the Company recorded no stock based compensation under APB 25.
Warrants
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 Companys common stock and in connection with the extension of the expiration date of warrants to purchase a total of 6,412,583 shares of common stock of the Company from earlier dates in 2009 to June 30, 2009. The Company has valued the warrant modification at $611,258 using the Black-Scholes pricing model and the 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 our December 31, 2008 Annual Report we disclosed in the Subsequent Events disclosure (Note 8) that we 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. The Company issued the shares of common stock in reliance upon the exemption from registration provided by Section 4(2) of the Securities Act of 1933, as amended, for a transaction not involving a public offering of securities. As of September 30, 2009, the Company had no outstanding stock purchase warrants issued to investors.
Item 2. | Managements 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 formerly known as Optical Molecular Imaging, Inc.
12
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, 2008 and the Risk Factors section set forth in Item 1A of Part II of our Form 10-Q for the quarterly period ended March 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 Annual Report and the description of our results of operations and financial condition reflect the operations of Spectral Molecular Imaging.
In May 2006, we decided to suspend our research and development activities on Spectral Molecular Imagings spectral imaging technology, and on September 11, 2006, we sold all of the outstanding capital stock of Spectral Molecular Imaging to Dr. Daniel Farkas, a co-founder of Spectral Molecular Imaging and inventor of its technology.
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.
13
Since our companys 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 our lead vaccine product candidate, and have not generated any recurring revenues. As a result, we have incurred operating losses and, as of September 30, 2009, we had an accumulated deficit of $13,857,548. We expect to incur significant research, development and administrative expenses before any of our products can be launched and recurring revenues, if ever, are generated.
Critical Accounting Policies
Managements discussion and analysis of our financial condition and results of operations are based on our consolidated 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 unaudited financial statements for the period from February 25, 2004 to September 30, 2009. 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 the FASBs SFAS No. 7, as codified in ASC 915, Accounting and Reporting by Development Stage Enterprises. We are devoting substantially all of our present efforts to research and development. All losses accumulated since inception have been 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 nine months ended September 30, 2008 and September 30, 2009, we recorded an expense of $1,068,159 and $684,598, respectively, related to research and development activities.
Stock-Based Compensation
In December 2004, the FASB issued SFAS 123R, as codified in ASC 718, Share Based Payment: An Amendment of FASB Statements No. 123 and 95 (SFAS 123R). This statement requires that the cost resulting from all share-based payment transactions be recognized in our consolidated financial statements. In addition, in March 2005 the SEC released SEC Staff Accounting Bulletin No. 107, as codified in ASC 718, Share-Based Payment (SAB 107). SAB 107 provides the SEC staffs position regarding the application of SFAS 123R and certain SEC rules and regulations, and also provides the SEC staffs views regarding the valuation of share-based payment arrangements for public companies. Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Pro forma disclosure of fair value recognition, as prescribed under SFAS 123, is no longer an alternative.
14
In the first quarter of 2006, we adopted the fair value recognition provisions of SFAS 123R utilizing the modified-prospective-transition method, as prescribed by SFAS 123R. 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 in accordance with SFAS 123, and (b) compensation expense for all share-based payments granted subsequent to January 1, 2006, based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. Under the modified-prospective-transition method, results for the prior periods have not been restated.
Results of Operations
Revenues
We had no revenues during the period for the three and nine months ended September 30, 2008. The Company had $300,000 in revenues related to a license fee payment we received under a research and license option agreement regarding our ICT-69 antibody with Roche Group. We incurred a net loss of $564,151 and $376,924 for the three months ended September 30, 2008 and 2009, respectively. We incurred a net loss of $2,363,252 and $1,772,607 for the nine months ended September 30, 2008 and 2009, respectively. We do not expect to generate any additional operating revenues during 2009.
Expenses
General and administrative expenses for the three months ended September 30, 2008 and 2009 were $355,293 and $421,890 respectively. General and administrative expenses for the nine months ended September 30, 2008 and 2009 were $1,013,337 and $1,215,704, respectively. The increase in general and administrative expenses is primarily due to increased personnel, occupancy and investor relations costs.
Research and development expenses for the three months ended September 30, 2008 and 2009 were $130,065 and $192,139, respectively. The increase in research and development expenses is primarily due to increased costs associated with one of our product candidates. Research and development expenses for the nine months ended September 30, 2008 and 2009 were $1,068,159 and $684,598, respectively. The decrease in research and development expenses is primarily due to $424,000 of in-process research & development costs associated with the acquired Molecular Discoveries technologies in 2008.
We had $65,311 of non-cash expense for the three months ended September 30, 2009, consisting of $64,470 of stock based compensation and $841 of depreciation expense, compared to $104,795 of non-cash expense for the three months ended September 30, 2008, consisting of $104,086 of stock based compensation and $709 of depreciation expense. We had $195,971 of non-cash expense for the nine months ended September 30, 2009, consisting of $193,449 of stock based compensation and $2,522 of depreciation expense, compared to $884,743 of non-cash expense for the nine months ended September 30, 2008, consisting of $394,443 of stock based compensation, $1,300 of depreciation expense and $489,000 paid in common stock for in-process research & development costs.
Loss
We incurred a net loss of $564,151 and $376,924 for the three months ended September 30, 2008 and 2009, respectively. We incurred a net loss of $2,363,252 and $1,772,607 for the nine months ended September 30, 2008 and 2009, respectively.
Liquidity and Capital Resources
As of September 30, 2009, we had working capital of $1,815,811, compared to working capital of $2,924,886 as of December 31, 2008.
15
The estimated cost of completing the development of our lead vaccine product candidate and of obtaining all required regulatory approvals to market that product candidate 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, although there is no assurance that such proceeds will be sufficient for this purpose.
We do not have any bank credit lines. We currently plan to attempt to obtain additional financing through the sale of additional equity, although we may also in the future seek to obtain funding through strategic alliances with larger pharmaceutical or biomedical companies. We cannot be sure that we will be able to obtain any additional funding from either of these sources, or that the terms under which we may be able to obtain such funding will be beneficial to us. If we are unsuccessful or only partly successful in our efforts to secure additional financing, we may find it necessary to suspend or terminate some or all of our product development and other activities.
As of September 30, 2009, 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 $1,883,306 of cash in our operations for the nine months ended September 30, 2009, compared to $1,522,644 for the nine months ended September 30, 2008, as the non-cash portion of our net loss for the 2009 period was $195,971 and the non-cash portion of our net loss for the 2008 period was $884,743. We used no cash in our investing activities for the nine months ended September 30, 2009 and $8,511 for this purpose for the nine months ended September 30, 2008. We received no cash from financing activities for the nine months ended September 30, 2008 and $467,810 from financing activities for the nine months ended September 30, 2009.
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.
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 September 30, 2009, (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.
16
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.
17
OTHER INFORMATION
Item 1. | Legal Proceedings |
None.
Item 1A. | Risk Factors |
None.
Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds |
The Company did not issue any unregistered securities during the nine -month period ended September 30, 2009 that were not previously reported in a Current Report on Form 8-K, and the Company did not repurchase any securities during that period.
Item 3. | Defaults Upon Senior Securities |
None.
Item 4. | Submission of Matters to a Vote of Security Holders |
Our annual meeting of stockholders was held on September 14, 2009. The following summarizes the proposals voted on at that meeting.
Proposal 1 | - | The election of Jacqueline Brandwynne, Richard A. Cowell, Navdeep Jaikaria, Ph.D., Robert L. Martuza, M. D., Manish Singh, Ph.D., and John Yu, M.D. to serve as all of the members of the Board of Directors, with the following vote totals: |
|
6,011,112 votes were cast for the election of Ms. Brandwynne to the Companys Board of Directors and 1,231,354 votes were withheld. |
|
6,447,423 votes were cast for the election of Mr. Cowell to the Companys Board of Directors and 795,043 votes were withheld. |
|
6,447,466 votes were cast for the election of Dr. Jaikaria to the Companys Board of Directors and 795,000 votes were withheld. |
|
6,447,466 votes were cast for the election of Dr. Martuza to the Companys Board of Directors and 795,000 votes were withheld. |
|
6,447,466 votes were cast for the election of Dr. Singh to the Companys Board of Directors and 795,000 votes were withheld. |
|
6,447,466 votes were cast for the election of Dr. Yu to the Companys Board of Directors and 795,000 votes were withheld. |
Proposal 2 | - | The ratification of the appointment of Stonefield Josephson, Inc. as the Companys independent registered public accounting firm for the year ended December 31, 2009 was approved with 6,448,466 votes cast for and 794,000 votes abstaining. |
18
Item 5. | Other Information |
None.
Item 6. | Exhibits |
Exhibit No. |
Description |
|
10.1 | Second Amendment dated August 1, 2009 to Exclusive License Agreement dated as of November 1, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. | |
10.2 | Agreement dated as of September 1, 2009 between James Bender, Ph.D. and ImmunoCellular Therapeutics, Ltd.* | |
10.3 | Amendment No. 1 dated September 14, 2009 to Agreement dated as of September 1, 2009 between James Bender, Ph.D. and ImmunoCellular Therapeutics, Ltd.* | |
31.1 | Certification of the Registrants 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 Registrants 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 Registrants 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 Registrants 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. |
19
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: November 13, 2009 | IMMUNOCELLULAR THERAPEUTICS, LTD. | |||||
By: |
/s/ Manish Singh |
|||||
Name: | Manish Singh, Ph.D. | |||||
Title: |
President and Chief Executive Officer
(Principal Executive Officer) |
20
IMMUNOCELLULAR THERAPEUTICS, LTD.
FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30, 2009
Exhibit No. |
Description |
|
10.1 | Second Amendment dated August 1, 2009 to Exclusive License Agreement dated as of November 1, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. | |
10.2 | Agreement dated as of September 1, 2009 between James Bender, Ph.D. and ImmunoCellular Therapeutics, Ltd.* | |
10.3 | Amendment No. 1 dated September 14, 2009 to Agreement dated as of September 1, 2009 between James Bender, Ph.D. and ImmunoCellular Therapeutics, Ltd.* | |
31.1 | Certification of the Registrants 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 Registrants 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 Registrants 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 Registrants 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. |
21
EXHIBIT 10.1
SECOND AMENDMENT
TO EXCLUSIVE LICENSE AGREEMENT
THIS SECOND AMENDMENT TO EXCLUSIVE LICENSE AGREEMENT (this Amendment) is made and entered into as of August 1, 2009 (Effective Date), by and between Cedars-Sinai Medical Center, a California nonprofit public benefit corporation (CSMC), and ImmunoCellular Therapeutics, Ltd., a Delaware corporation (Licensee), under the following circumstances:
A. | CSMC and Licensee entered into an Exclusive License Agreement dated November 17, 2006 (the Agreement), whereby CSMC granted to Licensee an exclusive license to use the Patent Rights and the Technical Information (as such terms are defined in the Agreement) pursuant to the terms and conditions of the Agreement. |
B. | The parties desire to amend the Agreement to modify (i) Licensees contact information as set forth in the Preamble to and Section 13.1 thereof; and (ii) revise the list of Milestones set forth in Exhibit D thereto, each as further described herein. |
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein and in the Agreement and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereby agree as follows:
1. Recitals; Defined Terms . The parties hereby acknowledge and agree that Recital A is true and accurate. Terms not otherwise defined herein shall have the meaning ascribed to them in the Agreement.
2. Amendments to Agreement .
a. | The address of Licensee set forth in the Preamble to the Agreement is hereby modified to read as follows: 21900 Burbank Boulevard, Third Floor, Woodland Hills, CA 91367. |
b. | Licensees contact information, as set forth in Section 13.1 of the Agreement, is hereby modified to read as follows: |
ImmunoCellular Therapeutics, Ltd.
21900 Burbank Boulevard, Third Floor
Woodland Hills, CA 91367
Fax: (818) 992-2908
c. | Exhibit D (Milestones) of the Agreement is hereby amended and restated in its entirety in the form set forth in Attachment A hereto. |
3. Other Provisions . This Amendment is a revision to the Agreement only, it is not a novation thereof. Except as otherwise provided herein, the terms and conditions of the Agreement shall remain in full force and effect. Upon the Effective Date, each
reference in the Agreement to this Agreement, hereunder, herein, hereof or words of like import referring to the Agreement shall mean and refer to the Agreement as amended by this Amendment.
4. Reaffirmation of Representations and Warranties . Licensee and CSMC each reaffirms each of its representations and warranties set forth in the Agreement as if such representations and warranties were set forth in full in this Amendment. Licensee also acknowledges to CSMC that, as of the date of this Amendment (and reflecting the revised milestones set forth in Attachment A hereto), it is not in default under the Agreement, nor has it breached any of the provisions of the Agreement. Licensee affirms to CSMC that, as of the date of this Amendment, it does not, to its best knowledge, have any defenses, offsets or counterclaims against CSMC with respect to the Agreement.
5. Further Assurances . Each of the parties hereto shall execute such further documents and instruments, and do all such further acts, as may be necessary or required in order to effectuate the intent and accomplish the purposes of this Amendment.
6. Counterparts . This Amendment may be executed in any number of counterparts, each of which shall be deemed an original, but all of which taken together shall constitute one and the same instrument.
* * * * *
IN WITNESS WHEREOF, the parties have executed this Amendment to Exclusive License Agreement as of the day and year first above written.
Dated: July 21 , 2009 | CEDARS-SINAI MEDICAL CENTER | |||
By: |
/s/ Edward M. Prunchunas |
|||
Name: | Edward M. Prunchunas | |||
Title: | Senior Vice President & CFO | |||
By: |
/s/ Richard S. Katzman |
|||
Name: | Richard S. Katzman | |||
Title: | Vice President for Academic Affairs | |||
Dated: July 22 , 2009 | IMMUNOCELLULAR THERAPEUTICS, LTD. | |||
By: |
/s/ Manish Singh |
|||
Name: | Manish Singh | |||
Title: | President and Chief Executive Officer |
2
ACKNOWLEDGED AND AGREED:
INVENTOR |
||
By: |
/s/ John Yu |
|
John Yu, M.D. |
3
Attachment A
SCHEDULE D
MILESTONES
1. On or before March 31, 2007, Licensee shall initiate a Phase I clinical trial for at least one (1) Product consistent with sound business practices and judgment.
2. On or before December 31, 2008, Licensee shall have raised at least an additional $5,000,000 in funding through one or more sources, including equity or debt financing or government or private grants; provided, however that this milestone shall not apply in the event Licensee has secured a sublicensee in compliance with the terms of this Agreement who has agreed to perform at its expense or to otherwise fund all or substantially all of the costs of completing a Phase II clinical trial for at least one Product consistent with sound business practices and judgment.
3. On or before June 30, 2010, Licensee shall initiate a Phase I clinical trial for a second Product consistent with sound business practices and judgment.
4. On or before March 31, 2012, Licensee shall initiate a Phase II clinical trial for at least one product consistent with sound business practices and judgment.
5. On or before December 31, 2014, Licensee shall initiate a Phase III clinical trial for at least one Product consistent with sound business practices and judgment.
6. On or before December 31, 2013, Licensee shall have raised at least an additional $10,000,000 in funding through one or more sources, including equity or debt financing or government or private grants; provided, however, that this milestone shall not apply in the event Licensee has secured a sublicensee in compliance with the terms of this Agreement who has agreed to perform at its expense or to otherwise fund all or substantially all of the costs of completing a Phase III clinical trial for at least one Product consistent with sound business practices and judgment.
7. On or before December 31, 2015, Licensee shall file for marketing approval with the FDA for at least one Product consistent with sound business practices and judgment.
EXHIBIT 10.2
September 1, 2009
James G. Bender, Ph.D.
3 Cloverdale
Rancho Santa Margarita, CA 92688
Dear Jim
This letter outlines the basis upon which ImmunoCellular Therapeutics, Ltd. (the Company) will continue to engage you as its Vice President Clinical Development.
1. Engagement . You will be engaged as Vice President Clinical Development of the Company for the term and upon the terms and conditions set forth herein, and you accept such offer of engagement. As the Vice President Clinical Development, your duties will be those that are customary for a Vice President Clinical Development of a company such as the Company, including without limitation assisting the Company in developing and implementing clinical development plans and strategies for the Companys product candidates, designing clinical trial protocols, securing and monitoring manufacturers for clinical supplies of product candidates, and communicating with the FDA on all matters relating to the Companys product candidates. You will report to the President and Chief Executive Officer of the Company.
2. Term . The term of your engagement will be one year, commencing on September 1, 2009, unless sooner terminated by you or the Company as set forth below in Section 7.
3. Commitment/Part-time Status . For the compensation provided in Section 4, you will set aside and commit a minimum (on average) of two business days per week toward attending to the affairs of the Company as the Vice President Clinical Development. The Company recognizes and agrees that, due to your part-time status, you may accept other employment or consulting assignments concurrent with your engagement by the Company, which may include employment as an officer of publicly-traded companies and/or employment by other companies engaged in biotech or pharmaceutical research and development, provided that you disclose such employment by any other company to the Company and such other companys activities are not directly competitive with the Companys activities in the cancer vaccine field.
4. Compensation . As payment in full for your services during the term of this Agreement, the Company shall compensate you as follows:
(a) The Company will pay you a monthly cash payment of $6,000 for each month during the term of the Agreement;
James G. Bender, Ph.D.
September 1, 2009
Page 2
(b) the Company will grant you on the date of commencement of the term of this Agreement an option to purchase 66,000 shares of the Companys common stock (the Option); and
(c) the Company will pay you the following cash bonuses and the following shares issuable upon exercise of the Option will vest upon the Company achieving the following milestones (the Development Milestones) by the following dates:
(i) complete by December 31, 2009 the manufacturing of ICT-121 drug product in a form and quantity suitable and sufficient to conduct a Phase I clinical trial for ICT-121 - $3,000 and 3,000 shares;
(ii) complete by March 31, 2010 all required in vitro preclinical studies with final reports to support an IND filing for ICT-121 - $3,000 and 3,000 shares;
(iii) complete by March 31, 2010 a mouse study and report to examine immunogenicity of mouse CD 133 peptide - $4,000 and 4,000 shares;
(iv) IND (or EU equivalent) for ICT-121 is cleared by June 30, 2010 - $10,000 and 10,000 shares;
(v) treat first patient in ICT-121 Phase I trial within two months of IND clearance - $5,000 and 5,000 shares; and
(vi) complete by June 30, 2010 the evaluation of Notch and Numb peptides to enable a go/no go decision on license option exercise - $5,000 and 5,000 shares.
The monthly cash compensation shall be paid on the last business day of each month, and the cash compensation for achieving the Development Milestones will be paid within 15 days of the Company achieving those respective milestones. The Option will have a seven-year term commencing on the date of grant; will vest at the rate of 3,000 shares per month over the term of this Agreement as to 36,000 shares and will vest as to the remaining shares upon achieving the respective Development Milestones as set forth above; will have an exercise price of the last reported trading price of the Companys common stock on the OTC Bulletin Board on September 1, 2009; and will have such other terms and conditions as are included in the Companys standard nonqualified stock option agreement under its 2006 Equity Incentive Plan. The Company will have no obligation to pay you any of the cash compensation or vest any of the shares covered by the Option specified in this Section 4 with respect to a Development Milestone that is not timely achieved for any reason, including a decision by the Company in its sole discretion to abandon the development of ICT-121 for any reason. You acknowledge that you have been paid in full by the Company for all services rendered by you to the Company through August 31, 2009 and have been reimbursed by the Company for all expenses incurred through August 31, 2009.
James G. Bender, Ph.D.
September 1, 2009
Page 3
5. Expenses . The Company will promptly reimburse you for all reasonable business expenses incurred by you in connection with the business of the Company in accordance with regular Company policy regarding the nature and amount of expenses and the maintenance and submission of receipts and records necessary for the Company to document them as proper business expenses. These expenses shall include, without limitation, out-of-pocket telephone, facsimile, office supplies and authorized travel expenses (including mileage to Cedars-Sinai Medical Center and to clinical manufacturer sites) but shall not include rent, utilities or similar overhead expenses incurred by you to maintain your office space.
6. Indemnity . To the extent permitted by California law, you agree to indemnify and hold the Company harmless from and against any and all losses, damages, liabilities, costs, and expenses, including attorneys fees, arising from or attributable to or resulting from your gross negligence or willful misconduct in rendering the services. You warrant and represent that you have full power and authority to enter into and perform this Agreement and that your performance of this Agreement will not violate the provisions of any other agreement to which you are a party. The Company agrees to indemnify and hold you harmless from and against any and all claims, demands, causes of action, losses, damages, liability, costs and expenses, including attorneys fees arising out of your services hereunder, other than those arising from or attributable to or resulting from your gross negligence or willful misconduct. The Company will name you as an officer on any policy of directors and officers liability insurance it secures throughout the term of your engagement.
7. Termination . This Agreement and your rights and obligations hereunder shall, under any of the following circumstances, terminate in advance of the time specified in Section 2 above, and you shall have the right to receive only your compensation that shall be accrued hereunder through the effective date of such termination and shall have no right to receive any further compensation hereunder from and after the time of such termination.
7.1 Death or Disability . This Agreement and your duties hereunder shall terminate immediately upon your death or upon your becoming disabled and unable to perform your duties under this Agreement for more than a 30-day period.
7.2 Termination by the Company . The Company may, at its option, terminate this Agreement and your duties hereunder by written notice to you at any time without cause upon 15 days written notice to you. If you are terminated without cause, in addition to all accrued compensation, the Company shall grant you 50% of any unvested options as of the date of termination. The Company may terminate this Agreement for Cause (as hereinafter defined) at any time upon written notice to you. Cause as used in this Agreement means that you, (i) after reasonable notice and warning, have failed to perform your assigned duties as defined in this Agreement, with such failure to be determined by the Board of Directors, (ii) have materially breached any of the terms or conditions of this Agreement and have failed to correct such breach within 15 days following written notice from the Company of such breach, or (iii) have been charged with a felony or any intentionally fraudulent act that materially damages, or may materially damage, the business or reputation of the Company.
James G. Bender, Ph.D.
September 1, 2009
Page 4
7.3 Termination by the You . You may terminate this Agreement at any time upon written notice to the Company if the Company shall have materially breached any of the provisions of this Agreement and has failed to correct such breach within 15 days following written notice from you of such breach.
8. Arbitration . In the event of any dispute under this Agreement, such dispute shall be resolved by binding arbitration with JAMS/ENDISPUTE in Los Angeles, California. The arbitrator shall be a retired judge with at least five years of experience on the bench. This provision shall not be interpreted so as to require arbitration of claims that the state and/or Federal Courts of California have ruled may not be the subjects of compelled arbitration in employment matters, nor shall it be interpreted so as to restrict any remedy, right of appeal or discovery device available to either party in a manner that violates the rulings of the state and/or Federal Courts of California with respect to employment-related arbitration. This provision shall not be interpreted so as to preclude the making of reports to governmental offices, or to preclude either party from seeking injunctive or provisional relief in a court of appropriate jurisdiction under such circumstances as may merit such relief.
9. Confidentiality . While this Agreement is in effect and for a period of five years thereafter, you shall hold and keep secret and confidential all trade secrets (within the meaning of California law) and shall use such information only in the course of performing your duties hereunder; provided, however, that with respect to trade secrets, you shall hold and keep secret and confidential such trade secrets for so long as they remain trade secrets under California law. You shall maintain in trust all such trade secrets as the Companys property, including, but not limited to, all documents concerning the Companys business, including your work papers, telephone directories, customer information and notes, and any and all copies thereof in your possession or under your control. Upon the expiration or earlier termination of your employment with the Company, or upon request by the Company, you shall deliver to the Company all such documents belonging to the Company, including any and all copies in your possession or under your control.
10. No Conflict . You represent that your performance of all the terms of this Agreement does not and will not breach any agreement to keep in confidence any proprietary information acquired by you in confidence prior to the date of this Agreement. You have not brought and will not bring with you any equipment, supplies, facility or trade secret information of any current or former employer which are not generally available to the public.
11. License and Assignment of Rights . You acknowledge that all inventions, original works of authorship, developments, concepts, know-how, improvements or trade secrets which are made by you (solely or jointly with others) within the scope of and as part of your serving as the Companys Vice President Clinical Development (collectively referred to herein as Inventions) are
James G. Bender, Ph.D.
September 1, 2009
Page 5
works made for hire (to the greatest extent permitted by applicable law) and are compensated by the consideration provided by the Company as described in this Agreement, unless regulated otherwise by the mandatory law of the State of California. You also agree and warrant that you will not use or incorporate third party proprietary materials into Inventions, disclose third party proprietary information to Company or knowingly engage in any activities or use any facilities in the course of providing services under this Agreement that could result in claims of ownership to any Inventions being made by any third party.
12. Applicable Law . This Agreement shall be interpreted in accordance with the internal laws of the State of California.
We are delighted that you have agreed to continue to serve as our Vice President Clinical Development and look forward to working with you to advance the Companys clinical development programs.
Very truly yours, | ||
IMMUNOCELLULAR THERAPEUTICS, LTD. | ||
By: |
/s/ Manish Singh |
|
Manish Singh, Ph.D. | ||
President and Chief Executive Officer. |
Agreed to and Accepted as of this 1st day
of September 2009. |
/s/ James Bender |
James G. Bender, Ph.D. |
EXHIBIT 10.3
AMENDMENT NO. 1 TO EMPLOYMENT AGREEMENT
This Amendment No. 1 to Employment Agreement (this Amendment) is made as of the 14th day of September 2009, by and between ImmunoCellular Therapeutics, Ltd., a Delaware corporation (the Corporation), and Dr. James Bender (hereinafter called Executive).
W I T N E S S E T H:
WHEREAS, the Corporation and Executive previously entered into an Employment Agreement, dated as of September 1, 2009 (the Employment Agreement);
WHEREAS, the Corporations Board of Directors approved the granting of a stock option to purchase 66,000 shares of the Corporations common stock, a portion of which is subject to achieving certain milestones, (the Option) on September 14, 2009; and
WHEREAS, the Corporation and Executive wish to amend the Employment Agreement to provide that the grant date and exercise price of the Executives stock option to purchase 66,000 shares of the Corporations common stock (the Option) would be amended to be the date the option is granted by the Corporations Board of Directors and the last reported trading price of the Companys common stock on the OTC Bulletin Board on the date of grant;
NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:
Amendment to Compensation. Paragraph 4(b) of the Employment Agreement is hereby amended to read in full as follows:
4. (b) the Company will grant you on the date of the next Board of Directors meeting an option to purchase 66,000 shares of the Companys common stock (the Option); and
The eighth paragraph of Section 4 (c) of the Employment Agreement is hereby amended to read in full as follows:
The monthly cash compensation shall be paid on the last business day of each month, and the cash compensation for achieving the Development Milestones will be paid within 15 days of the Company achieving those respective milestones. The Option will be granted at the next Board of Directors meeting on September 14, 2009; will have a seven-year term commencing on the date of grant; will vest commencing on the date of the Employment Agreement (September 1, 2009) at the rate of 3,000 shares per month over the term of this Agreement as to 36,000 shares and will vest as to the remaining shares upon achieving the respective Development Milestones as set forth above; will have an exercise price of the last reported trading price of the Companys common stock on the OTC Bulletin Board on the date of grant; and will have such other terms and conditions as are included in the Companys standard nonqualified stock option agreement under its 2006 Equity Incentive Plan. The Company will have no obligation to pay you any of the cash compensation or vest any of the shares covered by the Option specified in this Section 4 with respect to a Development Milestone that is not timely achieved for any reason, including a decision by the Company in its sole discretion to abandon the development of ICT-121 for any reason. You acknowledge that you have been paid in full by the Company for all services rendered by you to the Company through August 31, 2009 and have been reimbursed by the Company for all expenses incurred through August 31, 2009.
IN WITNESS WHEREOF, the parties hereto have caused this Amendment No. 1 to Employment Agreement to be duly executed as of the date first above set forth.
IMMUNOCELLULAR THERAPEUTICS, LTD. | EXECUTIVE: | |||||
By: |
/s/ Manish Singh |
/s/ James Bender |
||||
Manish Singh, Ph.D. | James Bender, Ph.D. | |||||
Its: | President and Chief Executive Officer |
EXHIBIT 31.1
Certification of the Principal Executive Officer Under Section 302 of the Sarbanes-Oxley Act
I, Manish Singh, Ph.D., certify that:
1. I have reviewed this report on Form 10-Q of ImmunoCellular Therapeutics, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrants most recent fiscal quarter (the registrants fourth quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 13, 2009 | By: |
/s/ Manish Singh |
||||
Name: | Manish Singh, Ph.D. | |||||
Title: | President and Chief Executive Officer |
EXHIBIT 31.2
Certification of the Principal Financial Officer Under Section 302 of the Sarbanes-Oxley Act
I, C. Kirk Peacock, certify that:
1. I have reviewed this report on Form 10-Q of ImmunoCellular Therapeutics, Ltd.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrants other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c) Evaluated the effectiveness of the registrants disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the registrants internal control over financial reporting that occurred during the registrant most recent fiscal quarter (the registrants fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrants internal control over financial reporting; and
5. The registrants other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrants auditors and the audit committee of the registrants board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrants ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrants internal control over financial reporting.
Date: November 13, 2009 | By: |
/s/ C. Kirk Peacock |
||||
Name: | C. Kirk Peacock | |||||
Title: | Chief Financial Officer and Treasurer |
EXHIBIT 32.1
Certification of the Principal Executive Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of ImmunoCellular Therapeutics, Ltd. (the Company) hereby certifies that, to his knowledge:
The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2009 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2009 | By: |
/s/ Manish Singh |
||||
Name: | Manish Singh, Ph.D. | |||||
Title: | President and Chief Executive Officer |
EXHIBIT 32.2
Certification of the Principal Financial Officer
Pursuant to 18 U.S.C. § 1350, as created by Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of ImmunoCellular Therapeutics, Ltd. (the Company) hereby certifies that, to his knowledge:
The Quarterly Report on Form 10-Q of the Company for the fiscal quarter ended September 30, 2009 (the Report) fully complies with the requirements of Section 13(a) or Section 15(d), as applicable, of the Securities Exchange Act of 1934, as amended; and
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: November 13, 2009 | By: |
/s/ C. Kirk Peacock |
||||
Name: | C. Kirk Peacock | |||||
Title: | Chief Financial Officer and Treasurer |