ImmunoCellular Therapeutics, Ltd. (Form: 10-K, Received: 03/31/2010 17:20:18)

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-K

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

For the fiscal year ended December 31, 2009

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

For the transition period from to

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)		(I.R.S. Employer Identification Number)

21900 Burbank Boulevard, 3 ^rd Floor Woodland Hills, California		91367
(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (818) 992-2907

Securities registered pursuant to Section 12(b) of the Exchange Act: None

Securities registered pursuant to Section 12(g) of the Exchange Act: None

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. ¨ Yes x No

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Exchange Act. ¨ Yes x No

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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. x Yes ¨ 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 if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of the registrant’s knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. x

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 (Check one):


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 x No

The aggregate market value of the common stock held by non-affiliates of the registrant as of June 30, 2009 (the last business day of the registrant’s most recently completed second fiscal quarter) was approximately $4,799,314.

There were 16,067,842 shares of the registrant’s common stock outstanding on March 1, 2010.

Documents incorporated by reference: None

Table of Contents

Form 10-K


		Page

	PART I

Item 1.	Business	1
Item 1A.	Risk Factors	15
Item 1B.	Unresolved Staff Comments	29
Item 2.	Properties	29
Item 3.	Legal Proceedings	29
Item 4.	(Reserved)	30

	PART II

Item 5.	Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities	30
Item 6.	Selected Financial Data	31
Item 7.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	31
Item 7A.	Quantitative and Qualitative Disclosures About Market Risk	35
Item 8.	Financial Statements and Supplementary Data	36
Item 9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure	36
Item 9A(T).	Controls and Procedures	36
Item 9B.	Other Information	37

	PART III

Item 10.	Directors, Executive Officers and Corporate Governance	37
Item 11.	Executive Compensation	43
Item 12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters	55
Item 13.	Certain Relationships and Related Transactions, and Director Independence	57
Item 14.	Principal Accounting Fees and Services	57

	PART IV

Item 15.	Exhibits and Financial Statement Schedules	58

Introductory Comment

Throughout this Annual Report on Form 10-K, the terms “we,” “us,” “our,” “our company,” “Company” and “the Registrant” refer to ImmunoCellular Therapeutics, Ltd., a Delaware corporation formerly known as Optical Molecular Imaging, Inc. and Patco Industries, Ltd., and, unless the context indicates otherwise, also include our former subsidiary, Spectral Molecular Imaging, Inc., a Nevada corporation, which we sold in September 2006.

“Safe Harbor” Statement

From time to time, we make oral and written statements that may constitute “forward-looking statements” (rather than historical facts) as defined in the Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (the “SEC”) in its rules, regulations and releases, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended (the “Exchange Act”). We desire to take advantage of the “safe harbor” provisions in the Private Securities Litigation Reform Act of 1995 for forward-looking statements made from time to time, including the forward-looking statements made in this Annual Report, as well as those made in our other filings with the SEC.

All statements in this Annual Report, including under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” other than statements of historical fact are forward-looking statements for purposes of these provisions, including statements of our current views with respect to our business strategy, business plan and research and development activities, our future financial results, and other future events. These statements include forward-looking statements both with respect to us, specifically, and the biotechnology industry, in general. In some cases, forward-looking statements can be identified by the use of terminology such as “may,” “will,” “expects,” “plans,” “anticipates,” “estimates,” “potential” or “could” or the negative thereof or other comparable terminology. Although we believe that the expectations reflected in the forward-looking statements contained herein are reasonable, there can be no assurance that such expectations or any of the forward-looking statements will prove to be correct, and actual results could differ materially from those projected or assumed in the forward-looking statements.

All forward-looking statements involve inherent risks and uncertainties, and there are or will be important factors that could cause actual results to differ materially from those indicated in these statements. We believe that these factors include, but are not limited to, those factors set forth in this Annual Report under the captions “Business,” “Risk Factors,” and “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” all of which you should review carefully. If one or more of these or other risks or uncertainties materialize, or if our underlying assumptions prove to be incorrect, actual results may vary materially from what we anticipate. Please consider our forward-looking statements in light of those risks as you read this Annual Report. We undertake no obligation to publicly update or review any forward-looking statement, whether as a result of new information, future developments or otherwise.

PART I

Item 1.

Business.

Overview

ImmunoCellular Therapeutics, Ltd. is a development stage company that is seeking to develop and commercialize new therapeutics to fight cancer using the immune system. Our product candidate portfolio includes cellular immunotherapies targeting cancer and cancer stem cell antigens, peptide based immunotherapies targeting cancer stem cells, and monoclonal antibodies to diagnose and treat several

different cancers. We have completed a Phase I clinical trial of our dendritic cell based vaccine product candidate to treat glioblastoma multiforme that was initiated in May 2007, and we are targeting initiating a multicenter Phase II clinical trial of this vaccine by the end of 2010. Another one of our vaccine product candidates is a peptide based off-the-shelf vaccine to target glioblastoma multiforme, the most common brain tumors, for which we plan to file an IND in the second half of 2010. This vaccine targets cancer stem cells, which are believed by many scientists to be roots of cancer, and may be applicable in multiple cancer indications. In addition, we have several monoclonal antibody product candidates targeting small cell lung cancer, pancreatic cancer, multiple myeloma and ovarian cancer. Through two important acquisitions in the last three years, we are building capabilities to develop new cancer immunotherapeutic products harnessing mechanisms of immune system surveillance in the human body.

In November 2006, we acquired an exclusive, worldwide license from Cedars-Sinai Medical Center to certain technology for use as cellular-based therapies, including 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. In June 2008, we licensed an additional technology from Cedars-Sinai to target cancer stem cells that may be applicable for brain tumors as well as several other cancer indications.

In February 2008, we entered into an agreement with Molecular Discoveries LLC, a New York limited liability company, covering our acquisition of certain monoclonal antibody related technology owned by Molecular Discoveries and completed the acquisition of the technology on that date. The technology acquired under the Molecular Discoveries agreement and now owned by us consists of (i) 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 (ii) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers. The monoclonal antibodies are covered by issued patents and pending patent applications in the fields of multiple myeloma, small cell lung and ovarian cancers.

In September 2009, we entered into a research and option license agreement with Roche Group, a leading global pharmaceutical company, giving them an option to acquire a license to develop and commercialize ICT-69, our monoclonal antibody product candidate targeting multiple myeloma and ovarian cancer. Upon completion of an evaluation period, Roche Group has the right to acquire for an option exercise payment a commercial license for this antibody from us, which would result in total payments due to us of up to $32 million in the event that all developmental milestones are met for multiple indications. Royalties also will be payable to us based on Roche Group’s worldwide sales, if any, of ICT-69 products.

In November 2009, we entered into an option agreement with the MD Anderson Cancer Center relating to an immunotherapy targeting cancer stem cells that has demonstrated in pre-clinical animal models significant abilities to target and destroy these cells. This technology is an immunotherapy targeting cancer stem cells using abnormal notch and numb pathways, two mechanisms implicated in many common solid tumors, including breast, colon and ovarian cancers. Pre-clinical research indicates that cytotoxic T cells induced by these peptides (polymers of amino acids) preferentially target cancer stem cells derived from breast cancer, ovarian cancer and pancreatic cancer; expression of these peptides has been demonstrated on clinical samples from ovarian cancer patients.

We do not currently anticipate that we will derive any revenues from either product sales or licensing during the foreseeable future. We do not have any bank credit lines and have financed all of our prior operations through the sale of securities, including a private placement of shares of our common stock and warrants to purchase shares of our common stock that we completed on March 29, 2010 that generated $1,740,000 of proceeds for us (before commissions and offering expenses).

arrangement with Socius Capital Group, LLC, will be sufficient to fund our currently planned level of operations for at least the next twelve months. We will seek to obtain additional funds through various financing sources, including possible sales of our securities, and in the longer term through strategic alliances with other pharmaceutical or biopharmaceutical companies, but there can be no assurance that we will be able to obtain any additional funding from any potential financing sources, or create any such alliances, or that the terms under which we would obtain any funding will be sufficient to fund our operations.

Company History

We filed our original Certificate of Incorporation with the Secretary of State of Delaware on March 20, 1987 under the name Redwing Capital Corp. On June 16, 1989, we changed our name to Patco Industries, Ltd. and conducted an unrelated business under that name until 1994. On January 30, 2006, we amended our Certificate of Incorporation to change our name to Optical Molecular Imaging, Inc. in connection with our merger on January 31, 2006 with Spectral Molecular Imaging, Inc. On November 2, 2006, we amended our Certificate of Incorporation to change our name to ImmunoCellular Therapeutics, Ltd. to reflect our disposition of our Spectral Molecular Imaging subsidiary and our acquisition of our cellular-based technology from Cedars-Sinai.

Our principal executive offices are located at 21900 Burbank Boulevard, 3 ^rd Floor, Woodland Hills, California 91367, and our telephone number at that address is (818) 992-2907.

Technology and Proposed Products

Overview

The table below summarizes the status of our product candidates


Product candidate	Target Indication	Status

Active Immunotherapy:

ICT-107 (cancer antigen vaccine)	Glioblastoma	Phase I completed.

ICT-121 (cancer stem cell antigen vaccine)	Glioblastoma, Pancreatic cancer and other solid tumor cancers	Pre-clinical

Notch and Numb Peptides	Breast and ovarian cancers	Pre-clinical

Monoclonal Antibodies:

ICT-109 (Monoclonal Antibody)	Lung and pancreatic and colon cancer therapeutic	Pre-clinical

ICT-037 (Monoclonal Antibody)	colon, ovarian, multiple myeloma therapeutic and diagnostic	Pre-clinical

ICT-69 (Monoclonal Antibody)	Multiple myeloma and ovarian cancer	Pre-clinical (option agreement with Roche Group)

ICT-Diagnostic-SCLC	Diagnostic/Prognostic for small cell lung cancer	Pre-clinical

Cancer is caused by abnormal cells that grow in an uncontrolled manner. These cells proliferate and metastasize throughout the body causing tumors which can cause organ failure and death. The current treatments such as surgery, radiation and chemotherapy have limited therapeutic effects and significant undesirable side effects. Our approach is to harness the body’s immune system to provide therapeutics with the ability to fight cancer. There are two arms of the immune system that provide natural protection to the body: the cellular immune system (T-cell based) and the humoral immune system (B-cell based), which uses antibodies to fight foreign invaders. Our strategy is to utilize both of these mechanisms in our product development programs. We believe that the synergy between the two types of immunity can be powerful. Elicitation of a cellular immune response has the potential of long-term protection against malignant diseases, while infusion of monoclonal antibodies (concentrated product of the humoral response) has the capacity to confer an immediate shield against the disease. The latter is especially important in cases where the patient’s immune system is compromised due to toxic treatment of the disease and cannot mount an adequate response to the active vaccine. In some situations a combination of a passive vaccine (monoclonal antibodies) aimed at halting the dissemination of cancer cells through the blood followed by an active vaccine when the patient recuperates may constitute an effective synergistic approach.

Active Immunotherapy

One of our product strategies is the development of cell-based vaccine products that could bolster the body’s natural tendency through its immune system to defend it against malignant brain tumors. We have been developing two forms of these vaccines, one based on cancer stem cells and one based on dendritic cells.

The high rate of mortality of patients diagnosed with brain cancers and in particular with glioblastoma multiforme (the most lethal and devastating form) is driving the scientific community to discover and develop improved treatments that could increase the survival time and enhance the quality of life of patients. Of the approximately 19,000 cases of malignant brain and spinal cord tumors that are diagnosed each year in the United States, there currently is no satisfactory treatment, and the two-year survival rates are only in the range of 26%. Neither surgery, radiation nor anti-cancer drugs, the standard treatment modalities, have shown to date any prospect of meaningful extension of patients’ lives. We and others in the medical research community believe that immunotherapy has the potential, in the not too distant future, to be teamed with other treatment modalities to become an integral part of mainstream medical practice in the treatment of patients with brain tumors.

Dendritic Cell Vaccines

Dendritic cells (human derived cells responsible for antigen processing and presentation to the immune system) play a central role in the body’s immune response. They trigger the systems that help the body fight infection or foreign bodies, by initiating a T cell or T cell response to the infection or foreign body. The dendritic cells do this by recognizing, processing and presenting foreign antigens (substances that stimulate the production of antibodies and combine specifically with them) to the T cells, which then effectuate the immune response. The goal of a cell-based vaccine is to (i) make use of and enhance the dendritic cell’s ability to trigger the T cell response and (ii) to stimulate the dendritic cell to focus the T cell response to specifically target the cancer cells for destruction.

Even though dendritic cells can be very potent, they are usually not present in sufficient numbers to permit an adequately potent immune response to fight cancer. What is more, dendritic cells often do not react aggressively to malignant tumors; they do not treat the tumor as a foreign body that needs to be destroyed or neutralized. Dendritic cells are powerful potentiators of acquired immunity through an effective presentation of the cancer antigens to T cells which subsequently mediate the killing of the cancer cells. Thus, dendritic cells are critical facilitators of T cell response. Dendritic cell therapy generally involves harvesting dendritic cells from a patient, then culturing and processing them in a

laboratory to produce more numerous and effective dendritic cells. In the laboratory, the dendritic cells are cultured with specific antigens that are on tumor cells to enable the dendritic cells to recognize cancer cells as targets for attack. When the newly cultured dendritic cells are injected back into the patient, they seek out remaining tumor cells and signal the T cells to destroy them.

Peptide Vaccines Targeting Cancer Stem Cells

Cancer stem cells are considered as a subset of cancerous cells which are responsible for the growth and re-growth of the primary and metastatic tumors. Complete eradication of tumor masses requires elimination of these cells, which are resistant to standard chemotherapy and radiation therapy. There are a number of markers that have been identified on various cancer stem cells which could be exploited for targeting these cells. We are utilizing peptides in combination with an adjuvant that can elicit an immune response in the body by triggering T cells to identify and destroy these cancer stem cells. These peptides were specifically designed to elicit a T cell response targeting CD133 positive cancer stem cells that have been identified in a number of cancer types, including gliomas, colon cancer and pancreatic cancer.

Antibody Immunotherapy

Another strategy for our product development is to harness the other arm of the immune system, which uses antibodies that can bind and neutralize any foreign antigen. These antibodies are produced by the B-lymphocytes (B-cells), and each antibody recognizes only one antigen. The antibodies we have acquired from Molecular Discoveries have been created to recognize certain antigens primarily expressed on the cancer cells and not expressed on the normal cells, such that binding to those antigens can lead to death of the tumor cells. We also have acquired an antibody development platform called DIAAD from our technology acquisition from Molecular Discoveries, which may enable us to discover and develop novel antigens and antibodies for cancer cells.

ICT-107: Dendritic Cell-Based Vaccine Targeting Tumor Associated Antigens

Current treatment of glioblastoma multiforme and other brain cancers involves a combination of surgery, radiation treatment, and chemotherapy. A significant issue with chemotherapy is that even as the chemicals become more powerful and more specifically targeted at a tumor’s DNA, the tumor’s cells may “outmaneuver” the chemotherapy by mutating or otherwise repulsing the attack. However, by combining chemotherapy with a cell-based immunotherapy treatment regimen, it appears that this could potentially enhance chemotherapy sensitivity and thereby improve patient treatment.

In a number of laboratory and clinical trials, dendritic cell immunotherapy has succeeded in eliciting a powerful immune response against brain tumor cells, but without achieving significant improvement in length of survival. Similarly, chemotherapy, even using agents specifically designed to attack the DNA of tumor cells and prevent their replication, becomes ineffective as the tumor cells develop drug resistance.

By combining chemotherapy and immunotherapy in a “two wave” approach, we believe that more promising results may be achievable. This would combine a first wave of a dendritic cell-based vaccine that is specifically formulated using highly immunogenic tumor antigens designed to destroy tumor cells and their ability to mutate, followed by a second wave of targeted chemotherapy targeted against the remaining cancer cells that have had their ability to mutate significantly impaired or destroyed by the vaccine.

Dr. Yu completed two clinical trials at Cedars-Sinai prior to his association with our company using dendritic cells loaded with tumor lysates derived from the patient’s cancer to generate an immune response against intracranial tumors. The results of these early studies preliminarily demonstrated the

safety of dendritic cell vaccination as well as biological efficacy in generating specific anti-tumor T cell responses. Based upon some additional pre-clinical research, Dr. Yu and his Cedars-Sinai team have developed what they believe could be a new, improved dendritic cell-based therapeutic vaccine, ICT-107.

ICT-107 is a new generation dendritic cell-based therapeutic vaccine that consists of a number of specific tumor antigens which, when loaded onto the dendritic cells, are expected to stimulate the body’s T cells to target only these specific proteins on the patient’s tumor cells. This product candidate is an intradermal dendritic cell-based therapeutic vaccine that we plan to use with chemotherapy concomitantly or subsequent to conventional therapy in patients with first diagnosed or recurrent glioblastoma.

We have tested ICT-107 in a Phase I clinical trial at Cedars-Sinai in patients with glioblastoma. The trial enrolled 19 patients and the vaccine was well tolerated, with no significant adverse events reported. Of the 19 patients enrolled, 12 patients are still alive, with six patients surviving at least two years after the surgery that preceded their vaccine treatment. Of the 12 patients who are still alive, three of the patients are completely free of the disease after two years, and four of the patients are completely free of the disease after one year. The median progression free survival in the 16 newly diagnosed patients enrolled in the trial was 18 months and seven of these 16 patients continue to show no signs of tumor recurrence at the present time.

In January 2010, we reported the results of a study in which it was shown that certain specific antigens are highly expressed on cancer stem cells. This suggests that ICT-107, which targets those antigens, potentially may effectively target not only the cells that make up the bulk of certain cancerous tumors, but also the cancer stem cells that are widely believed to give rise to them and to cause their recurrence.

Subject to obtaining sufficient capital to fund the trial, we are targeting initiating a multicenter Phase II clinical trial of ICT-107 by the end of 2010.

ICT-121: Cancer Stem Cell Vaccine For Glioblastoma Multiforme

The laboratory at Cedars-Sinai Medical Center of Dr. John Yu, our Chairman of the Board and the Director of Surgical Neurooncology at the Maxine Dunitz Neurosurgical Institute at Cedars-Sinai, was instrumental in identifying the cancer stem cells in glioblastoma. The characterization of cancer stem cells from glioblastoma has provided an opportunity to study the etiology of this dreaded disease and to be engaged in the development of product candidates that would be able to target the cancer stem cells which are believed to be responsible for the initiation and maintenance of glioblastoma. Dr. Yu and his team have identified several peptides that can elicit an immune response targeting CD133, a common marker present on most cancer stem cells. These peptides are specific to certain HLA markers in humans.

Our vaccine product candidate, ICT-121, is a peptide that can elicit an immune response in a HLA-A*0201 serotype patient population to target CD133 positive cancer stem cells in brain tumors and other cancers. HLA is the molecule by which protein segments are presented to the immune system by antigen presenting cells. HLA-A2 represents the most prevalent HLA Class I type in North America. The current treatment of glioblastoma and other brain cancers involves a combination of surgery, radiation treatment and chemotherapy. One of the significant issues with this treatment is the recurrence of tumors after a few months of treatment, which may be due to cancer stem cells left intact as these cells are resistant to chemotherapy as well as radiation therapy. By combining conventional treatment with a vaccine to target remaining cancer stem cells, one could potentially significantly delay or eliminate recurrence of these tumors.

We are currently conducting additional preclinical studies to support an IND filing that we are targeting for ICT-121 in the second half of 2010. Subject to obtaining sufficient capital to fund the trial, we plan to initiate a Phase I clinical trial for this vaccine after the IND filing has been cleared by the FDA. This trial will be a multi-center clinical trial in both recurrent as well as newly diagnosed patients with clinical as well as immunological response as the end points. We plan to enroll 15-20 patients for this trial.

Monoclonal Antibodies Targeting Cancer

We acquired from Molecular Discoveries several monoclonal antibodies that react with small cell lung cancer cells, bind to the molecular structure and kill those cells in vitro. The survival rate is significantly higher when the disease is still localized, but only 16% of lung cancers are diagnosed at this early stage according to the American Cancer Society. Thus, the creation of new screening, monitoring and diagnostic tests for early detection and disease follow-up of small cell lung cancer may save many lives and prolong the survival of patients afflicted with this devastating disease.

In collaboration with George Mason University, we recently completed a pilot study evaluating the cancer detection abilities of one of our monoclonal antibody product candidates, ICT-109. Data from this study demonstrated that ICT-109 had a statistically significant ability to discriminate between cancerous and non-cancerous samples, suggesting the potential to detect pancreatic and lung cancer in plasma and serum study sets. The study used reverse phase micro array technology to determine serum and plasma expression levels of glycosylated CEA, and was performed in collaboration with Dr. Emanuel Petricoin at George Mason University. Researchers at George Mason University investigated the ability of ICT-109 to detect pancreatic and lung cancer by binding specifically to glycosylated epitopes of CEA-CAM6 and CEA-CAM5, two common markers that are overly expressed in a majority of cancers. Glycosylated CEA is highly expressed in patients with pancreatic and lung cancers, and can be used to detect these cancers using a direct blood test. As CEA-CAM5 and CEA-CAM6 are also present on the normal tissue, any commercial product would require adding additional markers for developing a test with higher sensitivity and specificity.

Small cell lung cancer is the most aggressive form of lung cancer tethered with cigarette smoking. Small cell lung cancer cases are estimated to constitute about 13% of all lung cancer cases. In the United States, the American Cancer Society estimated 210,000 new lung cancer cases, as well as 161,000 deaths, occurred in 2008. Early diagnosis of small cell lung cancer is very difficult, and consequently, the vast majority of patients manifest an established cancer with metastasis at the time of diagnosis.

DIAAD utilizes immunological tolerization to accelerate the discovery of the molecular differences between diseased cells and their normal counterparts. The monoclonal antibodies produced by DIAAD provide the basis for the discovery and development of our potential diagnostic and therapeutic products.

DIAAD enhances the antibody response of laboratory animals to disease-specific antigens. Antibodies are proteins produced by the body’s immune system that target and selectively bind antigens found on the surface of cancer cells or cells invaded by pathogens such as bacteria and viruses. There are billions of antibodies, each capable of recognizing and binding a different and specific antigen. Antibodies produced from a single B cell are termed “monoclonal” and represent one unique protein sequence with a unique specificity and affinity.

Conventional methods of monoclonal antibody discovery involve immunizing a laboratory animal with diseased cells. Since the majority of the antigens expressed by the diseased cells are also present on normal cells, the vast majority of the antibodies produced also bind to the normal cells. The discovery of antibodies that bind only to the diseased cell involves a lengthy screening process to remove antibodies reacting with normal tissues. Thus, the screen for such an antibody is often exhaustive and time consuming and entails testing thousands of antibodies for their ability to bind selectively to the diseased cell.

DIAAD focuses the immune response on the tumor antigens by first eliminating the immune response directed against antigens on the normal cells. This is done by a process immunologists call tolerization, which is followed by immunizing the tolerized animals with prostate cancer cells. This directs the immune response towards only those antigens that are present on the cancerous but not on the normal cells.

We are continuing development of our monoclonal antibody product candidates, ICT-37 and ICT-109, for the diagnosis and treatment of small cell lung cancer and pancreatic cancer. Last year, we initiated a collaboration with Antitope, Ltd (UK) to humanize these antibodies by using their proprietary technologies, which was completed in August 2009. In light of the potential need to access other technology to combine our antibodies with other cancer killing technologies and the significant projected pre-clinical development costs for these antibodies, we plan during 2010 to seek partners or licensees to develop these product candidates.

We also have another antibody product candidate, ICT-69, which targets ovarian cancer and multiple myeloma. ICT-69 was designed using our DIAAD (differential immunization for antigen and antibody discovery) technology with the purpose of targeting human multiple myeloma and ovarian cancer cells. Preclinical data have demonstrated the ability of ICT-69 to target antigens specific to human multiple myeloma cells without binding to healthy tissues, making it a potential candidate for therapeutic applications associated with multiple myeloma as our preliminary data indicates that it directly targets malignant cells without corresponding damage to healthy cells. Consistent with our antibody plans above, we entered into a research and option license agreement with Roche Group, a leading global pharmaceutical company, giving them an option to acquire a license to develop and commercialize our monoclonal antibody targeting multiple myeloma and ovarian cancer. Upon completion of an evaluation period, Roche has the right to acquire for an option exercise payment a commercial license for this antibody from us, which would result in total payments due to us of up to $32 million in the event that all developmental milestones are met for multiple indications. Royalties also will be payable to us based on Roche Group’s worldwide sales, if any, of ICT-69 products.

These monoclonal antibody programs are at a pre-clinical stage of development and will require further development before an IND can be potentially filed for human testing. We expect our potential partners or licensees to do this development work.

Cedars-Sinai License Agreement

In November 2006, we entered into a license agreement with Cedars-Sinai under which we acquired an exclusive, worldwide license to our technology for use as cellular therapies, including 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, we issued Cedars-Sinai 694,000 shares of our common stock and paid Cedars-Sinai $62,000. Additional specified milestone payments will be required to be paid by us to Cedars-Sinai when we initiate patient enrollment in our first Phase III clinical trial and when we receive FDA marketing approval for our first product.

In June 2008, we licensed an additional cancer stem cell vaccine technology from Cedars-Sinai for which we paid 100,000 shares of our common stock.

We have agreed to pay Cedars-Sinai specified percentages of all of our sublicensing income and of our gross revenues from sales of products based on the licensed technology, subject to a reduction if we must make any payments to any third party whose proprietary rights would be infringed by sale of the products. To maintain our rights to the licensed technology, we must meet certain development and funding milestones.

Molecular Discoveries Agreement

In February 2008, we entered into an agreement with Molecular Discoveries covering our acquisition of certain monoclonal antibody related technology owned by Molecular Discoveries and completed the acquisition of the technology on that date. The Molecular Discoveries Agreement also was acknowledged and agreed to by Dr. Cohava Gelber, an inventor of the technology acquired by us under this agreement and an equity owner of Molecular Discoveries. We have retained Dr. Gelber as a consultant to assist us in developing the acquired technology.

The technology acquired under the Molecular Discoveries agreement and now owned by us consists of (i) a platform technology referred to by Molecular Discoveries as DIAAD for the potentially rapid discovery of monoclonal antibodies to detect and treat cancer and other chronic diseases and (ii) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers. The monoclonal antibodies are covered by issued patents and pending patent applications in the fields of multiple myeloma, small cell lung and ovarian cancers.

The consideration that we paid for the acquired technology consists of (i) the issuance of 800,000 shares of our common stock to Molecular Discoveries and (ii) our reimbursement to Molecular Discoveries or its managing member of $250,000 of previously incurred patent expenses. We are required to register the shares that we have issued to Molecular Discoveries, which has agreed to not publicly resell more than 100,000 shares in any 90-day period. All of the shares issued to Molecular Discoveries have been placed in escrow to secure its obligations to us under the Molecular Discoveries agreement, with 400,000 shares released in February 2009 and the remaining shares subject to release in February 2010.

Intellectual Property

We acquired exclusive worldwide rights from Cedars-Sinai to the inventions described below. Our dendritic cell based vaccine and cancer stem cell vaccine product candidates are currently covered by patent applications that have been filed in the United States. Our current patent applications for our vaccine technology are as follows:

•

“Cancer Vaccine Including Dendritic Cells Loaded with Tumor-Associated Antigens.” A U.S. patent application has been filed relating to a vaccine including dendritic cells loaded with tumor-associated antigens.

•

“Cancer Vaccine Including Antigens Obtained From Cancer Stem Cells.” A U.S. patent application has been filed relating to a vaccine including dendritic cells loaded with antigens obtained from cancer stem cells.

•

“Use of COX-2 Inhibitors to Prevent T-Cell Anergy Induced by Dendritic Cell Therapy.” A U.S. patent application has been filed relating to the use of COX-2 inhibitors in combination with a therapeutic dendritic cell vaccine for treating cancer.

•

“Intratumoral Delivery of Dendritic Cells.” Patent rights based on an International PCT Patent Application are pending in Europe and South Korea for intellectual property on the treatment of a tumor by administering dendritic cells either directly into the tumor or into its surrounding tissue.

In addition, we have acquired exclusive worldwide ownership rights to seven granted U.S. patents and 14 U. S. and foreign patent applications through our acquisition of the monoclonal antibody related technology from Molecular Discoveries. The issued patents relate to monoclonal antibodies targeting various cancers, including human myeloma, ovarian cancer and small cell lung cancer.

Employees

We have three full-time employees, including our President and Chief Executive Officer and our Vice-President – Product Development and Manufacturing. Our Chairman of the Board and our Chief Financial Officer work part-time for us. In addition, we have a number of consulting agreements for regulatory affairs, investor relations and business development.

Competition

The pharmaceutical and biopharmaceutical industry is characterized by intense competition and rapid and significant technological changes and advancements. Many companies, research institutions and universities are doing research and development work in a number of areas similar to those that we focus on that could lead to the development of new products which could compete with and be superior to our product candidates.

Most of the companies with which we compete have substantially greater financial, technical, manufacturing, marketing, distribution and other resources than those of ours. A number of these companies may have or may develop technologies for developing products for treating various diseases that could prove to be superior to ours. We expect technological developments in the pharmaceutical and biopharmaceutical and related fields to occur at a rapid rate, and we believe competition will intensify as advances in these fields are made. Accordingly, we will be required to continue to devote substantial resources and efforts to research and development activities in order to potentially achieve and maintain a competitive position in this field. Products that we develop may become obsolete before we are able to market them or to recover all or any portion of our research and development expenses. We will be competing with respect to our products with companies that have significantly more experience in undertaking preclinical testing and human clinical trials with new or improved therapeutic products and obtaining regulatory approvals of such products. A number of these companies already market and may be in advanced phases of clinical testing of various drugs that may compete with our lead product candidate or any future product candidates. Our competitors may develop or commercialize products more rapidly than we do or with significant advantages over any products we develop. Our competitors may therefore be more successful in commercializing their products than we are, which could adversely affect our competitive position and business.

In addition to larger pharmaceutical or biopharmaceutical companies that may develop different competing technologies or technologies within the stem cell field, we will be competing with a number of smaller biotechnology companies that are focused on cellular therapy technologies, which may include among others Dendreon, Northwest Biotherapeutics, Antigenics, Celldex Therapeutics, NeuralStem, Geron, NeuroNova, ReNeuron, Stemcells, Inc., Advanced Cell Technology and Osiris Therapeutics. We are aware that Dendreon and Northwest Biotherapeutics have conducted clinical trials with cancer vaccine product candidates utilizing dendritic cells (including a Northwest Biotherapeutics candidate for treating brain tumors that has been approved for marketing in Switzerland), and other companies may also be developing vaccines of this type.

A number of monoclonal antibody products currently are being marketed for the treatment of cancer, including Rituxan ^® , Herceptin ^® , Compath ^® , Avastin ^® , Erbitux ^® , Vectibix ^® , Zevatin ^® , and Bexxar ^® , and numerous other monoclonal antibody based products are under development for the treatment of cancer. In the monoclonal antibody space, we will be directly competing against a number of other well-established pharmaceutical and biotech companies such as Genentech, Seattle Genetics, Immunomedica, Medarex, Immunogen and others. Several of these companies are also targeting lung, pancreatic and colon cancer.

Colleges, universities, governmental agencies and other public and private research organizations are becoming more active in seeking patent protection and licensing arrangements to collect royalties for use of technologies that they have developed, some of which may be directly competitive with our lead product candidate or any future product candidates. The governments of a number of foreign countries are aggressively investing in cellular therapy research and promoting such research by public and private institutions within those countries. These domestic and foreign institutions and governmental agencies, along with pharmaceutical and specialized biotechnology companies, can be expected to compete with us in recruiting qualified scientific personnel.

Our competitive position will be significantly impacted by the following factors, among others:

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our ability to obtain FDA marketing approval for our product candidates on a timely basis

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the level of acceptance of our products by physicians, compared to those of competing products or therapies

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our ability to have our products manufactured on a commercial scale

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the effectiveness of sales and marketing efforts on behalf of our products

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our ability to meet demand for our products

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our ability to secure insurance reimbursement for our products candidates

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the price of our products relative to competing products or therapies

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our ability to recruit and retain appropriate management and scientific personnel

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our ability to develop a commercial scale research and development, manufacturing and marketing infrastructure either on our own or with one or more future strategic partners.

Government Regulation

The United States and other developed countries extensively regulate the preclinical and clinical testing, manufacturing, labeling, storage, record-keeping, advertising, promotion, export, marketing and distribution of drugs and biologic products. The United States Food and Drug Administration, under the Federal Food, Drug, and Cosmetic Act, the Public Health Service Act and other federal statutes and regulations, regulates pharmaceutical and biologic products.

To obtain approval of our product candidates from the FDA, we must, among other requirements, submit data supporting safety and efficacy for the intended indication as well as detailed information on the manufacture and composition of the product candidate. In most cases, this will require extensive laboratory tests and preclinical and clinical trials. The collection of these data, as well as the preparation of applications for review by the FDA involve significant time and expense. The FDA also may require post-marketing testing to monitor the safety and efficacy of approved products or place conditions on any approvals that could restrict the therapeutic claims and commercial applications of these products. Regulatory authorities may withdraw product approvals if we fail to comply with regulatory standards or if we encounter problems at any time following initial marketing of our products.

The first stage of the FDA approval process for a new biologic or drug involves completion of preclinical studies and the submission of the results of these studies to the FDA. This data, together with proposed clinical protocols, manufacturing information, analytical data and other information submitted to the FDA, in an investigational new drug application (“IND”), must become effective before human clinical trials may commence. Preclinical studies generally involve FDA regulated laboratory evaluation of product characteristics and animal studies to assess the efficacy and safety of the product candidate.

After the IND becomes effective, a company may commence human clinical trials. These are typically conducted in three sequential phases, but the phases may overlap. Phase I trials consist of testing of the product candidate in a small number of patients or healthy volunteers, primarily for safety at one or more doses. Phase I trials in cancer are often conducted with patients who are not healthy and who have end-stage or metastatic cancer. Phase II trials, in addition to safety, evaluate the efficacy of the product candidate in a patient population somewhat larger than Phase I trials. Phase III trials typically involve additional testing for safety and clinical efficacy in an expanded population at multiple test sites. A company must submit to the FDA a clinical protocol, accompanied by the approval of the Institutional Review Boards at the institutions participating in the trials, prior to commencement of each clinical trial.

To obtain FDA marketing authorization, a company must submit to the FDA the results of the preclinical and clinical testing, together with, among other things, detailed information on the manufacture and composition of the product candidate, in the form of a new drug application (“NDA”) or, in the case of a biologic, like dendritic cell-based vaccines for neurological disorders, a biologics license application (“BLA”).

The amount of time taken by the FDA for approval of an NDA or BLA will depend upon a number of factors, including whether the product candidate has received priority review, the quality of the submission and studies presented, the potential contribution that the compound will make in improving the treatment of the disease in question, and the workload at the FDA. The FDA has committed to reviewing standard BLAs in 10 months and priority BLAs in six months, but the actual time it takes to review any BLA that we may file could be substantially longer.

The FDA may, during its review of an NDA or BLA, ask for additional test data that may require the conduct of additional clinical trials. If the FDA does ultimately approve the product candidate for marketing, it may require post-marketing testing to monitor the safety and effectiveness of the product. The FDA also may in some circumstances impose restrictions on the use of the product, which may be difficult and expensive to administer and may require prior approval of promotional materials.

The FDA may, in some cases, confer upon an investigational product the status of a fast track product. A fast track product is defined as a new drug or biologic intended for the treatment of a serious or life-threatening condition that demonstrates the potential to address unmet medical needs for this condition. The FDA can base approval of an NDA or BLA for a fast track product on an effect on a surrogate endpoint, or on another endpoint that is reasonably likely to predict clinical benefit. If a preliminary review of clinical data suggests that a fast track product may be effective, the FDA may initiate review of entire sections of a marketing application for a fast track product before the sponsor completes the application.

We will also be subject to a variety of regulations governing clinical trials and sales of our products outside the United States. Whether or not FDA approval has been obtained, approval of a product candidate by the comparable regulatory authorities of foreign countries and regions must be obtained prior to the commencement of marketing the product in those countries. The approval process varies from one regulatory authority to another and the time may be longer or shorter than that required for FDA approval. In the European Union, Canada and Australia, regulatory requirements and approval processes are similar, in principle, to those in the United States.

Before approving a BLA, the FDA will inspect the facilities at which the product is manufactured and will not approve the product unless the manufacturing facilities are in compliance with the FDA’s cGMP, which are regulations that govern the manufacture, holding and distribution of a product. Manufacturers of biologics also must comply with the FDA’s general biological product standards.

Following approval, the FDA periodically inspects drug and biologic manufacturing facilities to ensure continued compliance with the good manufacturing practices regulations. We must ensure that any third-party manufacturers continue to comply with those requirements. Failure to comply with these requirements subjects the manufacturer to possible legal or regulatory action, such as suspension of manufacturing or recall or seizure of product. Adverse patient experiences with the product must be reported to the FDA and could result in the imposition of marketing restrictions through labeling changes or market removal. Product approvals may be withdrawn if compliance with regulatory requirements is not maintained or if problems concerning safety or efficacy of the product occur following approval.

The labeling, advertising, promotion, marketing and distribution of a drug or biologic product also must be in compliance with FDA and Federal Trade Commission, requirements, which include, among others, standards and regulations for off-label promotion, industry sponsored scientific and educational activities, promotional activities involving the internet, and direct-to-consumer advertising. We also will be subject to a variety of federal, state and local regulations relating to the use, handling, storage and disposal of hazardous materials, including chemicals and radioactive and biological materials. In addition, we will be subject to various laws and regulations governing laboratory practices and the experimental use of animals. In each of these areas, as above, the FDA has broad regulatory and enforcement powers, including the ability to levy fines and civil penalties, suspend or delay issuance of product approvals, seize or recall products, and deny or withdraw approvals.

We also will be subject to federal regulation by the Occupational Safety and Health Administration and the Environmental Protection Agency and to regulation under the Toxic Substances Control Act, the Resource Conservation and Recovery Act and other federal and state regulatory statutes, and may in the future be subject to other federal, state or local regulations.

GLOSSARY OF TERMS


Antibody:		any of a large body of proteins normally present in the body or produced in response to an antigen that it neutralizes, thus producing an immune response.

Antigen:		any substance that when introduced into the body can stimulate the production of antibodies and combine specifically with them.

Cancer Stem Cell:		cancer cells (found within tumors or hematological cancers) that possess characteristics associated with normal stem cells, specifically the ability to give rise to all cell types found in a particular cancer sample.

Cellular differentiation:		the process by which a cell becomes specialized in order to perform a specific function.

Cytokine:		any of a class of immunoregulatory proteins (such as interleukin, tumor necrosis factor, and interferon) that are released by cells of the immune system and act as intercellular mediators in the generation of an immune response. Also called chemokine.

Dendritic cell:		a highly specialized white blood cell found in the skin, mucosa and lymphoid tissues that initiates a primary immune response by activating lymphocytes and secreting cytokines.

DNA:		a nucleic acid that carries the genetic information in the cell and is capable of self-replication and synthesis of RNA, which determines protein synthesis and the transmission of genetic information.

Epitope:		a localized region on the surface of an antigen that is capable of eliciting an immune response and of combining with a specific antibody to counter that response.

Glioblastoma multiforme (GBM):		the most common and most aggressive type of primary brain tumor in humans

Immunogenic:		capable of inducing an immune response.

Lymphocyte:		any of various white blood cells, including B cells and T cells, that function in the body’s immune system by recognizing and deactivating antigens. B cells act by stimulating the production of antibodies. T cells contain receptors on their cell surfaces that are capable of recognizing and binding to specific antigens. Lymphocytes are found in the lymph nodes and spleen and circulate continuously in the blood and lymph.

Lysate:		the cellular debris and fluid produced by the disintegration of a cell resulting from the destruction of its membrane by a chemical substance, especially an antibody or enzyme.

Peptide:		a compound containing two or more amino acids in which the carboxyl group of one acid is linked to the amino group of the other

Stem cell:		an unspecified cell that upon division replaces its own numbers and also gives rise to cells that differentiate further into one or more specialized cell type.

T cell:		any of several closely related lymphocytes, developed in the thymus, which circulate in the blood and lymph and orchestrate the immune system’s response to infected or malignant cells.

Item 1A.

Risk Factors.

An investment in our securities involves a high degree of risk. You should carefully consider the risks described below before deciding to invest in or maintain your investment in our company. The risks described below are not intended to be an all-inclusive list of all of the potential risks relating to an investment in our securities. If any of the following or other risks actually occur, our business, financial condition or operating results and the trading price or value of our securities could be materially and adversely affected.

Risks Related To Our Business

We are a development-stage company subject to all of the risks and uncertainties of a new business, including the risk that we may never market any products or generate revenues.

We are a development-stage company that has only recently commenced any significant research and development activity. There is no assurance that we will be able to satisfactorily develop or market any of our current or proposed product candidates or that those product candidates will generate revenues or that any revenues generated will be sufficient for us to become profitable or thereafter maintain profitability. Only one of our product candidates has been clinically tested in an early stage trial. We have not generated any recurring revenues to date, and we do not expect to generate any such revenues for a number of years.

Our cell-based vaccine technologies and our recently acquired monoclonal antibody based technology currently are our primary platform technologies, and our commercial prospects will be heavily dependent on the outcome of the contemplated clinical trials for our two current vaccine product candidates and our ability to successfully develop and then clinically test one or more monoclonal antibody product candidates. We have only three full-time employees, including our President and Chief Executive Officer and our Vice-President – Product Development and Manufacturing, have limited resources and may not possess the ability to successfully overcome many of the risks and uncertainties frequently encountered by early stage companies involved in the new and rapidly evolving field of biotechnology in general and cancer immunotherapies and monoclonal antibodies in particular. You must consider that we may not be able to:

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obtain additional financial resources necessary to develop, test, manufacture and market our vaccine product candidates, our monoclonal antibody product candidates or any future product candidates;

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engage corporate partners to assist in developing, testing, manufacturing and marketing our vaccine product candidates, our monoclonal antibody product candidates or any future product candidates;

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satisfy the requirements of acceptable pre-clinical and clinical trial protocols, including timely patient enrollment;

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establish and demonstrate or satisfactorily complete the research to demonstrate at various stages the pre-clinical and clinical efficacy and safety of our vaccine product candidates, our monoclonal antibody product candidates or any future product candidates; and

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market our vaccine product candidates, our monoclonal antibody product candidates or any future product candidates to achieve acceptance and use by the medical community and patients in general and produce revenues.

We have a history of losses, expect future losses and cannot assure you that we will ever become or remain profitable.

With the exception of a licensing fee payment that we received in 2009 in connection with our entering into a research and license option agreement with Roche Group, we have not generated any revenues and have incurred operating losses since our inception, and we expect to continue to incur operating losses for the foreseeable future. There is no assurance that we will be able to develop or market products in the future that will generate revenues or that any revenues generated will be sufficient for us to become profitable or thereafter maintain profitability. In the event that our operating losses are greater than anticipated or continue for longer than anticipated, we will need to raise significant additional capital sooner, or in greater amounts, than otherwise anticipated in order to be able to continue development of our present or future product candidates and maintain our operations.

We will need to obtain significant additional capital, which additional funding may dilute our existing stockholders.

We believe that our existing cash balances, together with potential proceeds from our preferred stock purchase arrangement with Socius Capital Group, will be sufficient to fund our currently planned level of operations for at least the next twelve months. We will need significant funding to initiate and conduct our currently planned clinical trials for ICT-107 and ICT-121, as well as to carry out all of our development work on our vaccine product candidates, our monoclonal antibody product candidates and future product candidates and to expand the scope of our operations (including seeking to employ additional support personnel on a full-time basis). If we are unable to obtain sufficient capital on a timely basis, the development of our current or any future product candidates is likely to be delayed, and we could be forced to reduce the scope of our research and development projects or otherwise limit or terminate our operations altogether.

In December 2009, we entered into an agreement with Socius Capital under which Socius Capital has agreed to purchase from time to time an aggregate of up to $10 million of our preferred stock. However, Socius Capital’s obligation to purchase shares of our preferred stock is subject to our satisfying certain conditions at that time. There is no assurance that we will be able to satisfy those conditions if we wish to sell shares of our preferred stock to Socius Capital or that Socius Capital will have the ability to complete these purchases. In connection with each sale of preferred stock to Socius Capital, a pro rata portion of a warrant held by an affiliate of Socius Capital to purchase shares of our common stock will become exercisable. Should the Socius Capital affiliate sell substantial amounts of the underlying shares of our common stock, those sales could have a material adverse effect on the trading market for our common stock and make it impractical for us to make future sales of preferred stock to Socius Capital without substantial dilution to our existing shareholders.

Except for our financing agreement with Socius Capital, we have not identified the sources for the additional financing that we will require, and we do not have commitments from any third parties to provide this financing. Certain investors may be unwilling to invest in our securities since we are traded on the OTC Bulletin Board and not on a national securities exchange, particularly if there is only limited trading in our common stock on the OTC Bulletin Board at the time we seek financing. The volume and frequency of such trading has been limited to date. There is no assurance that sufficient funding through a financing will be available to us at acceptable terms or at all. Any additional funding that we obtain in a financing is likely to reduce the percentage ownership of the company held by our existing securityholders. The amount of this dilution may be substantially increased if the trading price of our common stock has declined at the time of any financing from its current levels. We may seek SBIR or other government grants to conduct a portion of our planned research and development work in addition to certain equity financing. We have not yet submitted any requests for these grants, the competition for obtaining these grants is intense and there is no assurance that we will secure any grant funding on a timely basis or at all.

Our access to Dr. Yu’s research laboratory at Cedars-Sinai may be limited.

We are heavily dependent upon Dr. John Yu, both for past research and as we develop our lead vaccine product candidates or any other or future vaccine product candidates. His laboratory at Cedars-Sinai has been financed in part by Cedars-Sinai (which is the licensor of our cellular-based therapy technology) and the National Institutes of Health (“NIH”). Cedars-Sinai or the NIH or other governmental agencies could promulgate new rules and regulations that might interfere with our product development or ownership rights if we wish to access on a contractual basis Dr. Yu’s laboratory at Cedars-Sinai in connection with our research and development activities.

Our current product candidates and any future product candidates will be based on novel technologies and are inherently risky.

We are subject to the risks of failure inherent in the development of products based on new technologies. The novel nature of the therapies creates significant challenges in regards to product development and optimization, manufacturing, government regulation, third-party reimbursement and market acceptance. For example, the FDA has limited experience with cancer stem cell or dendritic cell-based therapeutics and has not yet approved any of these therapeutics for marketing, and the pathway to regulatory approval for our vaccine product candidates or any future vaccine product candidates may accordingly be more uncertain, complex and lengthy than the pathway for new conventional drugs. The targeting of cancer stem cells as a potential therapy is a recent development that may not become broadly accepted by scientists or pharmaceutical companies. In addition, the manufacture of biological products, including cancer stem cell or dendritic cell-based vaccines, could be more complex and difficult, and therefore, these potential challenges may prevent us from developing and commercializing products on a timely or profitable basis or at all.

We may elect to delay or discontinue preclinical studies or clinical trials based on unfavorable results. Any product candidate using a cellular therapeutic technology may fail to:

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survive and persist in the desired location;

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provide the intended therapeutic benefits;

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properly integrate into existing tissue in the desired manner; or

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achieve therapeutic benefits equal to or better than the standard of treatment at the time of testing.

In addition, our product candidates may cause undesirable side effects. Results of preclinical research with our vaccine product candidates or any other or future product candidates or clinical results with formulations used in earlier trials that are similar but not identical to our product candidate formulations may not be indicative of the results that will be obtained in later stages of preclinical or clinical research on our product candidates. If regulatory authorities do not approve our products or if we fail to maintain regulatory compliance, we would be unable to commercialize our products, and our business and results of operations would be harmed. Furthermore, because cancer stem cell and dendritic cell based products represent new forms of therapy, the marketplace may not accept any products we may develop that utilize these technologies. If we do succeed in developing products, we will face many potential obstacles, such as the need to obtain regulatory approvals and to develop or obtain manufacturing, marketing and distribution capabilities. In addition, we will face substantial additional risks, such as product liability claims.

Because of the early stage of development of our vaccine product candidates, we do not know if we will be able to generate data that will support the filing of a biologics license or new drug application for these product candidates or the FDA’s approval thereof. If we experience substantial delays, we may not have the financial resources to continue development of these product candidates or the development of any of our any other or future product candidates. Delays in clinical trials could reduce the commercial viability of our vaccine product candidates and any other or future product candidates.

We are required to pay substantial royalties under our license agreement with Cedars-Sinai, and we must meet certain milestones to maintain our license rights.

Under our license agreement with Cedars-Sinai for our cellular-based therapy technology, we will be required to pay substantial royalties to that institution based on our revenues from sales of our products utilizing this technology, and these royalty payments could adversely affect the overall profitability for us of any products that we may seek to commercialize. In order to maintain our license rights under the Cedars-Sinai license agreement, we will need to meet certain specified milestones, subject to certain cure provisions, in the development of our vaccine product candidates and in the raising of funding. There is no assurance that we will be successful in meeting all of the milestones in the future on a timely basis or at all.

Before we can market our vaccine product candidates or any other or future product candidates, we must obtain governmental approval for each of these product candidates, the application and receipt of which is time-consuming, costly and uncertain.

Our current product candidates and any future product candidates that we will be developing will require approval of the U.S. Food and Drug Administration (“FDA”) before they can be marketed in the U.S. Although our focus at this time is primarily on the U.S. market, in the future similar approvals will need to be obtained from foreign regulatory agencies before we can market our current and proposed product candidates in other countries. The process for filing and obtaining FDA approval to market therapeutic products is both time-consuming and costly, with no certainty of a successful outcome. The historical failure rate for companies seeking to obtain FDA approval of therapeutic products is high and no cancer stem cell or dendritic cell-based cancer vaccine has to date been approved by the FDA. This process includes conducting extensive pre-clinical research and clinical testing, which may take longer and cost more than we initially anticipate due to numerous factors, including without limitation, difficulty in securing appropriate centers to conduct trials, difficulty in enrolling patients in conformity with required protocols in a timely manner, unexpected adverse reactions by patients in the trials to our proposed product candidates and changes in the FDA’s requirements for our testing during the course of that testing. The FDA may require pre-clinical work for our monoclonal antibody product candidates beyond what we currently plan to conduct, which could necessitate significant expenditures on our part that we have not budgeted and which could significantly delay the commencement of clinical trials for these product candidates. The formulation of our cancer stem cell vaccine product candidate needs to be completed and certain animal testing must be completed with this formulation before we can test this product candidate in humans. Our cancer stem cell vaccine product candidate has not been previously tested in patients, and we may encounter unexpected and adverse immune responses or other side effects in the patients whom we test with this product candidate.

The time required to obtain FDA and other approvals is unpredictable but often can exceed five years following the commencement of clinical trials, depending upon the complexity of the product and other factors. Any analysis we perform of data from preclinical and clinical activities is subject to confirmation and interpretation by regulatory authorities, which could delay, limit or prevent regulatory approval. We may also encounter unexpected delays or increased costs due to a variety of reasons, including new government regulations from future legislation or administrative action, or from changes in FDA policy during the period of product development, clinical trials and FDA regulatory review.

Any delay or failure in our clinical trial program and in obtaining required approvals would have a material adverse effect on our ability to generate revenues from the particular product. Furthermore, any regulatory approval to market a product may be subject to limitations on the indicated uses for which we may market the product. These limitations may limit the size of the market for the product.

Our lead vaccine product candidate and any other or future product candidates may not be eligible for Orphan Drug status.

The United States and Europe may designate drugs for relatively small patient populations as orphan drugs. Orphan Drug designation does not convey any advantage in, or shorten the duration of, the regulatory review and approval process, but does make the product eligible for orphan drug exclusivity, reduced filing fees and specific tax credits. Generally, if a company receives the first marketing approval for a product with an Orphan Drug designation in the clinical indication for which it has such designation, the product is entitled to orphan drug exclusivity. Orphan drug exclusivity means that the FDA will not approve another application to market the same drug for the same indication, except in limited circumstances, for a period of seven years in the United States. This exclusivity, however, could block the approval of our proposed product candidates if a competitor obtains marketing approval before us. We plan to seek orphan drug status for our dendritic cell vaccine to treat glioblastoma multiforme and may also seek this status for our cancer stem cell vaccine to treat glioblastoma multiforme and other diseases if we meet the eligibility criteria. However, even if we obtain orphan drug exclusivity for any of our proposed product candidates, we may not be able to maintain it. For example, if a competitive product is shown to be clinically superior to our product, any orphan drug exclusivity we have will not block the approval of such competitive product.

Fast Track designation for development of our vaccine product candidates or any other potential product candidate may not lead to a faster development or regulatory review or approval process, and it does not increase the likelihood that our product candidates will receive marketing approval.

If a drug is intended for the treatment of a serious or life-threatening condition and the drug demonstrates the potential to address unmet medical needs for this condition, the drug sponsor may apply for FDA Fast Track designation for a particular indication. Marketing applications filed by sponsors of products in Fast Track development may qualify for priority review under the policies and procedures offered by the FDA, but the Fast Track designation does not assure any such qualification or ultimate marketing approval by the FDA. Receipt of Fast Track designation may not result in a faster development process, review or approval compared to drugs considered for approval under conventional FDA procedures. In addition, the FDA may withdraw any Fast Track designation at any time. We may seek Fast Track designation for our vaccine product candidates or any other product candidates, but there is no assurance that the FDA will grant this status to any of our proposed product candidates.

Because our current product candidates represent and our other future potential product candidates will represent novel approaches to the treatment of disease, there are many uncertainties regarding the development, the market acceptance, third-party reimbursement coverage and the commercial potential of our product candidates.

There is no assurance that the approaches offered by our current product candidates or any future product candidates will gain broad acceptance among doctors or patients or that governmental agencies or third-party medical insurers will be willing to provide reimbursement coverage for proposed product candidates. Moreover, we do not have internal marketing data research resources and are not certain of and have not attempted to independently verify the potential size of the commercial markets for our current product candidates or any future product candidates. Since our current product candidates and any future product candidates will represent new approaches to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from these product candidates. We may spend large amounts of money trying to obtain approval for these product candidates, and never

succeed in doing so. In addition, these product candidates may not demonstrate in large sets of patients the pharmacological properties ascribed to them in the laboratory studies or smaller groups of patients, and they may interact with human biological systems in unforeseen, ineffective or even harmful ways either before or after they are approved to be marketed. We do not yet have sufficient information to reliably estimate what it will cost to commercially manufacture our current product candidates or any future product candidates, and the actual cost to manufacture these products could materially and adversely affect the commercial viability of these products. Certain of our cell-based vaccine product candidates may be formulated with cells harvested and processed from individual target patients, which could limit the target patient population for these vaccines and could require complex and costly manufacturing processes to produce these vaccines on a commercial basis. As a result, we may never succeed in developing a marketable product. If we do not successfully develop and commercialize products based upon our approach, we will not become profitable, which would materially and adversely affect the value of our common stock.

Other factors that are presently unknown to us that we believe will materially affect market acceptance of our current product candidates or any future product candidates include:

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the timing of our receipt of any marketing approvals, the terms of any approvals and the countries in which approvals are obtained;

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the safety, efficacy and ease of administration;

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the availability of government and third-party payor reimbursement;

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the pricing of our product candidates, particularly as compared to alternative treatments; and

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the availability of alternative effective forms of treatments, at that time, for the diseases that the product candidates we are developing are intended to treat.

Adverse publicity regarding cellular therapies could impact our business.

Although we are not utilizing embryonic stem cells, adverse publicity due to the ethical and social controversies surrounding the use of such cells or any adverse reported side effects from any stem cell, dendritic or other cell therapy clinical trials or to the failure of such trials to demonstrate that these therapies are efficacious could materially and adversely affect our ability to raise capital or recruit managerial or scientific personnel or obtain research grants.

As an early stage small company that will be competing against numerous large, established companies that have substantially greater financial, technical, manufacturing, marketing, distribution and other resources than we have, we will be at a significant competitive disadvantage.

Most of the companies with which we compete have substantially greater financial, technical, research, manufacturing, marketing, distribution and other resources than those of ours. A number of these companies may have or may develop technologies for developing products for treating various diseases, including brain cancers, that could prove to be superior to ours. We expect technological developments in the pharmaceutical and biopharmaceutical and related fields to occur at a rapid rate, and we believe competition will intensify as advances in these fields are made. Accordingly, we will be

required to continue to devote substantial resources and efforts to research and development activities in order to potentially achieve and maintain a competitive position in this field. Products that we develop may become obsolete before we are able to market them or to recover all or any portion of our research and development expenses. We will be competing with respect to our products with companies that have significantly more experience and expertise in undertaking preclinical testing and human clinical trials with new or improved therapeutic products and obtaining regulatory approvals of such products. A number of these companies already market and may be in advanced phases of clinical testing of various drugs that will or may compete with our current product candidates or other future potential product candidates. Our competitors may develop or commercialize products more rapidly than we do or with significant advantages over any products we develop. Our competitors may therefore be more successful in commercializing their products than we are, which could adversely affect our competitive position and business.

In addition to larger pharmaceutical or biopharmaceutical companies that may develop different competing technologies or technologies within the cellular and stem cell field, we will be competing with a number of smaller biotechnology companies that are focused on cellular therapy and cancer vaccine technologies, which may include among others AVANT Therapeutics, Dendreon, Northwest Biotherapeutics, Antigenics, Celldex Therapeutics, NeuralStem, Geron, NeuroNova, ReNeuron, Stemcells, Inc., Advanced Cell Technology and Osiris Therapeutics. We are aware that Dendreon and Northwest Biotherapeutics have conducted clinical trials with cancer vaccine product candidates utilizing dendritic cells (including a Northwest Biotherapeutics candidate for treating brain tumors), and AVANT Therapeutics is also currently conducting clinical trials to treat glioblastoma with their cancer vaccine. Other existing and new companies that may enter the field, may also be developing vaccines of this type.

Drugs targeting cancer stem cells is a new emerging field, and a number of companies are developing products that are in various stages of clinical or preclinical development. We will be competing with these companies, which may have more resources than we have. This list may include among others ChemGenex, GlaxoSmithKline, Geron, Stemline Therapeutics, OncoMed Pharmaceuticals, Raven and Arius Research. In addition, a number of academic and research centers are doing research in this area which may be commercialized by new or existing companies.

A number of monoclonal antibody products currently are being marketed for the treatment of cancer, including Rituxan ^® , Herceptin ^® , Compath ^® , Avastin ^® , Erbitux ^® , Vectibix ^® , Zevatin ^® , and Bexxar ^® , and numerous other monoclonal antibody based products are under development for the treatment of cancer. Accordingly, our monoclonal antibody products, if marketed, can be expected to compete with a number of monoclonal antibody products (as well as other products for the treatment of cancer) that are well established and marketed by substantial organizations.

Colleges, universities, governmental agencies and other public and private research organizations are becoming more active in seeking patent protection and licensing arrangements to collect royalties for use of technologies that they have developed, some of which may be directly competitive with our lead product candidate or any future product candidates. The governments of a number of foreign countries are aggressively investing in cellular therapy research and promoting such research by public and private institutions within those countries. These domestic and foreign institutions and governmental agencies, along with pharmaceutical and specialized biotechnology companies, also can be expected to compete with us in recruiting qualified scientific personnel.

We will need to outsource and rely on third parties for the clinical development and manufacture, sales and marketing of our current product candidates or any future product candidates, and our future success will be dependent on the timeliness and effectiveness of the efforts of these third parties.

We do not have the required financial and human resources to carry out on our own all the pre-clinical and clinical development for our vaccine product candidates or any other or future product candidates, and do not have the capability and resources to manufacture, market or sell our current product candidates or any future product candidates. Vaccines are often administered with one or more adjuvants, which if necessary we will have to procure from a third-party source. We will need to rely on a firm with expertise in producing a humanized form of our monoclonal antibody product candidates. Our business model calls for the outsourcing of the clinical and other development and manufacturing, sales and marketing of our product candidates in order to reduce our capital and infrastructure costs as a means of potentially improving our financial position. We have granted Roche Group an option to acquire a license to develop and commercialize ICT-69, one of our monoclonal antibody product candidates, although there is no assurance that Roche Group will elect to exercise that option. We currently are seeking a partner or licensee to be responsible for the early stage development of our other monoclonal antibody product candidates. Since we do not have any significant efficacy data for these product candidates, it will be more difficult for us to obtain partners or licensees on attractive terms or at all at this stage. Accordingly, we will seek to enter, at the appropriate time, into agreements with other companies that can assist us and provide certain capabilities that we do not possess. Even if we do succeed in securing these alliances, we may not be able to maintain them if, for example, development results are disappointing or approval of a product is delayed or sales of an approved product are below expectations. Furthermore, any delay in entering into agreements could delay the development and commercialization of our products and reduce their competitiveness even if they reach the market. Any such delay related to our agreements could adversely affect our business.

If any party to which we have outsourced certain functions fails to perform its obligations under agreements with us, the development and commercialization of our lead product candidate and any future product candidates could be delayed or terminated.

To the extent that we rely on third-party individuals or other companies to manage the day-to-day conduct of our clinical trials or to manufacture, sell or market our current product candidates or any future product candidates, we will be dependent on the timeliness and effectiveness of their efforts. If a clinical research management organization that we might utilize is unable to allocate sufficient qualified personnel to our studies or if the work performed by it does not fully satisfy the rigorous requirements of the FDA, we may encounter substantial delays and increased costs in completing our clinical trials. If a firm producing humanized forms of our molecular antibody product candidates or a manufacturer of the raw material or finished product for our clinical trials is unable to meet our time schedules or cost parameters, the timing of our clinical trials and development of our product candidates may be adversely affected. Any manufacturer that we select may encounter difficulties in scaling-up the manufacture of new products in commercial quantities, including problems involving product yields, product stability or shelf life, quality control, adequacy of control procedures and policies, compliance with FDA regulations and the need for further FDA approval of any new manufacturing processes and facilities. The manufacture of clinical supplies for studies and commercial quantities of our current product candidates and any future product candidates are likely to be inherently more difficult and costly than typical chemical pharmaceuticals. This could delay commercialization of any of our product candidates or reduce the profitability of these candidates for us. If any of these occur, the development and commercialization of our product candidates could be delayed, curtailed or terminated because we may not have sufficient financial resources or capabilities to continue such development and commercialization on our own.

If we or our manufacturers or service providers fail to comply with regulatory laws and regulations, we or they could be subject to enforcement actions, which could affect our ability to market and sell our vaccine product candidates and any other or future product candidates and may harm our reputation.

If we or our collaborators, manufacturers or service providers fail to comply with applicable federal, state or foreign laws or regulations, we could be subject to enforcement actions, which could affect our ability to develop, market and sell our current product candidates or any future product candidates under development successfully and could harm our reputation and lead to reduced or non-acceptance of our proposed product candidates by the market. Even technical recommendations or evidence by the FDA through letters, site visits, and overall recommendations to academia or biotechnology companies may make the manufacturing of a clinical product extremely labor intensive or expensive, making the product candidate no longer viable to manufacture in a cost efficient manner. The very nature of the product may make the product candidate not commercially viable. The required testing of the product candidate may make that candidate no longer commercially viable. The conduct of clinical trials may be critiqued by the FDA, or a clinical trial site’s Institutional Review Board or Institutional Biosafety Committee; which may delay or make impossible clinical testing of a product candidate. The Data Safety Monitoring Committee for a clinical trial established by us may stop a trial or deem a product candidate unsafe to continue testing. This may have significant negative repercussions on the value of the product candidate and may have negative repercussions on the company and on the shareholders.

Even if we obtain regulatory approvals, our products will be subject to ongoing regulatory review.

Following any initial regulatory approval of any products we may develop, we will also be subject to continuing regulatory review, including the review of adverse drug experiences and clinical results that are reported after our products are made commercially available. This would include results from any post-marketing tests or vigilance required as a condition of approval. The manufacturer and manufacturing facilities we use to make any of our products will also be subject to periodic review and inspection by the FDA. The discovery of any previously unknown problems with the product, manufacturer or facility may result in restrictions on the product or manufacturer or facility, including withdrawal of the product from the market. We do not have, and currently do not intend to develop, the ability to manufacture material for our clinical trials or on a commercial scale. Reliance on third-party manufacturers entails risks, including the continuation of a contractual or other relationship with the third-party manufacturer, and reliance on the third-party manufacturer for regulatory compliance. Our product promotion and advertising also will be subject to regulatory requirements and continuing FDA review.

The potential ramifications are far-reaching if there are areas identified as out of compliance by regulatory agencies, including, but not limited to, significant financial penalties, manufacturing and clinical trial consent decrees, commercialization restrictions or other restrictions and litigation.

Our patents may not protect the proprietorship of our products.

Our ability to compete successfully will depend significantly on our ability to defend patents that may have issued, obtain new patents, protect trade secrets and operate without infringing the proprietary rights of others or others infringing on our proprietary rights. Although Cedars-Sinai as our licensor has filed applications relative to our cancer vaccine technology, we are responsible going forward to prosecute these patent applications. We do not currently own or have licensed rights to any issued patents covering our cancer vaccine technology, and there is no guarantee that these patent applications will lead to issued patents.

Issuance of patents based upon the various patent applications licensed from Cedars-Sinai will depend upon the U.S. and foreign patent agencies being able to determine that the claims made in these applications were not already publicly known or were not obvious from prior published patents and

literature, including the extensive previous vaccine work performed and published by Dr. John Yu and other researchers at Cedars-Sinai. We have recently filed a provisional patent application covering our cancer stem cell vaccine product candidate. Another patent application that we licensed from Cedars-Sinai and that we have been pursuing was rejected by the U.S. Patent and Trademark Office based on prior art. This patent application covers the treatment of brain and other cancers by a combination of a dendritic cell-based vaccine and chemotherapy. We are seeking patent protection for our dendritic cell-based vaccine product candidate primarily through our licensed multiple antigen patent application. We are not dependent on any of the claims in the combination therapy application being granted in order to complete the development of or to commercialize our lead cancer stem cell vaccine product candidate or our dendritic cell-based vaccine product candidate. We may in the future elect to abandon one of more of our pending patent applications that do not provide significant coverage for the product candidates or technologies that we have focused on for strategic purposes.

Even if we are able to obtain patent protection for our vaccine product candidates or any of our other or future product candidates, there is no guarantee that the coverage of these patents or the existing patents we own covering our monoclonal antibody based technology will be sufficiently broad to protect us from competitors or that we will be able to enforce our patents against potential infringement by third parties. Patent litigation is expensive, and we may not be able to afford the costs. We may not become aware on a timely basis that products we are developing or marketing infringe the rights of others, nor may we be able to detect unauthorized use or take appropriate and timely steps to enforce our own intellectual property rights. Protecting our intellectual property rights may also consume significant management time and resources.

Dr. John Yu, a co-inventor of our cellular-based therapy technology who serves as our Chairman of the Board, is employed by Cedars-Sinai, which may assert that future intellectual property generated by Dr. Yu belongs to that institution rather than to us, and we may be required to seek a license from Cedars-Sinai for any such rights. We acquired our monoclonal antibody related technology from Molecular Discoveries, but third parties who previously employed that company’s lead scientist could potentially assert ownership claims to the technology. We do not have any issued patents or patent applications covering DIAAD and may not be able to protect this technology through any trade secrets that we may hold or future patents, if any, that we may seek to obtain.

Nondisclosure agreements with employees and third parties may not adequately prevent disclosure of trade secrets and other proprietary information.

In order to protect our proprietary technology and processes, we will also rely in part on nondisclosure agreements with our employees, licensing partners, consultants, agents and other organizations to which we disclose our proprietary information. These agreements may not effectively prevent disclosure of confidential information, may be limited as to their term, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we could not assert any trade secret rights against such party. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could adversely affect our competitive business position. Since we will rely on trade secrets and nondisclosure agreements, in addition to patents, to protect some of our intellectual property, there is a risk that third parties may obtain and improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect unauthorized use or take appropriate and timely steps to enforce our intellectual property rights.

The manufacture, use or sale of our current product candidates or any future product candidates may infringe on the patent rights of others, and we may be forced to litigate if an intellectual property dispute arises.

Should third parties patent specific cells, systems, receptors, monoclonal antibodies or other items that we are seeking to utilize in our development activities, we may be forced to license rights from these parties or abandon our development activities if we are unable to secure these rights on attractive terms or at all. In light of the large number of companies and institutions engaged in research and development in the cellular therapy and monoclonal antibody fields, we anticipate that many parties will be seeking patent rights for many cellular or monoclonal antibody based technologies and that licensing and cross licensing of these rights among various competitors may arise. Our dendritic cell-based vaccine product candidate utilizes six antigens for which we will be required to obtain licenses from a number of other parties before we can commercialize this product candidate. There is no assurance that we will be able to obtain these licenses on attractive terms or at all, which could result in our having to reformulate or abandon this product candidate. In addition, Cedars-Sinai has previously granted another institution rights to the use of certain peptide materials that we may seek to incorporate into one or more of our cellular-based therapy product candidates. We may be required to obtain a license from that other institution if we wish to use these materials. If we are unable to obtain this license, we would be required to develop vaccine products without the potential enhanced benefits that could be provided by these materials.

If we infringe or are alleged to have infringed another party’s patent rights, we may be required to defend an infringement action or challenge the validity of the patents in court. Patent litigation is costly and time consuming. We may not have sufficient resources to bring these actions to a successful conclusion. In addition, if we do not obtain a license, do not successfully defend an infringement action or are unable to have infringed patents declared invalid, we may:

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incur substantial monetary damages;

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encounter significant delays in marketing our current product candidates or any future product candidates;

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be unable to conduct or participate in the manufacture, use or sale of product candidates or methods of treatment requiring licenses;

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lose patent protection for our inventions and products; or

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find our patents are unenforceable, invalid, or have a reduced scope of protection.

Parties making such claims may be able to obtain injunctive relief that could effectively block our ability to further develop or commercialize our current product candidates or any future product candidates in the United States and abroad and could result in the award of substantial damages. Defense of any lawsuit or failure to obtain any such license could substantially harm us. Litigation, regardless of outcome, could result in substantial cost to and a diversion of efforts by us.

We will be dependent on our key personnel, and the loss of one or more of our key personnel would materially and adversely affect our business and prospects.

Except for our President and Chief Executive Officer and our Vice President – Product Development and Manufacturing, we do not have any full-time management personnel. We are dependent on our officers and directors for their scientific or managerial skills, including Dr. John Yu, our Chairman of the Board, and Dr. Manish Singh, our President and Chief Executive Officer. However, these individuals (with the exception of Dr. Singh and our Vice President – Product Development and Manufacturing) are associated with us on a part-time basis only. We do not currently maintain key man

life insurance on Drs. Yu and Singh, and our employment contract with Dr. Singh and our agreement with Dr. Yu under which he serves as our Chief Scientific Officer expire in February 2011, and the loss of either of their services would materially and adversely affect our business.

As we retain additional full-time senior personnel, our overhead expenses for salaries and related items will increase substantially from current levels. Competition for such personnel is intense, and there is no assurance that we will be able to attract or retain qualified senior personnel and our failure to do so could have an adverse effect on our ability to implement our business plan.

The market success of our current product candidates and any future product candidates will be dependent in part upon third-party reimbursement policies that have not yet been established for our product candidates.

Our ability to successfully commercialize and penetrate the market for our current product candidates and any future product candidates is likely to depend significantly on the availability of reimbursement for our lead product candidate or any other or future product candidates from third-party payers, such as governmental agencies, private insurers and private health plans. Even if we are successful in bringing a proposed product candidate to the market, these product candidates may not be considered cost-effective, and the amount reimbursed for our products may be insufficient to allow us to sell any of our products on a competitive basis. We cannot predict whether levels of reimbursement for our product candidates, if any, will be high enough to allow the price of our product candidates to include a reasonable profit margin. Even with FDA approval, third-party payers may deny reimbursement if the payer determines that our particular product candidates are unnecessary, inappropriate or not cost effective. If patients are not entitled to receive reimbursements similar to reimbursements for competing products which currently are reimbursable, they may be unwilling to use our product candidates since they will have to pay for the unreimbursed amounts. The reimbursement status of newly approved health care products is highly uncertain. If levels of reimbursement are decreased in the future, the demand for our lead proposed product candidate and any future product candidates could diminish or our ability to sell our products on a profitable basis could be adversely affected.

We believe that the efforts of governments and third-party payors to contain or reduce the cost of healthcare will continue to affect the business and financial condition of pharmaceutical and biopharmaceutical companies. A number of legislative and regulatory proposals to change the healthcare system in the United States and other major healthcare markets have been proposed in recent years. These proposals have included prescription drug benefit legislation recently enacted in the United States and healthcare reform legislation recently enacted by certain states. Further federal and state legislative and regulatory developments are possible, and we expect ongoing initiatives in the United States to increase pressure on drug pricing. Such reforms could have an adverse effect on anticipated revenues from any products that we may successfully develop.

We may be subject to product liability and other claims that could have a material negative effect on our operations and on our financial condition.

The development and sale of medical products in general, and vaccines in particular, expose us to the risk of significant damages from product liability and other claims. Product liability claims could delay or prevent completion of our clinical development programs. If we succeed in marketing our current lead products candidate or any future product candidates, such claims could result in an FDA investigation of the safety and effectiveness of our products or our marketing programs, and potentially a recall of our products or more serious enforcement action, or limitations on the indications for which they may be used, or suspension or withdrawal of approval. We plan to obtain and maintain product liability insurance for coverage of our clinical trial activities and obtained this coverage for the recently completed clinical trial of our dendritic cell-based vaccine product candidate. There is no assurance that we will be able to secure such insurance in the amounts we are seeking or at all for any of the future trials for our

current product candidates or any future product candidates. We intend to obtain coverage for our products when they enter the marketplace (as well as requiring the manufacturers of our products to maintain insurance), but we do not know if insurance will be available to us at acceptable costs or at all. The costs for many forms of liability insurance have risen substantially in recent years and the costs for insuring a vaccine type product may be higher than other pharmaceutical products, and such costs may continue to increase in the future, which could materially impact our costs for clinical or product liability insurance. If the cost is too high, we will have to self-insure, and we may have inadequate financial resources to pay the costs of any claims. A successful claim in excess of our product liability coverage could have a material adverse effect on our business, financial condition and results of operations.

We may encounter delays and difficulties in the development of technologies or operations of any other businesses we may acquire.

We may, from time to time, acquire technologies or businesses that are complimentary to our existing technologies or operations or that we otherwise believe offer an attractive opportunity for us in the future. We may encounter various types of unanticipated difficulties in connection with developing these technologies or operating these businesses; the risk of these occurring potentially being greater if these technologies or businesses are not directly related to any existing technology of operations. Any such difficulties could have a material adverse effect on our financial performance and condition.

Risks Related to Our Securities

Our stock may be traded infrequently and in low volumes, so you may be unable to sell your shares at or near the quoted bid prices if you need to sell your shares.

The shares of our common stock may trade infrequently and in low volumes on the OTC Bulletin Board, meaning that the number of persons interested in purchasing our common shares at or near bid prices at any given time may be relatively small or non-existent. This situation may be attributable to a number of factors, including the fact that we are a small early stage company which is relatively unknown to stock analysts, stock brokers, institutional investors and others in the investment community who can generate or influence sales volume, and that even if we came to the attention of such institutionally oriented persons, they tend to be risk-averse in this environment and would be reluctant to follow an early stage company such as ours or purchase or recommend the purchase of our shares until such time as we became more seasoned and viable. As a consequence, there may be periods of several days or more when trading activity in our shares is minimal or non-existent, as compared to a seasoned issuer which has a large and steady volume of trading activity that will generally support continuous sales without an adverse effect on share price. We cannot give you any assurance that a broader or more active public trading market for our common shares will develop or be sustained. Due to these conditions, we can give you no assurance that you will be able to sell your shares at or near bid prices or at all if you need money or otherwise desire to liquidate your shares. As a result, investors could lose all or part of their investment.

You may have difficulty selling our shares because they are deemed “penny stocks.”

Since our common stock is not listed on a national securities exchange, if the trading price of our common stock remains below $5.00 per share, trading in our common stock will be subject to the requirements of certain rules promulgated under the Exchange Act, which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-national securities exchange equity security that has a market price of less than $5.00 per share, subject to certain exceptions). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in

excess of $1,000,000 or annual income exceeding $200,000 individually or $300,000 together with a spouse). For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchaser’s written consent to the transaction prior to the sale. The broker-dealer also must disclose the commissions payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must disclose this fact and the broker-dealer’s presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from effecting transactions in our common stock, which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell their shares.

Our existing directors, executive officers and principal stockholders hold a substantial amount of our common stock and may be able to prevent other stockholders from influencing significant corporate decisions.

As of March 1, 2010, our directors and executive officers beneficially owned approximately 34% of our outstanding common stock. Dr. John Yu also currently is entitled to serve as a director and to designate two of our other directors. These stockholders, if they act together, and Dr. Yu, through his right to name three of our directors, may be able to direct the outcome of matters, including the election of our directors and other corporate actions such as:

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our merger with or into another company;

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a sale of substantially all of our assets; and

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amendments to our certificate of incorporation.

The decisions of these stockholders may conflict with our interests or those of our other stockholders.

Potential conflicts of interest could arise for certain members of our management team in the performance of their services for us.

Dr. John Yu, our Chairman of the Board, and Dr. Keith Black, the Chairman of our Scientific Advisory Board, are full-time employees of Cedars-Sinai, which owns shares of our common stock and where we plan to conduct certain research and development work, including clinical trials of our vaccine product candidates. Potential conflicts of interest could arise as a result, including for Dr. Yu and Dr. Black in performing services for us and for Cedars-Sinai, in establishing the terms under which Cedars-Sinai performs work for us, and in Cedars-Sinai conducting the research. Dr. Yu and other scientists associated with Dr. Yu at Cedars-Sinai may perform research in the field of brain tumors that is sponsored by other third parties. We will not acquire any interest in the intellectual property generated by this research, including several clinical trials with dendritic cell based vaccines that have been completed or are planned to be initiated. These studies may compete for patients to be enrolled in clinical trials with our current or future clinical trials.

Substantial sales of our common stock could cause our common stock price to fall.

In addition to our shares of common stock covered by this prospectus, there are currently approximately 16,067,842 shares of our currently outstanding common stock and another 9,909,230 shares of our common stock issuable upon exercise of options are eligible to be sold pursuant to Rule 144 or currently effective registration statements. The possibility that substantial amounts of our common stock may be sold in the public market may adversely affect prevailing market prices for our common stock and could impair our ability to raise capital through the sale of our equity securities.

Our securities are quoted on the OTC Bulletin Board, which may limit the liquidity and price of our securities more than if our securities were quoted or listed on or a national securities exchange.

Our securities are currently quoted on the OTC Bulletin Board, an NASD-sponsored and operated inter-dealer automated quotation system for equity securities not listed on a national securities exchange. Quotation of our securities on the OTC Bulletin Board may limit the liquidity and price of our securities more than if our securities were quoted or listed on a national securities exchange. Some investors may perceive our securities to be less attractive because they are traded in the over-the-counter market. In addition, as an OTC Bulletin Board listed company, we do not attract the extensive analyst coverage that accompanies companies listed on a national securities exchange. Further, institutional and other investors may have investment guidelines that restrict or prohibit investing in securities traded in the over-the-counter market. These factors may have an adverse impact on the trading and price of our securities.

The market price of our stock may be adversely affected by market volatility.

The market price of our common stock is likely to be volatile and could fluctuate widely in response to many factors, including:

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announcements of the results of clinical trials by us or our competitors;

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developments with respect to patents or proprietary rights;

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announcements of technological innovations by us or our competitors;

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announcements of new products or new contracts by us or our competitors;

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actual or anticipated variations in our operating results due to the level of development expenses and other factors;

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changes in financial estimates by securities analysts and whether our earnings meet or exceed such estimates;

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conditions and trends in the pharmaceutical and other industries;

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new accounting standards;

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general economic, political and market conditions and other factors; and

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the occurrence of any of the risks described in this report.

Item 1B.

Unresolved Staff Comments.

Not applicable.

Item 2.

Properties.

We currently maintain our corporate office in Woodland Hills, California under a month-to-month lease at a monthly rental rate of $2,894. We do not lease or own any other real property.

Item 3.

Legal Proceedings.

We are not a party to any material legal proceedings.

We may occasionally become subject to legal proceedings and claims that arise in the ordinary course of our business. It is impossible for us to predict with any certainty the outcome of any disputes that may arise, and we cannot predict whether any liability arising from claims and litigation will be material in relation to our consolidated financial position or results of operations.

Item 4.

(Reserved)

PART II

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Market Information

Our common stock has been traded on the OTC Bulletin Board over-the-counter market since December 7, 2006, under the symbol “IMUC.” The following price information reflects inter-dealer prices, without retail mark-up, mark-down or commission and may not represent actual transactions:


Quarter Ended	High	Low
March 31, 2008	0.85	0.51
June 30, 2008	0.70	0.32
September 30, 2008	0.68	0.21
December 31, 2008	0.68	0.16
March 31, 2009	0.35	0.15
June 30, 2009	0.59	0.22
September 30, 2009	1.38	0.28
December 31, 2009	1.22	0.61

Stockholders

As of March 1, 2010, there were approximately 237 holders of record of our common stock, not including any persons who hold their stock in “street name.”

Dividend Policy

We have not paid any dividends on our common stock to date and do not anticipate that we will pay dividends in the foreseeable future. Any payment of cash dividends on our common stock in the future will be dependent upon the amount of funds legally available, our earnings, if any, our financial condition, our anticipated capital requirements and other factors that the Board of Directors may think are relevant. However, we currently intend for the foreseeable future to follow a policy of retaining all of our earnings, if any, to finance the development and expansion of our business and, therefore, do not expect to pay any dividends on our common stock in the foreseeable future.

Issuances of Unregistered Securities; Purchases of Securities

We did not issue any unregistered securities during the three-month period ended December 31, 2009 that were not previously reported in a Current Report on Form 8-K, and we did not repurchase any securities during that period.

Equity Compensation Plan Information

See Part III, Item 12, Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters, of this Annual Report on Form 10-K for information regarding securities authorized for issuance under our equity compensation plans.

Item 6.

Selected Financial Data.

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

Item 7.

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

You should read the information in this Item 7 together with our consolidated financial statements and notes thereto that appear elsewhere in this Annual Report. This Annual Report contains forward-looking statements that involve risks, uncertainties, and assumptions. Actual results may differ materially from those anticipated in these forward-looking statements as a result of various factors, including, but not limited to, those presented under “Risk Factors” included in Item 1.A of Part I and elsewhere in this Annual Report.

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 Imaging’s 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.

Since our company’s inception on February 25, 2004, we have been primarily engaged in the acquisition of certain intellectual property, together with the recent clinical testing activities for one of our vaccine product candidates, and have not generated any recurring revenues. As a result, we have incurred operating losses and, as of December 31, 2009, we had an accumulated deficit of $14,711,716. 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.

For additional information about our plan of business operation, see the “Business” section of this Annual Report included in Item 1 of Part I.

Critical Accounting Policies

Management’s 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 financial statements for the period from February 25, 2004 to December 31, 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 FASB ASC Topic 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 are considered as part of our development stage activities.

Research and Development Costs

Although we believe that our research and development activities and underlying technologies have continuing value, the amount of future benefits to be derived from them is uncertain. Research and development costs are therefore expensed as incurred rather than capitalized. During the year ended December 31, 2008 and December 31, 2009, we recorded an expense of $1,296,772 and $962,526, respectively, related to research and development activities.

Stock-Based Compensation

In FASB ASC Topic 718, Share Based Payments requires that the cost resulting from all share-based payment transactions be recognized in our consolidated financial statements.

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

Results of Operations

For the Twelve Months Ended December 31, 2008 and 2009

Revenues

We had no revenues during the period for the twelve months ended December 31, 2008 and $300,000 in revenues during the period for the twelve months ended December 31, 2009 related to a license fee payment we received under a research and license option agreement regarding our ICT-69 antibody product candidate with the Roche Group. We do not expect to generate any additional operating revenues during 2010.

Expenses

General and administrative expenses for the twelve months ended December 31, 2008 and for the twelve months ended December 31, 2009 were $1,366,146 and $1,677,421, respectively. During 2008 and 2009, the Company accrued $34,952 and $84,667 in bonuses that are contingent on reaching certain clinical development milestones. Research and development expenses for the twelve months ended December 31, 2008 and for the twelve months ended December 31, 2009 were $1,296,772 and $962,526, respectively. We had $1,004,432 of non-cash expense for the twelve months ended December 31, 2008, consisting of $513,357 in stock based compensation, $489,000 paid in common stock for in process research and development and $2,075 in depreciation expense. We had $311,700 of non-cash expense for the twelve months ended December 31, 2009, including $308,303 in stock based compensation and $3,397 in depreciation expense.

We expect the amount of our general and administrative cash expenses in 2010 to be higher than those cash expenses incurred in 2009, primarily due to increased employee compensation and costs associated with financing and investor relations activities. We estimate that the cost of our research and development work to be approximately $3,000,000 in 2010, and we may incur significant additional research and development expenses should we expand our research and development work on additional potential applications for our existing technologies or should we acquire additional technologies from one or more third parties.

Loss

We incurred a net loss of $3,059,730 for the twelve months ended December 31, 2008 and a net loss of $2,626,205 for the twelve months ended December 31, 2009.

For the Twelve Months Ended December 31, 2007 and 2008

Revenues

We had no revenues during the twelve months ended December 31, 2007 or during the twelve months ended December 31, 2008. We incurred a net loss of $3,614,753 for the twelve months ended December 31, 2007 and a net loss of $3,059,730 for the twelve months ended December 31, 2008.

Expenses

General and administrative expenses for the twelve months ended December 31, 2007 and for the twelve months ended December 31, 2008 were $946,022 and $1,366,146, respectively. During 2008, the Company accrued $34,952 in bonuses that are contingent on reaching certain clinical development milestones. Research and development expenses for the twelve months ended December 31, 2007 and for the twelve months ended December 31, 2008 were $77,857 and $1,296,772, respectively. We had $2,752,914 of non-cash expense for the twelve months ended December 31, 2007, including $1,296,714 in stock based compensation and $1,456,200 in change in fair value of warrant liability. We had $1,004,432 of non-cash expense for the twelve months ended December 31, 2008, consisting of $513,357 in stock based compensation, $489,000 paid in common stock for in process research and development and $2,075 in depreciation expense.

Loss

We incurred a net loss of $3,614,753 for the twelve months ended December 31, 2007 and a net loss of $3,059,730 for the twelve months ended December 31, 2008.

Liquidity and Capital Resources

As of December 31, 2009, we had working capital of $1,053,438, compared to working capital of $2,924,886 as of December 31, 2008.

The estimated cost of completing the development of either of our current vaccine product candidates and of obtaining all required regulatory approvals to market either of those product candidates is substantially greater than the amount of funds we currently have available. We believe that our existing cash balances, together with potential proceeds under our preferred stock purchase arrangement with Socius Capital Group, LLC, will be sufficient to fund our currently planned level of operations through at least the third quarter of 2010, 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, and in March 2010 we completed a private placement of 1,740,000 units at a price of $1.00 per unit, with each unit consisting of one share of our common stock and a warrant to purchase 0.4 of a share of our common stock at an exercise price of $1.15 per share. 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 financings or alliances, or that the terms under which we may be able to obtain such funding will be beneficial to us. In December 2009, we entered into an agreement with Socius Capital under which Socius Capital has agreed to purchase from us from time to time an aggregate of up to $10 million of our preferred stock. However, Socius Capital’s obligation to purchase shares of our preferred stock is subject to our satisfying certain conditions at that time. There is no assurance that we will be able to satisfy those conditions if we wish to sell shares of our preferred stock to Socius Capital or that Socius Capital will have ability to complete these purchases. If we are unsuccessful or only partly successful in our efforts to secure additional financing, we may find it necessary to suspend or terminate some or all of our product development and other activities.

As of December 31, 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

For the Twelve Months Ended December 31, 2008 and 2009

We used $2,151,781 of cash in our operations for the twelve months ended December 31, 2009, compared to $1,945,447 for the twelve months ended December 31, 2008, as the non-cash portion of our net loss for the 2009 period was $311,700 and the non-cash portion of our net loss for the 2008 period was $1,004,432.

We provided $1,923,284 of cash from our investing activities for the twelve months ended December 31, 2009, consisting of $1,924,097 in sales of certificates of deposit offset by $813 in purchases of equipment and $3,010,087 of cash in our investing activities for the twelve months ended December 31, 2008, consisting of $3,000,000 in purchases of certificates of deposit and $10,087 in purchases of equipment.

We received $474,560 of cash from financing activities for the twelve months ended December 31, 2009, consisting of $11,812 from the exercise of stock options and $462,748 from the exercise of warrants and no cash from financing activities for the twelve months ended December 31, 2008.

For the Twelve Months Ended December 31, 2007 and 2008

We used $1,945,447 of cash in our operations for the twelve months ended December 31, 2008, compared to $912,003 for the twelve months ended December 31, 2007, as the non-cash portion of our net loss for 2008 was $1,004,432 and the non-cash portion of our net loss for the 2007 period was $2,752,914.

We used $3,010,087 of cash in our investing activities for the twelve months ended December 31, 2008, consisting of $3,000,000 in purchases of certificates of deposit and $10,087 in purchases of equipment and none for this purpose for the twelve months ended December 31, 2007.

We received no cash from financing activities for the twelve months ended December 31, 2008 and $4,892,486 from the private placements of our securities that we completed during the twelve months ended December 31, 2007.

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 7A.

Quantitative and Qualitative Disclosures About Market Risk.

Not applicable to a “smaller reporting company” as defined in Item 10(f)(1) of SEC Regulation S-K.

Item 8.

Financial Statements and Supplementary Data.

Our consolidated financial statements and notes thereto and the related report of Stonefield Josephson, Inc. are included in this Annual Report on Form 10-K beginning at page F-1 and are incorporated herein by reference.

Item 9.

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure.

Not applicable.

Item 9A(T).

Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in the reports that we file with the SEC under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms and that such information is accumulated and communicated to our management, including our principal executive and financial officers, as appropriate, to allow for timely decisions regarding required disclosure. As required by SEC Rule 15d-15(b), we carried out an evaluation, under the supervision and with the participation of our management, including our principal executive and financial officers, of the effectiveness of the design and operation of our disclosure controls and procedures as of December 31, 2009, which is the end of the period covered by this report. Based on the foregoing, our principal executive and financial officers concluded that our disclosure controls and procedures were effective as of December 31, 2009.

Management’s Report on Internal Control Over Financial Reporting

Our management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in Rule 15d-15(f) under the Exchange Act, and for assessing the effectiveness of internal control over financial reporting.

Internal control over financial reporting is intended to provide reasonable assurance regarding the reliability of our financial reporting and the preparation of financial statements for external purposes in accordance with accounting principles generally accepted in the United States. Internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of our assets, (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with accounting principles generally accepted in the United States and that our receipts and expenditures are being made only in accordance with authorizations of our management and directors, and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisitions, use, or disposition of our assets that could have a material effect on our financial statements.

Management, with the participation of our principal executive and financial officers, conducted an evaluation of the effectiveness of our internal control over financial reporting, as of December 31, 2009, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on that evaluation, management concluded that, as of December 31, 2009, our internal control over financial reporting was effective.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

This annual report does not include an attestation report of our independent registered public accounting firm regarding internal control over financial reporting. Management’s report was not subject to attestation by our independent registered public accounting firm pursuant to temporary rules of the SEC that permit us to provide only management’s report in this annual report.

Changes in Internal Control Over Financial Reporting

There was no change in our internal control over financial reporting during the most recent fiscal quarter that materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

Item 9B.

Other Information.

On March 29, 2010, we completed a private placement of our securities to 18 accredited investors. We sold to these investors 1,740,000 units at a price of $1.00 per unit, with each unit consisting of one share of our common stock and a 26 month warrant to purchase 0.4 of a share of our common stock at an exercise price of $1.15 per share. Under the terms of the placement, we have agreed that in the case of certain financings that may be completed by us prior to March 29, 2011 and that have financial terms more favorable for the investors than those that were provided in the March 29, 2010 financing, the investors in the March 29, 2010 financing will have the right to have the terms of that financing modified to be identical to those in the subsequent financing. We paid a broker-dealer a fee for assistance in identifying the investors in this private placement consisting of $34,800 in cash and a 26 month warrant to purchase 104,400 shares of our common stock at an exercise price of $1.15 per share. These securities were issued by us in reliance upon an exemption from registration under Section 4(2) of the Act.

PART III

Item 10.

Directors, Executive Officers and Corporate Governance.

Executive Officers and Directors

The following table sets forth the name, age and position held by each of our executive officers and directors. Directors are elected for a period of one year and thereafter serve until the next annual meeting at which their successors are duly elected by the stockholders.


Name	Age	Position
John S. Yu, M.D. ⁽¹⁾ ⁽²⁾	46	Chairman of the Board
Manish Singh, Ph.D.	41	President, Chief Executive Officer and Director
James Bender	60	Vice President – Product Development and Manufacturing
C. Kirk Peacock	41	Treasurer and Chief Financial Officer
Jacqueline Brandwynne ⁽²⁾	72	Director
Richard A. Cowell ⁽²⁾⁽³⁾	62	Director
Robert L. Martuza, M.D. ⁽¹⁾	61	Director
Navdeep Jaikaria ⁽¹⁾⁽²⁾ ⁽³⁾	47	Director

⁽¹⁾	Member of our Compensation Committee

⁽²⁾	Member of our Nominating and Corporate Governance Committee

⁽³⁾	Member of our Audit Committee

Business Experience and Directorships

The following describes the backgrounds of current executive officers and directors. Our Board of Directors has determined that all of our directors other than Dr. Singh are independent directors as defined in the Nasdaq rules governing members of boards of directors. Under his current right to designate two other members of our Board of Directors, Dr. Yu designated Dr. Robert Martuza in December 2006 and Jacqueline Brandwynne in January 2007 to serve as two of our directors.

John S. Yu, M.D., Chairman of the Board

Dr. Yu served as our Chief Scientific Officer and as a director from November 2006 to January 2007, when he became our Chairman of the Board. He is a member of the full-time faculty in the Department of Neurosurgery at Cedars-Sinai Medical Center. An internationally renowned neurosurgeon, Dr. Yu’s clinical focus is on the treatment of malignant and benign brain and spinal tumors. He is also conducting extensive research in immune and gene therapy for brain tumors. He has also done extensive research in the use of neural stem cells as delivery vehicles for brain cancers and neurodegenerative

diseases. He was inducted into Castle and Connelly’s America’s Top Doctors in 2005. Dr. Yu has published articles in a number of prestigious journals, including The Lancet, Cancer Research, Cancer Gene Therapy, Human Gene Therapy, Journal of Neuroimmunology, Journal of Neurological Science and Journal of Neurosurgery. Dr. Yu earned his bachelor’s degree in French literature and biological sciences from Stanford University and spent a year at the Sorbonne in Paris studying French literature. He also pursued a fellowship in immunology at the Institut Pasteur in Paris. He earned his medical degree from Harvard Medical School and master’s degree from the Harvard University’s Department of Genetics. He completed his neurosurgical residency at Massachusetts General Hospital in Boston. In addition, he was a Neuroscience Fellow at the National Institutes of Mental Health in the Neuroimmunology Unit at Massachusetts General Hospital from 1988 to 1989 and was a Culpepper Scholar at the Molecular Neurogenetics Unit at that hospital from 1993 to 1995. His other honors include the Preuss Award, Joint Section on Tumors, American Association of Neurological Surgeons and Congress of Neurologic Surgeons in 1995. He received the Academy Award from the American Academy of Neurological Surgery at its 1996 annual meeting. Other honors include the Young Investigator Award from the Congress of Neurological Surgeons in 2000, the National Brain Tumor Foundation Grant in 2001, and the Mahaley Clinical Research award from the American Association of Neurological Surgeons in 2005.

Dr. Yu, as a recognized leader in the field of neurosurgery, has extensive knowledge of current therapies and therapies under development for the treatment of brain tumors and has participated in numerous clinical trials for potential therapies in this field. As our Chief Scientific Officer and the co-inventor of our brain tumor vaccine technologies, Dr. Yu brings to the Board significant scientific expertise directly relevant to our product research and development activities.

Manish Singh, Ph.D., President, Chief Executive Officer and Director

Dr. Singh has served as our President, Chief Executive Officer and as a director since February 2008. Dr. Singh served as a Director at California Technology Ventures, a venture capital firm from June 2003 to December 2007. He managed investments made by that venture capital firm in a number of medical device and biotechnology companies and served as a board director or board observer for several of the firm’s portfolio companies. Dr. Singh co-founded and served as acting Chief Executive Officer of Aliva Biopharmaceuticals, an early stage company focusing on DNA engineering to produce human monoclonal antibodies and humanized mice, from January 2006 to December 2007. From October 1995 to June 2002, he held various management and scientific positions with Odysseus Solutions, Cell Genesys, Chiron Corporation and Genetic Therapy, Inc. Dr. Singh has an MBA from UCLA, a Ph.D. in Chemical and Biochemical Engineering from the University of Maryland Baltimore County, an M.S. in Chemical Engineering from Worcester Polytechnic Institute and a B.S. in Chemical Engineering from the Indian Institute of Technology, Roorkee.

Dr. Singh has had extensive prior experience as both an operating executive and board member in the biotechnology field. He also brings to the Board extensive knowledge and experience in the area of financing early stage healthcare companies through his prior work in the venture capital field.

James Bender, Vice President – Product Development and Manufacturing

Dr. Bender served as our Vice President – Clinical Development on a part time basis from September 2008 to February 2010 and has served as our Vice President – Product Development and Manufacturing on a full-time basis since February 2010. From 2002 through 2008 Dr. Bender held various positions at IDM Pharma, most recently as director of product development where he led that company’s efforts relating to the clinical development of a cancer vaccine for the treatment of lung cancer. Prior to that, he held various positions at Nexell Therapeutics relating to the development of therapeutic stem cell and cancer vaccine products. Prior to that, Dr. Bender spent 10 years with Baxter Healthcare Corporation, eight years with the University of New Mexico School of Medicine and five years with St. Joseph’s Hospital in Albuquerque, New Mexico. He has over 75 scientific publications, is an inventor of 11 U.S. patents and holds a Ph.D. degree in immunology from the University of New Mexico and an M.P.H. in laboratory management from the University of Michigan.

C. Kirk Peacock, Treasurer and Chief Financial Officer

Mr. Peacock has served as our Treasurer and Chief Financial Officer on a part-time basis since January 2006 and previously served in that capacity from May 2005 until September 2006 for our predecessor company on a part-time basis. He also served on a part-time basis as our interim President from November 2007 to February 2008. Mr. Peacock is a Certified Public Accountant and previously was Chief Financial Officer with CytRx Corporation, a ribonucleic acid interference and biopharmaceutical company focused on the development and commercialization of high-value human therapeutics from August 2003 through July 2004. Mr. Peacock has experience as Chief Financial Officer with several start-up companies, including DigitalMed, Inc., a venture-backed subsidiary of Tenet Healthcare, and Ants.Com, Inc., a venture-backed company of Bertelsmann Ventures. Mr. Peacock was also a manager with a large, international accounting firm for a number of years. Mr. Peacock serves as a director on the Board of Directors and a member of the Audit Committee of Laird Norton Company LLC. Mr. Peacock is a graduate of Claremont McKenna College.

Jacqueline Brandwynne, Director

Ms. Brandwynne has served as a director since January 2007. Since 1981, Ms. Brandwynne has served as President and CEO of Brandwynne Corporation, which has co-founded and assisted in the development of several healthcare and biotech companies. Ms. Brandwynne is a business strategist with more than 25 years of experience working with companies such as American Cyanimid, Bristol Myers/Clairol, National Liberty Life, Seagram & Sons and Neutrogena. From 1974 to 1981 she was in charge of developing Citicorp’s global business strategy. From 2000 to 2006, Ms. Brandwynne was a director of Microvision, Inc., a public company that develops sophisticated miniature displays. She has served in multiple advisory roles in several administrations, including as an Advisor to the Council of Economic Advisors, a member of the US Trade Representatives Services Policy Advisory Committee, a negotiator of the North American Trade Agreement, a participant in GATT negotiations and a member of The Committee on Critical Choices for America, and Chair of an Economic Summit at the White House. She currently serves on the boards of Pacific Union Bank, the Proteus Venture Biotech Fund and on several non-profit boards, including the Cedars-Sinai Health Systems Board of Governors and the California Institute of the Arts.

Ms. Brandwynne’s extensive involvement with early stage healthcare and biotech companies provides the Board with valuable expertise in the operation and development of the Company. With an extensive background as a business strategist for major corporations she also assists the Board in its strategic planning activities.

Mr. Richard A. Cowell, USA, (Ret.), Director

Mr. Richard A. Cowell, USA, (Ret.) has served as a director since June 2007. Mr. Cowell is a Principal at Booz Allen Hamilton, Inc., where he is involved in advanced concepts, technology experimentation and integration, and establishing new business operations. Prior to joining Booz Allen Hamilton in March 1996, Mr. Cowell served in the United States Army for 25 years. Mr. Cowell serves as a director and Chair of the Audit Committee for Microvision, Inc. He holds a Top Secret security clearance with special accesses based on a special background investigation. Mr. Cowell holds a B.S. degree in accounting from Ohio State University.

Mr. Cowell brings to the Board both financial and accounting expertise as well as experience in the handling of Audit Committee matters for a public company. As consultant with a major consulting firm in the fields of technology experimentation and establishing new business operations, he brings to the Board strategic and business planning experience.

Robert L. Martuza, M.D., Director

Dr. Martuza has served as a director since December 2006. He has been Chief of Neurosurgery Service at Massachusetts General Hospital and Higgins Professor of Neurosurgery at Harvard Medical School since 2000. Dr. Martuza has held appointments at Massachusetts General Hospital and Georgetown University Hospital since 1980 and academic appointments at Harvard Medical School and Georgetown University also since 1980. Dr. Martuza is presently Director of the Pappas Center for Neuro-Oncology at Massachusetts General Hospital and on the Board of Trustees for the Massachusetts General Physicians Organization, Inc. Dr. Martuza currently serves on the Managed Care Committee, Executive Committee on Research, and General Executive Committee at the Massachusetts General Hospital. In addition, he serves as a Director of the American Board of Neurological Surgery; serves on the Board of Scientific Counselors at the National Institute of Neurological Disorders and Stroke; and is coordinating reviewer and serves on the Program Committee for the American Society of Gene Therapy. Dr. Martuza is a recognized authority on neurosurgery, has published numerous articles and books in the field of neurology and has 11 patents issued or pending involving cell therapy. Dr. Martuza has received many grants for research with major research interests in central nervous system tumors, neurofibromatosis, cancer therapy with viral vectors and molecular neurosurgery. Dr. Martuza holds a B.A. degree from Bucknell University and a M. D. from Harvard Medical School. Dr. Martuza was a post-doctoral fellow at Massachusetts General Hospital.

Dr. Martuza, as a recognized leader in the field of neurosurgery, had extensive knowledge of current therapies and therapies under development for the treatment of brain tumors. As an active physician and researcher in the field, Dr. Martuza brings to the Board valuable expertise in the evaluation of potential product candidates and the oversight of their clinical development.

Navdeep Jaikaria, Ph.D., Director

Dr. Jaikaria has served as a director since June 2008. He currently is CEO of SGN Advisors, Inc., an advisory firm that conducts global biopharmaceutical due diligence for private equity funds and hedge funds as well as companies. Dr. Jaikaria held various positions with Rodman & Renshaw from 2003 until 2008, when he retired as Managing Director, Senior Equity Research Analyst – Biotechnology. Dr. Jaikaria previously held positions in equity research with Leerink Swann and Mehta Partners from 2000 to 2003 and consulting positions with Merck & Co. and Antigenics, Inc. from 1996 until 1999. Dr. Jaikaria holds a Ph.D. in Cell Biology and Anatomy from New York Medical College, conducted a research fellowship at Rockefeller University and holds a B.S. in Human Biology from All India Institute of Medical Sciences.

As a highly regarded and experienced former healthcare analyst for major healthcare investment banks, Dr. Jaikaria brings to the Board extensive healthcare industry knowledge in the area of capital raising and investment banking as well as a broad understanding of the healthcare market and competitive conditions.

Committees of the Board

Our Board of Directors has established an Audit Committee currently consisting of Mr. Cowell, as Chairman, and Dr. Jaikaria.

The Audit Committee assists the Board of Directors in fulfilling its oversight responsibilities relating to:

•

the quality and integrity of our financial statements and reports;

•

the independent auditors’ qualifications and independence; and

•

the performance of our internal audit function and independent auditors.

The Audit Committee appoints the independent auditors, reviews with the independent auditors the plans and results of the audit engagement, approves permitted non-audit services provided by our independent auditors and reviews the independence of the auditors. Mr. Cowell has been designated as an “audit committee financial expert” as defined under Item 407(d)(5) of Regulation S-K of the Exchange Act.

Our Board of Directors has established a Compensation Committee currently consisting of Drs. Yu, Martuza and Jaikaria. The Compensation Committee reviews, and makes recommendations to the full Board of Directors relating to, the compensation of our officers and directors, including our officers’ annual salaries and bonuses and the terms and conditions of option grants to our officers and directors under our stock incentive plan.

Our Board of Directors has established a Nominating and Corporate Governance Committee currently consisting of Ms. Brandwynne, as Chairwoman, Mr. Cowell, Dr. Jaikaria and Dr. Yu. The Nominating and Corporate Governance Committee develops and recommends corporate governance guidelines to the Board, selects or recommends for selection nominees to serve on the Board, and oversees the evaluation of the Board and its committees.

Scientific Advisory Board

We have established a Scientific Advisory Board (“SAB”)currently consisting of Dr. Keith Black, as Chairman, Dr. Peter Brooks, Dr. Sherie Morrison, Dr. Cohava Gelber, Dr. George Peoples and Dr. Constantine Ioannides to assist our management in the areas of expertise of the members of our SAB. We have compensated the members of our SAB from time to time through the grant of options to purchase our stock. In September 2009, we granted a five-year non-qualified option to purchase 10,000 shares of our common stock to each of four members of our SAB for service as members on the SAB for the coming year at an exercise price of $0.95 per share, with such option to vest quarterly for the one-year period following the date of grant.

Keith L. Black, M.D.

Dr. Black has served on our Scientific Advisory Board since January 2007. Dr. Black serves as Chairman of the Department of Neurosurgery and Director of the Maxine Dunitz Neurosurgical Institute at Cedars-Sinai Medical Center. An internationally renowned neurosurgeon and scientist, Dr. Black joined Cedars-Sinai Medical Center in July 1997 and was awarded the Ruth and Lawrence Harvey Chair in Neurosciences in November of that year. Prior to joining Cedars-Sinai, Dr. Black served on the University of California, Los Angeles (UCLA) faculty for 10 years where he was a Professor of Neurosurgery. In 1992 he was awarded the Ruth and Raymond Stotter Chair in the Department of Surgery and was Head of the UCLA Comprehensive Brain Tumor Program.

Dr. Black serves on the editorial boards of Neurological Research, Gene Therapy and Molecular Biology, Neurosurgery Quarterly and Frontiers In Bioscience . He was on the National Institutes of Health’s Board of Scientific Counselors for Neurological Disorders and Stroke and was appointed to the National Advisory Neurological Disorders and Stroke Council of the National Institutes of Health from 2000 to 2004. He was also selected as a committee member of the California Institute for Regenerative Medicine Independent Citizens Oversight Committee from 2004-2006.

Dr. Black pioneered research on designing ways to open the blood-brain barrier, enabling chemotherapeutic drugs to be delivered directly into the tumor for which he received the Jacob Javits award from the National Advisory Neurological Disorders and Stroke Council of the National Institutes

of Health in June 2000. Other groundbreaking research done by Dr. Black focused on developing a vaccine to enhance the body’s immune response to brain tumors, use of gene arrays to develop molecular profiles of tumors, the use of optical technology for brain mapping, and the use of focused microwave energy to noninvasively destroy brain tumors.

Dr. Black has published extensively and has five patents issued or pending. Dr. Black was featured on the cover of Time magazine in the Fall 1997 special edition “Heroes of Medicine” and was profiled in 1996 on the PBS program, The New Explorers, in an episode called “Outsmarting the Brain.”

Peter Brooks, Ph.D.

Dr. Brooks has served on our Scientific Advisory Board since October 2008. Dr. Brooks serves as a Senior Scientist at the Maine Medical Center Research Institute, where he is focused on studying mechanisms that regulate angiogenesis, tumor growth and metastasis. Prior to joining that Institute, Dr. Brooks served as associate professor and director of Antiogenesis and Radiation Research at New York University (NYU) School of Medicine. Prior to association with NYU, Dr. Brooks was an assistant professor at the USC School of Medicine, during which time he co-founded Cell Matrix Incorporated, a biotechnology company focuses on anti-antiogenic drugs targeting cryptic ECM epitopes. Dr. Brooks’ studies have led to a recent clinical trial to evaluate the effects of D93, a humanized antibody directed to a cryptic collagen epitope for the treatment of malignant tumors. Dr. Books obtained his Ph.D. in Cell and Developmental Biology from the State University of New York at Stony Brook.

Sherie Morrison, Ph.D.

Dr. Morrison is a distinguished professor of Microbiology, Immunology and Molecular Genetics at the University of California, Los Angeles. Dr. Morrison joined the faculty of UCLA in 1988 and acted as department chair for 10 years. Prior to that, Dr. Morrison served as professor in the Department of Microbiology at Columbia University College of Physicians and Surgeons, which followed various post-doctoral fellowships at Columbia University, University of California, Berkeley and Albert Einstein College of Medicine. Her long-time research interest has been the functional properties of antibodies and novel antibody-related proteins, and she is well published in this area. Dr. Morrison holds Ph.D. and B.A. degrees from Stanford University.

Cohava Gelber, Ph.D.

Dr. Gelber currently serves as the Chief Scientific & Technology Officer of ATCC, a position she has held since 2005. In this capacity she is responsible for a large group of scientists in numerous disciplines. Prior to joining ATCC, she served as Vice President – Research and Development for MannKind Corp., a public company developing therapeutics for diabetes, cancer and autoimmune diseases. She was responsible at that company for non clinical development and clinical immune safety of drugs from pre IND through phase III clinical trials. Dr. Gelber received her Ph.D. from the Weizmann Institute, her MBA degree from Cornell University and post doctorate training at Stanford University. Dr. Gelber has published numerous scientific manuscripts and textbook chapters and is the inventor of 7 granted patents and 49 patent applications. Dr. Gelber is one of the inventors of several monoclonal antibodies that we are developing, including ICT-69 and ICT-109, and has served as a consultant to our company in the past two years.

Dr. George Peoples

Dr. Peoples is the Director of the Cancer Vaccine Development Program and Deputy Director of the United States Military Cancer Institute. Prior to being appointed to that position, Dr. Peoples held positions as Chief of Surgical Oncology at the Walter Reed Army Medical Center and Director of the Cancer Vaccine Developmental Laboratory. He received his medical degree from the Johns Hopkins

School of Medicine prior to receiving surgical training at Harvard Medical School’s Brigham and Women’s Hospital, where he was also a research fellow. In addition to his appointments at some of the military’s most prestigious cancer research institutions, Dr. Peoples has significant research experience in the oncology field, with multiple peer-reviewed publications to his credit, including co-discovery credits on HER2/neu vaccines and a number of other anti-cancer vaccines from his time at the M.D. Anderson Cancer Center, where he completed training in surgical oncology.

Constantine Ioannides, Ph.D.

Dr. Ioannides is a well-known and highly respected cancer immunologist, with over one hundred peer-reviewed articles in the scientific literature. Dr. Ioannides’s current primary research interests are focused specifically on cancer stem cells. He currently serves as Professor of Immunology at M. D. Anderson Cancer Center. Dr. Ioannides has been involved with some of the most important advancements in the field of cancer immunology over the past 20 years and is the co-discoverer of the NeuVaxT (E75) vaccine. We recently entered into an option agreement with MD. Anderson Cancer Center for some of the cancer stem cell technologies that were developed at Dr. Ioannides’s laboratory.

Code of Ethics

Our Board of Directors has adopted a code of ethics covering all of our executive officers and key employees. A copy of our code of ethics will be furnished without charge to any person upon written request. Requests should be sent to: Secretary, ImmunoCellular Therapeutics, Ltd., 21900 Burbank Boulevard, Woodland Hills, California 91367.

Section 16(a) Beneficial Ownership Reporting Compliance

Because we have not registered our common stock under Section 12 of the Exchange Act, our directors and executive officers and owners of more than ten percent of our common stock are not required to file with the SEC reports under Section 16(a) of the Exchange Act regarding their ownership and changes in ownership of our common stock.

Item 11.

Executive Compensation

Compensation of Executive Officers

The following table sets forth the compensation for services paid in all capacities for the two fiscal years ended December 31, 2008 to Dr. Manish Singh, who has served as our President and Chief Executive Officer since February 18, 2008, and to C. Kirk Peacock, who served as our Interim President from November 5, 2007 to February 17, 2008 and who has served as our Chief Financial Officer since May 16, 2005. We did not pay any other person compensation that exceeded $100,000 during either of the fiscal years ended December 31, 2008 and December 31, 2009.

Summary Compensation Table


Name and Principal Position	Year	Salary ($)			Bonus ($)	Stock Awards ($)	Option Awards ($) ⁽⁵⁾			Non-Equity Incentive Plan Compensation ($)	Nonqualified Deferred Compensation Earnings ($)	All Other Compensation ($)	Total ($)
Manish Singh, Ph.D.	2008	$	175,000	⁽¹⁾	—	—	$	170,000	⁽⁶⁾	—	—	—	$	345,000
President and Chief Executive Officer	2009	$	243,750	⁽²⁾			$	87,500	⁽⁷⁾				$	331,250
C. Kirk Peacock	2008	$	96,000	⁽³⁾			$	34,116	⁽⁸⁾				$	130,116
Chief Financial Officer	2009	$	80,000	⁽⁴⁾			$	15,194	⁽⁹⁾				$	95,194

(1)	Includes $16,667 per month for the period from February 18, 2008 through December 31, 2008 for services rendered to us as President and Chief Executive Officer.

(2)	Includes $16,667 per month for the period from January 1, 2009 through February 17, 2009 and $20,833 from February 18, 2009 through December 31, 2009 for services rendered to us as President and Chief Executive Officer.

(3)	Includes $8,000 per month for services rendered to us as Chief Financial Officer and Treasurer.

(4)	Includes $8,000 per month for the period from January 1, 2009 through April 30, 2009 and $6,000 from May 1, 2009 through December 31, 2009 for services as Chief Financial Officer and Treasurer.

(5)

This column represents option awards computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions with respect to the option grants, refer to Note 2 of our financial statements in this Annual Report. These amounts do not correspond to the actual value that will be recognized by the named executives from these awards.

(6)	Includes a seven-year option to purchase 600,000 shares of our common stock granted February 18, 2008 at an exercise price of $1.00 per share, vesting monthly over a one-year period following the date of grant, for services rendered as President and Chief Executive Officer.

(7)

Includes (i) a seven-year option to purchase 600,000 shares of our common stock granted February 18, 2008 at an exercise price of $1.00 per share, vesting monthly over a one-year period following the date of grant and (ii) a seven-year option to purchase 300,000 shares of our common stock granted February 18, 2009 at an exercise price of $0.15 per share, vesting monthly over a one-year period following the date of grant and (iii) a seven-year option to purchase 200,000 shares of our common stock granted February 18, 2009 at an exercise price of $0.15 per share, vesting 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, for services rendered as President and Chief Executive Officer.

(8)

Includes (i) a seven-year option to purchase 50,000 shares of our common stock granted October 30, 2007 at an exercise price of $1.30 per share, vesting monthly over a one-year period following the date of grant, for services rendered as Chief Financial Officer and Treasurer commencing October 30, 2007 and also as Interim President commencing November 5, 2007 and (ii) a seven-year option to purchase 50,000 shares of our common stock granted October 30, 2008 at an exercise price of $0.30 per share, vesting monthly over a one-year period following the date of grant, for services rendered as Chief Financial Officer and Treasurer commencing October 30, 2008.

(9)

Includes (i) a seven-year option to purchase 50,000 shares of our common stock granted October 30, 2008 at an exercise price of $0.30 per share, vesting monthly over a one-year period following the date of grant, for services rendered as Chief Financial Officer and Treasurer commencing October 30, 2008 and (ii) a seven-year

option to purchase 50,000 shares of our common stock granted October 30, 2009, at an exercise price of $0.80 per share, vesting monthly over a one-year period following the date of grant, for services rendered as Chief Financial Officer and Treasurer commencing October 30, 2009 and (iii) a seven-year option to purchase 6,000 shares of our common stock granted October 30, 2009, at an exercise price of $0.80 per share, vesting upon the completion of the Company’s internal documentation and internal testing necessary to subsequently complete the Company’s Sarbanes-Oxley Section 404 audit.

Stock Option Grants

The following table sets forth information as of December 31, 2009 concerning unexercised options, unvested stock and equity incentive plan awards for the executive officers named in the Summary Compensation Table.

OUTSTANDING EQUITY AWARDS AT YEAR ENDED DECEMBER 31, 2009


	Option Awards								Stock Awards
Name	Number of Securities Underlying Unexercised Options (#) Exercisable		Number of Securities Underlying Unexercised Options (#) Unexercisable		Equity Incentive Plan Awards: Number of Securities Underlying Unexercised Unearned Options (#)	Option Exercise Price ($)		Option Expiration Date	Number of Shares or Units of Stock That Have Not Vested (#)	Market Value of Shares or Units of Stock That Have Not Vested ($)	Equity Incentive Plan Awards: Number of Unearned Shares, Units or Other Rights That Have Not Vested (#)	Equity Incentive Plan Awards: Market or Payout Value of Unearned Shares, Units or Other Rights That Have Not Vested ($)
Manish Singh, Ph.D.	700,000	⁽¹⁾				$	1.00	02-17-15
	25,000	⁽²⁾					.27	09-28-15
	250,000	⁽⁸⁾	50,000	⁽⁸⁾			.15	02-17-16
			400,000	⁽⁹⁾			.15	02-17-16
	7,846	⁽¹⁰⁾	23,538	⁽¹⁰⁾			.95	09-13-16
C. Kirk Peacock	50,181	⁽³⁾	—				0.35	05-15-10
	25,000	⁽⁴⁾	—				1.00	10-29-13
	50,000	⁽⁵⁾	—				1.00	10-29-13
	50,000	⁽⁶⁾	—				1.30	10-29-14
	50,000	⁽⁷⁾					.30	10-29-15
	9,334	⁽¹¹⁾	40,666	⁽¹¹⁾			.80	10-29-16
			6,000	⁽⁹⁾			.80	10-29-16

(1)	Vested monthly following grant on February 18, 2008

(2)	Vested 25% quarterly following grant on September 29, 2008

(3)	Vested monthly following grant on May 16, 2005.

(4)	Vested upon grant, October 30, 2006.

(5)	Vested 25% quarterly following grant on October 30, 2006.

(6)	Vested monthly following grant on October 30, 2007.

(7)	Vested monthly following grant on October 30, 2008.

(8)	Vested monthly following grant on February 18, 2009 as to 300,000 shares.

(9)	Vests upon completion of milestones pursuant to contract.

(10)	Vests 25% quarterly following grant on September 14, 2009.

(11)	Vests monthly following grant on October 30, 2009.

Compensation of Directors

On November 5, 2007, the Board of Directors adopted a compensation program for the directors whereby each non-employee director will receive compensation in the form of cash and stock options for serving on the board as well as serving on board committees. The cash compensation consists of an annual retainer of $10,000 for serving as a director, a fee of $1,000 for each Board meeting attended, and a fee of $750 for each Board committee meeting attended. In addition, the Chairman of the Board will receive a $25,000 annual retainer, and the Chairperson of each of the Board committees will receive a $15,000 annual retainer. All fees are to be paid quarterly. Seven-year non-qualified stock options to purchase 25,000 shares of the Company’s common stock are to be granted annually on the date of the annual shareholders’ meeting to each non-employee director at an exercise price equal to the last reported trading price of the Company’s common stock on that day, with such option to vest quarterly over the one-year period following the date of grant.

On June 4, 2009 the Board of Directors revised the compensation program for the directors whereby each non-employee director will receive compensation in the form of cash and stock options for serving on the Board as well as serving on Board committees. The cash compensation consists of an annual retainer of $10,000 for serving as a director, a fee of $1,000 for each quarterly Board meeting attended, and a fee of $500 for each non-quarterly Board meeting and each committee meeting attended. In addition, the Chairman of the Board will receive a $15,000 annual retainer, the Chairperson of the Audit Committee will receive a $7,500 annual retainer, the Chairpersons of the Compensation Committee and the Nominating and Corporate Governance Committees will each receive a $5,000 annual retainer. All fees are to be paid quarterly. Seven-year non-qualified stock options to purchase shares of the Company’s common stock are to be granted annually on the date of the annual shareholders’ meeting to each non-employee director at an exercise price equal to the last reported trading price of the Company’s common stock on that day, with such option to vest quarterly over the one-year period following the date of grant in the following amounts: Chairman of the Board – 50,000 shares, Board members (other than Chair) 30,000 shares, Audit Committee Chair – 20,000 shares, Compensation Committee and Nominating and Corporate Governance Committee Chairs each to receive 10,000 shares, and members of Committees (other than Chairs) to receive 5,000 shares.

During the fiscal year ended December 31, 2009, we paid our non-employee directors cash compensation for serving on the Board of Directors and committees of the Board and granted a non-qualified option to purchase shares of common stock to each of our directors for their service as a director for the one-year period commencing September 14, 2009, subject to shareholder approval of an increase in the authorized number of shares in the Equity Plan, and an interim grant due to a revised director compensation structure whereby the directors receive reduced cash compensation. Each of the options granted to the directors has a term of seven years, has an exercise price of $0.95 per share, vests in four equal quarterly installments following the date of grant, and may be exercised within their term during the period the grantee provides services to us and for 24 months after the grantee ceases providing services for any reason other than termination by us for cause. The amounts of the annual and interim grants were: Jacqueline Brandwynne, 40,000 shares and 4,151 shares, respectively; Richard Cowell, 55,000 shares and 8,301 shares, respectively; Dr. Navdeep Jaikaria, 45,000 shares and 4,151 shares, respectively; Dr. Robert Martuza, 35,000 shares and 2,767 respectively, Dr. Manish Singh, 30,000 and 1,384 shares respectively; and Dr. John Yu, 65,000 shares and 11,068 shares, respectively.

The following table sets forth information concerning the compensation paid to each of our non-employee directors during 2009 for their services rendered as directors. The compensation of Dr. Singh, who serves as a director and as our President and Chief Executive Officer, is described above in the Summary Compensation Table.

DIRECTOR COMPENSATION FOR FISCAL YEAR 2009


Name	Fees Earned or Paid in Cash		Stock Awards	Option Awards ⁽¹⁾⁽⁷ ⁾			Non-Equity Incentive Plan Compensation	Nonqualified Deferred Compensation Earnings	All Other Compensation	Total
Jacqueline Brandwynne	$	26,000	—	$	31,789	⁽²⁾	—	—	—	$	57,789
Richard A. Cowell	$	30,125	—	$	45,577	⁽³⁾	—	—	—	$	75,702
Navdeep Jaikaria	$	19,750	—		35,389	⁽⁴⁾	—	—	—	$	55,139
Robert L. Martuza	$	15,000	—	$	27,192	⁽⁵⁾	—	—	—	$	42,192
John Yu	$	44,500	—	$	54,769	⁽⁶⁾	—	—	—	$	99,296

(1)

This column represents the aggregate grant date fair value of options awarded computed in accordance with FASB ASC Topic 718, excluding the effect of estimated forfeitures related to service-based vesting conditions. For additional information on the valuation assumptions with respect to the option grants, refer to Note 2 of our financial statements in this Annual Report. These amounts do not correspond to the actual value that will be recognized by the named directors from these awards.

(2)

On September 14, 2009 we granted to Ms. Brandwynne, (i) a seven-year non-qualified option to purchase 4,151 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period for her services as a director and (ii) a seven-year non-qualified option to purchase 40,000 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period, for her services as a director for the one-year period commencing September 14, 2009.

(3)

On September 14, 2009 we granted to Mr. Cowell, (i) a seven-year non-qualified option to purchase 8,301 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period for his services as a director and (ii) a seven-year non-qualified option to purchase 55,000 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period, for his services as a director for the one-year period commencing September 14, 2009.

(4)

On September 14, 2009 we granted to Dr. Jaikaria, (i) a seven-year non-qualified option to purchase 4,151 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period for his services as a director and (ii) a seven-year non-qualified option to purchase 45,000 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period, for his services as a director for the one-year period commencing September 14, 2009.

(5)

On September 14, 2009 we granted to Dr. Martuza, (i) a seven-year non-qualified option to purchase 2,767 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period for his services as a director and (ii) a seven-year non-qualified option to purchase 35,000 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period, for his services as a director for the one-year period commencing September 14, 2009.

(6)

On September 14, 2009 we granted to Dr. Yu, (i) a seven-year non-qualified option to purchase 11,068 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period for his services as a director and (ii) a seven-year non-qualified option to purchase 65,000 shares of the Company’s common stock at an exercise price of $0.95 per share, vesting quarterly over a one-year period, for his services as a director for the one-year period commencing September 14, 2009.

(7)

As of December 31, 2009, our non-employee directors held vested and unvested options, which they received as compensation for their services as directors, to purchase the following number of shares of our common stock: Jacqueline Brandwynne – 200,401 shares; Richard A. Cowell – 163,301 shares; Navdeep Jaikaria – 74,151 shares; Robert L. Martuza – 137,767 shares; and John Yu – 126,068 shares.

Stock Incentive Plan

We have adopted an equity incentive plan, the 2006 Equity Incentive Plan (the “Equity Plan”), pursuant to which we are authorized to grant options, restricted stock and stock appreciation rights to purchase up to 3,400,000 shares of common stock to our employees, officers, directors, consultants and advisors, which will be increased, subject to approval by our stockholders, to 6,000,000 shares. Awards under the plan may consist of stock options (both non- qualified options and options intended to qualify as “Incentive Stock Options” under Section 422 of the Internal Revenue Code of 1986, as amended), restricted stock awards and stock appreciation rights.

The Equity Plan is administered by our Board of Directors or a committee appointed by the Board, which determines the persons to whom awards will be granted, the type of award to be granted, the number of awards to be granted and the specific terms of each grant, including the vesting thereof, subject to the provisions of the plan.

The Equity Plan provides that the exercise price of each incentive stock option may not be less than the fair market value of our common stock on the date of grant (or 110% of the fair market value in the case of a grantee holding more than 10% of our outstanding common stock). The exercise price of a non-qualified stock option shall be no less than the fair market value of the common stock on the date of grant. The maximum number of options that may be granted in any fiscal year to any participant is 600,000, which will be increased, subject to approval by our stockholders, to 725,000 shares.

The plan also permits the grant of freestanding stock appreciation rights or in tandem with option awards. The grant price of a stock appreciation right shall be no less than the fair market value of a share on the date of grant of the stock appreciation right. No stock appreciation right shall be exercisable later than the tenth anniversary of its grant. Upon the exercise of a stock appreciation right, a participant shall be entitled to receive common stock at a fair market value equal to the benefit to be received by the exercise.

The plan also provides us with the ability to grant or sell shares of common stock that are subject to certain transferability, forfeiture, repurchase or other restrictions. The type of restriction, the number of shares of restricted stock granted and other such provisions shall be determined by our Board of Directors or its committee.

Unless otherwise determined by our Board of Directors or its committee, awards granted under the Equity Plan are not transferable other than by will or by the laws of descent and distribution.

The Equity Plan provides that, except as set forth in an individual award agreement, upon the occurrence of a corporate transaction: (i) our Board of Directors or its committee shall notify each participant at least 30 days prior to the consummation of the corporate transaction or as soon as may be practicable and (ii) all options and stock appreciation rights shall terminate and all restricted stock shall be forfeited immediately prior to the consummation of such corporate transaction unless the committee determines otherwise in its sole discretion. A “corporate transaction” means (i) a liquidation or dissolution of the company; (ii) a merger or consolidation of the company with or into another corporation or entity (other than a merger with a wholly-owned subsidiary); (iii) a sale of all or substantially all of the assets of the company; or (iv) a purchase or other acquisition of more than 50% of the outstanding stock of the company by one person or by more than one person acting in concert.

Our Board of Directors may alter, amend or terminate the plan in any respect at any time, but no alteration, amendment or termination will adversely affect in any material way any award previously granted under the plan, without the written consent of the participant holding such award.

As of December 31, 2009, there were outstanding options under the Equity Plan to purchase approximately 3,072,502 shares of our common stock at a weighted average exercise price of approximately $0.68 per share. The grants of options under the Plan during 2009 are described below.

In November 2009, we granted a seven-year non-qualified option to purchase 56,000 shares of common stock at an exercise price of $0.80 per share to C. Kirk Peacock in accordance with his employment contract, with such option to vest monthly over the one-year term of his employment contract as to 50,000 shares and shall vest as to 6,000 shares upon the successful completion of all of the internal documentation and internal testing necessary by October 29, 2010 to subsequently complete the Sarbanes-Oxley Section 404 audit.

In September 2009, we granted a seven-year non-qualified option to purchase 66,000 shares of our common stock at an exercise price of $0.95 per share to Dr. James Bender in accordance with his consulting agreement to serve as our Vice President – Clinical Development for a one-year term, with such option to vest at the rate of 3,000 shares per month during the term of the consulting agreement and with the remaining 30,000 shares to vest in accordance with completion of milestones contained in the consulting agreement.

In September 2009, we granted a non-qualified option to purchase shares of common stock to each of our directors for their service as a director for the one-year period commencing September 14, 2009, subject to shareholder approval of an increase in the authorized number of shares in the Equity Plan, and an interim grant due to a revised director compensation structure whereby the directors receive reduced cash compensation. Each of the options granted to the directors has a term of seven years, has an exercise price of $0.95 per share, vests in four equal quarterly installments following the date of grant, and may be exercised within their term during the period the grantee provides services to us and for 24 months after the grantee ceases providing services for any reason other than termination by us for cause. The amounts of the annual and interim grants were: Jacqueline Brandwynne, 40,000 shares and 4,151 shares, respectively; Richard Cowell, 55,000 shares and 8,301 shares, respectively; Dr. Navdeep Jaikaria, 45,000 shares and 4,151 shares, respectively; Dr. Robert Martuza, 35,000 shares and 2,767 respectively, Dr. Manish Singh, 30,000 and 1,384 shares respectively; and Dr. John Yu, 65,000 shares and 11,068 shares, respectively.

In September 2009, we granted a five-year non-qualified option to purchase 10,000 shares of our common stock to each of four members of our Scientific Advisory Board (“SAB”) for service as members on the SAB for the coming year at an exercise price of $0.95 per share, with such option to vest quarterly for the one-year period following the date of grant.

In September 2009, we granted a seven-year non-qualified option to purchase 6,000 shares of our common stock at an exercise price of $0.95 per share, with such option to vest monthly following the date of grant, to Christine Firmature, our Executive Assistant and Officer Manager

In September 2009, we granted a five-year, fully vested non-qualified option to purchase 25,000 shares of our common stock at an exercise price of $0.95 per share to Linda S. Huff for administrative services rendered to the Company since 2004.

In February 2009, we granted a seven-year non-qualified option to purchase 300,000 shares of our common stock at an exercise price of $0.25 to Dr. John Yu for services rendered as our Chief Scientific Officer, with such option to vest in four equal quarterly installments following the date of grant, and may be exercised within their term during the period the grantee provides services to us and for 24 months after the grantee ceases providing services for any reason other than termination by us for cause.

In February 2009, we granted a seven-year non-qualified option to purchase 700,000 shares of our common stock at an exercise price of $0.15 per share was granted to Dr. Manish Singh upon the renewal of his employment as our President and Chief Executive Officer, with 300,000 of the shares to vest at the rate of 25,000 shares per month during the term of his agreement and with the remaining 400,000 shares to vest in accordance with completion of milestones contained in his employment agreement.

Employment Agreements

John S. Yu, M.D.

Dr. John Yu and the Company entered into an Agreement, dated as of November 17, 2006, and a related Securities Purchase Agreement, dated as of November 17, 2006, Non-qualified Stock Option Agreement, dated as of November 17, 2006 and Registration Rights Agreement, dated as of November 17, 2006. Under that Agreement, Dr. Yu agreed to serve as our Chief Scientific Officer for an initial one-year term on a part-time basis. Pursuant to that Agreement, the Company agreed that (i) for so long as Dr. Yu owns Company shares or fully vested immediately exercisable options to purchase Company shares totaling at least 2,000,000 shares, the Company will use commercially reasonable efforts to enable Dr. Yu to continue to serve on its Board of Directors and (ii) for so long as Dr. Yu owns shares of the Company’s common stock or fully vested immediately exercisable options to purchase shares of the Company’s common stock totaling at least 4,000,000 shares or at least 5,000,000 shares, the Company will use commercially reasonable efforts to enable Dr. Yu and either one or two, respectively, of his designees to serve on its Board of Directors.

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

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

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

Manish Singh, Ph.D.

Effective February 18, 2009, the Company entered into an Employment Agreement with Dr. Manish Singh (the “2009 Employment Agreement”) pursuant to which Dr. Singh continued to serve on a full-time basis as the Company’s President and Chief Executive Officer for a one-year term. The Company was required under the 2009 Employment Agreement to use its commercially reasonable efforts to have Dr. Singh continue to serve as a member of the Company’s Board of Directors during the term of the 2009 Employment Agreement.

The 2009 Employment Agreement provided for an annual base salary of $250,000 and cash bonuses of (1) $50,000 if the Company completed 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 completed 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 completed 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 would in no event exceed $200,000. Pursuant to the 2009 Employment Agreement, the Company granted Dr. Singh a seven-year non-qualified stock option on February 18, 2009 under the Equity Plan to purchase 700,000 shares of the Company’s common stock at an exercise price of $0.15 per share. The option vests (i) as to 300,000 shares in twelve equal monthly installments of 25,000 shares each over the twelve-month period from and immediately following the grant date, (ii) as to 200,000 shares if the Company achieved 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 achieved 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 terminated the 2009 Employment Agreement without cause or did not extend the 2009 Employment Agreement upon its expiration for an additional one-year term or Dr. Singh terminated the 2009 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 was 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 Equity Plan) that had not yet vested would immediately become vested. In the event the Company completed a merger in which Dr. Singh was 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 was not entitled to terminate the 2009 Employment Agreement based on a change in duties and responsibilities or a location change.

Effective as of February 18, 2010, the Company entered into a new Employment Agreement with Dr. Manish Singh (the “2010 Employment Agreement”) pursuant to which Dr. Singh will continue to serve on a full-time basis as the Company’s President and Chief Executive Officer for a one-year term. The Company is required under the 2010 Employment Agreement to use its commercially reasonable efforts to have Dr. Singh continue to serve as a member of the Company’s Board of Directors during the term of the 2010 Employment Agreement. The 2010 Employment Agreement may be extended for an additional one-year period upon the mutual agreement of the Company and Dr. Singh.

The 2010 Employment Agreement provides for an annual base salary of $300,000. In addition, provided that Dr. Singh continues to serve as the Company’s President and Chief Executive Officer for the entire one-year term of the 2010 Employment Agreement, the Company will pay Dr. Singh a discretionary cash bonus of up to $50,000 upon completion of the one-year term.

The 2009 Employment Agreement with Dr. Sing provided that Dr. Singh was entitled to receive cash milestone bonuses, not to exceed an aggregate amount of $200,000, of (1) $50,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at least $2,500,000 of net proceeds (after commissions) during the term of that agreement, (2) $100,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at least $5,000,000 of net proceeds (after commissions) during the term of that agreement, or (3) $200,000 upon the Company’s completion of a financing, a strategic alliance or a merger or acquisition generating at

least $10,000,000 of net proceeds (after commissions) during the term of that agreement. The 2009 Employment Agreement also provided that an option granted to Dr. Singh to purchase 200,000 shares of the Company’s common stock would vest if the Company’s working capital is at least $8,000,000 at the end of the term of that agreement.

The 2010 Employment Agreement amends the 2009 Employment Agreement to provide that the milestones described in the preceding paragraph may be satisfied by including the net proceeds received by the Company at any time prior to August 17, 2010 from (1) a financing by the Socius Capital Group or (2) any private placement financing that is covered by a signed term sheet that was entered into by the Company prior to February 18, 2010 or from another source at the same or better terms as contemplated by such signed term sheet. Also, for purposes of determining whether the $8,000,000 working capital milestone in the preceding paragraph has been satisfied, the 2010 Employment Agreement provides that working capital will be calculated as of the date of the Company’s receipt of the proceeds that are being included to satisfy the milestone.

Pursuant to the 2010 Employment Agreement, the Company granted to Dr. Singh a seven-year incentive stock option under the Company’s 2006 Equity Incentive Plan, or a new qualified option plan, to purchase 600,000 shares of the Company’s common stock at an exercise price equal to $0.90 per share, which was the closing market price of the common stock on the option grant date. The option grant is subject to the approval by the Company’s stockholders of an increase in the authorized number of shares under the Plan and an increase in the number of shares that may be granted to any individual during a twelve-month period. The option may be exercised during the period that Dr. Singh provides services to the Company and for 24 months after termination for any reason except termination for cause by the Company, provided that such exercise is within the seven-year term of the option.

The option granted to Dr. Singh under the 2010 Employment Agreement will vest (1) as to 360,000 shares, in twelve equal monthly installments of 30,000 shares each over the twelve-month period from and immediately following the grant date, (2) as to 30,000 shares, if the Company achieves during the term of the that agreement a volume-weighted average trading price for its common stock of greater than $1.60 for any consecutive 15-day trading period during the term of that agreement on average daily trading volume of at least 20,000 shares, (3) as to 90,000 shares, if the Company achieves during the term of that agreement a volume-weighted average trading price for its common stock of greater than $2.00 for any consecutive 15-day trading period during the term of that agreement on average daily trading volume of at least 20,000 shares, (4) as to 30,000 shares, upon treating during the term of that agreement the first patient in a Phase II clinical trial, and (5) as to 90,000 shares, if during the term of the agreement the Company completes a financing, a strategic alliance or a licensing agreement with upfront licensing payments to the Company or a merger or acquisition that generates at least $5,000,000 of net proceeds (after commissions) for the Company beyond the $10,000,000 achieved by August 17, 2010, with any financing proceeds received by the Company during the first six months of the 2010 Employment Agreement that are used to satisfy milestones under the 2009 Employment Agreement not being included as proceeds to satisfy the milestones described in this paragraph.

In the event that the Company terminates the 2010 Employment Agreement without cause or does not extend the 2010 Employment Agreement upon its expiration for an additional one-year term, then (1) the Company upon such termination will be required to make a lump sum payment to Dr. Singh equal to six months of his base annual salary, (2) any stock options granted to Dr. Singh, to the extent vested, will be retained by Dr. Singh and will be exercisable on the terms described above, and (3) the vesting of an additional number of shares subject to all options granted to Dr. Singh equal to 50% of all shares subject to such options that have not already vested will immediately accelerate and will be exercisable on the terms described above. If Dr. Singh terminates his employment for “good reason” as defined in the Employment Agreement, he will receive the severance benefits described in the preceding sentence, except that 100% of his options will vest if his employment terminates for good reason following a merger or similar corporate transaction in which the Company is not the surviving entity.

Dr. James Bender

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

The Employment Agreement provides for an annual base salary of $170,000. Pursuant to the Employment Agreement, the Company granted to Dr. Bender a seven-year incentive stock option under the Company’s 2006 Equity Incentive Plan to purchase 150,000 shares of the Company’s common stock at an exercise price equal to $0.90 per share, which was the closing market price of the common stock on the option grant date. The option grant is subject to the approval by the Company’s stockholders of an increase in the authorized number of shares under the Plan.

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

The Employment Agreement provides that all of the rights and obligations of the Company and Dr. Bender under his prior agreement to provide services to the Company (including Dr. Bender’s right to work for another organization) terminated as of January 31, 2010, except that Dr. Bender’s right under that agreement to receive cash bonuses and the vesting of options upon the Company’s achievement of specified development milestones will remain in effect. The Employment Agreement provides that, except as described in the following sentence, if Dr. Bender’s employment terminates prior to the expiration of the one-year term, Dr. Bender will not have any right to receive further compensation under the Employment Agreement other than compensation that was accrued as of his employment termination date. If the Company terminates Dr. Bender’s employment without “cause” as defined in the Employment Agreement, 50% of any unvested options held by Dr. Bender as of the employment termination date will vest, and he will also have the right to receive any compensation that was accrued as of the employment termination date.

C. Kirk Peacock

Effective October 30, 2008, the Company entered into an Employment Agreement with Mr. Peacock under which he continued to serve on a part-time basis as the Company’s Chief Financial Officer for a one-year term. Under this agreement, Mr. Peacock received a monthly salary of $8,000 and was granted a seven-year non-qualified option to purchase 50,000 shares of the Company’s common stock at a price of $0.30 per share, with such option to vest in equal monthly installments over the one-year term of the agreement, with 50% of any then unvested option shares to become vested if Mr. Peacock’s employment was terminated by the Company without cause and with all vested options to be exercisable for 24 months after termination of Mr. Peacock’s employment for any reason other than termination by the Company for cause.

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

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

Indemnification of Directors and Officers

Our Amended and Restated Certificate of Incorporation provides that, to the full extent permitted by the Delaware General Corporation Law, no director will be personally liable to us or our stockholders for or with respect to any acts or omissions in the performance of his or her duties as a director.

Our Amended and Restated Certificate of Incorporation also provides that each person who is or was or had agreed to become a director or officer, and each such person who is or was serving or who had agreed to serve at our request as a director, officer, employee, or agent of another corporation, partnership, joint venture, trust, or other entity, will be indemnified by us to the full extent permitted by the Delaware General Corporation Law and will be entitled to advancement of expenses in connection therewith. Our Bylaws have similar indemnification provisions.

Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to our directors, officers and controlling persons pursuant to the foregoing provisions, or otherwise, we have been advised that in the opinion of the SEC such indemnification is against public policy as expressed in the Securities Act and is, therefore, unenforceable.

Item 12.

Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

The following table sets forth certain information regarding beneficial ownership of our common stock as of March 1, 2010 (a) by each person known by us to own beneficially 5% or more of any class of our common stock, (b) by each of our executive officers named in the Summary Compensation Table and our directors and (c) by all executive officers and directors of this company as a group. As of March 1, 2010, there were 16,067,842 shares of our common stock issued and outstanding. Unless otherwise noted, we believe that all persons named in the table have sole voting and investment power with respect to all the shares beneficially owned by them.


Name and Address of Beneficial Owner ⁽¹⁾	Shares Beneficially Owned ⁽²⁾		Percentage of Class
John S. Yu, M.D.	6,288,958	⁽³⁾	28.13	%
Sanford J. Hillsberg 1801 Century Park East, Suite 1600 Los Angeles, California 90067	1,018,536	⁽⁴⁾	6.33	%
Manfred Mosk, Ph.D. Technomedics Management & Systems, Inc. P. O. Box 3207 Redondo Beach, CA 90277	1,254,729	⁽⁵⁾	6.84	%
Keith Black, M.D. 8631 West Third Street, Suite 800E Los Angeles, CA 90048	1,400,000	⁽³⁾	8.01	%
Dr. Manish Singh	1,136,692	⁽⁶⁾	6.61	%
James Bender	51,000	⁽³⁾	*
C. Kirk Peacock	249,516	⁽³⁾	1.53	%
Jacqueline Brandwynne	217,076	⁽⁷⁾	1.34	%
Robert L. Martuza, M.D.	101,384	⁽³⁾	*
Richard A. Cowell	104,151	⁽³⁾	*
Navdeep Jaikaria	27,076	⁽³⁾	*
All executive officers and directors as a group (8 persons) ⁽¹¹⁾	8,175,853		33.82	%

*	Less than 1%.

(1)	Unless otherwise indicated, the address of each of the persons shown is c/o ImmunoCellular Therapeutics, Ltd., 21900 Burbank Boulevard, 3 ^rd Floor, Woodland Hills, California 91367.

(2)

Beneficial ownership is determined in accordance with the rules of the Securities and Exchange Commission and generally includes voting or investment power with respect to securities. Shares of common stock subject to options, warrants and convertible securities currently exercisable or convertible, or exercisable or convertible within 60 days, are deemed outstanding, including for purposes of computing the percentage ownership of the person holding such option, warrant or convertible security, but not for purposes of computing the percentage of any other holder.

(3)	All of the shares shown are subject to options.

(4)	Excludes 202,593 shares owned beneficially by TroyGould PC, of which Mr. Hillsberg is a member.

(5)

Includes 1,023,479 shares of common stock and 81,250 shares of our common stock issuable upon exercise of options owned of record by Dr. Mosk, and 150,000 shares of our common stock issuable upon the exercise of options owned of record by Technomedics Management & Systems, Inc., of which Dr. Mosk is the controlling stockholder.

(6)	Includes 11,000 shares owned of record and 1,125,692 shares of our common stock issuable upon exercise of options.

(7)	Includes 58,750 shares owned of record and 158,326 shares of our common stock issuable upon exercise of options.

Equity Compensation Plan Information

The following table summarizes, as of December 31, 2009, (i) the number of shares of our common stock that are issuable under our equity compensation plans upon the exercise of outstanding options, warrants and other rights, (ii) the weighted-average exercise price of such options, warrants and rights, and (iii) the number of securities remaining available for future issuance under our equity compensation plans.


Plan Category	Number of securities to be issued upon exercise of outstanding options, warrants and rights	Weighted-average exercise price of outstanding options, warrants and rights		Number of securities remaining available for future issuance under equity compensation plans (excluding securities reflected in column (a))
	(a)	(b)		(c)
Equity compensation plans approved by stockholders	9,005,927	$	0.89	—
Equity compensation plans not approved by stockholders	1,550,000	$	1.16	—

Total	10,555,927	$	0.93	—

Our stockholders approved our Equity Plan. The only awards that are outstanding under that plan as of March 1, 2010 are options to acquire 3,072,503 shares of our common stock. In September 2008 the shareholders increased the authorized number of shares of our common stock available to be issued under our Equity Plan from 1,500,000 shares to 3,400,000 shares. In March 2010, our Board approved an increase in the number of shares of our common stock available to be issued under our Equity Plan from 3,400,000 shares to 6,000,000 shares, subject to approval by our stockholders.

In January 2007, we granted to Dr. Keith L. Black a fully-vested, ten-year option to purchase 1,500,000 shares of our common stock at an exercise price of $1.10 per share in consideration for his agreeing to serve as the Chairman of our Scientific Advisory Board. Dr. Black has exercised 100,000 shares of this option.

In November 2006, we granted to Dr. John Yu (1) an option to purchase 150,000 shares of our common stock in consideration for his relinquishment of his royalty interest in the cellular-based therapy technology that we licensed and (2) an option to purchase 5,783,424 shares of our common stock in consideration of his agreeing to serve as our Chief Scientific Officer for a one-year term. Both options have an exercise price of $1.00 per share, a term of ten years and were fully vested upon grant. In November 2006, our stockholders approved these option grants to Dr. Yu.

In November 2006, we granted to Technomedics Management & Systems, Inc. an option to purchase 300,000 shares of our common stock for a term of seven years at an exercise price of $1.00 per share in consideration for Dr. Mosk agreeing to serve as our Non-Executive Chairman of the Board on a part-time basis for one year. Upon grant, 150,000 shares of the option vested, with the balance of the shares to vest in four equal quarterly installments following the date of grant. Dr. Mosk voluntarily resigned as our Non-Executive Chairman of the Board in January 2007 and resigned as a director on March 19, 2008. The balance of Technomedics’ 150,000 unvested option shares were cancelled as a result of Dr. Mosk’s voluntary resignation: The Technomedics’ option covering the remaining 150,000 vested option shares expired unexercised on March 18, 2010.

Item 13.

Certain Relationships and Related Transactions, and Director Independence.

Independent Directors

Information regarding our independent directors is set forth above in Item 10 under the captions “Business Experience and Directorships” and “Committees of the Board”.

Item 14.

Principal Accounting Fees and Services.

The Audit Committee has appointed Stonefield Josephson, Inc. as our independent registered public accounting firm for the fiscal year ending December 31, 2010. The following table shows the fees that were paid or accrued by us for audit and other services provided by Stonefield Josephson, Inc. for the 2008 and 2009 fiscal years.


	2008		2009
Audit Fees (1)	$	46,053	$	49,249
Audit-Related Fees (2)	$	7,900		—
Tax Fees (3)	$	13,164	$	2,915
All Other Fees		—	$	13,495

Total	$	67,117	$	65,659

(1)

Audit fees represent fees for professional services provided in connection with the audit of our annual financial statements and the review of our financial statements included in our Form 10-Q quarterly reports and services that are normally provided in connection with statutory or regulatory filings for the 2008 and 2009 fiscal years.

(2)	Audit-related fees represent fees for assurance and related services that are reasonably related to the performance of the audit or review of our financial statements and not reported above under “Audit Fees.”

(3)	Tax fees represent fees for professional services related to tax compliance, tax advice and tax planning.

All audit related services, tax services and other services rendered by Stonefield Josephson, Inc. were pre-approved by our Board of Directors or Audit Committee. The Audit Committee has adopted a pre-approval policy that provides for the pre-approval of all services performed for us by Stonefield Josephson, Inc. The policy authorizes the Audit Committee to delegate to one or more of its members pre-approval authority with respect to permitted services. Pursuant to this policy, the Board delegated such authority to the Chairman of the Audit Committee. All pre-approval decisions must be reported to the Audit Committee at its next meeting. The Audit Committee has concluded that the provision of the non-audit services listed above is compatible with maintaining the independence of Stonefield Josephson, Inc.

PART IV

Item 15.

Exhibits and Financial Statement Schedules.

The Company’s financial statements and related notes thereto are listed and included in this Annual Report beginning on page F-1. The following exhibits are filed with, or are incorporated by reference into, this Annual Report.


Exhibit Number		Description
2.1		Agreement and Plan of Reorganization dated as of May 5, 2005, as amended, among Patco Industries Subsidiary, Inc., William C. Patridge, and Spectral Molecular Imaging, Inc., as amended on June 30, 2005, September 26, 2005 and January 20, 2006. (1)

3.1		Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (2)

3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (2)

3.3		Certificate of Amendment to Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (3)

3.4		Amended and Restated Bylaws of ImmunoCellular Therapeutics, Ltd. (4)

4.1		Form of Common Stock Certificate for ImmunoCellular Therapeutics, Ltd. (5)

4.2		Form of Subscription Agreement containing registration rights issued by Spectral Molecular Imaging, Inc. in January 2006 and assumed by ImmunoCellular Therapeutics, Ltd. (4)

4.3		Form of Warrant issued in January 2006 to purchase shares of the common stock of Spectral Molecular Imaging, Inc. and assumed by ImmunoCellular Therapeutics, Ltd. (4)

4.4		Subscription Agreement dated as of February 16, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.5		Letter Agreement dated as of February 16, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.6		Subscription Agreement dated as of April 19, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.7		Warrant dated as of February 16, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 800,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.8		Warrant dated as of February 16, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 533,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.9		Warrant dated as of April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 200,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)


4.10		Warrant dated as of April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 133,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.11		Form of Subscription Agreement containing registration rights between the participants in the April/May 2007 private placement and ImmunoCellular Therapeutics, Ltd. (7)

4.12		Form of Warrant issued to participants in the April/May 2007 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (7)

4.13		Form of Notice of Exercise of Warrants delivered by ImmunoCellular Therapeutics, Ltd. in January 2009 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 common stock of ImmunoCellular Therapeutics, Ltd. 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 ImmunoCellular Therapeutics, Ltd. (17)

4.14		Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock dated December 3, 2009. (20)

4.15		Warrant dated December 3, 2009 issued by ImmunoCellular Therapeutics, Ltd. to Socius Capital Group, LLC d/b/a Socius Life Sciences Capital Group, LLC (20)

10.1		Exclusive License Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd.† (8)

10.2		First Amendment to Exclusive License Agreement dated as of June 16, 2008 2006, between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd.† (9)

10.3		Stock Purchase Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (8)

10.4		Registration Rights Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (8)

10.5		Securities Purchase Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. (8)

10.6		Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.* (8)

10.7		Nonqualified Stock Option Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.* (8)

10.8		Registration Rights Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. (8)

10.9		2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (4)

10.10		Amendment No. 1 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (10)

10.11		Amendment No. 2 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (11)

10.12		Amendment No. 3 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (11)


10.13		Amendment No. 4 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (9)

10.14		Form of Non-Qualified Stock Option Agreement for the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (12)

10.15		Form of Incentive Stock Option Agreement for the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (12)

10.16		Employment Agreement dated as of February 18, 2008 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.* (11)

10.17		Employment Agreement dated as of February 18, 2009 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.* (17)

10.18		Employment Agreement dated as of November 5, 2007 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. (13)

10.19		Employment Agreement dated as of October 30, 2008 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd.* (17)

10.20		Agreement dated as of July 7, 2006 between Technomedics Management & Systems, Inc. and ImmunoCellular Therapeutics, Ltd. (14)

10.21		Agreement dated as of November 17, 2006 between Technomedics Management & Systems, Inc. and ImmunoCellular Therapeutics, Ltd.* (5)

10.22		Memorandum of Agreement dated as of November 21, 2007 between Molecular Discoveries LLC and ImmunoCellular Therapeutics, Ltd. (11)

10.23		Agreement dated as of February 14, 2008 between Molecular Discoveries, LLC and ImmunoCellular Therapeutics, Ltd. (11)

10.24		Registration Rights Agreement dated as of April 14, 2008, between Molecular Discoveries, LLC and ImmunoCellular Therapeutics, Ltd. (15)

10.25		Agreement dated as of February 14, 2008 between Dr. Cohava Gelber and ImmunoCellular Therapeutics, Ltd. (11)*

10.26		Agreement dated as of August 1, 2008 between Dr. Cohava Gelber and ImmunoCellular Therapeutics, Ltd.. * (17)

10.27		Agreement dated as of September 1, 2008 between James G. Bender and ImmunoCellular Therapeutics, Ltd. (16) *

10.28		Office lease dated April 28, 2008 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd., as amended. (17)

10.29		Amendment No. 1 to Agreement dated as of May 1, 2009 to Agreement dated October 30, 2008 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. *(18)

10.30		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. (19)

10.31		Preferred Stock Purchase Agreement dated as of December 3, 2009 between ImmunoCellular Therapeutics, Ltd. and Socius Capital Group, LLC d/b/a Socius Life Sciences Capital Group, LLC. (20)

10.32		Employment Agreement dated as of October 30, 2009 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. *(21)


10.33		License Agreement dated as of September 8, 2009 between Roche GlycArt AG (f/k/a) GlycArt Biotechnology AG) and ImmunoCellular Therapeutics, Ltd. † **

10.34		Employment Agreement dated as of February 1, 2010 between James G. Bender and ImmunoCellular Therapeutics, Ltd. * **

10.35		Employment Agreement dated as of February 18, 2010 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd. * **

10.36		Agreement dated March 1, 2010 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. * **

23.1		Consent of Stonefield Josephson, Inc. **

31.1		Certification of the registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

31.2		Certification of the registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

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

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

†	Certain portions of the exhibit have been omitted based upon a request for confidential treatment filed by us with the Securities and Exchange Commission. The omitted portions of the exhibit have been separately filed by us with the Securities and Exchange Commission.

*	Indicates a management contract or compensatory plan or arrangement.

**	Filed with this Annual Report on Form 10-K.

(1)	Previously filed by us on January 26, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(2)	Previously filed by us on November 3, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(3)	Previously filed by us on May 9, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(4)	Previously filed by us on February 6, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(5)	Previously filed by us on February 12, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-140598, and incorporated herein by reference.

(6)	Previously filed by us on May 1, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-142480, and incorporated herein by reference.

(7)	Previously filed by us on July 12, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-144521, and incorporated herein by reference

(8)	Previously filed by us on November 22, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(9)	Previously filed by us on August 14, 2008 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(10)	Previously filed by us on September 14, 2007 as an exhibit to our Registration Statement on Form SB-2/A and incorporated herein by reference.

(11)	Previously filed by us on March 25, 2008 as an exhibit to our Annual Report on Form 10-KSB and incorporated herein by reference.

(12)	Previously filed by us on November 9, 2007 as an exhibit to our Registration Statement on Form S-8, File No. 333-147278, and incorporated herein by reference.

(13)	Previously filed by us on November 6, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(14)	Previously filed by us on April 2, 2007 as an exhibit to our Annual Report on Form 10-KSB and incorporated herein by reference.

(15)	Previously filed by us on April 16, 2008 as an exhibit to our Registration Statement on Form S-1, File No. 333-150277, and incorporated herein by reference.

(16)	Previously filed by us on November 13, 2008 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(17)	Previously filed by us on March 30, 2009 as an exhibit to our Annual Report on Form 10-K and incorporated herein by reference.

(18)	Previously filed by us on August 14, 2009 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(19)	Previously filed by us on November 13, 2009 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(20)	Previously filed by us on December 7, 2009 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(21)	Previously filed by us on December 23, 2009 as an exhibit to our Registration Statement on Form S-1 and incorporated herein by reference.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) 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.


	IMMUNOCELLULAR THERAPEUTICS, LTD.

Date: March 30, 2010	By:	/s/ Manish Singh
	Manish Singh, Ph.D.
	President and Chief Executive Officer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.


Signature	Title	Date

/s/ Manish Singh Manish Singh, Ph.D.	President, Chief Executive Officer and Director (Principal Executive Officer)	March 30, 2010

/s/ C. Kirk Peacock C. Kirk Peacock	Chief Financial Officer (Principal Financial and Accounting Officer)	March 30, 2010

/s/ Jacqueline Brandwynne Jacqueline Brandwynne	Director	March 30, 2010

/s/ Richard A. Cowell Richard A. Cowell	Director	March 30, 2010

/s/ Navdeep Jaikaria Navdeep Jaikaria, Ph.D.	Director	March 30, 2010

/s/ Robert L. Martuza Robert L. Martuza, M.D.	Director	March 30, 2010

/s/ John Yu John Yu, M.D.	Director	March 30, 2010

ImmunoCellular Therapeutics, Ltd.

(a Development Stage Company)

Index to Financial Statements


		Page
Financial Statements:

Report of Independent Registered Public Accounting Firm		F-2
Balance Sheets as of December 31, 2009 and 2008		F-3
Statements of Operations for each of the three fiscal years in the period ended December 31, 2009 and from February 25, 2004 (Inception) to December 31, 2009		F-4
Statements of Shareholders Equity (Deficit) for each of the six years in the period ended December 31, 2009		F-5
Statements of Cash Flows for each of the three years in the period ended December 31, 2009 and from February 25, 2004 (Inception) to December 31, 2009		F-6
Notes to Consolidated Financial Statements		F-7

F-1

Report of Independent Registered Public Accounting Firm

Board of Directors

ImmunoCellular Therapeutics, Ltd.

Woodland Hills, California

We have audited the accompanying balance sheets of ImmunoCellular Therapeutics, Ltd. (a development stage company) as of December 31, 2008 and 2009 and the related statements of operations, shareholders’ equity (deficit) and cash flows for the years ended December 31, 2007, 2008 and 2009 and for the period from inception of operations (February 25, 2004) to December 31, 2009. These financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these financial statements based on our audit.

We conducted our audit in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. We were not engaged to perform an audit of the Company’s internal control over financial reporting. Our audit included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control over financial reporting. Accordingly, we express no such opinion. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of ImmunoCellular Therapeutics, Ltd. as of December 31, 2008 and 2009 and the results of its operations and its cash flows for the years ended December 31, 2007, 2008 and 2009 and for the period from inception of operations (February 25, 2004) to December 31, 2009 in conformity with U.S. generally accepted accounting principles.

/s/ Stonefield Josephson, Inc.

Los Angeles, California

March 29, 2010

F-2

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Balance Sheets


	December 31, 2008			December 31, 2009
Assets
Current assets:
Cash and cash equivalents	$	85,290		$	331,353
Short-term investments		3,000,000			1,075,903
Other assets		27,642			21,903

Total current assets		3,112,932			1,429,159
Fixed assets, net		8,012			5,428
Deferred financing costs		—			30,282
Other assets		7,438			7,847

Total assets	$	3,128,382		$	1,472,716

Liability and Shareholders’ Equity (Deficit)
Current liabilities:
Accounts payable	$	132,949		$	225,601
Accrued liabilities		55,097			150,120

Total current liabilities		188,046			375,721

Commitments and contingencies		—			—

Shareholders’ equity (deficit):
Common stock, $0.0001 par value; 74,000,000 shares authorized; 12,682,493 shares and 14,867,842 shares issued and outstanding as of December 31, 2008 and December 31, 2009, respectively		12,682			14,868
Preferred stock $0.0001 par value, 1,000,000 shares authorized; 0 shares outstanding as of December 31, 2008 and December 31, 2009		—			—
Additional paid in capital		15,012,595			15,845,941
Promissory note		—			(52,668	)
Deficit accumulated during the development stage		(12,084,941	)		(14,711,146	)

Total shareholders’ equity		2,940,336			1,096,995

Total liabilities and shareholders’ equity	$	3,128,382		$	1,472,716

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

F-3

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Statements of Operations


	For the Year Ended December 31, 2007			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			February 25, 2004 (Inception) to December 31, 2009
Revenues	$	—		$	—		$	300,000		$	300,000
Expenses:
Research and development		77,857			1,296,772			962,526			3,267,637
Merger costs		—			—			—			73,977
Stock-based compensation for general and administrative services		1,296,714			513,357			308,303			6,222,019
General and administrative		946,022			1,366,146			1,677,421			4,509,197

Total expenses		2,320,593			3,176,275			2,948,250			14,072,830

Loss before other income and income taxes		(2,320,593	)		(3,176,275	)		(2,648,250	)		(13,772,830	)

Other income:
Interest income		162,040			116,545			22,045			330,684
Change in fair value of warrant liability		(1,456,200	)		—			—			(1,269,000	)

		(1,294,160	)		(3,059,730	)		(2,626,205	)		(14,711,146	)

Loss before income taxes		(3,614,753	)		(3,059,730	)		(2,626,205	)		(14,711,146	)

Income taxes		—			—			—			—

Net loss	$	(3,614,753	)	$	(3,059,730	)	$	(2,626,205	)	$	(14,711,146	)

Weighted average number of shares:
Basic and diluted		10,853,406			12,540,301			13,719,991			9,948,426

Earnings (loss) per share:
Basic and diluted	$	(0.33	)	$	(0.24	)	$	(0.19	)	$	(1.48	)

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

F-4

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Statements of Shareholders’ Equity (Deficit)


	Common Stock					Additional Paid – In			Promissory			Deficit Accumulated During the Development			Total
	Shares		Amount			Capital			Note			Stage			Total
Initial capitalization at $0.00002 per share	6,256,500		$	97		$	—		$	—		$	—		$	97

Common stock issued for cash during 2004 at $0.00078 per share	193,500			150			—			—			—			150
Net loss	—			—			—			—			(11,741	)		(11,741	)

Balance at December 31, 2004	6,450,000			247			—			—			(11,741	)		(11,494	)

Common stock issued for cash during 2005 at $0.19 per share	387,000			6,590			68,410			—			—			75,000
Common stock issued for cash during 2005 at $0.32 per share	154,800			155			49,845			—			—			50,000
Common stock issued for research and development during 2005 at $0.99 per share	154,800			155			152,605			—			—			152,760
Net loss	—			—			—			—			(246,004	)		(246,004	)

Balance at December 31, 2005	7,146,600			7,147			270,860			—			(257,745	)		20,262

Common stock issued for services during 2006 at $0.50 per share	73,093			73			36,473			—			—			36,546
Common stock issued for cash during 2006 in private placements at $1.00 per share, net of redemptions	1,510,000			1,510			547,890			—			—			549,400
Common stock issued for research and development during 2006 at $1.00 per share	694,000			694			693,306			—			—			694,000
Shares issued in connection with reverse merger	825,124			825			(825	)		—			—			—
Shares cancelled in connection with the sale of Optical Molecular Imaging, Inc.	(2,059,100	)		(2,059	)		(62,941	)		—			—			(65,000	)
Exercise of stock options	10,062			10			3,512			—			—			3,522
Stock based compensation (options)	—			—			4,103,645			—			—			4,103,645
Net loss	—			—			—			—			(5,152,713	)		(5,152,713	)

Balance at December 31, 2006	8,199,779			8,200			5,591,920			—			(5,410,458	)		189,662

Common stock issued for cash during 2007 in private placements at $1.50 per share	3,531,603			3,531			4,888,955			—			—			4,892,486
Exercise of stock options	51,111			51			(51	)		—			—			—
Reclassification of warrant derivative liability	—			—			2,233,600			—			—			2,233,600
Stock based compensation (options)	—			—			1,296,714			—			—			1,296,714
Net loss	—			—			—			—			(3,614,753	)		(3,614,753	)

Balance at December 31, 2007	11,782,493			11,782			14,011,138			—			(9,025,211	)		4,997,709

Common stock issued for research and development during 2008 at $0.53 per share	800,000			800			423,200			—			—			424,000
Common stock issued for research and development during 2008 at $0.65 per share	100,000			100			64,900			—			—			65,000
Stock based compensation (options)	—			—			513,357			—			—			513,357
Net loss	—			—			—			—			(3,059,730	)		(3,059,730	)

Balance at December 31, 2008	12,682,493			12,682			15,012,595			—			(12,084,941	)		2,940,336

Exercise of warrants	1,970,992			1,971			460,777			—			—			462,748
Exercise of stock options	214,357			215			64,267			(52,668	)		—			11,814
Stock based compensation (options)	—			—			308,302			—			—			308,302
Net loss	—			—			—			—			(2,626,205	)		(2,626,205	)

Balance at December 31, 2009	14,867,842		$	14,868		$	15,845,941		$	(52,668	)	$	(14,711,146	)	$	1,096,995

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

F-5

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Cash Flows


	For the Year Ended December 31, 2007			For the Year Ended December 31, 2008			For the Year Ended December 31, 2009			February 25, 2004 (Inception) to December 31, 2009
Cash flows from operating activities:
Net loss	$	(3,614,753	)	$	(3,059,730	)	$	(2,626,205	)	$	(14,711,146	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		—			2,075			3,397			5,472
Change in fair value of warrant liability		1,456,200			—			—			1,269,000
Stock based compensation		1,296,714			513,357			308,303			6,222,019
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		(20,141	)		(5,440	)		(24,951	)		(60,031	)
Accounts payable		(45,004	)		102,753			92,652			225,601
Accrued liabilities		14,981			12,538			95,023			150,120

Net cash used in operating activities:		(912,003	)		(1,945,447	)		(2,151,781	)		(5,526,659	)

Cash flows from investing activities:
Sale (purchase) of short-term investments, net		—			(3,000,000	)		1,924,097			(1,075,903	)
Purchase of property and equipment		—			(10,087	)		(813	)		(50,900	)
Cash paid for sale of OMI		—			—			—			(25,000	)

Net cash provided by (used in) investing activities:		—			(3,010,087	)		1,923,284			(1,151,803	)

Cash flows from financing activities:
Advances from shareholders		—			—			—			—
Exercise of stock options		—			—			11,812			15,334
Exercise of warrant		—			—			462,748			462,748
Proceeds from issuance of common stock under private placement		4,892,486			—			—			6,406,486
Proceeds from issuance of common stock		—			—			—			125,247

Net cash provided by financing activities		4,892,486			—			474,560			7,009,815

Increase in cash and cash equivalents		3,980,483			4,955,534			246,063			331,353
Cash and cash equivalents at beginning of period		1,060,341			(5,040,824	)		85,290			—

Cash and cash equivalents at end of period	$	5,040,824		$	85,290		$	331,353		$	331,353

Supplemental cash flows disclosures:
Interest expense paid	$	—		$	—		$	—		$	—

Income taxes paid	$	—		$	—		$	—		$	—

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

F-6

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to 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.

In February 2008, the Company entered into an Agreement with Molecular Discoveries LLC (“Molecular Discoveries”), covering the Company’s acquisition of certain monoclonal antibody related technology owned by Molecular Discoveries and completed the acquisition of the technology on that date. The Molecular Discoveries agreement also was acknowledged and agreed to by Dr. Cohava Gelber, an inventor of the technology acquired by the Company under this agreement and an equity owner of Molecular Discoveries.

The technology acquired under the Molecular Discoveries agreement and now owned by the Company consists of (i) a platform technology referred to by Molecular Discoveries as DIAAD for the potentially rapid discovery of monoclonal antibodies to detect and treat cancer and other chronic diseases and (ii) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers. The monoclonal antibodies are covered by issued patents and pending patent applications in the fields of multiple myeloma, small cell lung and ovarian cancers.

As provided in the Molecular Discoveries agreement, the consideration for the intellectual property and related assets comprising the technology acquired by the Company consisted of (i) the issuance of 800,000 shares of the Company’s common stock to Molecular Discoveries and (ii) the reimbursement by the Company to Molecular Discoveries or its managing member of $250,000 of previously incurred patent expenses. Molecular Discoveries has agreed that it will not publicly resell more than 100,000 shares in any 90-day period. To secure Molecular Discoveries’s potential obligations to the Company under the Molecular Discoveries agreement, all of the shares were placed in escrow, with 400,000 shares subject to release after one year and the balance after two years from the closing of the transaction.

Since the Company’s inception on February 25, 2004, the Company has been primarily engaged in the acquisition of certain intellectual property, together with development of its product candidates and the recent clinical testing activities for one of its vaccine product candidates, and has not generated any recurring revenues. As a result, the Company has incurred operating losses and, as of December 31, 2009, the Company had an accumulated deficit of $14,711,146. The Company expects to incur significant research, development and administrative expenses before any of its products can be launched and recurring revenues generated.

2. Summary of Significant Accounting Policies

Cash and cash equivalents – The Company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents.

Short-Term Investments – As of December 31, 2008 and December 31, 2009, the Company had $3,000,000 and $1,075,903, respectively, of certificates of deposit. These securities were fully covered by FDIC insurance and mature within the next six months. They are classified as held-to-maturity and under ASC Topic 320, Investments in Debt Securities, are measured at cost since the Company has the intent and ability to hold these securities to maturity.

F-7

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

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

Stock Based Compensation – In Financial Accounting Standards Board (FASB) ASC Topic 718, Share Based Payment requires that the cost resulting for all share-based payment transactions be recognized in the Company’s consolidated financial statements.

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


	Year Ended December 31, 2007		Year Ended December 31, 2008		Year Ended December 31, 2009
Risk-free interest rate	4.56	%	2.65	%	1.40	%
Expected dividend yield	None		None		None
Expected life	3.0 years		3.9 years		3.8 years
Expected volatility	100.0	%	100.0	%	118.0	%

The weighted-average grant-date fair value of options granted during the years ended December 31, 2007, 2008 and 2009 was $0.73, $0.35 and $0.32, 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.

F-8

The Company’s stock price volatility and option lives involve management’s best estimates, both of which impact the fair value of the option calculated under the Black-Scholes methodology and, ultimately, the expense that will be recognized over the life of the option.

When options are exercised, our policy is to issue previously unissued shares of common stock to satisfy share option exercises. As of December 31, 2009, the Company had 57.9 million shares of authorized but unissued common stock.

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

Income Taxes – The Company accounts for federal and state income taxes in accordance with ASC Topic 740, “Accounting for Income Taxes”. Under the liability method, a deferred tax asset or liability is determined based on the difference between the financial statement and tax basis of assets and liabilities, as measured by the enacted tax rates. The Company’s provision for income taxes represents the amount of taxes currently payable, if any, plus the change in the amount of net deferred tax assets or liabilities. A valuation allowance is provided against net deferred tax assets if recoverability is uncertain on a more likely than not basis. FASB ASC 740, Income Taxes , (“ASC 740”), clarifies the accounting for uncertainty in income tax positions (“tax positions”). The provisions of ASC 740 require the Company to recognize in its financial statements the impact of a tax position if the position will more likely than not be sustained upon examination by a taxing authority, based on the technical merits of the position. In the initial year of adoption, ASC 740 provides that the cumulative effect of this change in accounting principal, if any, be recorded as an adjustment to opening retained earnings. The Company adopted the provisions of ASC 740 effective January 1, 2007. The adoption of the provisions of ASC 740 had no effect on the Company’s financial statements. The Company’s policy is to recognize interest related to unrecognized tax benefits as interest expense and penalties as operating expenses. The Company is not currently under examination by any taxing authority nor has it been notified of an impending examination.

The Company recognizes interest and penalties for uncertain tax positions in income tax expense. Upon adoption and as of December 31, 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.

F-9

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 15,057,667 shares, 16,113,917 shares and 10,555,927 shares at December 31, 2007, December 31, 2008 and December 31, 2009, respectively.

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

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

Reclassifications – Certain prior year items have been reclassified to conform to current year presentation.

3. Property and Equipment

As of December 31, 2008 and December 31, 2009, $10,087 and $10,900 of equipment had been placed into service, respectively. Depreciation expense was zero, $2,075 and $3,397 for the years ended December 31, 2007, December 31, 2008 and December 31, 2009, respectively. Depreciation expense was $5,472 for the period from February 25, 2004 (date of inception) to December 31, 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.

F-10

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

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

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

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

Legal Costs

As of December 31, 2008 and December 31, 2009, the Company was indebted to TroyGould PC, a shareholder, for legal services of $36,987 and $81,708, 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 $1,104,000.

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, which at the expiration of the lease, the rental is paid on a month-to-month basis.

F-11

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 Company’s 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 Company’s 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 Company’s Equity Plan (the “Plan”) to purchase 700,000 shares of the Company’s 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 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.

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

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

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 Company’s stock option plan to purchase 66,000 shares of the Company’s common stock at a purchase price of $0.95 per share (the closing price of the Company’s 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.

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)

Preferred Stock

On December 3, 2009, the Company entered into a Preferred Stock Purchase Agreement dated as of December 3, 2009 (the “Preferred Stock Agreement”) with Socius Capital Group, LLC, a Delaware limited liability company d/b/a Socius Life Sciences Capital Group, LLC (the “Investor”). Pursuant to the Preferred Stock Agreement, the Company will issue to the Investor up to $10,000,000 of the

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Company’s newly created Series A Preferred Stock (the “Preferred Stock”). The purchase price of the Preferred Stock is $10,000 per share. The shares of Preferred Stock that are issued to the Investor will bear a cumulative dividend of 10.0% per annum, payable in shares of Preferred Stock, will be redeemable under certain circumstances and will not be convertible into shares of the Company’s common stock. Subject to the terms and conditions of the Preferred Stock Agreement, the Company has the right to determine (1) the number of shares of Preferred Stock that it will require the Investor to purchase from the Company, up to a maximum purchase price of $10,000,000, (2) whether it will require the Investor to purchase Preferred Stock in one or more tranches, and (3) the timing of such required purchase or purchases of Preferred Stock.

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

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

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

Pursuant to the Preferred Stock Agreement, the Company agreed to file with the Securities and Exchange Commission a registration statement covering the resale of the shares of common stock that are issuable to the Investor under the Warrant and in satisfaction of the Commitment Fee. The registration statement was deemed effective on January 22, 2010. The 1.2 million shares of common stock registered for the Commitment Fee are held in escrow by the Company. As of December 31, 2009, the Company had not made an election to require the Investor to purchase shares of Preferred Stock.

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

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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 December 31, 2009, the Company has reserved 3,400,000 shares of common stock for issuance under the Plan and options to purchase 3,072,503 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 that are contingent on approval by the Company’s stockholders of an increase in the total number shares of common stock reserved for issuance under the Plan.

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

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

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

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

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The following table summarizes stock option activity for the Company during the twelve months ended December 31, 2009:


	Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Outstanding December 31, 2006	6,964,084		$	0.98
Granted	1,956,000		$	1.14
Exercised	(100,000	)	$	1.10
Forfeited or expired	(175,000	)	$	1.04

Outstanding December 31, 2007	8,645,084		$	1.02
Granted	1,100,000		$	0.77
Exercised	—		$	—
Forfeited or expired	(43,750	)	$	0.86

Outstanding December 31, 2008	9,701,334		$	0.99
Granted	1,494,822		$	0.43
Exercised	(509,229	)	$	0.69
Forfeited or expired	(131,000	)	$	0.93

Outstanding December 31, 2009	10,555,927		$	0.92	6.4	$	1,085,309

Vested or expected to vest at December 31, 2009	9,707,653		$	0.96	6.7	$	2,382,832

As of December 31, 2009, the total unrecognized compensation cost related to unvested stock options amounted to $259,614, which will be amortized over the weighted-average remaining requisite service period of less than one year.

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 Company’s common stock and in connection with the extension of the expiration date of warrants to purchase a total of 6,412,583 shares of the Company’s common stock from earlier dates in 2009 to June 30, 2009. The Company valued the warrant modification at $611,258, using the Black-Scholes pricing model and the following assumptions: contractual term of 0.45 years, an average risk-free interest rate of 0.29% a dividend yield of 0% and volatility of 118%. In the footnotes to the Company’s financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2008, the Company disclosed that it anticipated taking a non-cash charge of approximately $500,000 in the first quarter of 2009. In the first quarter 2009, the Company determined that the warrant modification should be treated as a dividend in-kind and not a non-cash charge, and since the Company was in a deficit position at the time of the modification, no dividend was recorded.

On June 30, 2009, the Company issued 1,970,992 shares of its common stock to 58 purchasers upon their exercise of warrants. The exercise price of 1,670,992 shares was $0.25 per share, and the exercise price of 300,000 shares was $0.15 per share. The Company received an aggregate purchase price of $462,748, and the Company did not pay any underwriting discounts or commissions in the transaction. As of December 31, 2009, the Company had no outstanding stock purchase warrants issued to investors.

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Promissory Note

In October 2009, the Company’s former President exercised stock options for 150,479 shares of common stock and as provided under the stock option agreement provided the Company with a full recourse five-year promissory note bearing interest of 2.59% per annum. The promissory note is secured by a pledge of shares being acquired with all proceeds of any sale to be applied first to retire in full the promissory note. The Company recorded the promissory note as an offset against shareholders’ equity.

7. Income Taxes

Deferred taxes represent the net tax effects of the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes. Temporary differences result primarily from the recording of tax benefits of net operating loss carryforwards and start-up costs that will be amortized for tax purposes once the Company begins doing business as defined by the Internal Revenue Code.

As of December 31, 2009, the Company has an insufficient history to support the likelihood of ultimate realization of the benefit associated with the deferred tax asset. Accordingly, a valuation allowance has been established for the full amount of the net deferred tax asset.

Deferred taxes consisted of the following:


	December 31, 2008			December 31, 2009
Net operating loss carryforwards		$1,960,890		$	2,888,051
Stock-based compensation		2,365,486			2,488,808
Less valuation allowance		(4,326,376	)		(5,376,859	)

Net deferred tax asset	$	—		$	—

At December 31, 2008 and December 31, 2009, the Company had approximately $4,902,225 and $7,220,127, respectively, of net operating loss carryforwards. Due to our equity financing transactions, and other owner shifts as defined in Section 382 of the Internal Revenue Code of 1986, as amended, or the Code, we incurred “ownership changes” pursuant to the Code. Accordingly, our use of net operating loss carryforwards is limited. We are currently studying the impact of Section 382 on the future realization of our various tax attributes. Such losses expire in 2024 through 2029 as of December 31, 2009. The utilization of the carryforwards is dependent upon the Company’s ability to generate sufficient taxable income during the carryforward period.

8. Comprehensive Loss

For the year ended December 31, 2009, there was no other comprehensive loss, and accordingly a Statement of Other Comprehensive Loss has not been presented. Comprehensive income would normally include: foreign currency translation adjustments, a change in the market value of a futures contract that qualifies as a hedge of an asset reported at fair value, a net loss recognized as an additional pension liability not yet recognized as net periodic pension cost, and unrealized holding gains and losses on available-for-sale securities.

9. Subsequent Events

Private Placement

In March 2010, the Company raised $1,740,000 (before commissions and offering expenses) from the sale of 1,740,000 shares of common stock and warrants to purchase 696,000 shares of common stock at an exercise price of $1.15 per share, to various investors in a private placement. The warrants have a term of 26 months from the date of issuance.

Agreement with Dr. John Yu

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

Employment Agreement with Dr. Manish Singh

On March 4, 2010, the Company entered into an Employment Agreement, effective as of February 18, 2010, with Dr. Manish Singh pursuant to which Dr. Singh will continue to serve on a full-time basis as the Company’s President and Chief Executive Officer for a one-year term commencing February 18, 2010. The Company is required under the Employment Agreement to use its commercially reasonable efforts to have Dr. Singh continue to serve as a member of the Company’s Board of Directors during the term of the Employment Agreement. The Employment Agreement may be extended for an additional one-year period upon the mutual agreement of the Company and Dr. Singh.

The Employment Agreement provides for an annual base salary of $300,000. In addition, provided that Dr. Singh continues to serve as the Company’s President and Chief Executive Officer for the entire one-year term of the Employment Agreement, the Company will pay Dr. Singh a discretionary cash bonus of up to $50,000 upon completion of the one-year term.

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

The Employment Agreement amends the Prior Agreement to provide that the milestones described in the preceding paragraph may be satisfied by including the net proceeds received by the Company at any time prior to August 17, 2010 from (1) a financing by the Socius Capital Group or (2) any private placement financing that is covered by a signed term sheet that was entered into by the Company prior to February 18, 2010 or from another source at the same or better terms as contemplated by such signed term sheet. Also, for purposes of determining whether the $8,000,000 working capital milestone in the preceding paragraph has been satisfied, the Employment Agreement provides that working capital will be calculated as of the date of the Company’s receipt of the proceeds that are being included to satisfy the milestone.

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

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

In the event that the Company terminates the Employment Agreement without cause or does not extend the Employment Agreement upon its expiration for an additional one-year term, then (1) the Company upon such termination will be required to make a lump sum payment to Dr. Singh equal to 6 months of his base annual salary, (2) any stock options granted to Dr. Singh, to the extent vested, will be retained by Dr. Singh and will be exercisable on the terms described above, and (3) the vesting of an additional number of shares subject to all options granted to Dr. Singh equal to 50% of all shares subject to such options that have not already vested will immediately accelerate and will be exercisable on the terms described above. If Dr. Singh terminates his employment for “good reason” as defined in the Employment Agreement, he will receive the severance benefits described in the preceding sentence, except that 100% of his options will vest if his employment terminates for good reason following a merger or similar corporate transaction in which the Company is not the surviving entity.

Employment Agreement with Dr. James Bender

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

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

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

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

Agreement with Cedars-Sinai

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

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Exhibit Index


Exhibit Number		Description

2.1		Agreement and Plan of Reorganization dated as of May 5, 2005, as amended, among Patco Industries Subsidiary, Inc., William C. Patridge, and Spectral Molecular Imaging, Inc., as amended on June 30, 2005, September 26, 2005 and January 20, 2006. (1)

3.1		Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (2)

3.2		Certificate of Amendment to Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (2)

3.3		Certificate of Amendment to Amended and Restated Certificate of Incorporation of ImmunoCellular Therapeutics, Ltd. (3)

3.4		Amended and Restated Bylaws of ImmunoCellular Therapeutics, Ltd. (4)

4.1		Form of Common Stock Certificate for ImmunoCellular Therapeutics, Ltd. (5)

4.2		Form of Subscription Agreement containing registration rights issued by Spectral Molecular Imaging, Inc. in January 2006 and assumed by ImmunoCellular Therapeutics, Ltd. (4)

4.3		Form of Warrant issued in January 2006 to purchase shares of the common stock of Spectral Molecular Imaging, Inc. and assumed by ImmunoCellular Therapeutics, Ltd. (4)

4.4		Subscription Agreement dated as of February 16, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.5		Letter Agreement dated as of February 16, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.6		Subscription Agreement dated as of April 19, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (6)

4.7		Warrant dated as of February 16, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 800,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.8		Warrant dated as of February 16, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 533,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.9		Warrant dated as of April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 200,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)

4.10		Warrant dated as of April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the purchase of 133,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (6)



4.11		Form of Subscription Agreement containing registration rights between the participants in the April/May 2007 private placement and ImmunoCellular Therapeutics, Ltd. (7)

4.12		Form of Warrant issued to participants in the April/May 2007 private placement to purchase shares of common stock of ImmunoCellular Therapeutics, Ltd. (7)

4.13		Form of Notice of Exercise of Warrants delivered by ImmunoCellular Therapeutics, Ltd. in January 2009 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 common stock of ImmunoCellular Therapeutics, Ltd. 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 ImmunoCellular Therapeutics, Ltd. (17)

4.14		Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock dated December 3, 2009. (20)

4.15		Warrant dated December 3, 2009 issued by ImmunoCellular Therapeutics, Ltd. to Socius Capital Group, LLC d/b/a Socius Life Sciences Capital Group, LLC (20)

10.1		Exclusive License Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd.† (8)

10.2		First Amendment to Exclusive License Agreement dated as of June 16, 2008 2006, between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd.† (9)

10.3		Stock Purchase Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (8)

10.4		Registration Rights Agreement dated as of November 17, 2006 between Cedars-Sinai Medical Center and ImmunoCellular Therapeutics, Ltd. (8)

10.5		Securities Purchase Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. (8)

10.6		Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.* (8)

10.7		Nonqualified Stock Option Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd.* (8)

10.8		Registration Rights Agreement dated as of November 17, 2006 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. (8)

10.9		2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (4)

10.10		Amendment No. 1 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (10)

10.11		Amendment No. 2 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (11)

10.12		Amendment No. 3 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (11)

10.13		Amendment No. 4 to the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (9)



10.14		Form of Non-Qualified Stock Option Agreement for the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (12)

10.15		Form of Incentive Stock Option Agreement for the 2006 Equity Incentive Plan of ImmunoCellular Therapeutics, Ltd. (12)

10.16		Employment Agreement dated as of February 18, 2008 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.* (11)

10.17		Employment Agreement dated as of February 18, 2009 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd.* (17)

10.18		Employment Agreement dated as of November 5, 2007 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. (13)

10.19		Employment Agreement dated as of October 30, 2008 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd.* (17)

10.20		Agreement dated as of July 7, 2006 between Technomedics Management & Systems, Inc. and ImmunoCellular Therapeutics, Ltd. (14)

10.21		Agreement dated as of November 17, 2006 between Technomedics Management & Systems, Inc. and ImmunoCellular Therapeutics, Ltd.* (5)

10.22		Memorandum of Agreement dated as of November 21, 2007 between Molecular Discoveries LLC and ImmunoCellular Therapeutics, Ltd. (11)

10.23		Agreement dated as of February 14, 2008 between Molecular Discoveries, LLC and ImmunoCellular Therapeutics, Ltd. (11)

10.24		Registration Rights Agreement dated as of April 14, 2008, between Molecular Discoveries, LLC and ImmunoCellular Therapeutics, Ltd. (15)

10.25		Agreement dated as of February 14, 2008 between Dr. Cohava Gelber and ImmunoCellular Therapeutics, Ltd. (11)*

10.26		Agreement dated as of August 1, 2008 between Dr. Cohava Gelber and ImmunoCellular Therapeutics, Ltd.. * (17)

10.27		Agreement dated as of September 1, 2008 between James G. Bender and ImmunoCellular Therapeutics, Ltd. (16) *

10.28		Office lease dated April 28, 2008 between Regent Business Centers and ImmunoCellular Therapeutics, Ltd., as amended. (17)

10.29		Amendment No. 1 to Agreement dated as of May 1, 2009 to Agreement dated October 30, 2008 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. *(18)

10.30		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. (19)

10.31		Preferred Stock Purchase Agreement dated as of December 3, 2009 between ImmunoCellular Therapeutics, Ltd. and Socius Capital Group, LLC d/b/a Socius Life Sciences Capital Group, LLC. (20)

10.32		Employment Agreement dated as of October 30, 2009 between C. Kirk Peacock and ImmunoCellular Therapeutics, Ltd. *(21)



10.33		License Agreement dated as of September 8, 2009 between Roche GlycArt AG (f/k/a) GlycArt Biotechnology AG) and ImmunoCellular Therapeutics, Ltd. † **

10.34		Employment Agreement dated as of February 1, 2010 between James G. Bender and ImmunoCellular Therapeutics, Ltd. * **

10.35		Employment Agreement dated as of February 18, 2010 between Dr. Manish Singh and ImmunoCellular Therapeutics, Ltd. * **

10.36		Agreement dated March 1, 2010 between Dr. John Yu and ImmunoCellular Therapeutics, Ltd. * **

23.1		Consent of Stonefield Josephson, Inc. **

31.1		Certification of the registrant’s Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

31.2		Certification of the registrant’s Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.**

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

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

†	Certain portions of the exhibit have been omitted based upon a request for confidential treatment filed by us with the Securities and Exchange Commission. The omitted portions of the exhibit have been separately filed by us with the Securities and Exchange Commission.

*	Indicates a management contract or compensatory plan or arrangement.

**	Filed with this Annual Report on Form 10-K.

(1)	Previously filed by us on January 26, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(2)	Previously filed by us on November 3, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(3)	Previously filed by us on May 9, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(4)	Previously filed by us on February 6, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(5)	Previously filed by us on February 12, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-140598, and incorporated herein by reference.

(6)	Previously filed by us on May 1, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-142480, and incorporated herein by reference.

(7)	Previously filed by us on July 12, 2007 as an exhibit to our Registration Statement on Form SB-2, File No. 333-144521, and incorporated herein by reference

(8)	Previously filed by us on November 22, 2006 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(9)	Previously filed by us on August 14, 2008 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(10)	Previously filed by us on September 14, 2007 as an exhibit to our Registration Statement on Form SB-2/A and incorporated herein by reference.

(11)	Previously filed by us on March 25, 2008 as an exhibit to our Annual Report on Form 10-KSB and incorporated herein by reference.

(12)	Previously filed by us on November 9, 2007 as an exhibit to our Registration Statement on Form S-8, File No. 333-147278, and incorporated herein by reference.

(13)	Previously filed by us on November 6, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(14)	Previously filed by us on April 2, 2007 as an exhibit to our Annual Report on Form 10-KSB and incorporated herein by reference.

(15)	Previously filed by us on April 16, 2008 as an exhibit to our Registration Statement on Form S-1, File No. 333-150277, and incorporated herein by reference.

(16)	Previously filed by us on November 13, 2008 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(17)	Previously filed by us on March 30, 2009 as an exhibit to our Annual Report on Form 10-K and incorporated herein by reference.

(18)	Previously filed by us on August 14, 2009 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(19)	Previously filed by us on November 13, 2009 as an exhibit to our Quarterly Report on Form 10-Q and incorporated herein by reference.

(20)	Previously filed by us on December 7, 2009 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.

(21)	Previously filed by us on December 23, 2009 as an exhibit to our Registration Statement on Form S-1 and incorporated herein by reference.

T EXT MARKED BY [ * * *] HAS BEEN OMITTED PURSUANT TO A R EQUEST FOR C ONFIDENTIAL T REATMENT AND WAS

FILED SEPARATELY WITH THE S ECURITIES AND E XCHANGE C OMMISSION .

License Agreement

This Agreement is entered into with effect as of the Effective Date (as defined below) by and between GlycArt Biotechnology AG with an office and place of business at Wagistrasse 18, CH-8952 Schlieren-Zürich, Switzerland (“GlycArt”) and ImmunoCellular Therapeutics, Ltd. with their office and place of business at 21900 Burbank Boulevard, 3rd Floor, Woodland Hills, California 91367 USA (“ICT”) on the other hand

ICT owns a proprietary antibody known as ICT-069 and possesses proprietary technology and intellectual property rights relating thereto; and

WHEREAS, GlycArt has expertise in the research, development, manufacture and commercialization of pharmaceutical and diagnostic products, including its proprietary GlycoMab technology; and

WHEREAS, GlycArt wishes to apply its GlycoMab technology to ICT-069 to create and test modified antibodies and obtain an option to develop and commercialize such modified antibodies and explore their potential applications in various therapeutic areas; and

WHEREAS, ICT is willing to grant to GlycArt rights to use ICT-069 and its proprietary technology and intellectual property rights to create and test modified antibodies and obtain an option to develop and commercialize such modified antibodies and explore their potential applications in various therapeutic areas under ICT’s intellectual property rights to make, use, offer for sale, sell and import and export products worldwide, as contemplated herein.

NOW, THEREFORE, in consideration of the mutual covenants and promises contained in this Agreement and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereto, intending to be legally bound, do hereby agree as follows:

1. Definitions

As used in this Agreement, the following terms, whether used in the singular or plural, shall have the following meanings:

1.1 Affiliate

The term “Affiliate” means any individual, corporation, association or other business entity which directly or indirectly controls, is controlled by, or is under common control with the Party in question, As ‘used in this definition of “Affiliate,” the term “control” means the direct or indirect ownership of more than fifty percent (>50%) of the stock having the right to vote for directors thereof or the ability to otherwise control the management of the corporation or other business entity whether through the ownership of voting securities, by contract, resolution, regulation or otherwise. Anything to the contrary in this paragraph notwithstanding, Chugai Pharmaceutical Co., Ltd, a Japanese corporation, (“Chugai”) shall not be deemed an Affiliate of GlycArt unless GlycArt provides written notice to ICT of its desire to include Chugai as an Affiliate of GlycArt. GlycArt shall have the right to include Chugai in whole or in part, i.e. on a legal entity-by-legal entity basis.

1.2 Agreement

The term “Agreement” shall mean this document including any and all appendices and amendments to it as may be added and/or amended from time to time in accordance with the provisions of this Agreement.

1.3 Agreement Term

The term “Agreement Term” shall mean the term of this Agreement as set forth in Section 18.1.

1.4 Antibody

The term “Antibody” shall mean the antibody known as ICT-069, which is owned by lCT.

1.5 Background IP

The term “Background IP” shall mean all intellectual property rights in the Territory, which are Controlled by a Party on the Effective Date, including the ICT Base Patent Rights.

1.6 BLA

The term “BLA” shall mean a Biologics License Application, or similar application for marketing approval of the Products for use in the Field submitted to the FDA, or a foreign equivalent of the FDA.

1.7 Blocking Third Party Intellectual Property

The term “Blocking Third Party Intellectual Property” shall mean, patent rights in such country owned or controlled by a Third Party that cover specific reagents or assays related to markers required for use or sale of a Diagnostic Product if the manufacture, use or sale of such Diagnostic Product would, in the absence of a license granted by such Third Party in such country, infringe such patent rights.

1.8 Calendar Quarter

The term “Calendar Quarter” shall mean each period of three (3) consecutive calendar months, ending March 31, June 30, September 30, and December 31.

1.9 Calendar Year

The term “Calendar Year” shall mean the period of time beginning on January 1 and ending December 31, except for the first year which shall begin on the Effective Date and end on December 31.

1.10 Change of Control

The term “Change of Control” shall mean, with respect to a Party: (a) the acquisition by any Third Party of beneficial ownership of fifty percent (50%) or more of the then outstanding common shares or voting power of such Party, other than acquisitions by employee benefit plans sponsored or maintained by such Party; or (b) the consummation of a business

combination involving such Party, unless, following such business combination, the stockholders of such Party immediately prior to such business combination beneficially own directly or indirectly more than fifty percent (50%) of the then outstanding common shares or voting power of the entity resulting from such business combination.

1.11 Combination Product

The term “Combination Product” shall mean a finished dosage form of a Therapeutic Product containing a given Modified Antibody in combination with one or more pharmaceutically active ingredients other than the Modified Antibody.

1.12 Commercially Reasonable Efforts

The term “Commercially Reasonable Efforts” shall mean such level of efforts required to carry out such obligation in sustained manner consistent with the efforts GlycArt or ICT, as applicable, devotes at the same stage of development or commercialization, as applicable, for its own internally developed pharmaceutical products in a similar area with similar market potential, at a similar stage of their product life taking into account the existence of other competitive products in the market place or under development, the proprietary position of the product, the regulatory structure involved, the anticipated profitability of the product and other relevant factors. It is understood that such product potential may change from time to time based upon changing scientific, business and marketing and return on investment considerations. GlycArt (and its Affiliates) need not always seek to market its own products in every country or seek to obtain regulatory approval in every country or for every potential indication. As a result, the exercise of diligence by GlycArt is to be determined by judging GlycArt’s commercially reasonable efforts in the Major Countries, taken as a whole.

1.13 Composition of Matter Claim

The term “Composition of Matter Claim” shall mean, for a given Product in a given country of the Territory, a Valid Claim of a ICT Patent Right that Covers the Modified Antibody that is included in such Product, in whole or as a component thereof, as an active ingredient of such Product.

1.14 Completion

The term “Completion” shall mean the availability of the final study report.

1.15 Confidential Information

The term “Confidential Information” shall mean any and all information, data or know-how (including Know-How), whether technical or non-technical, oral or written, that is disclosed by one Party or its Affiliates (“Disclosing Party”) to the other Party or its Affiliates (“Receiving Party”). Information shall not include any information, data or know-how which:

(i) was generally available to the public at the time of disclosure, or information which becomes available to the public after disclosure by the Disclosing Party other than through fault (whether by action or inaction) of the Receiving Party,

(ii) can be shown by cogent written records to have been already known to the Receiving Party prior to its receipt from the Disclosing Party,

(iii) is obtained at any time lawfully from a third Person under circumstances permitting its use or disclosure,

(iv) is developed independently by the Receiving Party as evidenced by written records other than through knowledge of Confidential Information,

(v) is required to be disclosed by the Receiving Party to comply with a court or administrative order providing the Receiving Party furnishes prompt notice (in no event less than three (3) days) to the Disclosing Party to enable it to resist such disclosure, or (vi) is approved in writing by the Disclosing Party for release by the Receiving Party.

The terms of this Agreement shall be considered Confidential Information of both Parties.

1.16 Control

The term “Control” shall mean (as an adjective or as a verb including conjugations and variations such as “Controls” “Controlled” or “Controlling”) (a) with respect to Patent Rights and/or Know-How, the possession by a Party of the ability to grant a license or sublicense of such Patent Rights and/or Know-How without violating the terms of any agreement or arrangement between such Party and any other Party and (b) with respect to proprietary materials, the possession by a Party of the ability to supply such proprietary materials to the other Party as provided herein without violating the terms of any agreement or arrangement between such Party and any other Party.

1.17 Cover

The term “Cover” shall mean (as an adjective or as a verb including conjugations and variations such as “Covered,” “Coverage” or “Covering”) that the developing, making, using, offering for sale, promoting, selling, exporting or importing of a given compound, formulation or product would infringe a Valid Claim in the absence of a license under the Patent Rights to which such Valid Claim pertains. The determination of whether a compound, formulation, process or product is Covered by a particular Valid Claim shall be made on a country-by-country basis.

1.18 Development Event

The term “Development Event” shall mean each of those milestone events as set forth in Section 9.4.

1.19 Development Event Payment

The term “Development Event Payment” shall mean each of those milestone event payments as set forth in Section 9.4.

1.20 Diagnostic Net Sales

The term “Diagnostic Net Sales” shall mean, with respect to worldwide sales or other dispositions of Diagnostic Product(s), the total gross amount invoiced by GlycArt, GlycArt’s Affiliates or GlycArt’s sublicensees to end users, distributors or agents in a bona fide arms-length transaction with an unrelated Third Party after deduction of (a) actual volume discounts, sales rebates, allowances, deduction of returns and (b) sales taxes (e.g. value added taxes) and other taxes directly linked to the sales but not profits (provided that such taxes are separately invoiced to such end users, distributors or agents), less the following lump sum deductions from the foregoing net amount for:

Sales Expenses in the amount of [***]

Reagent Rental Expenses in the amount of [***]

Third Party Royalty Expenses

In the event one or more Diagnostic Product(s) is/are sold together with one or more other diagnostic or therapeutic product(s) at a single price (such combination is hereinafter referred to as “Diagnostic Combination Product”), such single price shall be allocated among the Diagnostic Product(s) and the other product(s) in the Diagnostic Combination Product based on the market price for such products when sold separately. If any such Diagnostic Product is not being sold alone with a market price, ICT and GlycArt shall agree upon a fair market price for that Diagnostic Product solely. This price agreed upon shall be used to calculate Diagnostic Net Sales.

1.21 Diagnostic Product

The term “Diagnostic Product” shall mean any product in the form of a device, compound, kit or service useful in the Field that is discovered, created, developed, or made during or as part of or as a direct result of the Agreement and which (i) contains a component which is able to detect and/or quantify the presence or amount of an analyte in body fluids or tissue that affects the pathogenesis of a disease or a biological marker or a set of biological markers shown to indicate a predisposition to a disease that is relevant to a therapeutic product; or (ii) is useful for the measurement or prediction of individual patient response to a therapeutic product and contains a component which is able to detect and/or quantify the presence of an analyte in body fluids or tissue.

1.22 Diagnostic Royalty Term

The term “Diagnostic Royalty Term” shall mean the period of time commencing, on a Diagnostic Product-by-Diagnostic Product and country-by-country basis, on the date of First Commercial Sale of a given Diagnostic Product in such country and continuing, on a country-by-country basis, until the earliest of (a) initiation of the marketing of a Therapeutic Product by or on behalf of GlycArt in such country, and (b) expiration of the last ICT issued patent rights in such country containing a Valid Claim that would but for this Agreement be infringed by the sale of such Diagnostic Product in such country.

1.23 Effective Date

The term “Effective Date” shall mean the date of the last signature on this Agreement.

1.24 EMEA

The term “EMEA” shall mean the European Agency for the Evaluation of Medicinal Products or any successor agency with responsibilities comparable to those of the European Agency for the Evaluation of Medicinal Products.

1.25 Engineered Antibody

The term “Engineered Antibody” shall mean versions of the Antibody as modified by GlycArt, including any recombinant version of the Antibody, either chimera or humanized derivatives, both as a naked modified Antibody, Antibody fusion or as an Antibody conjugate, whether or not such Engineered Antibody is produced by Glycoengineered Antibody Cells.

1.26 EU

The term “EU” shall mean the European Community and all its present and future member countries.

1.27 Expert

The term “Expert” shall mean a person with no less than fifteen (15) years of pharmaceutical industry experience and expertise having occupied at least one senior position within a large pharmaceutical company relating to product development and/or licensing but excluding any current or former employee or consultant of either Party. Such person shall be fluent in the English language.

1.28 Extension Period

The term “Extension Period” shall mean the period of time beginning at the end of the Initial Period and ending six (6) months thereafter.

1.29 FDA

The term “FDA” shall mean the Food and Drug Administration of the United States of America.

1.30 FDCA

The term “FDCA” shall mean the Food, Drug and Cosmetics Act.

1.31 Field

The term “Field” shall mean the prevention, diagnosis and/or treatment of human diseases.

1.32 Filing

The term “Filing” shall mean the submission of an application to the FDA as defined in the FD&C Act and applicable regulations, or the equivalent application to the equivalent agency in any other country or group of countries, the official approval of which is required before any lawful commercial sale or marketing of Products.

1.33 First Commercial Sale

The term “First Commercial Sale” shall mean the first invoiced sale of a Product to a Third Party on the anticipated commercial terms for that Product by the GlycArt Group following the receipt of any Regulatory Approval required for the sale of such Product, if any.

1.34 Generic Product

The term “Generic Product” shall mean a product which is not produced, licensed or owned by the GlycArt Group that (i) contains an ingredient that has essentially the same structure as the Modified Antibody in the Therapeutic Product and (ii) has the same or substantially the same labelling as the applicable Therapeutic Product for at least one indication of such Therapeutic Product.

1.35 GlycArt Group

The term GlycArt Group shall mean collectively GlycArt, its Affiliates (including without limitation Roche Holdings) and its sub-licensees.

1.36 GlycArt Know-How

The term “GlycArt Know-How” shall mean all Know-How that GlycArt Controls during the Agreement Term.

1.37 GlycArt Patent Rights

The term “GlycArt Patent Rights” shall mean all Patent Rights Covering a Product that GlycArt owns or controls during the Agreement Term.

1.38 GlycArt Research IP

The term “GlycArt Research IP” shall mean all Research IP excluding the ICT Research IP.

1.39 Glycoengineered Antibody Cells

The term “Glycoengineered Antibody Cells” shall mean cells generated using GlycoMab Technology that contain an expression vector for the Antibody.

1.40 Glycoengineered Cells

The term “Glycoengineered Cells” shall mean cells generated using GlycoMab Technology that are analogous to Glycoengineered Antibody cells but to do not contain an expression vector for the Antibody.

1.41 GlycoMab Technology

The term “GlycoMab Technology” shall mean GlycArt’s proprietary technology for generating glycoengineered cells that produce glycoengineered antibodies.

1.42 Handle

The term “Handle” shall mean preparing, filing, prosecuting (including interference and opposition proceedings) and maintaining (including interferences, reissue, re-examination and opposition proceedings).

1.43 Hybridoma

The term “Hybridoma” shall mean the hybridoma cell line that produces Antibody.

1.44 ICT Base Patent Rights

The term “ICT Base Patent Rights” shall mean any and all Patent Rights in the Territory, which are Controlled by ICT on the Effective Date, said Patent Rights being exhaustively listed in Appendix 1.44 of this Agreement.

1.45 ICT Know-How

The term “ICT Know-How” shall mean the Know-How that ICT Controls at the Effective Date and during the Agreement Term.

1.46 ICT Patent Rights

The term “ICT Patent Rights” shall mean any and all Patent Rights that ICT Controls, relating to or arising from the discovery, manufacture, development or commercialization of or Covering a Product. The term ICT Patent Rights shall include ICT Base Patent Rights.

1.47 ICT Research IP

The term “ICT Research IP” shall mean all intellectual property relating solely to the Antibody and the use of the Antibody for any therapeutic or diagnostic purpose.

1.48 IND

The term “IND” shall mean an application as defined in the FDCA and applicable regulations promulgated by the FDA, or the equivalent application to the equivalent agency in any. other country or group of countries, the filing of which is necessary to commence clinical testing of the Products in humans.

1.49 Indication

The term “Indication” shall mean an indication defined within a sub-block of the then current International Classifications of Diseases and Related Health Problems (e.g. C56 “Malignant neoplasm of ovary” or C90 “Multiple myeloma and malignant plasma cell neoplasms”) and all indications within a given sub-block shall be understood to belong to the same one Indication (e.g. C90.0 “Multiple myeloma” and C90.1 “Plasma cell leukaemia” and C90.2 “Plasmacytoma, extramedullary” all belong to the C90 “Multiple myeloma and malignant plasma cell neoplasms” single Indication).

1.50 Initial Indication

The term “Initial Indication” shall mean for each Therapeutic Product the first three (3) Indications developed for such Therapeutic Product.

1.51 Initial Period

The term “Initial Period” shall mean the period of time beginning on the date of delivery of the Antibody by ICT to GlycArt and ending twelve (12) months thereafter.

1.52 Initiation

The term “Initiation” shall mean the date that a human is first dosed with the Product in a Clinical Study approved by the respective Regulatory Authority.

1.53 Inventions

The term “Invention” shall mean an invention that is conceived or reduced to practice in connection with any activity carried out pursuant to this Agreement. Under this definition, an Invention may be made by employees of ICT solely or jointly with a Third Party (a “ICT Invention”), by employees of the GlycArt Group solely or jointly with a Third Party (a “GlycArt Invention”), or jointly by employees of ICT and a member of the GlycArt Group with or without a Third Party (a “Joint Invention”).

1.54 Know-How

The term “Know-How” shall mean data, knowledge and information, including materials, samples, chemical manufacturing data, toxicological data, pharmacological data, preclinical data, assays, platforms, formulations, specifications, quality control testing data, that are necessary or useful for the discovery, manufacture, development or commercialization of Products.

1.55 Legal Requirement

The term “Legal Requirement” shall mean any present or future law, regulation, directive, instruction, direction or rule of any Regulatory Authority including any amendment, extension or replacement thereof which is from time to time in force.

1.56 Major Countries

The term “Major Countries” shall mean US, UK, Germany, France, Italy, Spain, and Japan.

1.57 Materials

The term “Materials” shall mean any chemical or biological substances including any: (i) organic or inorganic chemical or compound; (ii) gene; (iii) vector or construct, whether plasmid, phage, virus or any other type; (iv) host organism, including bacteria and eukaryotic cells; (v) eukaryotic or prokaryotic cell line or expression system; (vi) protein, including any peptide or amino acid sequence, enzyme, antibody or protein conferring targeting properties and any

fragment of a protein or peptide or enzyme; (vii) genetic material, including any genetic control element (e.g., promoters); (viii) virus; or (ix) assay or reagent.

1.58 Modified Antibody

The term “Modified Antibody” shall mean Glycoengineered Antibody Cells and/or Engineered Antibody, but shall specifically exclude Glycoengineered Cells.

1.59 NDA

The term “NDA” shall mean a new drug application, including all necessary documents, data, and other information concerning a Product, required for Regulatory Approval of the Product as a pharmaceutical product by the FDA or an equivalent application to the equivalent agency in any other country or group of countries (e.g. the marketing authorization application (MAA) in the EU).

1.60 Net Sales

With regard to a Therapeutic Product, the term “Net Sales” shall mean the amount calculated by subtracting from the amount of Adjusted Gross Sales (as defined below) [***] in lieu of those sales-related deductions which are not accounted for by GlycArt, its Affiliates and GlycArt sublicensees on a Therapeutic Product-by-Therapeutic Product basis (e.g. outward freights, postage charges, transportation insurance, packaging materials for dispatch of goods, custom duties, bad debt expense);

For purposes of this definition of “Net Sales”, “Adjusted Gross Sales” shall mean the amount of gross sales of the Therapeutic Product invoiced by GlycArt, its Affiliates and GlycArt sublicensees to Third Parties less deductions such as:

(a) Governmental price reductions and changes to reserves of governmental price reductions, such as rebates to managed care organizations or social and welfare systems, charge backs or reserves for chargebacks, cash sales incentives (but only to the extent it is a sales related deduction which is accounted for within Licensee on a product-by-product basis), government mandated rebates and similar types of rebates (e.g., Pharmaceutical Price Regulation Scheme, Medicaid, clawback schemes and any other such scheme)

(b) Contract pricing chargebacks and changes to reserves of contract pricing chargebacks, such as periodic charges of wholesalers and chargebacks for price capping programs

(d) Returns and return reserves, such as in cases for spoiled, damaged, out-dated, rejected, returned Licensed Product sold, withdrawals and recalls, covering both resellable products and goods which have to be destroyed

(e) Cash discounts

(f) Taxes, such as value added or sales taxes, government mandated exceptional taxes and other taxes directly linked to the gross sales amount but not linked to profits

For the avoidance of doubt, the “Adjusted Gross Sales” on a Therapeutic Product-by-Therapeutic Product basis, means the same methodology as GlycArt consistently uses to recognize sales in its financial reporting, which is in accordance with the then used International Financial Reporting Standards (IFRS), and is reviewed and approved by GlycArt’s external auditors.

1.61 Option Right

The term “Option Right” shall mean the option right granted to GlycArt in Section 3.1. of this Agreement.

1.62 Party

The term “Party” shall mean ICT or GlycArt, as the case may be, and “Parties” shall mean ICT and GlycArt collectively.

1.63 Patent Rights

The term “Patent Rights” shall mean all rights under any patent or patent application, in any country of the Territory, including any patents issuing on such patent application, and further including any substitution, extension or supplementary protection certificate, reissue, reexamination, renewal, division, continuation or continuation-in-part of any of the foregoing.

1.64 Phase I Study

The term “Phase I Study” shall mean a human clinical trial in any country that would satisfy the requirements of 21 C.F.R. § 312.21 (a), as amended from time to time, and the foreign equivalent thereof.

1.65 Phase II Study

The term “Phase II Study” shall mean a human clinical trial, for which the primary endpoints include a determination of dose ranges and/or a preliminary determination of efficacy in patients being studied as described in 21 C.F.R. § 312.21(b), and the foreign equivalent thereof.

1.66 Phase III Study

The term “Phase III Study” shall mean a human clinical trial that is prospectively designed to demonstrate statistically whether a product is safe and effective for use in humans in a manner sufficient to obtain regulatory approval to market such product in patients having the disease or condition being studied as described in 21 C.F.R. § 312.21(c), and the foreign equivalent thereof.

1.67 Product

The term “Product” shall mean any Therapeutic Product or Diagnostic Product, including without limitation any Combination Product or Diagnostic Combination Product.

1.68 Reagent Rental Expenses

The term “Reagent Rental Expenses” shall mean, with respect to worldwide sales or other dispositions of Diagnostic Product(s), a lump sum deduction of fees for all services which are included in reagent prices such as instrument service costs, instrument depreciation, finance costs, disposables and rental fees.

1.69 Regulatory Authority

The term “Regulatory Authority” shall mean any national, supranational (e.g., the European Commission, the Council of the European Union, the European Medicines Agency), regional, state or local regulatory agency, department, bureau, commission, council or other governmental entity including the FDA, in each country involved in the granting of Regulatory Approval for the Product.

1.70 Regulatory Approval

The term “Regulatory Approval” shall mean any approvals (including pricing and reimbursement approvals), licenses, registrations or authorizations by Regulatory Authority, necessary for the manufacture and sale of a Product in the Field in a regulatory jurisdiction in the Territory.

1.71 Research IP

The term “Research IP” shall mean all intellectual property generated as the result of the performance of the Research Program.

1.72 Research Program

The term “Research Program” shall mean the activities undertaken by the GlycArt to produce Glycoengineered Cells, Glycoengineered Antibody Cells, and Engineered Antibody and to conduct research to determine whether GlycArt has an interest in exercising its Option Right.

1.73 Research Term

The term “Research Term” shall mean the Initial Period plus the Extension Period, if applicable, unless terminated sooner by GlycArt exercising its Option Right.

1.74 Royalty Term

The term “Royalty Term” shall mean the period of time commencing, on a Therapeutic Product-by-Therapeutic Product and country-by-country basis, on the date of First Commercial Sale of a given Therapeutic Product in such country and continuing, on a country-by-country basis, until the later of (a) ten (10) years after First Commercial Sale in such country in which said Therapeutic Product is sold or (b) the earlier of (x) expiration of the last issued ICT Patent Rights in such country containing a Valid Claim that would but for this Agreement be infringed by the sale of such Therapeutic Product in such country and (y) the date a generic version of the Therapeutic Product is being marketed in that country. With regard to the calculation of the ten (10) year period, the EU shall be considered as one country.

1.75 Sales Expenses

The term “Sales Expenses” shall mean, with respect to worldwide sales or other dispositions of Diagnostic Product(s), a lump sum deduction in lieu of deductions for actual internal expenses of GlycArt or GlycArt ‘s Affiliates such as for (a) tariffs, duties and taxes imposed upon the production, sale, delivery or use of Diagnostic Product(s) (excluding taxes that are separately invoiced to end users, distributors or agents) and (b) distribution and other customary expenses, such as freight, transportation and insurance expenses and for (c) cash discounts, retroactive price reductions or credits to customers on account of settlement of complaint.

1.76 Sublicensee

The term “Sublicensee” means an entity to which GlycArt or its Affiliates have licensed rights pursuant to this Agreement.

1.77 Target

The term “Target” shall mean a target which is bound to by the Antibody or an Engineered Antibody.

1.78 Territory

The term “Territory” shall mean all countries of the world.

1.79 Therapeutic Product

The term “Therapeutic Product” shall mean any pharmaceutical formulations containing as active pharmaceutical ingredient a Modified Antibody, including a Combination Product. Therapeutic Products containing different Modified Antibodies shall be considered different Therapeutic Products. All formulations, dosage forms, and strengths of a Therapeutic Product containing a given Modified Antibody shall be considered a single Therapeutic Product.

1.80 Third Party

The term “Third Party” shall mean a person or entity other than (i) ICT or any of its Affiliates or (ii) a member of the GlycArt Group.

1.81 Third Party Royalty Expenses

The term “Third Party Royalty Expenses” shall mean, with respect to worldwide sales or other dispositions of Diagnostic Product(s), royalties paid to third parties on Diagnostic Net Sales by GlycArt, GlycArt ‘s Affiliates or sublicensees to obtain rights and licenses under the Blocking Third Party Intellectual Property.

1.82 US

The term “US” shall mean the United States of America and its territories and possessions.

1.83 Valid Claim

The term “Valid Claim” shall mean, as applicable, a claim in any (i) unexpired and issued ICT Patent Rights that have not been disclaimed, revoked or held invalid by a final nonappealable decision of a court of competent jurisdiction or government agency or (ii) pending patent application in any country of the Territory that (a) is on file with the applicable patent office and has shown evidence of reasonably consistent activity to advance to issuance of a patent and (b) which application has been on file with the applicable patent office for no more than [***] from the earliest date to which the patent application claims it earliest priority.

2. Research

2.1 Conduct of the Research Program

(a) Scope

ICT shall deliver to GlycArt sufficient quantities of the Antibody and Hybridoma so that GlycArt can apply GlycoMab Technology to the Antibody under the Research Program. Within thirty (30) days after the Effective Date, ICT shall deliver to GlycArt the following quantities of the Hybridoma and also provide antibody sequence information for generating plasmids:

Hybridoma — [***] of hybridoma producing the Antibody

Plasmids — Available sequence information

Research Program

GlycArt shall conduct the Research Program with the primary goal of investigating the utility of the Antibody through the use of the GlycoMab Technology to create Engineered Antibodies for the treatment of certain tumors, and the secondary goal to isolate and identify potential Targets. Modified Antibody may be used by GlycArt for any research purpose including, without limitation, (i) evaluation of how the Antibody and Modified Antibody perform, (ii) study of ADCC for the Antibody and Modified Antibody and their in vivo efficacy in mouse models, (iii) further engineering of the Antibody to humanize it, (iv) increase of the Antibody’s/Engineered Antibody’s affinity for the antigen and (v) the identification of Targets by mass spectrometry on proteins purified by using the Antibody from myeloma cells, either in-house or at Third Party contractors of GlycArt.

(b) Duration

The Research Program shall commence on the Effective Date and shall continue until the end of the Research Term. During the Research Term, ICT shall work exclusively with GlycArt with regard to the Antibody and shall not provide the Antibody to any Third Party. The Research Program shall initially be for the Initial Period. If GlycArt wants to extend the Initial

Period by adding an Extension Period, then GlycArt shall notify ICT in writing prior to the end of the Initial Period and pay to ICT the option extension fee as provided for in Section 9.2. The option extension fee shall be payable within thirty (30) days after notification of ICT by GlycArt that it wants the extension and receipt of an invoice from ICT.

GlycArt, at its sole cost, shall be responsible for pursuing all activities in the Research Program.

2.2 Reports

During the Research Term, GlycArt shall provide quarterly written reports to ICT reporting the status of and results obtained under the Research Program in a form and with sufficient detail which the Alliance Directors mutually agree reasonably enables ICT to assess such status and results from a scientific viewpoint.

3. Grant of Option Right and License

3.1 Option Right

(a) Grant of Option Right

ICT hereby grants to GlycArt an exclusive Option Right for an exclusive (even as to ICT), sub-licensable license under the ICT Patent Rights and Know-How to research, have researched, develop, have developed, make, have made, use, have used, manufacture, have manufactured, import, have imported, export, have exported, offer for sale, sell and have sold the Product in the Field in the Territory.

(b) Exercise of Option Right

GlycArt shall have the right to exercise the Option Right at any time during the Research Term by giving written notice to ICT and paying to ICT the option exercise fee as provided for in Section 9.3. The option exercise fee shall be payable within thirty (30) days after notification of ICT by GlycArt that it wants to exercise the Option Right and receipt of an invoice from ICT. If GlycArt does not exercise the Option Right during the Research Term, then the Option Right shall expire.

3.2 Research License

ICT hereby grants to GlycArt an exclusive (even as to ICT), license in the Territory, without the right to sub-license (other than to Affiliates and subsidiaries), under the ICT Patent Rights and ICT Know-How to conduct the Research Program during the Research Term. GlycArt shall have the right to outsource selected research activities, at its own discretion. Notwithstanding to the preceding, this license shall not limit ICT from conducting research during the Research Term with respect to the Antibody.

3.3 Commercial License

If GlycArt exercises its Option Right pursuant to Section 3.1(b), then (i) ICT shall grant to GlycArt an exclusive (even as to ICT), sub-licensable license under the ICT Patent Rights and

Know-How to research, have researched, develop, have developed, make, have made, use, have used, manufacture, have manufactured, import, have imported, export, have exported, offer for sale, sell and have sold the Product in the Field in the Territory, and (ii) ICT shall not sell or offer for sale or enable any Third Party to sell or offer for sale any product containing the Antibody.

3.4 Sublicense

GlycArt and its Affiliates shall have the right to sublicense or subcontract any or all of its rights and obligations under this Agreement but shall remain liable for the performance of all of its obligations under this Agreement.

3.5 Data reporting

If GlycArt exercises its Option Right, then GlycArt shall prepare an annual status report at the end of each Calendar Year detailing the efforts and results undertaken by or on behalf of GlycArt to use Commercially Reasonable Efforts to develop and commercialize a Product.

4. Diligence

GlycArt shall use Commercially Reasonable Efforts to perform its activities contemplated by this Agreement, including but not limited to any activities under the Research Program. Specifically, GlycArt agrees to use Commercially Reasonable Efforts to pursue further development and commercialization of Therapeutic Products in the Field in the Territory. GlycArt shall be deemed to use Commercially Reasonable Efforts if it develops and commercializes at least one Therapeutic Product in at least one indication. Efforts to commercialize Therapeutic Products shall be judged in relation to GlycArt’s efforts to commercialize its own comparable therapeutic products with similar market potential. However, GlycArt will not always seek to market or seek to obtain regulatory approval for its own therapeutic products in every country of the Territory or for every potential indication of a Therapeutic Product. As a result, the exercise of diligence by GlycArt is to be determined by judging its efforts for all Therapeutic Products taken as a whole. Until regulatory approval is obtained for a first Therapeutic Product in the US or EU, whichever occurs first, GlycArt shall keep ICT reasonably informed by providing yearly written reports to ICT describing the progresses of its research and development activities for the Modified Antibody and Therapeutic Products during the past year and planned activities for the next year.

5. Development

5.1 Development by GlycArt

(a) Scope

GlycArt has the sole responsibility for development of Products in the Territory.

(b) Development Efforts

GlycArt will conduct development of one or more Therapeutic Products in accordance with a written plan that it shall provide to ICT on an annual basis. The development plan shall set forth (i) the scope of the GlycArt development efforts and the resources that will be dedicated to the activities contemplated within the scope of the development, and (ii) specific objectives, which objectives shall be updated or amended, as appropriate, by GlycArt as development progresses.

GlycArt, at its sole cost, shall be responsible for pursuing clinical development of Products.

(d) Exchange of Information

ICT shall disclose and make available to GlycArt all data and information necessary to develop Products. GlycArt shall answer any questions reasonably posed and provide any information reasonably requested by ICT with regard to the development of Therapeutic Products, until Regulatory Approval of a first Therapeutic Product is achieved.

6. Governance

6.1 Information Exchange

GlycArt shall disclose to ICT the information in relation to GlycArt’s activities under this Agreement through the Alliance Directors and annual reports.

6.2 Alliance Director

Each Party shall appoint an Alliance Director. The Alliance Directors shall be the point of contact within each Party with responsibility for facilitating communication and collaboration between the Parties. The Alliance Directors shall facilitate resolution of potential and pending issues and potential disputes.

7. Regulatory

GlycArt, at its sole cost, shall pursue all regulatory affairs related to Product in the Territory including the preparation and filing of applications for regulatory approval, as well as any or all governmental approvals required to develop, have developed, make, have made, use, have used, manufacture, have manufactured, import, have imported, sell and have sold Products. GlycArt shall be responsible for pursuing, compiling and submitting all regulatory filing documentation, and for interacting with regulatory agencies, for all Products in all countries in the Territory. GlycArt or its Affiliates shall own and file in their discretion all regulatory filings and regulatory approvals for all Products in all countries of the Territory. GlycArt shall inform ICT of the main regulatory filings and material correspondence to and from the FDA and EMEA promptly following their delivery or receipt. Within thirty (30) days after the Effective Date, ICT shall transfer to GlycArt all relevant historical clinical safety data (Safety information on serious adverse events shall be provided in CIOMS format and Safety information on non-serious adverse events shall be provided in English Line Listing format).

8. Commercialization

GlycArt, at its own expense, shall have sole responsibility and decision making authority for the marketing, promotion, sale and distribution of Products in the Territory. During the Agreement Term, GlycArt shall inform ICT in writing on a regular basis, but no less frequently than once per Calendar Year, regarding the commercialization of Therapeutic Products in the Territory by GlycArt, its Affiliates and Sublicensees.

9. Payment

9.1 Signing Fee

Within thirty (30) days after the Effective Date and receipt of an invoice from ICT, GlycArt shall pay to ICT three hundred thousand dollars (US$300,000).

9.2 Option Extension Fee

Within thirty (30) days after notification of ICT by GlycArt that it wants the extension pursuant to Section 2.1(c) and receipt of an invoice from ICT, GlycArt shall pay to ICT [***] .

9.3 Option Exercise Fee

Within thirty (30) days after notification of ICT by GlycArt that it wants to exercise its Option Right pursuant to Section 3.3 and receipt of an invoice from ICT, GlycArt shall pay to ICT [***] .

9.4 Development Event Payments

(a) Therapeutic Products

For each Initial Indication developed for a Therapeutic Product, GlycArt shall pay ICT up to a total of [***] per Initial Indication, as follows:

[***]

For a given Initial Indication, each Development Event Payment shall be paid only once, the first time the applicable Development Event is reached through development of a Therapeutic Product for such Initial Indication and irrespective of the number of times such Development Event may be subsequently reached for the same Initial Indication through development of the same or different Therapeutic Products. In the event two (2) Development Events are combined or a preceding Development Event is waived (such as a combination Phase I/Phase II Study), the Development Event Payments shall be made as if both of the applicable Development Events were achieved.

For sake of clarity, if for a given Initial Indication development of a Therapeutic Product fails before achieving [***] , then all Development Event Payments already paid through development of such Therapeutic Product (or previous Therapeutic Products for that Initial Indication) for such given Initial Indication shall no more be due for subsequent Therapeutic Products for that Initial Indication. However, Development Event Payments still outstanding for such given Initial Indication shall be paid through development of further Therapeutic Products until all Development Event Payments are paid for such given Initial Indication.

In no case shall the total Development Event Payments paid to ICT for all Therapeutic Products against all Indications developed under the Agreement exceed the aggregate amount of [***] . For the sake of clarity, if one or more Therapeutic Products are developed for a total of only two (2) Initial Indications (i.e., ovarian cancer and multiple myeloma), the aggregate amount of Development Payments paid to ICT shall in no case exceed [***] .

(b) Diagnostic Products

GlycArt shall pay ICT up to a total of [***] in Development Event Payments, upon first occurrence of the applicable Development Event for a Diagnostic Product developed by GlycArt, in one-time non-refundable payments, as follows:

•

[***]

•

[***]

For the avoidance of doubt, the [***] event payments may be triggered through development of the same or two different Diagnostic Product(s): In no case shall the aggregate amount of Development Event Payments paid for all Diagnostic Products to ICT during the term of the Agreement exceed [***] if royalties on Net Sales are paid to ICT upon the First Commercial Sale of a first Diagnostic Product or [***] If no royalties on Net Sales are due to ICT upon such first occurrence.

(c) Upon reaching a Development Event, GlycArt shall timely notify ICT and Development Event Payments shall be paid by GlycArt to ICT within thirty (30) days after the occurrence of the applicable Development Event and receipt of an invoice from ICT.

9.5 Royalty Payments

Therapeutic Products:

(a) Royalty Term

Royalties shall be payable by GlycArt on Net Sales of Therapeutic Products on a Therapeutic Product-by Therapeutic Product basis until the expiry of the Royalty Term. Thereafter, the licenses shall be fully paid up, royalty-free, and irrevocable.

The following royalty rates shall apply to the respective tiers of aggregate Calendar Year Net Sales of a Product per area of the Territory, on an incremental basis, as follows:

For the US:


Tier of Calendar Year Net Sales in million US$		Percent (%) of Net Sales
[]*		[]*
[]*		[]*
[]*		[]*
[]*		[]*
[]*		[]*

For aggregate countries of the Territory other than US:


Tier of Calendar Year Net Sales in million US$		Percent (%) of Net Sales
[]*		[]*
[]*		[]*
[]*		[]*
[]*		[]*
[]*		[]*

For example, if Net Sales of a Therapeutic Product in the US, for a given Calendar Year, are US$1,200 million, then the royalty rate applicable on such Net Sales of such Product for that year shall be calculated as follows: [***]

For the purpose of calculating royalties of a Therapeutic Product, Calendar Year Net Sales shall be subject to the following adjustments:

(b) Combination Product

If GlycArt or its Affiliates intend to sell a Combination Product, then the Parties shall meet approximately one (1) year prior to the anticipated First Commercial Sale of such Combination Product to negotiate in good faith and agree to an appropriate adjustment to Net Sales to reflect the relative pharmaceutical activity of the Product and the other pharmaceutically active agent(s) contained in the Combination Product. If, after such good faith negotiations not to exceed ninety (90) days, the Parties cannot agree to an appropriate adjustment, the dispute shall be initially referred to the executive officers of the Parties in accordance with Section 20.2. Should the Parties fail to agree within sixty (60) days of such referral, then the Net Sales shall equal such portion of the Net Sales of the Combination Product which is equivalent to the relative contribution to the pharmaceutical activity of the Product within the Combination Product, as determined by an Expert jointly appointed by the Parties within a further thirty (30) days. In the absence of an agreement on the appointment of the Expert, either Party may have such Expert appointed by the ordinary courts having jurisdiction. The decision of the Expert shall be final and binding on the Parties and the fees of the Expert shall be shared equally between the Parties.

For a given Product, if in a given country of the Territory (i) no Valid Claim Covers such Product and (ii) commercial marketing of a Generic Product has resulted in a decline of the quarterly sales of such Product after commencement of commercial marketing of a Generic Product greater than

9.5.c.1

[***] of the level of the quarterly sales of such Product achieved in the calendar quarter immediately prior to commencement of commercial marketing of a Generic Product, then the royalties payable in such country shall be reduced for so long as that Generic Product or any other Generic Product is marketed in that country by [***] of the amount otherwise due and payable;

9.5.c.2

9.5.c.3

(d) Third Party Payments

ICT shall be responsible for the existing Third Party patent rights, if any, for technologies related to the Antibody. If, after exercise of the Option Right, any other Third Party license related to the Antibody is or becomes necessary to GlycArt for the general operations and conduct of the development and commercialization of Products, then GlycArt (i) at its own discretion, shall decide whether or not to access such license and (ii) shall be entitled to receive from ICT [***] any amount paid to such Third Party in relation to such license (but in no event more than [***] of the royalty otherwise payable to ICT) through either (a) credit against any amount payable to ICT or (b) prompt reimbursement by ICT.

(e) Diagnostic Products:

There shall be [***] royalty owed to ICT by GlycArt under the Agreement with regard to the development and commercialization of Diagnostic Products, as long as GlycArt is or has been diligently marketing Therapeutic Products, itself or through a Third Party or Affiliate.

If the situation should arise where GlycArt were to market Diagnostic Products but not market or have previously marketed Therapeutic Products, then GlycArt would pay to ICT a fixed royalty in the amount of [***] of Diagnostic Net Sales until such time as GlycArt markets a Therapeutic Product. Such royalty will be paid by GlycArt to ICT, on a Diagnostic Product-by-Diagnostic Product and country-by-country basis, during the Diagnostic Royalty Term in the country of sale.

10. Accounting and reporting

10.1 Timing of Payments

GlycArt shall calculate royalties on Net Sales and Diagnostic Net Sales quarterly as of March 31, June 30, September 30 and December 31 (each being the last day of an “Accounting Period”) and shall pay royalties on Net Sales and Diagnostic Net Sales within the ninety (90) days after the end of each Accounting Period in which such Net Sales and Diagnostic Net Sales occur.

10.2 Late Payment

Any payment under this Agreement that is not paid on or before the date such payment is due shall bear interest, to the extent permitted by applicable law, at two (2) percentage points above the average one-month Euro Interbank Offered Rate (EURIBOR), as reported by Reuters from time to time, calculated on the number of days such payment is overdue.

10.3 Method of Payment

All payments pursuant to Article 9 shall be paid by GlycArt to ICT in US Dollars by wire transfer or other immediately available funds.

10.4 Currency Conversion

When calculating the Adjusted Gross Sales, Net Sales and Diagnostic Net Sales, GlycArt shall convert the amount of such sales in currencies other than US Dollars into US Dollars using for internal foreign currency translation GlycArt’s then current standard practices actually used on a consistent basis in preparing its audited financial statements.

10.5 Reporting

With each payment for Therapeutic Products, GlycArt shall provide ICT in writing for the relevant Calendar Quarter on a Therapeutic Product-by-Therapeutic Product basis the following information shown separately for the U.S. and the rest of the world:

(a) Adjusted Gross Sales;

(b) Net Sales;

(d) Net Sales after adjustments made pursuant to Section 9.5;

(e) Total Net Sales in the Territory in US$;

(f) Total royalty payable to ICT in US$; and

(g) Exchange rates used for the conversions made above.

The report for the fourth Calendar Quarter shall include a list of all countries in which a Product is sold in the Territory for the applicable Calendar Year.

With each payment for Diagnostic Products, GlycArt shall provide ICT in writing for the relevant Calendar Quarter on a Diagnostic Product-by- Diagnostic Product basis the following information:

(a) Total Gross Amounts invoiced less deductions;

(b) Third Party Royalty Expenses;

(d) Total royalty payable to ICT in US$;

(e) Exchange rates used for the conversions made above;

11. Taxes

ICT shall pay all sales, turnover, income, revenue, value added, and other taxes levied on account of any payments accruing or made to ICT under this Agreement. If provision is made in law or regulation of any country for withholding of taxes of any type, levies or other charges with respect to any royalty or other amounts payable under this Agreement to ICT, then GlycArt shall promptly pay such tax, levy or charge for and on behalf of ICT to the proper governmental authority, and shall promptly furnish ICT with receipt of payment. GlycArt shall be entitled to deduct any such tax, levy or charge actually paid from royalty or other payment due ICT or be promptly reimbursed by ICT if no further payments are due ICT. Each Party agrees to reasonably assist the other Party in claiming exemption from such deductions or withholdings under double taxation or similar agreement or treaty from time to time in force and in minimizing the amount required to be so withheld or deducted.

12. Auditing

12.1 ICT Right to Audit

GlycArt shall keep, and shall require its and its Affiliates and sub-licensees to keep, full, true and accurate books of account containing all particulars that may be necessary for the purpose of calculating all royalties payable under this Agreement. Such books of accounts shall be kept at their principal place of business. At the expense of ICT, ICT has the right to engage one of the major independent public accountant firms reasonably acceptable to GlycArt to perform, on behalf of ICT an audit of such books and records of GlycArt and its Affiliates, its licensees and sub-licensees, that are deemed necessary by GlycArt’s independent public accountant to report on Net Sales of Product for the period or periods requested by ICT and the correctness of any report or payments made under this Agreement.

Upon timely request and at least sixty (60) working days’ prior written notice from ICT, such audit shall be conducted in the countries specifically requested by ICT, during regular business hours in such a manner as to not unnecessarily interfere with GlycArt’s normal business activities, and shall be limited to results in the two (2) calendar years prior to audit notification.

Such audit shall not be performed more frequently than once per Calendar Year nor more frequently than once with respect to records covering any specific period of time.

All information, data documents and abstracts herein referred to shall be used only for the purpose of verifying royalty statements, shall be treated as GlycArt Confidential Information subject to the obligations of this Agreement and need neither be retained more than one (1) year after completion of an audit hereof, if an audit has been requested; nor more than two (2) years from the end of the calendar year to which each shall pertain; nor more than two (2) years after the date of termination of this Agreement.

12.2 Sharing of draft reports

The auditors shall share all draft reports with GlycArt before the draft report is shared with the ICT and before the final document is issued; the auditors shall not interpret the agreement. The final report shall be shared by GlycArt and ICT.

12.3 Over-or Underpayment

If the audit reveals an overpayment, ICT shall reimburse GlycArt for the amount of the overpayment within thirty (30) days. If the audit reveals an underpayment, GlycArt shall make up such underpayment with the next royalty payment (and shall pay at that time any deficiency if that royalty payment amount is less than the amount of the underpayment) but in no event more than ninety (90) days after the amount of the overpayment has been determined. GlycArt shall pay for the audit costs if the underpayment of GlycArt exceeds [***]. Section 10.2 shall apply to this Section 12.3.

12.4 Duration of Audit Rights

The failure of ICT to request verification of any royalty calculation within the period during which corresponding records must be maintained under this Section 12 will be deemed to be acceptance of the royalty payments and reports.

13. Intellectual Property

13.1 Ownership of Inventions

Each Party shall retain ownership of all of its own Background IP.

Research IP will be owned as follows:

•

ICT shall own all Research IP (regardless of inventorship) relating solely to the Antibody and/or use of the Antibody for any therapeutic and diagnostics purposes;

•

GlycArt shall own all Research IP (regardless of inventorship) other than that owned by ICT pursuant to the previous paragraph, including all Research IP relating to (i) Glycoengineered Cells, and (ii) Modified Antibody. Notwithstanding such ownership, GlycArt acknowledges that (i) to use these Glycoengineered Cells or Modified Antibodies after the Research Term or (ii) to commercialize any product that requires any knowledge or rights generated under the Agreement to any novel epitope, novel Target or known Target or epitope with a new association with cancer or a particular cancer, GlycArt must exercise its Option Right and conform with the terms and conditions of the Agreement. ICT acknowledges that the Glycoengineered Cells shall be prepared by GlycArt through the use of the GS System of Lonza and that nothing in this Agreement allows ICT to use or to claim any right to use, for any purpose, Glycoengineered Cells or Modified Antibody or other technology or know-how of Lonza.

GlycArt and ICT shall have the right, but not the obligation, to file, prosecute, maintain, defend and enforce the GlycArt and ICT patents and patent applications, at their own cost and expense. Inventorship shall be determined in accordance with U.S. law.

13.2 German Statute on Employee’s Inventions

In accordance with the German Statute on Employees’ Inventions, each Party agrees to claim the unlimited use of any Invention conceived, reduced to practice, developed, made or created in the performance of, or as a result of, any Research Program by its German employees or any other German person acting on its behalf. The Party which is the ultimate assignee of the German employee’s or other person’s Invention under this Agreement shall pay

any royalty or other compensation payable to the employee or other person, and the Parties agree that the Party which is the ultimate assignee must agree to the royalty or other compensation negotiated with the employee or other person.

13.3 Prosecution of ICT Patent Rights

During the term of this Agreement, ICT shall, at its own expense and discretion, (i) prepare, file, prosecute and maintain (including their issuance, reissuance, reexamination and the defense of any interference, revocation or opposition proceedings) (collectively, “Handle”) all ICT Patent Rights, including all Patent Rights claiming ICT Research IP, (ii) consult with GlycArt as to the Handling of such ICT Patent Rights, and (iii) furnish to GlycArt copies of all material documents relevant to any such Handling, ICT shall furnish such documents and consult with GlycArt in sufficient time before any action by ICT is due to allow GlycArt to provide comments thereon, which comments ICT must consider in good faith. At ICT’s expense and reasonable request, GlycArt shall cooperate, in all reasonable ways with the Handling of all ICT Patent Rights.

13.4 Prosecution of Patent Rights Claiming GlycArt Inventions

GlycArt shall, at its own expense and discretion, Handle all Patent Rights other than ICT Patent Rights, including all Patent Rights claiming GlycArt Research IP.

13.5 Infringement

Each Party shall promptly provide written notice to the other Party during the term of this Agreement of any (i) known infringement or suspected infringement by a Third Party of any ICT Patent Rights or GlycArt Patent Rights, or (ii) known or suspected unauthorized use or misappropriation by a Third Party of any ICT Know-How or GlycArt Know-How, and shall provide the other Party with all evidence in its possession supporting such infringement or unauthorized use or misappropriation.

Each Party shall have the right to enforce its Patent Rights as it deems appropriate at its own cost. Notwithstanding the above, if a Party provides written notice that a Composition of Matter Claim is being infringed and GlycArt has exercised its Option Right, then GlycArt shall have the right to enforce such ICT Patent Right and shall notify ICT in writing of its decision (“Suit Notice”) within sixty (60) days after being made aware of such infringement (“Decision Period”).

If GlycArt provides Suit Notice, GlycArt may immediately commence such suit or take such action. In the event that GlycArt (i) does not in writing advise ICT within the Decision Period that GlycArt will commence suit or take action, or (ii) fails to commence suit or take action within a reasonable time after providing Suit Notice, ICT shall thereafter have the right to commence suit or take action in the Territory and shall provide written notice to GlycArt of any such suit commenced or action taken by ICT.

Upon written request, the Party bringing suit or taking action with regard to a Composition of Matter Claim (“Initiating Party”) shall keep the other Party informed of the status of any such suit or action and shall provide the other Party with copies of all substantive documents communications filed in such suit or action. The Initiating Party shall have the sole and exclusive right to select counsel for any such suit or action.

The Initiating Party shall, except as provided below, pay all expenses of the suit or action, including the Initiating Party’s attorneys’ fees and court costs. Any damages, settlement fees or other consideration received as a result of such suit or action shall be allocated as follows:

(a) First, to reimburse the Initiating Party for its costs and, if any remains, to the other Party for any advisory counsel fees and costs; and

(b) Second, the balance, if any, shall be allocated [***] to the Initiating Party, and [***] to the other Party.

If the Initiating Party believes it is reasonably necessary or desirable to obtain an effective remedy, upon written request the other Party agrees to be joined as a Party to the suit or action but shall be under no obligation to participate except to the extent that such participation is required as the result of its being a named Party to the suit or action. At the Initiating Party’s written request, the other Party shall offer reasonable assistance to the Initiating Party in connection therewith at no charge to the Initiating Party except for reimbursement of reasonable out-of-pocket expenses incurred by the other Party in rendering such assistance. The other Party shall have the right to participate and be represented in any such suit or action by its own counsel at its own expense.

The Initiating Party may settle, consent judgment or otherwise voluntarily dispose of the suit or action (“Settlement”) without the written consent of the other Party but only if such Settlement can be achieved without adversely affecting the other Party (including any of its patent rights). If a Settlement could adversely affect the other Party, then the written consent of the other Party would be required, which consent shall not be unreasonably withheld.

13.6 Defense

If the manufacture, use, importation, offer for sale or sale of any Product pursuant to this Agreement results in any claim, suit or proceeding alleging patent infringement or trade secret misappropriation against ICT or a member of the GlycArt Group, then such Party shall promptly notify the other Party hereto. The Parties shall cooperate with each other in connection with any such claim, suit or proceeding and shall keep each other reasonably informed of all material developments in connection with any such claim, suit or proceeding.

If a Third Party asserts that Patent Rights owned by or licensed to it are infringed by the development, manufacture, use, importation, offer for sale or sale of Products by a member of the GlycArt Group, or that its trade secrets were misappropriated in connection with such activity, then GlycArt shall have the exclusive right and responsibility to resolve any such claim, whether by obtaining a license from such Third Party, by defending against such Third Party’s claims or otherwise, and shall be solely responsible for the defense of any such action, any and all costs incurred in connection with such action (including, without limitation, attorneys’ and expert fees) and all liabilities incurred in connection therewith. Notwithstanding the above, GlycArt shall not enter into any settlement of any such claim without the prior written consent of ICT if such settlement would require ICT to be subject to an injunction or to make any monetary payment to GlycArt or any Third Party, or admit any wrongful conduct by ICT or its Affiliates, or would limit or restrict the claims of or admit any invalidity and/or unenforceability of any of the Patent Rights Controlled by ICT, or have any impact on activities outside the Field.

13.7 Common Interest Disclosures

With regard to any information or opinions disclosed pursuant to this Agreement by one Party to each other regarding intellectual property and/or technology owned by Third Parties, the Parties agree that they have a common legal interest in determining whether, and to what extent,

Third Party intellectual property rights may affect the conduct of the Research Program and/or Antibodies and/or Modified Antibodies and/or Products, and have a further common legal interest in defending against any actual or prospective Third Party claims based on allegations of misuse or infringement of intellectual property rights relating to the conduct of the R&D Program and/or Antibodies and/or Modified Antibodies and/or Products. Accordingly, the Parties agree that all such information and materials obtained by ICT and GlycArt from each other will be used solely for purposes of the Parties’ common legal interests with respect to the conduct of the Agreement. All information and materials will be treated as protected by the attorney-client privilege, the work product privilege, and any other privilege or immunity that may otherwise be applicable. By sharing any such information and materials, neither Party intends to waive or limit any privilege or immunity that may apply to the shared information and materials. Neither Party shall have the authority to waive any privilege or immunity on behalf of the other Party without such other Party’s prior written consent, nor shall the waiver of privilege or immunity resulting from the conduct of one Party be deemed to apply against any other Party.

13.8 Patent Term Extensions

The parties shall use Commercially Reasonable Efforts to obtain all available patent term extensions, adjustments or restorations, or supplementary protection certificates (“SPCs”, and together with patent term extensions, adjustments and restorations, “Patent Term Extensions”), ICT shall execute such authorizations and other documents and take such other actions as may be reasonably requested by GlycArt to obtain such Patent Term Extensions, including designating GlycArt as its agent for such purpose as provided in 35 U.S.C. Section 156. All filings for such Patent Term Extensions shall be made by GlycArt; provided, that in the event that GlycArt elects not to file for a Patent Term Extension, GlycArt shall (a) promptly inform ICT of its intention not to file and (b) grant ICT the right to file for such Patent Term Extension. Each Party shall execute such authorizations and other documents and take such other actions as may be reasonably requested by the other Party to obtain such extensions. The parties shall cooperate with each other in gaining patent term restorations, extensions and/or SPCs wherever applicable to such ICT Patent Rights.

14. Representations and Warranties

14.1 Safety Data

ICT has disclosed to GlycArt and will immediately continue to disclose to GlycArt (i) the results of all preclinical testing and human clinical testing of Product in its possession or control and (ii) all information in its possession or control concerning side effects, injury, toxicity or sensitivity reaction and incidents or severity thereof with respect to Product.

14.2 Patent Rights

ICT has no knowledge of the existence of any patent or patent application owned by or licensed to any Third Party which could prevent GlycArt from making, having made, using,

offering for sale, selling or importing Product in the Territory. ICT is not in possession of information which could render invalid and/or unenforceable any claims that are in any of ICT Patent Rights.

14.3 Ownership of Patent Rights

ICT is the exclusive owner of all right, title and interest in, or is the exclusive licensee of, the ICT Base Patent Rights. Appendix 1.44 contains a complete and accurate list of all patents and patent applications included in the ICT Base Patent Rights. ICT is the sole and exclusive owner of the ICT Base Patent Rights. No other parties have any right, title or interest in or to the ICT Base Patent Rights. The ICT Base Patent Rights are free and clear of all liens, claims, security interests and other encumbrances of any kind or nature. ICT has not granted any licenses to the ICT Base Patent Rights to any Third Party, nor has Licensor effectuated any prior transfer, sale or assignment of any part of the ICT Base Patent Rights.

14.4 Inventors

ICT warrants that the inventors of the inventions disclosed and/or claimed in ICT Base Patent Rights have transferred to ICT full ownership of the patent rights and know-how licensed under this Agreement. All of the ICT’s employees, officers and consultants have executed agreements requiring assignment to the ICT of all Inventions made by such individuals during the course of and as a result of their association with the ICT.

14.5 Grants

ICT has the right to grant GlycArt and its Affiliates the rights and licenses described in this Agreement.

14.6 Authorization

Each Party represents that the execution, delivery and performance of this Agreement by that Party and all instruments and documents to be delivered by that Party hereunder: (i) are within the corporate power of that Party; (ii) have been duly authorized by all necessary or proper corporate action; (iii) are not in contravention of any provision of the certificate of formation or limited liability company agreement of that Party; (iv) to the knowledge of that Party, will not violate any Law or regulation or any order or decree of any court of governmental instrumentality; (v) will not violate the terms of any indenture, mortgage, deed of trust, lease, agreement, or other instrument to which that Party is a party or by which that Party or any of its property is bound, which violation would have an adverse effect on the financial condition of that Party or on the ability of that Party to perform its obligations hereunder; and (vi) do not require any filing or registration with, or the consent or approval of, any governmental body, agency, authority or any other Person, which has not been made or obtained previously (other than approvals required under the HSR Act, Regulatory Approvals required for the Sale of Products and filings with regulatory authorities required in connection with Products).

14.7 Validity of Patent Rights

To the best of ICT’s knowledge and belief, ICT has the lawful right to grant GlycArt the rights and licenses granted under this Agreement. ICT is not in possession of any information that would, in its reasonable opinion, render invalid and/or unenforceable any claims in any

issued patent licensed pursuant to this Agreement. ICT has no knowledge of any inventorship disputes concerning any ICT Base Patent Rights.

14.8 Ownership and Validity of Know-How

To the best of ICT’s knowledge and belief, ICT’s Know-How is legitimately in the possession of ICT and has not been misappropriated from any Third Party. ICT has taken reasonable measures to protect the confidentiality of its Know-How.

14.9 No Claims

There are no claims or investigations, pending or threatened against ICT or any of its Affiliates, at Law or in equity, or before or by any governmental authority relating to the matters contemplated under this Agreement or that would materially adversely affect ICT’s ability to perform its obligations hereunder.

14.10 No Conflict

Each Party represents that neither it nor any of its Affiliates is or will be under any obligation to any person, contractual or otherwise, that is conflicting with the terms of this Agreement or that would impede the fulfillment of that Party’s obligations hereunder.

14.11 No Other Representations

EXCEPT AS EXPRESSLY SET FORTH IN THIS AGREEMENT, NEITHER PARTY MAKES ANY OTHER REPRESENTATIONS OR WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, WITH RESPECT TO THIS AGREEMENT.

15. Indemnification

15.1 Indemnification by GlycArt

GlycArt shall indemnify, hold harmless and defend ICT and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without limitation attorneys’ fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts ICT becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of activities related to the Product (e.g. product liability claims) conducted by or on behalf of GlycArt, except to the extent such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of ICT.

15.2 Indemnification by ICT

ICT shall indemnify, hold harmless and defend GlycArt and its directors, officers, employees and agents from and against any and all losses, expenses, cost of defense (including without limitation attorneys’ fees, witness fees, damages, judgments, fines and amounts paid in settlement) and any amounts GlycArt becomes legally obligated to pay because of any claim or claims against it to the extent that such claim or claims arise out of activities related to the Product (e.g. product liability claims) conducted by or on behalf of ICT, except to the extent such losses, expenses, costs and amounts are due to the gross negligence or willful misconduct or failure to act of GlycArt.

15.3 Procedure

In the event of a claim by a Third Party against a Party entitled to indemnification under this Agreement (“Indemnified Party”), the Indemnified Party shall promptly notify the other Party (“Indemnifying Party”) in writing of the claim and the Indemnifying Party shall undertake and solely manage and control, at its sole expense, the defense of the claim and its settlement. The Indemnified Party shall cooperate with the Indemnifying Party and may, at its option and expense, be represented in any such action or proceeding by counsel of its choice. The Indemnifying Party shall not be liable for any litigation costs or expenses incurred by the Indemnified Party without the Indemnifying Party’s written consent. The Indemnifying Party shall not settle any such claim unless such settlement fully and unconditionally releases the Indemnified Party from all liability relating thereto, unless the Indemnified Party otherwise agrees in writing.

16. Disclaimer

THE FOREGOING REPRESENTATIONS AND WARRANTIES ARE IN LIEU OF ALL OTHER REPRESENTATIONS AND WARRANTIES NOT EXPRESSLY SET FORTH HEREIN. ICT AND GLYCART DISCLAIM ALL OTHER WARRANTIES, WHETHER EXPRESS OR IMPLIED, WITH RESPECT TO EACH OF THEIR RESEARCH, DEVELOPMENT AND COMMERCIALIZATION EFFORTS HEREUNDER, INCLUDING, WITHOUT LIMITATION, WHETHER THE PRODUCTS CAN BE SUCCESSFULLY DEVELOPED OR MARKETED, THE ACCURACY, PERFORMANCE, UTILITY, RELIABILITY, TECHNOLOGICAL OR COMMERCIAL VALUE, COMPREHENSIVENESS, MERCHANTABILITY OR FITNESS FOR ANY PARTICULAR PURPOSE WHATSOEVER OF THE PRODUCTS. IN NO EVENT SHALL EITHER ICT OR GLYCART BE LIABLE FOR SPECIAL, INDIRECT, INCIDENTAL OR CONSEQUENTIAL DAMAGES ARISING OUT OF THE REPRESENTATIONS OR WARRANTIES MADE IN THIS AGREEMENT BASED ON CONTRACT, TORT OR ANY OTHER LEGAL THEORY.

17. Obligation Not to Disclose Confidential Information

17.1 Non-Use and Non-Disclosure

During the Term of this Agreement and for five (5) years thereafter, a Receiving Party shall (i) treat Confidential Information provided by Disclosing Party as it would treat its own information of a similar nature, (ii) take all reasonable precautions not to disclose such Confidential Information to Third Parties, without the Disclosing Party’s prior written consent, and (iii) not use such Confidential Information other than for fulfilling its obligations under this Agreement.

17.2 Permitted Disclosure

Notwithstanding the obligation of non-use and non-disclosure set forth in Section 17.1, the Parties recognize the need for certain exceptions to this obligation, specifically set forth below, with respect to press releases, patent rights, publications, and certain commercial considerations.

17.3 Press Releases

GlycArt shall issue press releases in accordance with its internal policy that typically does not issue a second press release until proof of concept has been achieved for a Modified Antibody. GlycArt shall provide ICT with a copy of any draft press release related to the activities contemplated by this Agreement prior to its intended publication for ICT’s review. ICT may provide GlycArt with suggested modification to the draft press release. GlycArt shall consider ICT’s suggestions in issuing its press release.

Upon the signing of this Agreement, ICT may issue a press release in the form set forth in Appendix 17.3. ICT shall not issue any other press release with respect to the Agreement without prior approval of GlycArt, not to be unreasonably withheld, subject to laws and regulations. Press releases shall be jointly drafted and approved before release. ICT will provide GlycArt with written notice sufficiently before the release of any external communication regarding the Agreement in order to allow time for comment on the release according to the GlycArt’s ongoing standard review and approval procedures, subject to ICT’s obligation to make timely disclosures under the U.S. securities laws.

17.4 Publications

During the Term of this Agreement, the following restrictions shall apply with respect to disclosure by any Party of Confidential Information relating to the Product in any publication or presentation:

(a) Both Parties acknowledge that it is their policy for the studies and results thereof to be registered and published in accordance with their internal guidelines. GlycArt, in accordance with its internal policies and procedures, shall have the right to publish all studies, clinical trials and results thereof on the clinical trial registries which are maintained by or on behalf of GlycArt. ICT shall not publish any studies, clinical trials or results thereof on its clinical trial registry, provided however, that GlycArt’s clinical trial registry can be accessed via a link from ICT’s clinical trial registry.

(b) A Party (“Publishing Party”) shall provide the other Party with a copy of any proposed publication or presentation at least thirty (30) days (or at least 10 days in the case of oral presentations) prior to submission for publication so as to provide such other Party with an opportunity to recommend any changes it reasonably believes are necessary to continue to maintain the Confidential Information disclosed by the other Party to the Publishing Party in accordance with the requirements of this Agreement. The incorporation of such recommended changes shall not be unreasonably refused; and If such other Party notifies (“Notice”) the Publishing Party in writing, within thirty (30) days after receipt of the copy of the proposed publication or presentation (or at least fifteen (15) days in the case of oral presentations), that such publication or presentation in its reasonable judgment (i) contains an invention, solely or jointly conceived and/or reduced to practice by the other Party, for which the other Party reasonably desires to obtain patent protection or (ii) could be expected to have a material adverse effect on the commercial value of any Confidential Information disclosed by the other Party to the Publishing Party, the Publishing Party shall prevent such publication or delay such publication for a mutually agreeable period of time. In the case of inventions, a delay shall be for a period reasonably sufficient to permit the timely preparation and filing of a patent application(s) on such invention, and in no event less than ninety (90) days from the date of the Notice.

17.5 Commercial Considerations

Nothing in this Agreement shall prevent GlycArt or its Affiliates from disclosing Confidential Information of ICT to (i) governmental agencies to the extent required or desirable to secure government approval for the development, manufacture or sale of Product in the Territory, (ii) Third Parties acting on behalf of GlycArt, to the extent reasonably necessary for the development, manufacture or sale of Product in the Territory, or (iii) Third Parties to the extent reasonably necessary to market the Product in the Territory. The Receiving Party may disclose Confidential Information of the Disclosing Party to the extent that such Confidential Information is required to be disclosed by the Receiving Party to comply with applicable laws, to defend or prosecute litigation or to comply with governmental regulations, provided that the Receiving Party provides prior written notice of such disclosure to the Disclosing Party and, to the extent practicable, takes reasonable and lawful actions to minimize the degree of such disclosure.

18. Term and Termination

18.1 Commencement and Term

The Agreement Term shall commence upon the Effective Date and, unless this Agreement is terminated sooner as provided in this Section, expire on the date when no royalty or other payment obligations under this Agreement are or will become due.

18.2 Termination

(a) Termination for Breach

A Party (“Non-Breaching Party”) shall have the right to terminate this Agreement in its entirety or on a country-by-country basis in the event the other Party (“Breaching Party”) is in breach of any of its material obligations under this Agreement. The non-Breaching Party shall provide written notice to the Breaching Party, which notice shall identify the breach and the countries in which the Non-Breaching Party intends to have this Agreement terminate. The Breaching Party shall have a period of one hundred and twenty (120) days after such written notice is provided to cure such breach, except that in any default in making a required payment must be cured within thirty (30) days after such notice (“Peremptory Notice Period”). If such breach is not cured within the Peremptory Notice Period, this Agreement shall effectively terminate in such countries, unless there exists a bona fide dispute as to whether such breach occurred or has been cured or Section 18.2 applies.

(b) Termination by GlycArt for Change of Control

If there is a Change of Control of ICT, then GlycArt may, in its sole discretion immediately terminate the Agreement in its entirety, except as set forth in this Section 18.2(b). All licenses granted by ICT to GlycArt shall remain in effect subject to GlycArt complying with all of the payment obligations under this Agreement.

GlycArt shall have the right to terminate this Agreement at any time on a Product-by-Product and country-by-country basis immediately during the Research Term, with three (3) months prior written notice after the Research Term but before First Commercial Sale of the Product, or with nine (9) months prior written notice after the First Commercial Sale of the Product. The effective date of termination under this Section shall be the instant date or the date three (3) months or nine (9) months as the case may be after GlycArt provides such written notice to ICT.

18.3 Consequences of Termination

If GlycArt terminates the Agreement during the Research Term, GlycArt shall (i) cease use of (a) the Antibody and all information thereof, (b) the Modified Antibody, and (c) Glycoengineered Antibody Cells, and (ii) grant to ICT an exclusive worldwide, perpetual, fully paid royalty free license under the GlycArt Research IP to use the Target(s) to develop and commercialize the Antibody (excluding Glycoengineered Cells and Modified Antibody).

If GlycArt terminates the Agreement after the Option Right has been exercised, then GlycArt’s rights and licenses with respect to such terminated Product or country shall terminate. Upon such termination, all information on the Modified Antibody and on Products shall remain the sole and exclusive property of GlycArt; provided, however, that GlycArt would be required to cease use of Research IP and ICT Patent Rights and ICT Know-How in their entirety or with respect to the terminated Product or country, and would cause its Affiliates and sublicensees to do the same. If GlycArt were to terminate the Agreement with regard to Therapeutic Products only, then GlycArt would grant to ICT an exclusive worldwide, perpetual, fully paid and royalty free license under the GlycArt Research IP to use the Target(s) to develop and commercialize the Antibody. Such grant back would not include Glycoengineered Cells and Modified Antibody, unless GlycArt, at its sole discretion, agrees to such inclusion after a request for such was made by ICT. If GlycArt agrees to such inclusion, then (a) ICT would pay to GlycArt a royalty in the amount of [***] of the Net Sales of Therapeutic Products sold by ICT itself or through a Third Party, for a period of ten (10) years from First Commercial Sale, on a Therapeutic Product-by-Therapeutic Product and country-by-country basis, and (b) ICT would have no right to further modify Glycoengineered Cells and Modified Antibody.

18.4 SurvIval

Sections 13.1 (Ownership of Inventions); 17.1 (Obligation not to Use and Not to disclose Confidential Information), 20.1 (Governing Law), and 20.3 (Arbitration), Article 15 (Indemnification), and Article 18 (Termination) shall survive any expiration or termination of this Agreement for any reason.

19. Bankruptcy

All licenses (and to the extent applicable rights) granted under or pursuant to this Agreement by ICT to GlycArt are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11, US Code (the “Bankruptcy Code”) licenses of rights to “intellectual property” as defined under Section 101(60) of the Bankruptcy Code. Unless GlycArt elects to terminate this Agreement, the Parties agree that GlycArt, as a licensee or sub-licensee of such rights under this Agreement, shall retain and may fully exercise all of its rights and elections under the Bankruptcy Code, subject to the continued performance of its obligations under this Agreement.

20. Miscellaneous

20.1 Governing Law

This Agreement shall be governed by and construed in accordance with the laws of the State of New York, without reference to its conflict of laws principles, and shall not be governed by the United Nations Convention of International Contracts on the Sale of Goods (the Vienna Convention).

20.2 Disputes

Unless otherwise set forth in this Agreement, in the event of any dispute in connection with this Agreement, such dispute shall be referred to the respective executive officers of the parties designated below or their designees, for good faith negotiations attempting to resolve the dispute. The designated executive officers are as follows:

For ICT: CEO

For GlycArt: CEO

20.3 Arbitration

Should the parties fail to agree within two (2) months after such dispute has first arisen, it shall be finally settled by arbitration in accordance with the commercial arbitration rules of the International Chamber of Commerce as in force at the time when initiating the arbitration. The tribunal shall consist of three arbitrators. The place of arbitration shall be for matters brought by ICT, Basel, Switzerland, and of matters brought by GlycArt, Los Angeles, California, US. The language to be used shall be English.

20.4 Assignment

Neither Party may assign its rights or obligations under this Agreement absent the prior written consent of the other Party, except to any of its Affiliates or in the context of a merger, acquisition, sale or other transaction involving all or substantially all of the assets of the Party or of the business unit of the Party that holds the assets covered by this Agreement seeking to assign, in which case such Party in its sole discretion may assign its rights and obligations under this Agreement. Any permitted assignment shall be binding on the successors of the assigning Party.

20.5 Debarment

(a) ICT hereby certifies that it has not been debarred under the provisions of the Generic Drug Enforcement Act of 1992, 21 U.S.C. Sec. 335a(a) and (b). In the event that during the term of this Agreement ICT or any of its employees (i) becomes debarred; or (ii) receives notice of an action or threat of an action with respect to its debarment, at a time period when ICT is performing activities under this Agreement, ICT agrees to immediately notify GlycArt. ICT also agrees that in the event that it becomes debarred it shall immediately cease all activities relating to this Agreement.

(b) In the event that ICT becomes debarred, this Agreement shall automatically terminate, without any further action or notice by either party. In the event that GlycArt receives notice from ICT or otherwise becomes aware that (i) a debarment action has been brought against ICT or any of its employees; or (ii) ICT has been threatened with a debarment action, then GlycArt shall have the right to terminate this Agreement immediately.

(c) ICT hereby certifies that it has not and will not use in any capacity the services of any individual, corporation, partnership or association which has been debarred under 21 U.S.C. Sec. 335(a) or (b) in activities in connection with this Agreement. In the event that ICT becomes aware of the debarment or threatened debarment of any individual, corporation, partnership or association providing services to ICT which directly or indirectly relate to the activities under this Agreement, ICT shall notify GlycArt immediately. Upon the receipt of such notice by GlycArt or if GlycArt otherwise becomes aware of such debarment or threatened debarment, GlycArt shall have the right to terminate this Agreement immediately.

(d) GlycArt agrees that subsections (a)-(c) apply mutatis mutandis to GlycArt.

(e) Termination by a Party under this Section shall be deemed termination under Section 18.2(a) for the other Party’s uncured material breach.

20.6 Independent Contractor

No employee or representative of either Party shall have any authority to bind or obligate the other Party to this Agreement for any sum or in any manner whatsoever or to create or impose any contractual or other liability on the other Party without said Party’s prior written approval. For all purposes, and notwithstanding any other provision of this Agreement to the contrary, ICT’s legal relationship to GlycArt under this Agreement shall be that of independent contractor.

20.7 Unenforceable Provisions and Severability

If any of the provisions of this Agreement are held to be void or unenforceable, then such void or unenforceable provisions shall be replaced by valid and enforceable provisions which will achieve as far as possible the economic business intentions of the parties. However the remainder of this Agreement will remain in full force and effect, provided that the material interests of the parties are not affected, i.e. the parties would presumably have concluded this Agreement without the unenforceable provisions.

20.8 Waiver

The failure by either Party to require strict performance and/or observance of any obligation, term, provision or condition under this Agreement will neither constitute a waiver thereof nor affect in any way the right of the respective Party to require such performance and/or observance. The waiver by either Party of a breach of any obligation, term, provision or condition hereunder shall not constitute a waiver of any subsequent breach thereof or of any other obligation, term, provision or condition.

20.9 Appendices

All Appendices to this Agreement shall form an integral part to this Agreement.

20.10 Entire Understanding

This Agreement contains the entire understanding between the parties hereto with respect to the within subject matter and supersedes any and all prior agreements, understandings and arrangements, whether written or oral.

20.11 Amendments

No amendments of the terms and conditions of this Agreement shall be binding upon either Party hereto unless in writing and signed by both parties.

20.12 Notice

All notices which are required or permitted hereunder shall be in writing and sufficient if delivered personally, sent by facsimile (and promptly confirmed by personal delivery, registered or certified mail or overnight courier), sent by nationally recognized overnight courier or sent by registered or certified mail, postage prepaid, return receipt requested, addressed as follows:


if to ICT, to:		ImmunoCellular Therapeutics, Ltd. 21900 Burbank Boulevard, 3rd Floor Woodland Hills, California 91367 USA Attn: President Facsimile No.: (818) 992-2908

And:		Sanford J. Hillsberg TroyGould PC 1801 Century Park East Suite 1600 Los Angeles, CA 90067-2367 Facsimile No.: 310-201-4746

if to GlycArt, to:		GlycArt Biotechnology AG Wagistrasse 18 CH-8952 Schlieren-Zürich Switzerland Attn: General Manager Facsimile No.: +41 44 755 61 60

And:		F. Hoffmann-La Roche Ltd Grenzacherstrasse 124 4070 Basel Switzerland Attn: Legal Department Facsimile No.: +41 61 688 13 96

or to such other address as the Party to whom notice is to be given may have furnished to the other Party in writing in accordance herewith.

IN WITNESS WHEREOF, the Parties have entered into this Agreement as of the Effective Date.


ImmunoCellular Therapeutics, Ltd.

By:		/s/ Dr. Manish Singh
Name:		Dr. Manish Singh
Title:		President and Chief Executive Officer

By:		/s/ C. Kirk Peacock
Name:
Title:

GlycArt Biotechnology AG

By:		/s/ Pablo Umana
Name:		Pablo Umana
Title:		CSO

By:		/s/ Ruegg
Name:		Ruegg
Title:		Head of Finance and Operations

Appendix 1.44

[***]

Table of Contents


			Page
1.	Definitions		1
	1.1	Affiliate	1
	1.2	Agreement	2
	1.3	Agreement Term	2
	1.4	Antibody	2
	1.5	Background IP	2
	1.6	BLA	2
	1.7	Blocking Third Party Intellectual Property	2
	1.8	Calendar Quarter	2
	1.9	Calendar Year	2
	1.10	Change of Control	2
	1.11	Combination Product	3
	1.12	Commercially Reasonable Efforts	3
	1.13	Composition of Matter Claim	3
	1.14	Completion	3
	1.15	Confidential Information	3
	1.16	Control	4
	1.17	Cover	4
	1.18	Development Event	4
	1.19	Development Event Payment	4
	1.20	Diagnostic Net Sales	5
	1.21	Diagnostic Product	5
	1.22	Diagnostic Royalty Term	5
	1.23	Effective Date	5
	1.24	EMEA	6
	1.25	Engineered Antibody	6
	1.26	EU	6
	1.27	Expert	6
	1.28	Extension Period	6
	1.29	FDA	6
	1.30	FDCA	6
	1.31	Field	6
	1.32	Filing	6
	1.33	First Commercial Sale	7
	1.34	Generic Product	7
	1.35	GlycArt Group	7
	1.36	GlycArt Know-How	7
	1.37	GlycArt Patent Rights	7
	1.38	GlycArt Research IP	7
	1.39	Glycoengineered Antibody Cells	7
	1.40	Glycoengineered Cells	7
	1.41	GlycoMab Technology	7
	1.42	Handle	8
	1.43	Hybridoma	8
	1.44	ICT Base Patent Rights	8
	1.45	ICT Know-How	8
	1.46	ICT Patent Rights	8
	1.47	ICT Research IP	8
	1.48	IND	8

Table of Contents

(continued)


			Page
	1.49	Indication	8
	1.50	Initial Indication	9
	1.51	Initial Period	9
	1.52	Initiation	9
	1.53	Inventions	9
	1.54	Know-How	9
	1.55	Legal Requirement	9
	1.56	Major Countries	9
	1.57	Materials	9
	1.58	Modified Antibody	10
	1.59	NDA	10
	1.60	Net Sales	10
	1.61	Option Right	11
	1.62	Party	11
	1.63	Patent Rights	11
	1.64	Phase I Study	11
	1.65	Phase II Study	11
	1.66	Phase III Study	11
	1.67	Product	12
	1.68	Reagent Rental Expenses	12
	1.69	Regulatory Authority	12
	1.70	Regulatory Approval	12
	1.71	Research IP	12
	1.72	Research Program	12
	1.73	Research Term	12
	1.74	Royalty Term	12
	1.75	Sales Expenses	13
	1.76	Sublicensee	13
	1.77	Target	13
	1.78	Territory	13
	1.79	Therapeutic Product	13
	1.80	Third Party	13
	1.81	Third Party Royalty Expenses	13
	1.82	US	14
	1.83	Valid Claim	14
2.	Research		14
	2.1	Conduct of the Research Program	14
	2.2	Reports	15
3.	Grant of Option Right and License		15
	3.1	Option Right	15
	3.2	Research License	15
	3.3	Commercial License	15
	3.4	Sublicense	16
	3.5	Data reporting	16
4.	Diligence		16
5.	Development		16
	5.1	Development by GlycArt	16
6.	Governance		17
	6.1	Information Exchange	17

Table of Contents

(continued)


			Page
	6.2	Alliance Director	17
7.	Regulatory		17
8.	Commercialization		17
9.	Payment		18
	9.1	Signing Fee	18
	9.2	Option Extension Fee	18
	9.3	Option Exercise Fee	18
	9.4	Development Event Payments	18
	9.5	Royalty Payments	19
10.	Accounting and reporting		21
	10.1	Timing of Payments	21
	10.2	Late Payment	21
	10.3	Method of Payment	22
	10.4	Currency Conversion	22
	10.5	Reporting	22
11.	Taxes		23
12.	Auditing		23
	12.1	ICT Right to Audit	23
	12.2	Sharing of draft reports	23
	12.3	Over-or Underpayment	24
	12.4	Duration of Audit Rights	24
13.	Intellectual Property		24
	13.1	Ownership of Inventions	24
	13.2	German Statute on Employee’s Inventions	24
	13.3	Prosecution of ICT Patent Rights	25
	13.4	Prosecution of Patent Rights Claiming GlycArt Inventions	25
	13.5	Infringement	25
	13.6	Defense	26
	13.7	Common Interest Disclosures	27
	13.8	Patent Term Extensions	27
14.	Representations and Warranties		27
	14.1	Safety Data	27
	14.2	Patent Rights	27
	14.3	Ownership of Patent Rights	28
	14.4	Inventors	28
	14.5	Grants	28
	14.6	Authorization	28
	14.7	Validity of Patent Rights	28
	14.8	Ownership and Validity of Know-How	29
	14.9	No Claims	29
	14.10	No Conflict	29
	14.11	No Other Representations	29
15.	Indemnification		29
	15.1	Indemnification by GlycArt	29
	15.2	Indemnification by ICT	29
	15.3	Procedure	30
16.	Disclaimer		30
17.	Obligation Not to Disclose Confidential Information		30
	17.1	Non-Use and Non-Disclosure	30

iii

Table of Contents

(continued)


			Page
	17.2	Permitted Disclosure	30
	17.3	Press Releases	31
	17.4	Publications	31
	17.5	Commercial Considerations	32
18.	Term and Termination		32
	18.1	Commencement and Term	32
	18.2	Termination	32
	18.3	Consequences of Termination	33
	18.4	Survival	33
19.	Bankruptcy		33
20.	Miscellaneous		34
	20.1	Governing Law	34
	20.2	Disputes	34
	20.3	Arbitration	34
	20.4	Assignment	34
	20.5	Debarment	34
	20.6	Independent Contractor	35
	20.7	Unenforceable Provisions and Severability	35
	20.8	Waiver	35
	20.9	Appendices	35
	20.10	Entire Understanding	36
	20.11	Amendments	36
	20.12	Notice	36

EXHIBIT 10.34

February 1, 2010

James G. Bender, Ph.D.

3 Cloverdale

Rancho Santa Margarita, CA 92688

Dear Jim

This letter sets forth the basis upon which ImmunoCellular Therapeutics, Ltd. (the “Company”) will engage you as its Vice President – Product Development and Manufacturing.

1. Engagement . You will be engaged on a full-time basis as Vice President – Product Development and Manufacturing 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 – Product Development and Manufacturing, your duties will be those that are customary for a Vice President – Product Development and Manufacturing of a company such as the Company, including without limitation assisting the Company in establishing and implementing plans and strategies for the formulation and development of the Company’s product candidates, securing and monitoring manufacturers for clinical supplies of product candidates, and assuring that the Company’s manufacturing activities comply with all applicable FDA requirements. You will not serve as an officer, director or consultant of any other company during the term of this Agreement without the written consent of the Company. 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 February 1, 2010, unless sooner terminated by you or the Company as set forth below in Section 7.

3. Prior Engagement . The parties hereby agree that the term of your engagement as the Company’s part-time Vice President – Clinical Development as described in our Agreement, dated September 1, 2009, as amended on September 14, 2009 (the “Prior Agreement”), will terminate as of January 31, 2010 and that all of the parties’ rights and obligations under the Prior Agreement (including your right to work in any capacity for any other company or organization) will terminate as of that date, except that the cash bonuses and option vesting for achieving certain development milestones as set forth in paragraph 4(c)(ii) through (vi) of the Prior Agreement will remain in effect for the amounts and with the deadline dates set forth therein. The monthly vesting of 3,000 shares per month for the option granted to you under the Prior Agreement will cease as of January 31, 2010, and the remaining unvested portion of the shares that were to vest monthly under that option will be cancelled as of that date. You acknowledge that, except as set forth in the preceding sentence, you have been paid in full by the Company for all services by you to the Company through January 31, 2010 and have been reimbursed by the Company for all expenses incurred through January 31, 2010.

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 $14,166.67 for each month during the term of the Agreement;

LOGO

James G. Bender, Ph.D.

February 1, 2010

Page 2

(b) the Company will grant you on the date of the next meeting of the Company’s Board of Directors an option under the Company’s 2006 Equity Incentive Plan (the “Plan”) to purchase 150,000 shares of the Company’s common stock (the “Option”), which option grant shall be subject to approval by the Company’s shareholders of an increase in the number of authorized shares under the Plan; 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 September 30, 2010 the tech transfer to a contract manufacturer organization for ICT-107, including without limitation validation/qualification runs—$10,000 and 25,000 shares;

(ii) complete by December 31, 2010 FDA acceptance of a Phase II clinical trial plan for ICT-107—$10,000 and 25,000 shares; and

(iii) complete by December 31, 2010 enrollment of the first patient into the Phase II clinical trial for ICT-107—$10,000 and 25,000 shares;

The monthly cash compensation shall be paid in accordance with the Company’s regular payroll practices, 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 an incentive stock option to the maximum extent that is legally permitted; will have a seven-year term commencing on the date of grant; will vest at the rate of 6,250 shares per month over the term of this Agreement as to 75,000 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 Company’s 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 Company’s standard stock option agreement under the 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 delay or abandon the development of ICT-107 for any reason.

All payments made by the Company under this Agreement shall be reduced by any tax or other amounts required to be withheld by the Company under applicable law.

5. Vacation . In addition to holidays observed by the Company, you shall be entitled to paid vacation of two(2) weeks per year. Any such vacations are to be taken at times mutually agreeable to you and the Company’s President. You shall not be entitled to accrue more than four (4) weeks of accrued vacation time at any given time. In the event that you have accrued the

James G. Bender, Ph.D.

February 1, 2010

Page 3

maximum of four (4) weeks accrued and unused vacation time, you shall cease accruing further vacation time until such time as your accrued and unused vacation time is less than such maximum amount.]

6. Benefits. You shall be entitled to all rights and benefits for which you shall be eligible under any benefit or other plans (including, without limitation, dental, medical, medical reimbursement and hospital plans, pension plans, employee stock purchase plans, profit sharing plans, bonus plans and other so-called “fringe” benefits) as the Company shall make available to its employees from time to time.

7. 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.

8. 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.

9. 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.

9.1 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.

9.2 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

James G. Bender, Ph.D.

February 1, 2010

Page 4

cause upon 15 days written notice to you. If you are terminated without cause, in addition to all accrued compensation, 50% of any unvested options as of the date of termination shall vest. 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.

9.3 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.

10. 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.

11. 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 Company’s property, including, but not limited to, all documents concerning the Company’s 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.

12. 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

James G. Bender, Ph.D.

February 1, 2010

Page 5

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.

13. 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 Company’s Vice President – Product Development and Manufacturing (collectively referred to herein as “Inventions”) are “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.

14. 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 – Product Development and Manufacturing and look forward to working with you to advance the Company’s 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 February 2010.

/s/ James G. Bender

James G. Bender, Ph.D.

EXHIBIT 10.35

EMPLOYMENT AGREEMENT

This Employment Agreement (this “Agreement”) is made as of the 18th day of February, 2010, by and between ImmunoCellular Therapeutics, Ltd., a Delaware corporation (the “Corporation”), and Dr. Manish Singh (hereinafter called “Executive”).

W I T N E S S E T H:

WHEREAS, the Corporation previously employed Executive as its President and Chief Executive Officer under an Employment Agreement dated as of February 18, 2009 (he “Prior Agreement”);

WHEREAS, the Corporation and Executive desire to amend certain provisions of the Prior Agreement; and

WHEREAS, the Corporation desires to continue to employ Executive as its President and Chief Executive Officer under a new employment pursuant to the terms of this Agreement, and Executive is willing to accept such employment on the terms and subject to the conditions hereinafter set forth;

NOW, THEREFORE, in consideration of the mutual covenants hereinafter set forth, the parties hereto agree as follows:

1. Employment by Corporation . The Corporation hereby agrees to employ Executive to continue to perform the duties on behalf of the Corporation as the Corporation’s full-time President and Chief Executive Officer of the Corporation. As President and Chief Executive Officer, Executive will report to the Corporation’s Chairman of the Board, and shall have such duties consistent with that of a President and Chief Executive Officer that may from time to time be designated or assigned to Executive pursuant to the directives of the Corporation’s Board of Directors (the “Board”), including without limitation the overseeing and implementation of the Corporation’s business plan as adopted by the Board. Executive will perform his duties under this Agreement at the Corporation’s corporate headquarters in the metropolitan Los Angeles area, with such office currently located in the Woodland Hills, California area, or at such other location as shall be mutually agreed upon by the Corporation and Executive; and he will do such traveling as may be required of him in the performance of his duties as the President and Chief Executive Officer. The Corporation will use its commercially reasonable efforts to have Executive serve as a member of the Board during the term of this Agreement.

2. Executive’s Acceptance of Employment . Executive hereby accepts such employment and agrees that throughout the period of his employment hereunder he will devote his full time, attention, knowledge and skills, faithfully, diligently and to the best of his ability, in furtherance of the business of the Corporation, and he will perform the duties assigned to him pursuant to Section 1 hereof, subject, at all times, to the direction and control of the Board.

Executive shall at all times be subject to, observe and carry out such reasonable rules, regulations, policies, directions and restrictions as the Corporation shall from time to time establish. During the period of his employment by the Corporation, Executive agrees to be bound by the Corporation’s Code of Ethics and any amendments adopted thereto, copies of which Executive hereby acknowledges he has received and read, and Executive agrees that he shall not, without the prior written approval of the Board, directly or indirectly, accept employment or compensation from or perform services of any nature for, any business enterprise other than the Corporation, other than as explicitly set forth herein.

3. Amendment to Prior Agreement . In consideration of Executive’s agreeing to enter into this Agreement, the Corporation and Executive agree that the Prior Agreement is hereby amended to provide that the milestones set forth in clauses (i), (ii) and (iii) of Section 4.2 of the Prior Agreement and clause (iii)(b) of Section 4.3 of the Prior Agreement may be satisfied by including the net proceeds received by the Corporation at any time prior to August 17, 2010 from (i) the Socius Capital Group financing or (ii) from any private placement financing that is covered by a signed term sheet that was entered into by the Corporation prior to February 18, 2010, or from another source at the same or better terms as contemplated in the signed term sheet. Any financing described in the preceding sentence shall be undertaken and the terms of such financing shall be at the discretion of the Board. For purposes of determining whether the $8,000,000 working capital requirement of the milestone set forth in clause (iii)(b) of Section 4.3 of the Prior Agreement has been satisfied, such working capital amount shall be calculated as of the date of the Corporation’s receipt of the proceeds that are being included to satisfy this milestone. Except as specifically set forth above, the February 17, 2010 deadline for achieving the milestones set forth in Section 4.2 and 4.3 of the Prior Agreement is not being modified or extended. The parties further acknowledge and agree that to the extent that any portion of the option granted to Executive under the Prior Agreement is determined to have not been granted under the Corporation’s 2006 Equity Incentive Plan (the “Plan”), the portion of the option not granted under the Plan shall be allocated to the portion of the option that is to vest under Section 4.3(iii)(b) of the Prior Agreement and shall upon vesting remain outstanding and have all of the other terms and conditions as the portion of the option granted under the Plan.

4. Term . Executive shall be employed under this Agreement for a term of one year commencing on February 18, 2010 (the “Commencement Date”), and ending on February 17, 2011 unless his employment is terminated prior thereto pursuant to the provisions hereof. The term of this Agreement may be extended for an additional year, if both the Corporation and Executive deliver a written extension notice to each other no later than the 60th calendar day prior to the expiration of the term of this Agreement. This Agreement shall automatically expire on February 17, 2011 and shall not be extended or renewed except in a writing signed by an authorized officer of the Corporation following approval by the Board. Executive hereby acknowledges and agrees that, except in the case of the Corporation and Executive agreeing in writing to extend the term of the Agreement beyond the expiration date of this Agreement, his employment by the Corporation, if any, beyond the expiration date of this Agreement shall be terminable by either party at will and shall not, under any circumstances, be deemed to expressly or impliedly renew the terms of this Agreement.

5. Compensation/Benefits .

5.1 The Corporation will pay to Executive as compensation for his services hereunder an initial base salary of $300,000 per annum, payable in equal biweekly installments. Provided that Executive continues to serve as the Corporation’s President and Chief Executive Officer for the entire one-year term of this Agreement, the Corporation shall pay Executive a discretionary cash bonus of up to $50,000 upon completion of the one-year term. The Board of Directors of the Corporation shall annually review Executive’s performance and base salary to determine whether an increase in the amount thereof is warranted. Executive acknowledges that he has been paid by the Corporation all amounts owing under the Prior Agreement through the date hereof.

5.2 The Corporation shall grant the Executive on the date of the next Board meeting under the Corporation’s 2006 Equity Incentive Plan or a new qualified stock option plan of the Corporation (collectively, the “Plan”), a stock option (the “Option”) to purchase 600,000 shares of the Corporation’s common stock (“Common Stock”) having an exercise price per share equal to the closing market price on the date of grant and having a term of seven years from the date of grant. The Option shall be an incentive stock option to the maximum extent that is legally permitted. This option grant shall be subject to approval by the Company’s shareholders of an increase in the authorized number of shares under the Plan and an increase in the number of shares that can be granted to any individual under the Plan during any twelve-month period. The option shall vest (i) as to 360,000 shares in twelve equal monthly installments of 30,000 shares each over the twelve month period from and immediately following the grant date; (ii) as to 30,000 shares if the Corporation achieves during term of this Agreement a volume weighted average trading price for the Common Stock of greater than $1.60 for any 15 consecutive trading day period during the term of this Agreement on average daily trading volume of at least 20,000 shares; (iii) as to 90,000 shares if the Corporation achieves during term of this Agreement a volume weighted average trading price for the Common Stock of greater than $2.00 for any 15 consecutive trading day period during the term of this Agreement on average daily trading volume of at least 20,000 shares, (iv) as to 30,000 shares for treating the first patient in a phase II clinical trial and (v) as to 90,000 shares if during the term of this Agreement the Corporation completes a financing, a strategic alliance or licensing agreement with upfront licensing payments to the Corporation or a merger or acquisition (each of these a “Liquidity Event”) that generates at least $5,000,000 of net proceeds (after commissions) for the Corporation beyond the $10,000,000 achieved by August 17, 2010 (the merger or acquisition proceeds for purposes of this Section 5.2 to be calculated based on the value of the net proceeds (after commissions) received or paid by the Corporation). Any Liquidity Event shall be undertaken and the terms of any Liquidity Event shall be at the discretion of the Board. Any financing proceeds received by the Corporation during the first six months of the term of this Agreement that are used to satisfy the milestones under the Prior Agreement as described in Section 3 hereof shall not be included as proceeds to satisfy the milestones set forth in this Section 5.2 hereof.

The Option will be exercisable within the seven year term of the option during the period that Executive provides services to the Corporation and for 24 months after termination for any reason except termination for cause by the Corporation, provided that such exercise is effected within the seven-year term of the option. In the event of a Corporate Transaction (as

such term is defined in the Plan), vesting of the Option (and any other options granted to Executive) shall be governed by the provisions contained in the Corporation’s standard stock option agreement under the Plan for the Corporation’s officers and directors, except that the portion of the Option that is to vest in monthly installments will fully vest if the Corporation is not the surviving entity in the Corporate Transaction. The Option will have such other terms and conditions as are included in the Corporation’s standard stock option agreement under the Plan. If the term of this Agreement is extended beyond February 17, 2011, or if Executive’s employment hereunder continues at-will beyond February 17, 2011, the Board of Directors of the Corporation shall review the aggregate number of stock options granted to the Executive promptly following such date (and thereafter not less frequently than annually) in order to determine whether an increase in the number thereof is warranted. Any such option shall have substantially the same terms and conditions as the Option contemplated hereunder. Within 30 days following the grant of the Option to Executive, the Corporation shall file with the U.S. Securities and Exchange Commission a registration statement on Form S-8 covering the shares of the Corporation’s common stock issuable pursuant to any options issued to Executive and then-outstanding, to the extent the shares so issuable are not covered by an existing Form S-8 registration statement.

In the event some or all of the shares covered by the Option must be cancelled as a result of the Corporation’s shareholders failing to approve the necessary amendments to the Plan to permit the grant of the Option in full, the Corporation shall be required to grant to Executive options outside of the Plan or issue Executive restricted common stock of the Corporation having a Black-Scholes value (and such vesting and other terms and conditions as set forth in the Option) equal to the Black-Scholes value of the shares on the date of the option grant covered by the Option that are required to be cancelled.

6. Business Expenses . The Corporation will promptly reimburse Executive for all business expenses incurred by Executive in connection with the business of the Corporation in accordance with the Corporation’s policy regarding the nature and amount of expenses and the maintenance and submission of receipts and records necessary for the Corporation to document them as proper business expenses.

7. Vacation . In addition to holidays observed by the Corporation, Executive shall be entitled to paid vacation of three weeks per year or such greater amount of vacation as is approved by the Chairman of the Board. Any such vacations are to be taken at times mutually agreeable to Executive and the Chairman of the Board. Executive shall not be entitled to accrue more than six weeks of accrued vacation time at any given time. In the event that Executive has accrued the maximum of six weeks accrued and unused vacation time, Executive shall cease accruing further vacation time until such time as Executive’s accrued and unused vacation time is less than such maximum amount.

8. Benefits . Executive shall be entitled to all rights and benefits for which he shall be eligible under any benefit or other plans (including, without limitation, dental, medical, medical reimbursement and hospital plans, pension plans, employee stock purchase plans, profit sharing plans, bonus plans and other so-called “fringe” benefits) as the Corporation shall make available to its executive officers from time to time.

Executive will be offered participation in a 401K plan and the Corporation will make a minimum match of base salary to meet the safe harbor provisions of the Internal Revenue Service (but not to exceed 3-4% of base salary).

9. Termination .

9.1 In addition to all other rights and remedies which the parties may have under applicable law, the Corporation may terminate this Agreement and the services of Executive, effective upon the occurrence of any of the following events, any of which shall constitute a termination for “cause” under this Agreement: (i) a failure by Executive to perform any of his material obligations under this Agreement; (ii) the death of Executive or his disability resulting in his inability to perform his reasonable duties assigned hereunder for a period of three consecutive months; (iii) Executive’s theft, dishonesty, or falsification of any Corporation documents or records; (iv) Executive’s improper use or disclosure of the Corporation’s confidential or proprietary information; or (v) Executive’s conviction (including any plea of guilty or nolo contendere) of any criminal act which impairs Executive’s ability to perform his or her duties hereunder or which in the Board’s judgment may materially damage the business or reputation of the Corporation; provided, however, that prior to termination for cause arising under clause (i), Executive shall have a period of ten days after written notice from Corporation to cure the event or grounds constituting such cause. Any notice of termination provided by Corporation to Executive under this Section 9 shall identify the events or conduct constituting the grounds for termination with sufficient specificity so as to enable Executive to take steps to cure the same if such default is a failure by Executive to perform any of his material obligations under this Agreement. In the event Corporation terminates Executive for cause, (i) Executive shall be entitled as of the termination date to no further base salary other than such portion of Executive’s base salary as shall have accrued but remain unpaid as of the termination date, which shall be due immediately upon termination, (ii) Executive shall be entitled to receive payment of any earned but unpaid bonus, as well as any expense reimbursement amounts owed by the Corporation to the Executive through the date of termination and (iii) any then unexercised but outstanding stock options granted to Executive shall be cancelled. The Corporation shall have no further obligations to Executive under this Agreement.

9.2 The Corporation may terminate Executive without cause upon 60 days written notice delivered to Executive. In the event the Corporation terminates Executive’s employment without cause (including a failure by the Corporation upon the expiration of the original term of this Agreement to extend the term of Executive’s employment for an additional one year beginning February 18, 2011), all of the following will apply: (i) immediately upon termination, the Corporation will pay to Executive any base salary as shall have accrued but remain unpaid as of the termination date, any earned but unpaid bonus and any expense reimbursement amounts owed by the Corporation to the Executive through the date of termination; (ii) immediately upon termination, the Corporation will pay to Executive severance compensation in a lump sum cash payment equal to Executive’s then effective base salary for a period of six (6) months; (iii) any stock options granted to Executive, to the extent vested, will be retained by the Executive and will be exercisable as detailed in Section 5.3 hereof, the Plan and related stock option agreement (which shall reflect the terms set forth in Section 5.3 hereof); and (iv) the vesting of an

additional number of shares subject to all options granted to Executive equal to 50% of all such shares subject to such options that have not already vested shall immediately accelerate and become fully vested and exercisable by Executive and will continue to be exercisable as provided in Section 5.3 hereof, the Plan and related stock option agreement (which shall reflect the terms set forth in Section 5.3 hereof).

9.3 Executive may terminate Executive’s employment at will (without “Good Reason” as defined below) by giving 60 days’ prior written notice to Corporation. Executive shall be entitled to (i) all base salary up to and through the 60-day period after Executive’s notice of termination is given to Corporation, any earned but unpaid bonus and any expense reimbursement amounts owed by the Corporation to the Executive through the date of termination and (ii) any stock options, to the extent vested, may be retained by Executive and will be exercisable as detailed in Section 5.3 hereof, the Plan and applicable stock option agreement (which shall reflect the terms set forth in Section 5.3 hereof). Executive has the right to terminate Executive’s employment for “Good Reason” due to, and within a reasonable period of time following, the occurrence of any of the following: (i) Corporation’s requirement that Executive’s principal place of work relocate more than 50 miles from its location as of the Commencement Date without the written consent of Executive to such relocation, (ii) a material adverse change in Executive’s duties and responsibilities; (iii) any failure by Corporation to pay, or any material reduction by Corporation of, the base salary or any failure by Corporation to pay any incentive compensation to which Executive may be entitled pursuant to Section 5 hereof; or (iv) Corporation creates a work environment designed to constructively terminate Executive or to unlawfully harass or retaliate against Executive In the event that Executive terminates his employment for Good Reason, all of the following will apply: (A) within five days after the termination date, Corporation will pay to Executive any base salary as shall have accrued but remain unpaid as of the termination date, any earned but unpaid bonus and any expense reimbursement amounts owed by the Corporation to the Executive through the date of termination; (B) within five days after the termination date, Corporation will pay to Executive severance compensation in a lump sum cash payment equal to Executive’s base salary then in effect equal to six (6) months; (C) any stock options granted to Executive, to the extent vested, will be retained by the Executive and will be exercisable as detailed in Section 5.3 hereof, the Plan and related stock option agreement (which shall reflect the terms set forth in Section 5.3 hereof); and (D) the vesting of an additional number of shares subject to all options granted to Executive equal to 50% of all such shares (or 100% of all such shares if the Corporation is not the surviving entity in a Corporate Transaction) subject to such options that vest monthly but have not already vested shall immediately accelerate and become fully vested and exercisable by Executive and will continue to be exercisable as provided in Section 5.3 hereof, the Plan and related stock option agreement (which shall reflect the terms set forth in Section 5.3 hereof).

10. Indemnity . Executive warrants and represents that he has full power and authority to enter into and perform this Agreement and that his performance of this Agreement will not violate the provisions of any other agreement to which he is a party. The Corporation agrees to indemnify and hold Executive harmless from and against any and all claims, demands, causes of action, losses, damages, liability, costs and expenses, including attorneys fees arising out of his services hereunder, other than those arising from or

attributable to or resulting from his gross negligence or willful misconduct. The Corporation will name Executive as an officer on any policy of directors and officers liability insurance it secures throughout the term of this Agreement.

11. Non-Competition . In consideration of the Corporation’s entering into this Agreement:

11.1 Executive agrees that during the term of this Agreement he will not directly or indirectly own, manage, operate, join, control, participate in, perform any services for, invest in, or otherwise be connected with, in any manner, whether as an officer, director, employee, consultant, partner, investor or otherwise, any business entity which is engaged in any business in which the Corporation is currently engaged or is engaged at the termination of this Agreement without an approval from the Board. Nothing herein contained shall be deemed to prohibit (i) Executive from maintaining any investments in, and the holding of any securities of, any company to the extent such investments were made or such securities held by Executive prior to the Commencement Date or (ii) investing his funds in securities of a company if the securities of such company are listed for trading on a national securities exchange or traded in the over the counter market and Executive’s holdings therein represent less than 5% of the total number of shares or principal amount of other securities of such company outstanding.

11.2 Executive agrees that Executive will not, during the term hereof or prior to the expiration of one year following the termination of the Executive’s employment for any reason, without the written consent of the Corporation, directly or indirectly, by action alone or in concert with others, solicit for employment or engagement, or advise or recommend to any other person or entity that such person or entity solicit for employment or engagement, any person or entity employed or engaged by the Corporation.

12. Confidentiality Agreement .

12.1 As used herein, the term “Confidential Information” shall mean the any and all information of the Corporation, including, but not limited to, all data, compilations, programs, devices, strategies, or methods concerning or related to (i) the Corporation’s finances, financial condition, results of operations, employee relations, amounts of compensation paid to officers and employees and any other data or information relating to the internal affairs of the Corporation and its operations; (ii) the terms and conditions (including prices) of sales and offers of sales of the Corporation’s products and services; (iii) the terms, conditions and current status of the Corporation’s agreements and relationship with any customer or supplier; (iv) the customer and supplier lists and the identities and business preferences of the Corporation’s actual and prospective customers and suppliers or any employee or agent thereof with whom the Corporation communicates; (v) the trade secrets, manufacturing and operating techniques, price data, costs, methods, systems, plans, procedures, formulas, processes, hardware, software, machines, inventions, designs, drawings, artwork, blueprints, specifications, tools, skills, ideas, and strategic plans possessed, developed, accumulated or acquired by the Corporation; (vi) any communications between the Corporation, its officers, directors, shareholders, or employees, and any attorney retained by the Corporation for any purpose, or any person retained or employed by such attorney for

the purpose of assisting such attorney in his or her representation of the Corporation; (vii) any other non-public information and knowledge with respect to the Corporation’s products, whether developed or in any stage of development by the Corporation; (viii) the abilities and specialized training or experience of others who as employees or consultants of the Corporation during the Executive’s employment have engaged in the design or development of any such products; and (ix) any other matter or thing, whether or not recorded on any medium, (a) by which the Corporation derives actual or potential economic value from such matter or thing being not generally known to other persons or entities who might obtain economic value from its disclosure or use, or (b) which gives the Corporation an opportunity to obtain an advantage over its competitors who do not know or use the same.

12.2 Executive acknowledges and agrees that the Corporation is engaged in a highly competitive business and has expended, or will expend, significant sums of money and has invested, or will invest, a substantial amount of time to develop and maintain the secrecy of the Confidential Information. The Corporation has thus obtained, or will obtain, a valuable economic asset which has enabled, or will enable, it to develop an extensive reputation and to establish long-term business relationships with its suppliers and customers. If such Confidential Information were disclosed to another person or entity or used for the benefit of anyone other than the Corporation, the Corporation would suffer irreparable harm, loss and damage. Accordingly, Executive acknowledges and agrees that, unless the Confidential Information was (a) in the public domain or becomes publicly known through legitimate origins not involving an act or omission by Executive, (b) was in Executive’s possession free of any obligation of confidence at or subsequent to the time such Confidential Information was communicated to Executive; (c) was developed by Executive prior to the date of this Agreement or after the expiration of the term of this Agreement independently of and without reference to any Confidential Information; (c) was known to Executive at the time of disclosure; or (v) was approved for release by written authorization of the Corporation, then:

(i) the Confidential Information is, and at all times hereafter shall remain, the sole property of the Corporation;

(ii) Executive shall use his best efforts and the utmost diligence to guard and protect the Confidential Information from disclosure to any competitor, customer or supplier of the Corporation or any other person, firm, corporation or other entity; and

(iii) unless the Corporation gives Executive prior express written permission, during his employment and thereafter, Executive shall not use for his own benefit, or divulge to any competitor or customer or any other person, firm, corporation, or other entity, any of the Confidential Information which Executive may obtain, learn about, develop or be entrusted with as a result of Executive’s employment by the Corporation.

12.3 Executive also acknowledges and agrees that all documentary and tangible Confidential Information including, without limitation, such Confidential Information as Executive has committed to memory, is supplied or made available by the Corporation to the Executive solely to assist him in performing his services under this Agreement. Executive further agrees that after his employment with the Corporation is terminated for any reason:

(i) Executive shall not remove from the property of the Corporation and shall immediately return to the Corporation, all documentary or tangible Confidential Information in his possession, custody, or control and not make or keep any copies, notes, abstracts, summaries or other record of any type of Confidential Information; and

(ii) Executive shall immediately return to the Corporation any and all other property of the Corporation in his possession, custody or control, including, without limitation, any and all keys, security cards, passes, credit cards and marketing literature.

13. Invention Disclosure . Executive agrees to disclose to the Corporation promptly and fully all ideas, inventions, discoveries, developments or improvements (“Inventions”) that may be made, conceived, created or developed by him (whether such Inventions are developed solely by him or jointly with others) during his employment by the Corporation which either (i) in any way is connected with or related to the actual or contemplated business, work, research or undertakings of the Corporation or (ii) results from or is suggested by any task, project or work that he may do for, in connection with, or on behalf of the Corporation. Notwithstanding the foregoing, this Section 13 shall not apply to any Inventions that meet all of the following requirements: (a) do not relate, at the time of conception, reduction to practice, creation, derivation, development or making of such Invention to the Corporation’s business or actual or demonstrably anticipated research, development or business; and (b) were developed entirely on Executive’s own time; and (c) were developed without use of any of the Corporation’s equipment, supplies, facilities or trade secret information; and (d) did not result from any work Executive performed for the Corporation. Executive agrees that such Inventions shall become the sole and exclusive property of the Corporation and Executive hereby assigns to the Corporation all of his rights to any such Inventions. With respect to Inventions, Executive shall during the period of his employment hereunder and at any time and from time to time hereafter (a) execute all documents requested by the Corporation for vesting in the Corporation the entire right, title and interest in and to the same, (b) execute all documents requested by the Corporation for filing and prosecuting such applications for patents, trademarks and/or copyrights as the Corporation, in its sole discretion, may desire to prosecute, and (c) give the Corporation all assistance it reasonably requires, including the giving of testimony in any suit, action or proceeding, in order to obtain, maintain and protect the Corporation’s right therein and thereto. If any such assistance is required following the termination of Executive’s employment with the Corporation, the Corporation shall reimburse Executive for his lost wages or salary and the reasonable expenses incurred by him in rendering such assistance.

14. Remedies . Executive acknowledges and agrees that the business of the Corporation is highly competitive and that the provisions of Sections 11, 12 and 13 are reasonable and necessary for the protection of the Corporation and that any violation of such covenants would cause immediate, immeasurable and irreparable harm, loss and damage to the Corporation not adequately compensable by a monetary award. Accordingly, the Executive agrees, without limiting any of the other remedies available to the Corporation, that

any violation of said covenants, or any one of them, may be enjoined or restrained by any court of competent jurisdiction, and that any temporary restraining order or emergency, preliminary or final injunctions may be issued by any court of competent jurisdiction, without notice and without bond.

15. Attorneys’ Fees and Costs . In any action between the parties based on this Agreement, the prevailing party shall be entitled to recovery of reasonable attorneys’ fees and out-of-pocket costs incurred by such party in the action.

16. Entire Agreement . This Agreement constitutes the entire agreement of the parties hereto with respect to the matters set forth herein and no amendment or modification hereof shall be valid or binding unless made in writing and signed by both parties hereto.

17. Notices . Any notice, required, permitted or desired to be given pursuant to any of the provisions of this Agreement shall be deemed to have been sufficiently given or served for all purposes if delivered in person or sent by certified mail, return receipt requested, postage and fees prepaid as follows:

if to the Corporation, at:

ImmunoCellular Therapeutics, Ltd.

21900 Burbank Boulevard, 3 ^rd Floor

Woodland Hills, CA 91367

with a copy to:

TroyGould PC

1801 Century Park East, Suite 1600

Los Angeles, California 90067

Attention: Sanford J. Hillsberg

and, if to Executive:

Dr. Manish Singh

23526 Dolorosa Street

Woodland Hills, California 91367

Either of the parties hereto may at any time and from time to time change the address to which notice shall be sent hereunder by notice to the other party given as provided herein. The date of the giving of any notice hereunder shall be the date delivered or if sent by mail, shall be the date of the posting of the mail.

18. Non Assignability . Neither this Agreement nor the right to receive any payments hereunder may be assigned by Executive. This Agreement shall be binding upon Executive and inure to the benefit of his heirs, executors and administrators and be binding upon the Corporation and inure to the benefit of its successors and assigns.

19. Choice of Law And Forum . This Agreement shall be governed, interpreted and construed under the laws of the State of California without regard to its conflict of law principles. 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.

20. Waiver . No course of dealing nor any delay on the part of any party in exercising any rights hereunder shall operate as a waiver of any such rights. No waiver of any default or breach of this Agreement shall be deemed a continuing waiver or a waiver of any other breach or default.

21. Severability . If any provision of this Agreement, including any paragraph, sentence, clause or part thereof, shall be deemed contrary to law or invalid or unenforceable in any respect by a court of competent jurisdiction, the remaining provisions of such paragraph, sentence, clause or part thereof shall not be affected, but shall, subject to the discretion of such court, remain in full force and effect and any invalid and unenforceable provisions shall be deemed, without further action on the part of the parties hereto, modified, amended and limited to the extent necessary to render the same valid and enforceable.

22. Section 409A . If Executive becomes eligible for payments under this Agreement on account of his “separation from service,” within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended, (the “Code”) and Executive is a “specified employee” within the meaning of Section 409A of the Code, as determined by Corporation, any portion of the payments that either do not qualify under the “short-term deferral rule” or exceed two times the lesser of (A) Executive’s “annualized compensation” for the calendar year preceding Executive’s separation from service (in each case, as those terms are defined under Section 409A of the Code), or (B) the maximum amount that may be taken into account under Section 401(a)(17) of the Code for the year in which Executive’s separation from service occurs, and which are not otherwise exempt from Section 409A of the Code, shall be accrued, without interest, and its payment delayed until the first day of the seventh month following Executive’s separation from service, or if earlier, Executive’s death, at which point the accrued amount will be paid in a single, lump sum cash payment. Furthermore, Corporation shall not be required to make, and Executive shall not be required to receive, any severance or other payment or benefit under this Agreement at such time as the making of such payment or the provision of such benefit or the receipt thereof shall result in a tax to Executive arising under Section 409A of the Code. The preceding provisions, however, shall not be construed as a guarantee by the Corporation of any particular tax effect to Executive under this Agreement. The parties agree that for purposes of Section 409A of the Code, the severance amounts payable under this Agreement shall be treated as a right to a series of

separate payments. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Code. This Agreement shall be administered, interpreted and construed in a manner consistent with Section 409A of the Code. The Corporation and Executive agree that they will execute any and all amendments to this Agreement as they mutually agree in good faith may be necessary to ensure compliance with the provisions of Section 409A of the Code.

23. Survival at Termination . The termination of Executive’s employment hereunder by expiration of the term of this Agreement or otherwise shall not affect his obligations to the Corporation hereunder which by the nature thereof are intended to survive any such termination including, without limitation, Executive’s obligations under Sections 11, 12, 13, 14 and 22 hereof.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed as of the date first above set forth.


IMMUNOCELLULAR THERAPEUTICS, LTD.		EXECUTIVE:

By:	/s/ C. Kirk Peacock	/s/ Manish Singh
	C. Kirk Peacock	Dr. Manish Singh
Its:	Chief Financial Officer

EXHIBIT 10.36

AGREEMENT

This agreement (this “ Agreement ”) effective as of March 1, 2010 (the “ Effective Date ”) by and between ImmunoCellular Therapeutics, Ltd., a Delaware corporation (“Company”), and Dr. John Yu, an individual (“Dr. Yu”).

WHEREAS, Dr. Yu has been serving as the Company’s Chief Scientific Officer; and

WHEREAS, the Company and Dr. Yu desire to enter into an agreement under which Dr. Yu shall continue to serve as the Company’s Chief Scientific Officer on the terms set forth in this Agreement, with the term of this Agreement to commence on the Effective Date.

NOW, THEREFORE, upon the above premises, and in consideration of the mutual covenants and agreements hereinafter contained, the Company and Dr. Yu hereto agree as follows.

1. Engagement . Effective as of the Effective Date, the Company shall employ Dr. Yu, and Dr. Yu shall serve, as the Company’s Chief Scientific Officer. The Company acknowledges that Dr. Yu is a full-time employee of Cedars-Sinai Medical Center (“CSMC”) and that Dr. Yu has pre-existing obligations to CSMC and will continue to be subject to the policies and procedures of CSMC. Pursuant to the Full Time Faculty Consulting Guidelines of CSMC, Dr. Yu has received the consent of CSMC to participate in the activities of the Company. A copy of the Consent Memorandum has been provided to the Company. Company and Dr. Yu agree that each will comply with the Consent Memorandum and, in the event of a conflict between this Agreement and the Consent Memorandum, the terms and conditions of the Consent Memorandum shall control.

2. Services . Dr. Yu agrees to provide to the Company services in the capacity of the Company’s Chief Scientific Officer (the “Services”). Dr. Yu will report directly and be responsible to the Company’s Board of Directors (the “Board”). The Services will be those customarily performed by a Chief Scientific Officer for a company such as the Company; provided, however that Dr. Yu shall provide the Services on a part-time basis. Dr. Yu will perform the Services primarily at the Company’s principal executive offices, which shall be in the Los Angeles, California area. Dr. Yu shall perform all duties assigned to him by the Company faithfully, diligently and to the best of his ability. Such duties will include, but are not limited to, directing technology development and evaluation research, giving public presentations on behalf of the Company, and meeting with investors and potential alliance partners.

3. Term . The term for which the Services shall be performed shall commence on the Effective Date and shall terminate one year thereafter, unless sooner terminated by Dr. Yu or the Company as set forth in Section 11.

4. Compensation . As the total consideration for Dr. Yu’s services rendered under this Agreement, the Company shall pay or provide Dr. Yu the following compensation and benefits:

4.1 Salary . Commencing on the Effective Date, Dr. Yu shall be entitled to receive an annual salary of $70,000, which shall be payable in equal bi-weekly payments.

4.2 Stock Options . At the first regularly scheduled meeting of the Board following the Effective Date, the Company shall grant to Dr. Yu a seven-year option to purchase 125,000 shares of the Company’s common stock (“ Option ”) under the Company’s 2006 Equity Incentive Plan (the “ Plan ”) with an exercise price equal to the closing market price on the date of grant. The Option shall vest as to 75,000 shares in four equal quarterly installments following the date of grant and the remaining 50,000 shares shall vest pursuant to the performance milestones described in Section 4.3. The Option grant is subject to approval by the Company’s shareholders of an increase in the authorized number of shares under the Plan.

4.3 Bonus . Dr. Yu shall receive the following bonus payments and vesting of shares under the Option if the following milestones are met:

(a) $15,000 and the vesting of 25,000 shares under the Option if FDA acceptance of a Phase II clinical trial plan for ICT-107 is completed by December 31, 2010; and

(b) $15,000 and the vesting of 25,000 shares under the Option if a PI sponsored IND submission for one of the Company’s product candidates (ICT-107, ICT-207 or ICT-121) has been accepted by the FDA by no later than December 31, 2010.

The Company will have no obligation to pay Dr. Yu any of the cash compensation or vest any of the shares covered by the Option specified in this Section 4.3 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 delay or abandon the development of ICT-107 or any of its other product candidates for any reason.

5. Expenses . The Company shall reimburse Dr. Yu for necessary and reasonable out-of-pocket business expenses incurred by Dr. Yu in the performance of this Agreement in accordance with the reimbursement policies of the Company in effect from time to time.

6. No Benefits . Dr. Yu acknowledges and agrees that he will not be eligible for any Company employee benefits and, to the extent he otherwise would be eligible for any Company employee benefits but for the express terms of this Agreement, Dr. Yu hereby expressly declines to participate in such Company employee benefits.

7. Withholding; Indemnification . Dr. Yu shall have full responsibility for applicable withholding taxes for all compensation paid to him under this Agreement. Dr. Yu agrees to indemnify, defend and hold the Company harmless from any liability for, or assessment of, any claims or penalties with respect to such withholding taxes, labor or employment requirements, including any liability for, or assessment of, withholding taxes imposed on the Company by the relevant taxing authorities with respect to any compensation paid to Dr. Yu.

8. Proprietary Rights . All inventions, improvements, discoveries, copyrightable or patentable works, intellectual property, whether or not patentable or copyrightable, and all other work performed and all materials developed or prepared by Dr. Yu, in connection with the Services provided to the Company in connection with the Company’s technology, whether

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developed or prepared solely or jointly by Dr. Yu with others, are the property of the Company and, as between Dr. Yu and the Company, all rights, title and interest therein shall vest in the Company and shall be deemed to be works made for hire and made in the course of the services described above. To the extent that title to any such works may not, by operation of law, vest in the Company or such works may not be considered works made for hire, all rights, title and interest therein are hereby irrevocably assigned to the Company. All such materials shall belong exclusively to the Company, and the Company shall have the right to obtain and to hold in its own name, copyrights, trademarks, patents, other registrations, or such other protection as may be appropriate to the subject matter, and any extensions and renewals thereof. Dr. Yu agrees to give the Company and any person designated by the Company such reasonable assistance, at the Company’s expense, as is required to perfect the rights defined in this Section. Dr. Yu agrees to return to the Company all materials developed or prepared for the Company by Dr. Yu upon the termination of this Agreement, along with all materials and other property of the Company in Dr. Yu’s possession at the time of termination of this Agreement.

9. Confidential Information .

9.1 Confidentiality Obligations . “Confidential Information” means, collectively: (a) business or technical information of the Company, including but not limited to information relating to the Company’s product plans, designs, costs, product prices and names, finances, marketing plans, business opportunities, personnel, research, development or know-how; (b) any information designated by the Company as “confidential” or “proprietary” or which, under the circumstances taken as a whole, would reasonably be deemed to be confidential; and (c) the terms and conditions of this Agreement. Dr. Yu hereby agrees that, except with respect to any required disclosure to CSMC (which he shall disclose in writing to the Company, including a description of the Confidential Information required to be disclosed, before making such disclosure to CSMC, unless such disclosure relates to a patient safety issue (in which case he shall promptly advise the Company in writing after making such safety issue disclosure to CSMC)), he (x) will not disclose to any third party or use any Confidential Information disclosed to him by the Company except as expressly permitted in this Agreement; (y) will not disclose to the Company any Confidential Information of any third party disclosed to him by such third party without the prior written consent of such third party; and (z) will take all reasonable measures to maintain the confidentiality of all Confidential Information of the Company in his possession or control.

9.2 Exclusions . “Confidential Information” will not include information that is: (i) already lawfully known by the receiving party prior to this Agreement without restriction, (ii) in the public domain due to no fault of the receiving party, (iii) rightfully obtained by the receiving party without similar restriction from such party, (iv) independently developed by the receiving party without reference to the other party’s confidential information, or (v) provided by the disclosing party to another party without similar restriction.

10. Indemnity . Dr. Yu agrees to indemnify and hold the Company harmless from and against any and all claims, demands, causes of action, losses, damages, liabilities, costs, and expenses, including attorneys’ fees, arising from a breach of any of his representations and warranties herein or attributable to or resulting from his gross negligence or willful misconduct in rendering the Services. The Company agrees to indemnify and hold Dr. Yu harmless from

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and against any and all claims, demands, causes of action, losses, damages, liability, costs and expenses, including attorneys fees arising out of his services hereunder, other than those arising from Dr. Yu’s breach of any of his representations and warranties hereunder or Dr. Yu’s gross negligence or willful misconduct.

11. Termination of Services . The term for which the Services will be provided will terminate in advance of the times specified in Section 3 as follows:

11.1 Death . The term of the Services shall terminate immediately upon Dr. Yu’s death.

11.2 Termination by the Company . In the event that Dr. Yu shall become either physically or mentally incapacitated so as to be incapable of performing his duties as required hereunder, and if such incapacity shall continue for a period of 45 consecutive days, the Company may, at its option, terminate the term of the Services and Dr. Yu’s duties hereunder by written notice to Dr. Yu at that time or at any time thereafter while such incapacity continues. The Company may terminate the term of the Services for Cause (as hereinafter defined) at any time upon written notice to Dr. Yu. “Cause” as used in this Agreement means that Dr. Yu, (i) after reasonable notice and warning, has failed to perform his assigned duties to the Company as determined by the Board of Directors, (ii) has materially breached any of the terms or conditions of this Agreement and has failed to correct such breach within 15 days following written notice from the Company of such breach, or (iii) has been charged with a felony or any intentionally fraudulent act that materially damages, or could reasonably be expected to materially damage, the business or reputation of the Company.

11.3 Termination by Dr. Yu . Dr. Yu may terminate the term of the Services at any time upon sixty (60) days written notice to the Company.

11.4 Payments Upon Termination . In the event of termination of this Agreement pursuant to Section 11.1, 11.2 or 11.3, Dr. Yu shall be entitled to (i) all base salary up to and through the date of termination, (ii) any earned but unpaid bonus and any expense reimbursement amounts owed by the Company to Dr. Yu through the date of termination, and (iii) and any stock options, to the extent vested.

12. General Terms .

12.1 Assignment . This Agreement is personal to Dr. Yu. He may not sell, transfer, sublicense, subcontract, hypothecate or assign his rights and duties under this Agreement without the prior written consent of the Company. The Company may freely assign its rights and obligations under this Agreement.

12.2 Notices . Any notices or communications under this Agreement shall be in writing and shall be hand-delivered or sent by certified mail (return receipt requested), or telecopied, or overnight couriered to the party receiving such communication at the address specified below:

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If to the Company:		Dr. Manish Singh, President ImmunoCellular Therapeutics, Ltd. 21900 Burbank Boulevard, 3 ^rd Floor Burbank, California 91367

If to Dr. Yu:		Dr. John Yu Suite 800E 8631 West Third Street Los Angeles, CA 90048

or such other address or addressee as either party may in the future specify to the other party.

12.3 California Law . This Agreement shall be governed by and construed in accordance with the laws of the State of California, excluding its conflicts of laws provisions.

12.4 Dispute Resolution . Any dispute arising out of or relating to this Agreement shall be decided by binding arbitration by JAMS and shall be held in Los Angeles, California. The ruling of the arbitrator shall be final and may be enforced by any party to such arbitration in any court of competent jurisdiction located in Los Angeles, California.

12.5 Amendment . No modification, amendment, supplement to or waiver of the provisions of this Agreement shall be binding upon the parties hereto unless made in writing and duly signed by both parties.

12.6 Waiver . A failure of either party to exercise any right provided for herein shall not be deemed to be a waiver of any right hereunder.

12.7 Entire Agreement . This Agreement sets forth the entire understanding of the parties as to the subject matter therein and may not be modified except in writing executed by both parties.

12.8 Severability . In the event any one or more of the provisions of this Agreement is invalid or otherwise unenforceable, the enforceability of the remaining provisions shall be unimpaired.

12.9 Survival . The following Sections shall survive the termination of this Agreement: 8 (Proprietary Rights), 9 (Confidentiality) and 10 (Indemnity).

12.10 Attorneys Fees . If an arbitration or other legal proceeding is brought to enforce or interpret the provisions of this Agreement or as to the rights or obligations of any party to this Agreement, the prevailing party in such action shall be entitled to recover its reasonable attorneys’ fees and costs.

12.11 Disclosure . The terms of this Agreement may be publicly disclosed by the Company to the extent the Company’s counsel determines that such disclosure is required by law. The Company shall provide Dr. Yu [and CSMC] with a copy of any such disclosure for his review at least three days prior to making such disclosure.

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IN WITNESS WHEREOF, the parties hereto, each acting under due and proper authority, have executed this Agreement as of the date set forth above.


	IMMUNOCELLULAR THERAPEUTICS, LTD.

/s/ John Yu	By:	/s/ Manish Singh
Dr. John Yu	Name:	Dr. Manish Singh
	Title:	President and Chief Executive Officer

Date:	Date:

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EXHIBIT 23.1

CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

We consent to the incorporation by reference in the following Registration Statements:

1. Registration Statement (Form S-8 No. 333-155199) pertaining to the 2006 Equity Incentive Plan;

2. Registration Statement (Form S-8 No. 333-151968) pertaining to the 2006 Equity Incentive Plan; and

3. Registration Statement (Form S-8 No. 333-150277) pertaining to the 2006 Equity Incentive Plan;

and related Prospectuses of ImmunoCellular Therapeutics, Ltd. of our report of Independent Registered Public Accounting Firm dated March 29, 2010 covering the financial statements of ImmunoCellular Therapeutics, Ltd. as of December 31, 2008 and 2009 and for the years ended December 31, 2007, 2008 and 2009 and for the period from inception of operations (February 25, 2004) to December 31, 2009.

/s/ STONEFIELD JOSEPHSON, INC.

Los Angeles, California

March 29, 2010

EXHIBIT 31.1

Certification of the Principal Executive Officer Under Section 302 of the Sarbanes-Oxley Act

I, Manish Singh, certify that:

1.	I have reviewed this report on Form 10-K 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;

The registrant’s 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 annual 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 registrant’s 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 registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s 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 registrant’s 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 registrant’s internal control over financial reporting.




Date:	March 30, 2010	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-K 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;

The registrant’s 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)

(b)

(c)

(d)

5.	The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a)

(b)

Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.




Date:	March 30, 2010	By:	/s/ C. Kirk Peacock
		Name:	C. Kirk Peacock
		Title:	Chief Financial Officer

EXHIBIT 32.1

CERTIFICATION OF THE PRINCIPAL EXECUTIVE OFFICER

Pursuant to 18 U.S.C. § 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned officer of ImmunoCellular Therapeutics, Ltd. (the “Company”) hereby certifies that, to his knowledge:

(i) The Annual Report on Form 10-K of the Company for the fiscal year ended December 31, 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

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Date:	March 30, 2010	By:	/s/ Manish Singh
		Name:	Manish Singh, Ph.D.
		Title:	President and Chief Executive Officer

EXHIBIT 32.2

CERTIFICATION OF THE PRINCIPAL FINANCIAL OFFICER

(ii) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.




Date:	March 30, 2010	By:	/s/ C. Kirk Peacock
		Name:	C. Kirk Peacock
		Title:	Chief Financial Officer