UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

(Mark One)

[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended April 30, 2014

 

[  ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT

 

For the transition period from _____________ to _____________

 

Commissions file number 000-28489

 

ADVAXIS, INC.
(Exact name of registrant as specified in its charter)

 

Delaware   02-0563870
(State or other jurisdiction of incorporation or organization)   (IRS Employer Identification No.)

 

305 College Road East, Princeton, NJ 08540
(Address of principal executive offices)
 
(609) 452-9813
(Registrant’s telephone number)
 
 
(Former name, former address and former fiscal year, if changed since last report)

 

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

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes [X]   No [  ]

 

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

 

Large accelerated filer [  ] Accelerated filer [  ] Non-accelerated filer [  ] Smaller Reporting Company [X]

 

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

 

The number of shares of the registrant’s common stock, $0.001 par value, outstanding as of June 3, 2014 was 19,274,103

 

 

 

 
 

 

INDEX

 

     

Page No.

       
PART I FINANCIAL INFORMATION  
       
Item 1. Condensed Financial Statements   F-1
       
  Balance Sheets at April 30, 2014 (unaudited) and October 31, 2013   F-1
       
  Statements of Operations for the three and six month periods ended April 30, 2014 and 2013   F-2
       
  Statements of Cash Flow for the six month periods ended April 30, 2014 and 2013   F-3
       
  Notes to Financial Statements   F-5
       
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations   3
       
Item 3. Quantitative and Qualitative Disclosures About Market Risk   11
       
Item 4. Controls and Procedures   11
       
PART II OTHER INFORMATION   12
       
Item 1. Legal Proceedings   12
       
Item 1A. Risk Factors   12
       
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds   13
       
Item 5. Other Information   14
       
Item 6. Exhibits   15
       
SIGNATURES   16

 

All other items called for by the instructions to Form 10-Q have been omitted because the items are not applicable or the relevant information is not material.

 

2
 

 

  PART I – FINANCIAL INFORMATION

 

Item 1. Condensed Financial Statements

 

ADVAXIS, INC.

BALANCE SHEETS

 

    April 30, 2014
(unaudited)
    October 31, 2013  
ASSETS                
Current Assets:                
Cash   $ 27,574,332     $ 20,552,062  
Prepaid Expenses     260,197       31,255  
Other Current Assets     58,182       8,182  
Deferred Expenses - current     153,016       218,007  
Total Current Assets     28,045,727       20,809,506  
                 
Deferred Expenses – long term     62,477       129,041  
Property and Equipment (net of accumulated depreciation)     91,174       80,385  
Intangible Assets (net of accumulated amortization)     2,629,595       2,528,551  
Other Assets     38,438       38,438  
                 
TOTAL ASSETS   $ 30,867,411     $ 23,585,921  
                 
LIABILITIES AND SHAREHOLDERS’ EQUITY                
Current Liabilities:                
Accounts Payable   $ 1,607,233     $ 3,841,771  
Accrued Expenses     1,452,060       869,260  
Short Term Convertible Notes and Fair Value of Embedded Derivative     62,882       62,882  
Notes Payable – Former Officer     -       163,132  
Total Current Liabilities     3,122,175       4,937,045  
                 
Common Stock Warrant Liability     245,374       646,734  
Total Liabilities     3,367,549       5,583,779  
                 
Commitments and Contingencies                
Shareholders’ Equity:                
Common Stock - $0.001 par value; authorized 25,000,000 shares, issued and outstanding 19,102,601 at April 30, 2014 and 13,719,861 at October 31, 2013.     19,103       13,720  
Additional Paid-In Capital     105,448,591       88,454,245  
Accumulated Deficit     (77,967,832 )     (70,465,823 )
Total Shareholders’ Equity     27,499,862       18,002,142  
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY   $ 30,867,411     $ 23,585,921  

 

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

 

F- 1
 

 

ADVAXIS, INC.

STATEMENTS OF OPERATIONS

(unaudited)

 

    Three Months Ended
April 30,
    Six Months Ended
April 30,
 
    2014     2013     2014     2013  
                         
Revenue   $ 1,000,000     $ -     $ 1,000,000     $ -  
                                 
Operating Expenses                                
Research and Development Expenses     1,544,922       2,112,756       3,104,789       3,091,859  
General and Administrative Expenses     2,051,055       3,364,041       6,448,891       4,565,992  
Total Operating Expenses     3,595,977       5,476,797       9,553,680       7,657,851  
                                 
Loss from Operations     (2,595,977 )     (5,476,797 )     (8,553,680 )     (7,657,851 )
                                 
Other Income (expense):                                
Interest Expense     (3,238 )     (95,986 )     (5,253 )     (457,162 )
Other Income     10,749       21,344       19,321       1,446  
Gain on note retirement     -       194,795       6,243       347,286  
Net changes in fair value of derivative liabilities     273,849       79,838       405,797       (3,943,761 )
Net Loss before benefit for income taxes     (2,314,617 )     (5,276,806 )     (8,127,572 )     (11,710,042 )
                                 
Income tax benefit     -       -       625,563       725,190  
                                 
Net Loss     (2,314,617 )     (5,276,806 )     (7,502,009 )     (10,984,852 )
                                 
Dividends attributable to preferred shares     -       185,000       -       370,000  
                                 
Net Loss applicable to Common Stock   $ (2,314,617 )   $ (5,461,806 )   $ (7,502,009 )   $ (11,354,852 )
                                 
Net Loss per share, basic and diluted   $ (0.15 )   $ (1.29 )   $ (0.51 )   $ (2.90 )
                                 
Weighted average number of shares outstanding, basic and diluted     15,749,434       4,230,560       14,779,983       3,912,625  

   

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

  

F- 2
 

 

ADVAXIS, INC.
STATEMENTS OF CASH FLOWS
(unaudited)

 

    Six Months Ended
April 30,
 
    2014     2013  
OPERATING ACTIVITIES                
Net Loss   $ (7,502,009 )   $ (10,984,852 )
Adjustments to reconcile Net Loss to net cash used in operating activities:                
Non-cash charges to consultants and employees for options and stock     2,345,301       2,768,524  
Amortization of deferred financing costs     -       25,177  
Amortization of discount on convertible promissory notes     -       18,392  
Non-cash interest expense     51       396,111  
(Gain) Loss on change in value of warrants and embedded derivative     (405,797 )     3,943,761  
Warrant expense     4,437       24,467  
Settlement expense     34,125       364,335  
Employee Stock Purchase Plan     5,371       14,250  
Depreciation expense     13,806       9,184  
Amortization expense of intangibles     84,616       77,811  
(Gain) Loss on note retirement     (6,243 )     (347,286 )
Changes in operating assets and liabilities:                
Decrease (Increase) in prepaid expenses     (228,941 )     6,128  
(Increase) in other current assets     (50,000 )     (50,000 )
Decrease in deferred expenses     131,556       268,261  
Increase (Decrease) in accounts payable and accrued expenses     (1,850,985 )     69,967  
(Decrease) in deferred rent     -       (4,803 )
(Decrease) Increase in interest payable     (98,192 )     17,642  
Net cash used in operating activities     (7,522,904 )     (3,382,931 )
                 
INVESTING ACTIVITIES                
Purchase of property and equipment     (24,595 )     -  
Cost of intangible assets     (185,660 )     (64,748 )
Net cash used in Investing Activities     (210,255 )     (64,748 )
                 
FINANCING ACTIVITIES                
Proceeds from convertible notes     -       1,453,500  
Payment of deferred offering expenses     -       (3,500 )
Proceeds from Officer Loan     -       11,200  
Repayment of Officer Loan     (64,926 )     (85,700 )
Proceeds from exercise of warrants     250       94,444  
Net proceeds of issuance of common stock     14,820,105       2,987,932  
Net cash provided by Financing Activities     14,755,429       4,457,876  
Net increase in cash     7,022,270       1,010,197  
Cash at beginning of period     20,552,062       232  
Cash at end of period   $ 27,574,332     $ 1,010,429  

  

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

 

F- 3
 

 

Supplemental Disclosures of Cash Flow Information

 

    Six months ended
April 30,
 
    2014     2013  
Cash paid for Interest   $ 105,409     $ 188  

 

Supplemental Schedule of Non-cash Investing and Financing Activities

 

    Six months ended
April 30,
 
    2014     2013  
Accounts Payable from consultants settled with Common Stock   $ 3,000     $ -  
Notes payable and embedded derivative liabilities converted to Common Stock   $ -     $ 1,384,099  
Accrued Legal fees included in financing costs   $ 239,297     $ -  

 

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

 

F- 4
 

 

  ADVAXIS, INC.
NOTES TO THE FINANCIAL STATEMENTS
(unaudited)

 

1. ORGANIZATION

 

Advaxis, Inc. (“Advaxis” or the “Company”) is a clinical stage biotechnology company focused on the discovery, development and commercialization of proprietary Lm - LLO cancer immunotherapies. These immunotherapies are based on a platform technology that utilizes live attenuated Listeria monocytogenes (“ Lm” ), bioengineered to secrete antigen/adjuvant fusion proteins. These Lm -LLO strains are believed to be a significant advancement in immunotherapy as they integrate multiple functions into a single immunotherapy as they access and direct antigen presenting cells to stimulate anti-tumor T-cell immunity, stimulate and activate the immune system with the equivalent of multiple adjuvants, and simultaneously reduce tumor protection in the tumor microenvironment to enable the T-cells to eliminate tumors. Other immunotherapies may employ individual elements of the Company’s comprehensive approach, but, to its knowledge, none combine all of these elements together in a single, easily administered, well-tolerated yet comprehensive immunotherapy.

 

ADXS-HPV is Advaxis’ lead immunotherapy product candidate for the treatment of human papilloma virus (“HPV”)-associated cancers.   The Company completed a Phase 2 study in 109 patients with recurrent cervical cancer in India that demonstrated a manageable safety profile, improved survival and objective tumor responses.   The Company plans to advance this immunotherapy into registrational trials for the treatment of women with recurrent cervical cancer. ADXS-HPV has received orphan drug designation for three HPV-associated cancers: cervical, head and neck, and anal cancer, and is being evaluated in three ongoing cooperative group and investigator-initiated clinical trials as follows: locally advanced cervical cancer (with the Gynecologic Oncology Group), head and neck cancer (with the Icahn School of Medicine at Mount Sinai, U.S.); and anal cancer (Brown University, Oncology Group, U.S.). Advaxis is also developing two other cancer immunotherapies: ADXS-PSA for the treatment of prostate cancer; and ADXS-cHER2 that targets the HER2 receptor, which is overexpressed in certain solid-tumor cancers, including osteosarcoma in human and canine, and breast cancer.  The Company has received orphan drug designation for ADXS-cHER2 in osteosarcoma. Over twenty distinct additional constructs have been developed to various stages of development, developed directly by the Company and through strategic collaborations with recognized centers of excellence.

 

Since inception in 2002, the Company has focused its development efforts on understanding its platform technology and establishing a drug development pipeline that incorporates this technology into therapeutic cancer immunotherapies, currently those targeting HPV-associated cancer (cervical cancer, head and neck cancer and anal cancer), prostate cancer, and HER2 overexpressing cancers. Although no immunotherapies have been commercialized to date, research and development and investment continues to be placed behind the advancement of this technology. Pipeline development and the further exploration of the technology for advancement entails risk and expense. The Company anticipates that its ongoing operational costs will increase significantly as it continues conducting its clinical development program.

 

From inception through the period ended January 31, 2014, Advaxis Inc. was a development stage company. In the current period, the Company exited the development stage upon its execution of a license agreement with Aratana Therapeutics Inc. (“Aratana”). This provided an upfront payment of $1M, in the current period, which the Company recognized and earned as revenue.

 

Liquidity and Financial Condition

 

The Company’s products are being developed and have not generated significant revenues. As a result, the Company has suffered recurring losses. These losses are expected to continue for an extended period of time.  However, in the three months ended April 30, 2014, the Company recorded $1 million in revenue pursuant to a licensing agreement with Aratana. The licensing agreement provides for potentially significant revenues based on the achievement of event-based milestones in the future. In addition, the Company completed a public offering of its common stock in October 2013, resulting in $24.3 million in net proceeds, and an additional public offering in March 2014, resulting in $12.6 million in net proceeds. Lastly, the Company received $1.9 million in net proceeds from Aratana Therapeutics and Global Biopharma Inc., related to the purchase of common stock. The Company believes its current cash position is sufficient to fund its business plan through its fiscal year ending October 31, 2015.

 

The Company recognizes it will need to raise additional capital over and above the amount raised during both October 2013 and March 2014 in order to continue to execute its business plan. Subsequent to April 30, 2014, the Company may plan to continue to raise additional funds through the sales of equity securities. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company or whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to scale back its business plan, extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

 

F- 5
 

 

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES AND BASIS OF PRESENTATION

 

Basis of Presentation - Unaudited Interim Financial Information

 

The accompanying unaudited interim condensed financial statements and related notes have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) for interim financial information, and in accordance with the rules and regulations of the United States Securities and Exchange Commission (the “SEC”) with respect to Form 10-Q and Article 8 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. The unaudited interim financial statements furnished reflect all adjustments (consisting of normal recurring accruals) which are, in the opinion of management, necessary to represent a fair statement of the results for the interim periods presented. Interim results are not necessarily indicative of the results for the full year. These unaudited interim financial statements should be read in conjunction with the financial statements of the Company for the year ended October 31, 2013 and notes thereto contained in the Company’s annual report on Form 10-K for the year ended October 31, 2013, as filed with the SEC on January 29, 2014.

 

Revenue Recognition

 

The Company is expected to derive the majority of its revenue in 2014 from patent licensing. In general, these revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. The intellectual property rights granted may be perpetual in nature, or upon the final milestones being met, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. The Company recognizes licensing fees when there is persuasive evidence of a licensing arrangement, fees are fixed or determinable, delivery has occurred and collectability is reasonably assured.

 

An allowance for doubtful accounts is established based on the Company’s best estimate of the amount of probable credit losses in the Company’s existing license fee receivables, using historical experience. The Company reviews its allowance for doubtful accounts periodically. Past due accounts are reviewed individually for collectability.

 

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, this is yet to occur.

 

If product development is successful, the Company will recognize revenue from royalties based on licensees’ sales of its products or products using its technologies. Royalties are recognized as earned in accordance with the contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received.

 

The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event and collection is reasonably assured. If these criteria are not met, the Company recognizes milestone payments ratably over the remaining period of the Company’s performance obligations under the collaboration agreement. All such recognized revenues are included in collaborative licensing and development revenue in the Company’s consolidated statements of operations.

 

Estimates

 

The preparation of financial statements in accordance with GAAP involves the use of estimates and assumptions that affect the recorded amounts of assets and liabilities as of the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Significant estimates include the fair value and recoverability of the carrying value of intangible assets (patents and licenses), the fair value of options, the fair value of embedded conversion features, warrants and related disclosure of contingent assets and liabilities. On an on-going basis, the Company evaluates its estimates, based on historical experience and on various other assumptions that it believes to be reasonable under the circumstances. Actual results may differ from estimates.

 

Concentration of Credit Risk

 

The Company maintains its cash in bank deposit accounts (checking) that at times exceed federally insured limits. Approximately $27.0 million is subject to credit risk at April 30, 2014. However, these cash balances are maintained at creditworthy financial institutions. The Company has not experienced any losses in such accounts and believes it is not exposed to any significant credit risk.

 

F- 6
 

 

Net Loss per Share

 

Basic net income or loss per common share is computed by dividing net income or loss available to common shareholders by the weighted average number of common shares outstanding during the period. Diluted earnings per share give effect to dilutive options, warrants, convertible debt and other potential common stock equivalents outstanding during the period. Therefore, in the case of a net loss the impact of the potential common stock resulting from warrants, outstanding stock options and convertible debt are not included in the computation of diluted loss per share, as the effect would be anti-dilutive. In the case of net income the impact of the potential common stock resulting from these instruments that have intrinsic value are included in the diluted earnings per share. The table sets forth the number of potential shares of common stock that have been excluded from diluted net loss per share.

 

    As of April 30,  
    2014     2013  
Warrants     4,541,454       890,799  
Stock Options     491,923       480,899  
Shares earned but not issued     206,989       9,897  
Convertible Debt (using the if-converted method)     3,354       333,047  
Total     5,243,720       1,714,642  

 

Stock Based Compensation

 

The Company has an equity plan which allows for the granting of stock options to its employees, directors and consultants for a fixed number of shares with an exercise price equal to the fair value of the shares at date of grant.  The Company measures the cost of services received in exchange for an award of equity instruments based on the fair value of the award. For employees and directors, the fair value of the award is measured on the grant date and for non-employees, the fair value of the award is generally re-measured on interim financial reporting dates until the service period is complete. The fair value amount is then recognized over the period during which services are required to be provided in exchange for the award, usually the vesting period.

 

The above stock-based compensation for employees, executives and directors is measured based on the fair value of the shares issued on the date of grant and is recognized over the requisite service period in both research and development expenses and general and administrative expenses on the statement of operations.

 

Fair Value of Financial Instruments

 

The carrying amounts of financial instruments, including cash, accounts payable and accrued expenses approximated fair value as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the financing arrangements issued approximate fair value as of the balance sheet date presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates, anti-dilution protection and associated warrants.

 

Recent Accounting Pronouncements

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying condensed financial statements.

 

F- 7
 

 

3. PROPERTY AND EQUIPMENT

 

Property and equipment consists of the following:

 

    April 30, 2014
(Unaudited)
    October 31, 2013  
Laboratory Equipment   $ 333,727     $ 309,132  
Accumulated Depreciation     (242,553 )     (228,747 )
Net Property and Equipment   $ 91,174     $ 80,385  

 

Depreciation expense for the three and six months ended April 30, 2014 and 2013 was $6,903, $13,806, $4,592 and $9,184, respectively.

 

4. INTANGIBLE ASSETS

 

Under the University of Pennsylvania (“Penn”) license agreements, the Company is billed actual patent expenses as they are passed through from Penn and are billed directly from our patent attorney. The following is a summary of intangible assets as of the end of the following fiscal periods:

 

    April 30, 2014
(Unaudited)
    October 31, 2013  
License   $ 651,992     $ 651,992  
Patents     2,882,203       2,696,543  
Total intangibles     3,534,195       3,348,535  
Accumulated Amortization     (904,600 )     (819,984 )
Intangible Assets   $ 2,629,595     $ 2,528,551  

 

The expirations of the existing patents range from 2014 to 2028 but the expirations can be extended based on market approval if granted and/or based on existing laws and regulations. Capitalized costs associated with patent applications that are abandoned without future value are charged to expense when the determination is made not to pursue the application. No patent applications with future value were abandoned or expired and charged to expense in the three and six months ended April 30, 2014 or 2013. Amortization expense for licensed technology and capitalized patent costs are included in general and administrative expenses and aggregated $42,682, $84,616, $39,108, and $77,811, respectively, for the three and six months ended April 30, 2014 and 2013.

 

Estimated amortization expense for the next five years is as follows:

 

Year ended October 31,    
2014 (Remaining) 82,500  
2015 167,500  
2016 167,500  
2017 167,500  
2018 167,500  

 

5. ACCRUED EXPENSES:

 

The following table represents the major components of accrued expenses:

 

    April 30, 2014
(Unaudited)
    October 31, 2013  
Salaries and Other Compensation   $ 601,181     $ 508,979  
Severance Pay   260,193       243,269  
Clinical Trial Related - Toxicology     162,325       -  
Consultants     2,000       2,000  
Legal     315,136       15,000  
Withholding Taxes Payable     11,213       -  
Share Purchase     100,012       100,012  
    $ 1,452,060     $ 869,260  

 

F- 8
 

 

6. SHORT-TERM CONVERTIBLE NOTES & FAIR VALUE OF EMBEDDED DERIVATIVE

 

As of April 30, 2014 and October 31, 2013, the Company had $62,882 in principal outstanding on its junior subordinated convertible promissory notes that are currently overdue and are recorded as current liabilities in its balance sheet at April 30, 2014 and October 31, 2013.

 

7. NOTES PAYABLE- FORMER OFFICER:

 

As of October 31, 2013, the Company owed $163,132 in principal and accrued interest to its former Chairman. During the three and six months ended April 30, 2014 and 2013, the Company recorded interest expense of approximately $3,200, $5,253, $9,500 and $17,642 in interest on these notes, respectively. On February 4, 2014, the Company paid Mr. Moore $168,280 in principal and accrued interest, in full satisfaction of these Notes.

 

8. DERIVATIVE INSTRUMENTS

 

Warrants

 

A summary of changes in warrants for the six months ended April 30, 2014 is as follows:

 

    Number of       Weighted-Average  
    Warrants     Exercise Price  
Outstanding Warrants at October 31, 2013:     4,265,262     $ 6.71  
Issued     288,567     $ 5.49  
Exercised     (250 )   $ 5.00  
Expired     (12,125 )   $ 21.25  
Outstanding Warrants at April 30, 2014:     4,541,454     $ 6.60  

 

At April 30, 2014, the Company had approximately 3.9 million of its total 4.5 million outstanding warrants classified as equity (equity warrants).  At October 31, 2013, the Company had approximately 3.7 million of its total 4.3 million outstanding warrants classified as equity (equity warrants). At issuance, equity warrants are recorded at their relative fair values, using the Relative Fair Value Method, in the shareholders’ equity section of the balance sheet. The equity warrants can only be settled through the issuance of shares and are not subject to anti-dilution provisions. During the six months ended April 30, 2014, the Company issued 153,061 equity warrants to Aratana Therapeutics Inc. pursuant to a Licensing Agreement (See Footnote - 11: Shareholders’ Equity). These warrants expire in March 2024 and have an exercise price of $4.90. In addition, during the six months ended April 30, 2014, the Company issued 100,000 equity warrants to Global BioPharma Inc. pursuant to a Stock Purchase Agreement. These warrants expire in December 2018 and have an exercise price of $5.52.

 

At April 30, 2014, the Company had approximately 0.6 million of its total 4.5 million outstanding warrants classified as liability warrants (common stock warrant liability). At October 31, 2013, the Company had approximately 0.6 million of its total 4.3 million outstanding warrants classified as liability warrants (common stock warrant liability). During the six months ended April 30, 2014, the Company issued 35,506 liability warrants, at exercise prices ranging from $7.86 to $9.16, as a result of existing anti-dilution provisions. The fair value of the warrant liability, as of April 30, 2014, was approximately $0.2 million. The fair value of the warrant liability, as of October 31, 2013 was approximately $0.6 million. In fair valuing the warrant liability, at April 30, 2014 and October 31, 2013, the Company used the following inputs in its Black-Scholes Model (“BSM”):

 

    04/30/2014     10/31/2013  
             
Exercise Price:   $ 2.76-21.25     $ 2.76-21.25  
                 
Stock Price   $ 2.72     $ 3.74  
                 
Expected term:     11-1193 days       61-1371 days  
                 
Volatility %     59%-114 %     99%-186 %
                 
Risk Free Rate:     .02%-.87 %     .035%-.94 %

 

F- 9
 

 

Warrant Liability/Embedded Derivative Liability

 

Warrant Liability

 

As of April 30, 2014, the Company had approximately 589,000 of its total approximately 4.5 million total warrants classified as liabilities (liability warrants). Of these 589,000 liability warrants, approximately 311,000 warrants are outstanding and approximately 278,000 warrants are exchange warrants – nonexercisable. The Company utilizes the BSM to calculate the fair value of these warrants at issuance and at each subsequent reporting date. For those warrants with exercise price reset features (anti-dilution provisions), the Company computes multiple valuations, each quarter, using an adjusted BSM, to account for the various possibilities that could occur due to changes in the inputs to the BSM as a result of contractually-obligated changes (for example, changes in strike price to account for down-round provisions). The Company effectively weights each calculation based on the likelihood of occurrence to determine the value of the warrants at the reporting date. At April 30, 2014, approximately 238,000 of the 589,000 liability warrants are subject to weighted-average anti-dilution provisions. A certain number of liability warrants contain a cash settlement provision in the event of a fundamental transaction (as defined in the common stock purchase warrant). Any changes in the fair value of the warrant liability (i.e. - the total fair value of all outstanding liability warrants at the balance sheet date) between reporting periods will be reported on the statement of operations.

 

As of October 31, 2013, the Company had approximately 565,000 of its total approximately 4.3 million total warrants classified as liabilities (liability warrants). Of these 565,000 liability warrants, approximately 287,000 warrants are outstanding and approximately 278,000 warrants are exchange warrants – nonexercisable. The Company utilizes the BSM to calculate the fair value of these warrants at issuance and at each subsequent reporting date. For those warrants with exercise price reset features (anti-dilution provisions), the Company computes multiple valuations, each quarter, using an adjusted BSM, to account for the various possibilities that could occur due to changes in the inputs to the BSM as a result of contractually-obligated changes (for example, changes in strike price to account for down-round provisions). The Company effectively weights each calculation based on the likelihood of occurrence to determine the value of the warrants at the reporting date. At October 31, 2013, approximately 203,000 of the 565,000 liability warrants are subject to anti-dilution provisions. A certain number of liability warrants contain a cash settlement provision in the event of a fundamental transaction (as defined in the common stock purchase warrant). Any changes in the fair value of the warrant liability (i.e. - the total fair value of all outstanding liability warrants at the balance sheet date) between reporting periods will be reported on the statement of operations.

 

At April 30, 2014 and October 31, 2013, the fair value of the warrant liability was $245,374 and $646,734, respectively. For the three months ended April 30, 2014 and 2013, the Company reported income of $273,849 and $79,838, respectively, due to changes in the fair value of the warrant liability. For the six months ended April 30, 2014 and 2013, the Company reported income of $405,797 and a loss of $3,943,761, respectively, due to changes in the fair value of the warrant liability.

 

Warrants with anti-dilution provisions

 

Some of the Company’s warrants (approximately 238,000) contain anti-dilution provisions originally set at $25.00 with a term of five years. As of April 30, 2014, these warrants had an exercise price of approximately $7.86. As of October 31, 2013, these warrants had an exercise price of approximately $9.24. If the Company issues any common stock, except for exempt issuances as defined in the warrant agreement for consideration less than the exercise price then the exercise price and the amount of warrant shares available would be adjusted to a new price and amount of shares per the “weighted average” formula included in the warrant agreement. For the three and six months ended April 30, 2014, this anti-dilution provision required the Company to issue approximately 34,000 and 35,700 additional warrant shares, respectively; and the exercise price to be lowered to $7.86. Any future financial offering or instrument issuance below the current exercise price of $7.86 will cause further anti-dilution and re-pricing provisions in approximately 238,000 of our total outstanding warrants.

 

For those warrants with exercise price reset features (anti-dilution provisions), the Company computes multiple valuations, each quarter, using an adjusted BSM, to account for the various possibilities that could occur due to changes in the inputs to the BSM as a result of contractually-obligated changes (for example, changes in strike price to account for down-round provisions). The Company utilized different exercise prices of $7.86 and $6.50, weighting the possibility of warrants being exercised at $7.86 between 40% and 50% and warrants being exercised at $6.50 between 60% and 50%.

 

As of April 30, 2014, there were outstanding warrants to purchase 4,541,454 shares of the Company’s Common Stock including exchange warrants - nonexercisable to purchase 278,329 shares of the Company’s Common Stock with exercise prices ranging from $2.76 to $21.25 per share.

 

F- 10
 

 

9. STOCK OPTIONS:

 

A summary of changes in the stock option plan for six months ended April 30, 2014 is as follows:

 

    Number of       Weighted-Average  
    Options     Exercise Price  
Outstanding at October 31, 2013:     467,923     $ 15.86  
Granted     36,000     $ 4.02  
Exercised     -     $ -  
Expired     (12,000 )   $ 13.63  
Outstanding at April 30, 2014     491,923     $ 14.91  
Vested and Exercisable at April 30, 2014     396,737     $ 15.86  

 

Total compensation cost related to the Company’s outstanding stock options, recognized in the statement of operations for the three months ended April 30, 2014, was $260,000 of which approximately $98,000 was included in research and development expenses and approximately $162,000 was included in general and administrative expenses. For the three months ended April 30, 2013, compensation cost related to the Company’s outstanding stock options was approximately $1.9 million, of which approximately $805,000 was included in research and development expenses and approximately $1.1 million was included in general and administrative expenses. For the six months ended April 30, 2014, compensation cost related to the Company’s outstanding stock options was approximately $517,000 of which approximately $188,000 was included in research and development expenses and approximately $329,000 was included in general and administrative expenses. For the six months ended April 30, 2013, compensation cost related to the Company’s outstanding stock options was approximately $2.3 million of which approximately $915,000 was included in research and development expenses and approximately $1.4 million was included in general and administrative expenses.

 

The fair value of the options granted for the six months ended April 30, 2014 and 2013 amounted to approximately $145,000 and $1,582,500, respectively.

 

As of April 30, 2014, there was approximately $1,044,000 of unrecognized compensation cost related to non-vested stock option awards, which is expected to be recognized over a remaining average vesting period of 0.80 years.

 

The aggregate intrinsic value of these outstanding options, as of April 30, 2014, was $0.

 

10. COMMITMENTS AND CONTINGENCIES

 

Resignation of Mark Rosenblum

 

On March 24, 2014, Mark J. Rosenblum, Senior Vice President, Chief Financial Officer and Secretary of the Company, resigned. In connection with Mr. Rosenblum’s resignation, the Company and Mr. Rosenblum entered into a separation agreement (the “Separation Agreement”). The Separation Agreement provides for severance benefits of, among other things, one year’s salary of $275,000 payable in equal bi-weekly payments over a period of twelve (12) months as well as accelerated vesting of Mr. Rosenblum’s stock and option awards which resulted in the Company recording approximately $209,000 in stock compensation expense on the statement of operations representing 66,667 shares of our common stock (38,700 shares on a net basis after employee payroll taxes).

 

F- 11
 

 

Appointment of New Chief Financial Officer

 

On March 24, 2014, the Company’s board of directors appointed Sara M. Bonstein to serve as the Company’s Chief Financial Officer. The Company and Ms. Bonstein entered into an employment agreement (the “Bonstein Employment Agreement”) that provides for Ms. Bonstein’s appointment as Chief Financial Officer, which took effect as of such date. The Bonstein Employment Agreement provides for an initial term of one year, after which it will be automatically renewed for one year periods unless otherwise terminated by either party upon ninety (90) days written notice prior to the expiration of the applicable term. Ms. Bonstein is entitled to a base salary of $225,000 per year (plus annual cost-of-living adjustments), which salary will be reviewed on an annual basis by the Company’s Chief Executive Officer and Compensation Committee.

 

Ms. Bonstein voluntarily agreed to utilize a percentage of her base salary for stock compensation. Ms. Bonstein will receive ninety-two and one-half percent (92.5%) of her base salary in the form of cash and seven and one-half percent (7.5%) of her base salary in the form of common stock of the Company. The Bonstein Employment Agreement contains provisions with respect to bonus and equity participation which are consistent with the terms of the Company’s employment agreements with its other executive officers, as well as other customary covenants regarding non-solicitation, non-compete, confidentiality and works for hire. See “Employment Agreements” immediately below for a discussion of an amendment to the Bonstein Employment Agreement.

 

Employment Agreements

 

On June 5, 2014, the Company and each of Daniel J. O’Connor, Chief Executive Officer and President, Gregory T. Mayes, Executive Vice President, Chief Operating Officer and Secretary, Robert G. Petit, Executive Vice President and Chief Scientific Officer, Sara M. Bonstein, Senior Vice President, Chief Financial Officer and Chris L. French, Vice President, Regulatory & Medical Affairs (each an “Executive”), voluntarily entered into an amendment (each, an “Amendment” and collectively, the “Amendments”) to their respective Employment Agreements (each, an “Employement Agreement”). The Amendments provide that the applicable stock component will now occur on the last business day of each calendar month and will be effected through a direct purchase from the Company at a purchase price equal to the consolidated closing bid price of the Common Stock on the purchase date. The Executives acknowledged and agreed that the Company has not filed a Registration Statement on Form S-8 (or any other registration form) that covers the shares of Common Stock issuable pursuant to the Amendments. Previously, the stock compensation was acquired by the Executives on the last business day of each fiscal quarter of the Company in accordance with the terms and provisions of the Company’s 2011 Omnibus Incentive Plan.

 

Under the terms of each Amendment, all of the Executives voluntarily agreed to utilize a percentage of their base salary for stock compensation. The allocation between the cash and equity components of each Executive’s base salary is as follows:

 

    % of base salary     % of base salary  
Executive   in cash     in stock  
Daniel J. O’Connor     75.0       25.0  
Gregory T. Mayes     92.5       7.5  
Sara M. Bonstein     92.5       7.5  
Robert G. Petit     91.5       8.5  
Chris L. French     95.0       5.0  

 

For the three months ended April 30, 2014, the Company recorded stock compensation expense of $33,251 on the statement of operations representing 12,225 shares of its common stock (8,615 shares on a net basis after employee payroll taxes). For the six months ended April 30, 2014, the Company recorded stock compensation expense of $51,251 on the statement of operations representing 16,242 shares of its common stock (11,749 shares on a net basis after employee payroll taxes).

 

In addition, pursuant to his Amendment, Daniel J, O’Connor also agreed to forego the scheduled increases in his base salary that were contained in his Employment Agreement. Therefore, Mr. O’Connor will not receive an annual salary increase (excluding standard cost of living adjustment) or a salary increase for closing a licensing or other strategic transaction. Mr. O’Connor’s salary will remain at $325,000.

 

F- 12
 

 

Stock Awards

 

In December 2013, the Company granted stock awards and restricted stock units (“RSUs”) to employees, executive officers and directors under the 2011 Omnibus Incentive Plan.

 

Management Team Bonuses: Executive officers received a portion of their year-end performance bonus (with a total fair value of approximately $129,000) in the aggregate amount of 31,846 shares of the Company’s Common Stock (21,389 on a net basis after employee payroll taxes).
     
  Equity grant to executive officers: The Company granted 425,000 shares of its Common Stock to its executive officers. Of these shares, 20% (85,000 shares) vested immediately, with a total fair value of $342,550, and were issued and recorded as a charge to income during the six months ended April 30, 2014. The remaining 80% of the grant (340,000 shares) represent RSUs and are to vest in equal installments over twelve quarters such that 100% of the RSUs have vested by the third anniversary of the grant date. The first quarterly vesting, totaling an aggregate of 28,333 shares of our common stock are subject to availability of shares under the 2011 Omnibus Incentive Plan and are subject to forfeiture under certain conditions.  Currently, these shares are not available under the 2011 Omnibus Plan and accordingly, have not been issued.
     
  Equity grant to non-executive employees: The Company granted approximately $101,250 of the aggregate base salary compensation, to be issued in the form of Common Stock to its non-executive employees. Of this grant, 20% (an aggregate value of $20,250) vested immediately and 5,025 shares of common stock were issued to non-executive employees. The remaining 80% of the grant (shares with an aggregate value of $81,000) represent RSUs and are to vest in equal installments over twelve quarters such that 100% of the RSUs have vested by the third anniversary of the grant date. The first quarterly vesting, totaled a fair value of $6,750 and was recorded as a charge to income, representing 1,675 shares of our common stock (1,328 shares on a net basis after employee payroll taxes). The second quarterly vesting, totaled a fair value of $6,750, representing 1,675 shares of our common stock (1,328 shares on a net basis after employee payroll taxes). All of these non-executive equity grants are currently available under the 2011 Omnibus Incentive Plan. As of April 30, 2014, all vested shares have been issued.

 

The Company recognizes the fair value of those vested shares, in the statement of operations in the period earned.

 

Director Compensation

 

During December 2013, the Board of Directors deemed it advisable and in the best interests of the Company to issue shares of RSUs as compensation for all 2013 Board of Director committee meetings and to cancel any options designated for issuance related to those 2013 committee  and board meetings and to further issue shares of RSUs for all fiscal years 2013 through 2016 Board of Director committee meetings in the aggregate amount of 50,000 shares of RSUs to each non-employee director (excluding Mr. Moore). The RSU grant will vest quarterly over three years such that 100 % of the RSU will be vested on the third anniversary date (December 2016).

 

During December 2013, the Board of Directors deemed it advisable and in the best interests of the Company to amend a certain provision of the consulting agreement with Mr. Moore, which took effect August 19, 2013 and issue 37,500 restricted stock units (RSU’s). The RSU grant will vest quarterly over three years such that 100 % of the RSU will be vested on the third anniversary date (December 2016). As Mr. Moore is not nominated for re-election, only 10,976 RSUs will be vested through his current term on the Board.

 

Currently, these director compensation shares are not available under the 2011 Omnibus Incentive Plan and accordingly, the Company did not record a charge to income.

 

Legal Proceedings - Iliad Research and Trading

 

On March 24, 2014, Iliad Research and Trading, L.P. (“Iliad”) filed a complaint (the “Complaint”) against us in the Third Judicial District Court of Salt Lake County, Utah. Iliad alleges that we granted a participation right to Tonaquint, Inc. (“Tonaquint”) in a securities purchase agreement between Tonaquint and us, dated as of December 13, 2012 (the “Purchase Agreement”), pursuant to which Tonaquint was entitled to participate in any transaction that we structured in accordance with Section 3(a)(9) or Section 3(a)(10) of the Securities Act of 1933, as amended. Iliad further alleges that the settlement that we entered into with Ironridge Global IV, Ltd. (“Ironridge”), pursuant to which we issued certain shares of our common stock to Ironridge in reliance on the Section 3(a)(10) exemption, occurred without adequate notice for Tonaquint to exercise its participation right. In addition, Iliad alleges that it acquired all of Tonaquint’s rights under the Purchase Agreement in April 2013. On May 9, 2014, we filed papers in support of our motion to dismiss the Complaint in its entirety. On June 2, 2014, Iliad filed an amended complaint (the “Amended Complaint”) which purports to assert claims against us for breach of contract and breach of the implied covenant of good faith and fair dealing as well as claims under the federal and Utah securities laws and for common law fraud. In the Amended Complaint, Iliad alleges damages of greater than $300,000 plus interest, attorneys’ fees and costs. In connection with its claim under the Utah Securities Act , Iliad has asked for punitive damages equal to three times its actual damages. Our papers in response to the Amended Complaint are due by July 14, 2014. We intend to continue to defend ourselves vigorously.

 

F- 13
 

 

The Company is from time to time involved in legal proceedings in the ordinary course of our business. The Company does not believe that any of these existing claims and proceedings against us is likely to have, individually or in the aggregate, a material adverse effect on the financial condition or results of operations. There were no other material changes to legal proceedings referenced in the Company’s Form 10-Q for the quarter ended January 31, 2014, as filed with the SEC on March 17, 2014.

 

University of Pennsylvania

 

On May 10, 2010, the Company entered into a second amendment to the Penn license agreement pursuant to which it acquired exclusive licenses related to its proprietary Listeria vaccine technology.   As part of this amendment the Company exercised its option for the rights to additional patent dockets and agreed to pay historical patent costs incurred by Penn. During the three months ended April 30, 2014, the Company paid Penn approximately $292,000 under all licensing agreements. During the six months ended April 30, 2014, the Company paid Penn approximately $598,000 under all licensing agreements.   As of April 30, 2014, the Company had no outstanding balance with Penn under all licensing agreements.   As of April 30, 2014, Penn owned 28,468 shares of the Company’s Common Stock.

 

Separation Agreement

 

On March 6, 2013, the Company announced the departure of Dr. John Rothman, the Company’s former Executive Vice President of Clinical and Scientific Operations, effective March 1, 2013. On March 20, 2013, the Company entered into a separation agreement and general release with Dr. Rothman, pursuant to which Dr. Rothman released the Company from all claims and agreed to continue to assist the Company as a consultant until February 28, 2014 in exchange for (i) being compensated on an hourly basis for certain project assignments as requested by the Company, (ii) receiving an aggregate of approximately $275,000, paid in installments over the course of the one year consulting period, and (iii) all of the options to purchase shares of the Company’s common stock held by Dr. Rothman being fully vested with the exercise period of such options being extended until March 1, 2015.

 

As of April 30, 2014, there was approximately $12,700 remaining and due under the separation agreement and general release. As of May 28, 2014, there was no outstanding balance due under the separation agreement and general release.

 

Consulting Agreement; Debt Conversion/Repayment

 

On August 19, 2013, the Company entered into a consulting agreement with Mr. Thomas A. Moore, a Director of the Company and our former Chief Executive Officer, pursuant to which Mr. Moore will continue to assist the Company in exchange for (i) receiving an aggregate of approximately $350,000, paid in installments over the course of the one year consulting period, (ii) reimbursement by the Company for any costs associated with or incurred by Mr. Moore for participation in a group health plan and (iii) a grant of 37,500 RSUs that will vest quarterly over three years. As Mr. Moore is not nominated for re-election, only 10,976 RSUs will be vested through his current term on the Board. The one-year consulting agreement automatically terminates on August 18, 2014.

 

On September 26, 2013, the Company entered into a debt conversion and repayment agreement with Mr. Moore with respect to the repayment and partial conversion of amounts owed to Mr. Moore under outstanding promissory notes issued pursuant to that certain Note Purchase Agreement dated September 22, 2008, as amended from time to time. The Company refers to these outstanding notes as the Moore Notes. As provided in the agreement, following the closing of the October 22, 2013 public offering: (a) the Company paid Mr. Moore $100,000 in cash as partial repayment of the Moore Notes, (b) the Company converted one-half of the remaining balance (approximately $162,132)  using the same terms as securities being offered and sold in the October 22, 2013 offering and issued Mr. Moore 40,783 shares of our Common Stock and a five-year warrant to purchase 20,392 shares of our Common Stock at an exercise price of $5.00 per share on October 31, 2013 and (c) within three months of the closing of the offering, the Company will pay Mr. Moore in cash the then remaining outstanding balance under the Moore Notes (approximately $163,132). The Company paid Mr. Moore $168,280, inclusive of additional interest expense incurred, on February 4, 2014, fully satisfying its obligations under the Moore Notes, which no longer remain outstanding.

 

Numoda Corporation

 

On June 19, 2009 the Company entered into a Master Agreement and on July 8, 2009, it entered into a Project Agreement with Numoda Corporation (“Numoda”), to oversee Phase 2 clinical activity with ADXS-HPV for the treatment of invasive cervical cancer and CIN.

 

The Company is currently in discussions with Numoda relating to amounts outstanding under these agreements. Numoda has taken the position that it is owed approximately $540,000 while the Company believes that the amount due to Numoda should be substantially less then that amount because of Numoda’s failure to deliver all outstanding deliverables and payments the Company made to others related to these services.

 

Sale of Net Operating Losses (NOLs)

 

The Company may be eligible, from time to time, to receive cash from the sale of its Net Operating Losses under the State of New Jersey NOL Transfer Program.  In January 2014, the Company received a net cash amount of $625,563 from the sale of its state NOLs and research and development tax credits for the periods ended October 31, 2010 and 2011.

 

F- 14
 

 

11. SHAREHOLDERS’ EQUITY

 

Public Offering

 

On March 31, 2014, the Company closed its public offering of 4,692,000 shares of common stock, including 612,000 shares that were offered and sold by the Company pursuant to the full exercise of the underwriters’ over-allotment option, at a price to the public of $3.00 per share. Total gross proceeds from the offering were $14,076,000, before deducting underwriting discounts and commissions and other offering expenses paid by the Company of approximately $1,400,000.

 

Equity Enhancement Program

 

On September 27, 2013, the Company notified Hanover Holdings LLC that it irrevocably commits to suspend any draw-downs under the Common Stock Purchase Agreement without the prior written consent of Aegis Capital Corp. for a six month period from the closing.   During the six months ended April 30, 2014, the Company and Hanover agreed to terminate the Common Stock Purchase Agreement in exchange for the issuance of 7,080 shares of the Company’s Common Stock.

 

Licensing Agreement – Global BioPharma Inc.

 

On December 9, 2013, the Company entered into an exclusive licensing agreement for the development and commercialization of ADXS-HPV with Global BioPharma, Inc. (“GBP”), a Taiwanese based biotech company funded by a group of investors led by Taiwan Biotech Co., Ltd (TBC).

 

GBP plans to conduct registration trials with ADXS-HPV for the treatment of advanced cervical cancer and will explore the use of Advaxis’ lead product candidate in several other indications including lung, head and neck, and anal cancer.

 

GBP will pay Advaxis event-based financial milestones, an annual development fee, and annual net sales royalty payments in the high single to double digits. In addition, as an upfront payment, GBP made an investment in Advaxis of $400,000 by purchasing from the Company 108,724 shares of its Common Stock at a price of $3.68 per share, GBP also received 100,000 warrants at an exercise price of $5.52 which expire in December 2018.

 

GBP will be responsible for all clinical development and commercialization costs in the GBP territory. In collaboration with Advaxis, GBP will also identify and pay the clinical trial costs for up to 150 patients with cervical cancer for enrollment in Advaxis’ U.S. and GBP’s Asia registrational programs for cervical cancer. GBP is committed to establishing manufacturing capabilities for its own territory and to serving as a secondary manufacturing source for Advaxis in the future. Under the terms of the agreement, Advaxis will exclusively license the rights of ADXS-HPV to GBP for Asia, Africa, and former USSR territory, exclusive of India and certain other countries, for all HPV-associated indications. Advaxis retains exclusive rights to ADXS-HPV for the rest of the world.

 

Licensing Agreement – Aratana Therapeutics

 

On March 19, 2014, the Company and Aratana Therapeutics Inc. (“Aratana”) entered into a definitive Exclusive License Agreement (the “Agreement”). Pursuant to the Agreement, Advaxis granted Aratana an exclusive, worldwide, royalty-bearing, license, with the right to sublicense, certain Advaxis proprietary technology that enables Aratana to develop and commercialize animal health products that will be targeted for treatment of osteosarcoma and other cancer indications in animals. Under the terms of the Agreement, Aratana paid an upfront payment to the Company, of $1 million. As this license has stand-alone value to Aratana (who has the ability to sublicense) and was delivered to Aratana, upon execution of the Agreement, the Company recorded the $1 million payment as licensing revenue in the three months ended April 30, 2014. Aratana will also pay the Company up to an additional $36.5 million based on the achievement of certain milestones with respect to the advancement of products pursuant to the terms of the Agreement. In addition, Aratana may pay the Company an additional $15 million in cumulative sales milestones pursuant to the terms of the Agreement.

 

F- 15
 

 

Advaxis (i) issued and sold 306,122 shares of Advaxis’ common stock to Aratana at a price of $4.90 per share, which was equal to the closing price of the common stock on the NASDAQ Capital Market on March 19, 2014, and (ii) issued a ten-year warrant to Aratana giving Aratana the right to purchase up to 153,061 additional shares of Advaxis’ common stock at an exercise price of $4.90 per share. In connection with the sale of the common stock and warrants, Advaxis received aggregate net proceeds of $1,500,000.

 

Based on the above licensing agreement, the Company expects to derive the majority of revenue from patent licensing if clinical development is successful. In general, these revenue arrangements provide for the payment of contractually determined fees in consideration for the grant of certain intellectual property rights for patented technologies owned or controlled by the Company. The intellectual property rights granted may be perpetual in nature, or upon the final milestones being met, or can be granted for a defined, relatively short period of time, with the licensee possessing the right to renew the agreement at the end of each contractual term for an additional minimum upfront payment. The Company recognizes licensing fees when there is persuasive evidence of a licensing arrangement, fees are fixed or determinable, delivery has occurred and collectability is reasonably assured.

 

An allowance for doubtful accounts is established based on the Company’s best estimate of the amount of probable credit losses in the Company’s existing license fee receivables, using historical experience. The Company reviews its allowance for doubtful accounts periodically. Past due accounts are reviewed individually for collectability.

 

Account balances are charged off against the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. To date, this is yet to occur.

 

The Company recognizes revenue from royalties based on licensees’ sales of its products or products using its technologies. Royalties are recognized as earned in accordance with the contract terms when royalties from licensees can be reasonably estimated and collectability is reasonably assured. If royalties cannot be reasonably estimated or collectability of a royalty amount is not reasonably assured, royalties are recognized as revenue when the cash is received. 

 

The Company recognizes revenue from milestone payments received under collaboration agreements when earned, provided that the milestone event is substantive, its achievability was not reasonably assured at the inception of the agreement, the Company has no further performance obligations relating to the event and collection is reasonably assured. If these criteria are not met, the Company recognizes milestone payments ratably over the remaining period of the Company’s performance obligations under the collaboration agreement. All such recognized revenues are included in collaborative licensing and development revenue in the Company’s consolidated statements of operations.

 

12. FAIR VALUE

 

The authoritative guidance for fair value measurements defines fair value as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or the most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Market participants are buyers and sellers in the principal market that are (i) independent, (ii) knowledgeable, (iii) able to transact, and (iv) willing to transact. The guidance describes a fair value hierarchy based on the levels of inputs, of which the first two are considered observable and the last unobservable, that may be used to measure fair value which are the following:

 

● Level 1 — Quoted prices in active markets for identical assets or liabilities

 

● Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or corroborated by observable market data or substantially the full term of the assets or liabilities

 

● Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the value of the assets or liabilities

 

F- 16
 

 

The following table provides the liabilities carried at fair value measured on a recurring basis as of April 30, 2014:

 

April 30, 2014     Level 1       Level 2     Level 3     Total  
                                 
Common stock warrant liability, warrants exercisable at $2.76 - $21.25 from June 2014 through March 2024   $ -     $     $ 245,374     $ 245,374  
                                 
October 31, 2013   Level 1       Level 2     Level 3     Total  
                                 
Common stock warrant liability, warrants exercisable at $2.76 - $21.25 from October 2012 through August 2017   $ -     $     $ 646,734     $ 646,734  

 

 

Common stock warrant liability:

 

    April 30, 2014
(Unaudited)
 
Beginning balance: October 31, 2013   $ 646,734  
Issuance of additional warrants due to anti-dilution provisions     4,437  
Change in fair value     (405,797 )
Balance at April 30, 2014   $ 245,374  

 

13. SUBSEQUENT EVENTS

 

Issuance of shares to Consultant

 

On May 13, 2014, the Company issued 100,000 shares of its common stock to a consultant pursuant to the underlying agreement for consulting services. On May 15, 2014, the Company issued an additional 25,000 shares of its common stock pursuant to this consulting agreement. As of May 15, 2014, there were no outstanding obligations pursuant to this consulting agreement.

 

Yenson Co. Ltd

 

On May 15, 2014, the Company issued 45,323 shares of its common stock pursuant to a Securities Purchase Agreement with Yenson Co. Ltd dated August 28, 2013.

 

F- 17
 

 

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 

Cautionary Note Regarding Forward Looking Statements

 

The Company has included in this Quarterly Report certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995 concerning the Company’s business, operations and financial condition. “Forward-looking statements” consist of all non-historical information, and the analysis of historical information, including the references in this Quarterly Report to future revenues, collaborative agreements, future expense growth, future credit exposure, earnings before interest, taxes, depreciation and amortization, future profitability, anticipated cash resources, anticipated capital expenditures, capital requirements, and the Company’s plans for future periods. In addition, the words “could”, “expects”, “anticipates”, “objective”, “plan”, “may affect”, “may depend”, “believes”, “estimates”, “projects” and similar words and phrases are also intended to identify such forward-looking statements. Such factors include the risk factors included in other filings by the Company with the SEC and other factors discussed in connection with any forward-looking statements.

 

Actual results could differ materially from those projected in the Company’s forward-looking statements due to numerous known and unknown risks and uncertainties, including, among other things, the Company’s ability to raise capital, unanticipated technological difficulties, the length, scope and outcome of our clinical trial, costs related to intellectual property, cost of manufacturing and higher consulting costs, product demand, changes in domestic and foreign economic, market and regulatory conditions, the inherent uncertainty of financial estimates and projections, the uncertainties involved in certain legal proceedings, instabilities arising from terrorist actions and responses thereto, and other considerations described as “Risk Factors” in other filings by the Company with the SEC. Such factors may also cause substantial volatility in the market price of the Company’s Common Stock. All such forward-looking statements are current only as of the date on which such statements were made. The Company does not undertake any obligation to publicly update any forward-looking statement to reflect events or circumstances after the date on which any such statement is made or to reflect the occurrence of unanticipated events.

 

General

 

The shares of our Common Stock and warrants are listed on The NASDAQ Capital Market under the symbols “ADXS” and “ADXSW,” respectively.

 

We are a clinical stage biotechnology company focused on the discovery, development and commercialization of proprietary Lm - LLO cancer immunotherapies. These immunotherapies are based on a platform technology that utilizes live attenuated Listeria monocytogenes (“ Lm” ), bioengineered to secrete antigen/adjuvant fusion proteins. These Lm -LLO strains are believed to be a significant advancement in immunotherapy as they integrate multiple functions into a single immunotherapy as they access and direct antigen presenting cells to stimulate anti-tumor T-cell immunity, stimulate and activate the immune system with the equivalent of multiple adjuvants, and simultaneously reduce tumor protection in the tumor microenvironment to enable the T-cells to eliminate tumors. Other immunotherapies may employ individual elements of the Company’s comprehensive approach, but, to its knowledge, none combine all of these elements together in a single, easily administered, well-tolerated yet comprehensive immunotherapy.

 

Since inception in 2002, we have focused our development efforts on understanding our platform technology and establishing a drug development pipeline that incorporates this technology into therapeutic cancer immunotherapies, currently those targeting HPV-associated cancer (cervical cancer, head and neck cancer and anal cancer), prostate cancer, and HER2 overexpressing cancers. Although no immunotherapies have been commercialized to date, research and development and investment continues to be placed behind the advancement of this technology. Pipeline development and the further exploration of the technology for advancement entails risk and expense. We anticipate that our ongoing operational costs will increase significantly as we continue conducting our clinical development program.

 

3
 

 

Events that occurred after the quarter  

 

FDA Grants End-of-Phase 2 Type B Meeting to Review Clinical Data and Discuss the Potential Next Phase of the AXDS-HPV Development Program

 

On June 9, 2014, the Company was granted an End of Phase 2 meeting with the U.S. Food and Drug Administration (“FDA”).   The purpose of an end-of-phase 2 meeting with the FDA is to review clinical findings, to date, in order to assess ADXS-HPV’s safety and any additional information needed before moving forward with the next phase of clinical study.  The meeting will establish a dialogue with the FDA on ADXS-HPV during which we can obtain agency recommendations and feedback on the next steps we need to take in investigating this important immunotherapy product candidate.   We plan to prepare and provide the FDA with a comprehensive package detailing our investigational invasive cervical cancer therapy, our phase 1 and 2 clinical findings, and our plan for a transition into a pivotal phase 3 program.

 

Data presented at the American College of Veterinary Internal Medicine Forum – ADXS-cHER2

 

On June 6, 2014, the Company announced that principal investigator, Nicola Mason, B.Vet. Med, PhD, DACVIM, of the University of Pennsylvania School of Veterinary Medicine, presented updated data from the ongoing ADXS-cHER2 study in canine osteosarcoma at the 2014 American College of Veterinary Internal Medicine (ACVIM) Forum in Nashville, TN. ADXS-cHER2 is an immunotherapy that targets the HER2 receptor, which is overexpressed in certain solid-tumor cancers, including canine and human bone cancer and breast cancer.

 

The preliminary findings of the Phase 1 clinical trial in dogs with osteosarcoma suggest that ADXS-cHER2 is safe and well tolerated at doses up to 3 x 109 CFU with no evidence of cardiac, hematological, or other systemic toxicities. The study determined that ADXS-cHER2 is able to delay or prevent metastatic disease and significantly prolong overall survival in dogs with osteosarcoma that had minimal residual disease following standard of care (amputation and follow-up chemotherapy). At the time of Dr. Mason’s presentation, 80% of the dogs treated (n=15) were still alive and median survival had not yet been reached; median survival in control dogs (n=13) was 316 days. Immunological analyses are also being conducted in this study to further evaluate the immune response to ADXS-cHER2. Dr. Mason is also conducting a second study evaluating combination therapy with ADXS-cHER2 immunotherapy and radiation for dogs with primary osteosarcoma that cannot undergo amputation.

   

Data Published by Researchers at the National Cancer Institute Further Identifies Lm-LLO Immunotherapy Eradicates Tumors

 

On June 4, 2014, the Company announced the publication of preclinical research with its lead candidate, ADXS-HPV for the treatment of HPV-associated cancers in the journal, Cancer Immunology Research. In this publication, researchers at the National Cancer Institute (NCI) reported on the biologic mechanisms behind the unique ability of ADXS-HPV to decrease the immunosuppressive activity of Tregs in the tumor microenvironment that result in increased anti-tumor activity. This research demonstrates the critical role of the tLLO peptide fusion and the strong adjuvant effect of tLLO as contributing to the increase in activated T-cells and the relative decrease in the number of Tregs in tumors, thereby increasing anti-tumor activity.

 

The research was conducted by Dr. Zhisong Chen, Dr. Samir Khleif and their research team at the Vaccine Branch, center for Cancer Research, NCI, NIH. The research was supported by the Intramural Research Program of the Center for Cancer Research, NCI, NIH and funded in part by Advaxis through a collaborative research and development agreement. The publication, entitled, “Episomal expression of a truncated listeriolysin O (LLO) in LmddA-LLO-E7 vaccine enhances anti-tumor efficacy by preferentially inducing CD4+FoxP3- T cell and CD8+ T cell expansion,” by Drs. Chen, Ozbun, Chong, Wallecha, Berzofsky, and Khleif, reported the complete regression of tumors in about 40% of mice after two vaccinations with ADXS-HPV. Furthermore, with the exception of one, these mice survived at least six months without relapse.

 

Final Data Results for ADXS-HPV – Long-Term Survival in Patients with Cervical Cancer

 

On May 31, 2014, the Company announced final results from the Phase 2 clinical study of its lead immunotherapy product candidate, ADXS-HPV, in women with recurrent cervical cancer at the 2014 American Society of Clinical Oncology Annual Meeting in Chicago, Illinois. The results showed that ADXS-HPV was well-tolerated and that 22% (24/109) of the patients were long-term survivors (LTS) >18 months. 18% (16/91) of patients were alive for more than 24 months. Of the 109 patients treated in the study, LTS included not only patients with tumor shrinkage but also included patients who experienced increased tumor burden as their best tumor response overall. 17% (19/109) of the patients in the trial had recurrence of disease after at least two prior treatments for their cervical cancer; these patients comprised 8% (2/24) of LTS. Among the LTS, 25% (3/11) of patients had an ECOG performance status of 2, a patient population that is often excluded from clinical trials because of their poor survival.

 

Master Services Agreement with inVentiv Health Clinical

 

On May 29, 2014, the Company and inVentiv Health Clinical (“inVentiv”), a leading global clinical research organization (“CRO”), announced that they have entered into a master services agreement for the clinical development of certain immunotherapy product candidates in Advaxis’s proprietary pipeline. The agreement is global and will focus initially on Advaxis’s lead immunotherapy for cervical cancer, ADXS-HPV.

 

Under the terms of the agreement inVentiv can provide Advaxis with full CRO services to execute clinical studies for the current Advaxis cancer immunotherapy product candidates including ADXS-HPV for cervical cancer, and other HPV- associated cancer; ADXS-cHER2 for pediatric osteosarcoma and other HER2 over-expressing cancer and ADXS-PSA for prostate cancer. In addition, pending regulatory approval, Advaxis can leverage inVentiv’s significant commercialization capabilities in select countries, should it seek to do so.

 

inVentiv will work with Advaxis to develop clinical study protocols and will serve as the CRO on the planned registrational trials that will evaluate the safety and efficacy of ADXS-HPV in women with recurrent cervical cancer. In addition, inVentiv will provide feasibility and study start-up activities for the planned clinical development of ADXS-cHER2 in pediatric osteosarcoma. 

 

Orphan Drug Designation – ADXS-cHER2 for the treatment of Osteosarcoma

 

On May 27, 2014, the Company announced that it has been granted Orphan Drug Designation (ODD) from the FDA Office of Orphan Products Development (OOPD) for ADXS-cHER2 for the treatment of osteosarcoma.

 

Based on strong pre-clinical and canine osteosarcoma clinical data, Advaxis is planning to initiate a clinical development program with ADXS-cHER2 in pediatric patients with osteosarcoma. Pediatric osteosarcoma affects about 400 children and teens in the U.S. every year, representing a small but significant unmet medical need that has seen little therapeutic advancement in decades. Both veterinary and human osteosarcoma specialists consider canine osteosarcoma to be the most analogous disease to human osteosarcoma.

 

4
 

 

Clinical Development Program for Pediatric Osteosarcoma

 

On May 5, 2014, the Company announced that it intends to initiate a clinical development program with its product candidate, ADXS-cHER2, for the treatment of pediatric osteosarcoma. ADXS-cHER2 is an immunotherapy that targets the HER2 oncogene, which is overexpressed in certain solid-tumor cancers, including osteosarcoma in human and canine, and breast cancer. In a veterinarian clinical study, pet dogs with naturally occurring osteosarcoma treated with ADXS-cHER2 after the standard of care showed a statistically significant prolonged overall survival benefit compared with dogs that received standard of care without ADXS-cHER2. Both veterinary and human osteosarcoma specialists consider canine osteosarcoma to be an appropriate model for human osteosarcoma.

 

The Company has entered into a Master Service Agreement with Southern Research Institute, initiating the necessary toxicology work in support of our IND. Subsequent to the initial clinical development program in pediatric osteosarcoma, the Company plans to initiate other protocols in HER2 overexpressing cancers.

 

Orphan Drug Designation – ADXS-HPV for invasive cervical cancer

 

On May 1, 2014, the Company announced that it has been granted Orphan Drug Designation from the FDA OOPD for ADXS-HPV, its lead immunotherapy drug candidate, for the treatment of Stage II-IV invasive cervical cancer.

 

Orphan Drug Designation is granted to drug therapies intended to treat diseases or conditions that affect fewer than 200,000 people in the United States. Orphan Drug Designation entitles the sponsor to clinical protocol assistance with the FDA, as well as annual grant funding, tax credits, waiver of PDUFA filing fees, and potentially a seven year market exclusivity period.

 

ADXS-HPV Head and Neck study at Mount Sinai

 

Icahn School of Medicine at Mount Sinai is currently conducting an investigator IND trial to evaluate the safety, effectiveness, and immunogenicity of ADXS-HPV in patients with head and neck cancer. While the trial is currently opened to enrollment, the enrollment is occurring at a slower pace than expected. Therefore, we will most likely not have data from this trial this year.

 

Events that occurred during the three months ended April 30, 2014

 

Aratana Therapeutics Inc.

 

On March 19, 2014, the Company and Aratana Therapeutics Inc. (“Aratana”) entered into a definitive Exclusive License Agreement (the “Agreement”). Pursuant to the Agreement, the Company granted Aratana an exclusive, worldwide, royalty-bearing, license, with the right to sublicense, certain Advaxis proprietary technology that enables Aratana to develop and commercialize animal health products that will be targeted for treatment of osteosarcoma and other cancer indications in animals. Under the terms of the agreement, Aratana paid an upfront payment to it, of $1 million. As this license has stand-alone value to Aratana (who has the ability to sublicense) and was delivered to Aratana, upon execution of the agreement, the Company recorded the $1 million payment as licensing revenue in the three months ended April 30, 2014. Aratana will also pay the Company up to an additional $36.5 million based on the achievement of certain milestones with respect to the advancement of products pursuant to the terms of the agreement. In addition, Aratana may pay the Company an additional $15 million in cumulative sales milestones pursuant to the terms of the agreement.

 

In addition to the constructs licensed by Aratana upon signing of the Agreement, Aratana also has a right of first refusal to license additional Advaxis constructs in the future if the Company develops (on our own or upon request of Aratana) new constructs which are reasonably believed to be suitable for treating osteosarcoma and certain other veterinary cancer indications (“Additional Constructs”). If Aratana and the Company agreed upon the terms pursuant to which such Additional Constructs shall be added as constructs under the Agreement, such Additional Constructs will be added by virtue of an amendment to the Agreement.

 

Aratana has granted the Company an exclusive, worldwide, royalty-free, fully-paid, irrevocable and perpetual license, with the right to sublicense, under Aratana’s existing technology, and any related sole Aratana development or Aratana’s rights in any joint inventions which may be developed by the parties during the course of the Agreement, solely for us to develop and commercialize Advaxis products for any and all uses outside of the Aratana field, including, without limitation, all human health applications. The Aratana technology to be licensed to the Company will include any patents or patent applications controlled by Aratana during the term of the Agreement that claim or cover the manufacture, use, sale, offer for sale or import of any Products as well as related know-how, data, technical information, results and other information controlled by Aratana during the term of the Agreement that is necessary or useful in the development, manufacture or commercialization of any compound, construct or product.

 

In conjunction with the agreement, the Company (i) issued and sold 306,122 shares of its common stock to Aratana at a price of $4.90 per share, which was equal to the closing price of the common stock on the NASDAQ Capital Market on March 19, 2014, and (ii) issued a ten-year warrant to Aratana giving Aratana the right to purchase up to 153,061 additional shares of its common stock at an exercise price of $4.90 per share. In connection with the sale of the common stock and warrants, the Company received aggregate net proceeds of $1,500,000.

 

5
 

 

Patent for ADXS-HPV issued in Japan

 

On March 18, 2014, the Company announced the issuance of a significant patent from the Japan Patent Office, entitled, “Compositions and Methods for Enhancing Immunogenicity of Antigens”. The claims of the patent (patent number 5479918) cover the use of ADXS-HPV for the treatment of late-stage cervical cancer with a term that extends to 2028.

 

University of California, San Francisco (UCSF) Agreement

 

On March 17, 2014, the Company announced that it had signed an agreement with the University of California, San Francisco (“UCSF”), under which Lawrence Fong, M.D., Professor in the Department of Medicine and principal investigator of the studies at UCSF, will evaluate several new immunotherapy constructs, in addition to ADXS-PSA, each built on the Advaxis proprietary technology. The agreement provides for the evaluation of the combination of the unique Advaxis immunotherapy platform, which generates both tumor fighting T cells and reduces tumor protection inside the tumor microenvironment, with targets that have already been shown to be important in effective immunotherapies for prostate cancer.

 

SynCo Bio Partners B.V. (“SynCo”)

 

On February 11, 2014, the Company entered into an agreement with SynCo Bio Partners B.V. (“SynCo”), one of the leading GMP contract manufacturers of biopharmaceuticals, for SynCo to manufacture ADXS-HPV. Under the agreement, SynCo will assist Advaxis in developing scale-up and commercial manufacturing processes for ADXS-HPV bulk drug substance and drug product.

 

GRU Cancer Center

 

On February 5, 2014, the Company announced it has expanded its relationship by entering into a master clinical trial agreement with GRU Cancer Center to conduct multiple Phase 1/2 clinical trials. The trials will be conducted under the supervision of Dr. Samir Khleif, Director, Georgia Reagents University Cancer Center.

 

Other Significant Events

 

Biocon Limited

 

On January 20, 2014, the Company and Biocon Limited, a company incorporated under the laws of India (“Biocon”) entered into a Distribution and Supply Agreement (“Biocon Agreement”).

 

Pursuant to the Biocon Agreement, the Company granted Biocon an exclusive license (with a right to sublicense) to (i) use its data from clinical development activities, regulatory filings, technical, manufacturing and other information and know-how to enable Biocon to submit regulatory filings for ADXS-HPV in the following territories: India, Malaysia, Kenya, Bangladesh, Bhutan, Maldives, Myanmar, Nepal, Pakistan, Sri Lanka, Bahrain, Jordan, Kuwait, Oman, Saudi Arabia, Qatar, United Arab Emirates, Algeria, Armenia, Egypt, Eritrea, Iran, Iraq, Lebanon, Libya, Sudan, Syria, Tunisia and Yemen (collectively, the “Territory”) and (ii) import, promote, market, distribute and sell pharmaceutical products containing ADXS-HPV. ADXS-HPV is based on a novel platform technology using live, attenuated bacteria that are bio-engineered to secrete an antigen/adjuvant fusion protein(s) designed to redirect the powerful immune response all human beings have to the bacterium against their cancer.

 

Under the Biocon Agreement, Biocon has agreed to use commercially reasonable efforts to obtain regulatory approvals for ADXS-HPV in India.  In the event additional Phase 2 or Phase 3 clinical trials are required, Advaxis shall conduct such trials at its cost, provided that if Advaxis is unable to commence such clinical trials, Biocon may conduct such clinical trials, subject to reimbursement of costs by Advaxis.  Biocon has agreed to commence commercial distribution of ADXS-HPV no later than 9 months following receipt of regulatory approvals in a country in the Territory.  Biocon will be responsible for the costs of obtaining and maintaining regulatory approvals in the Territory.

 

Advaxis will have the exclusive right to supply ADXS-HPV to Biocon and Biocon will be required to purchase its requirements of ADXS-HPV exclusively from Advaxis at the specified contract price, as such price may be adjusted from time to time. In addition, Advaxis will be entitled to a six-figure milestone payment if net sales of ADXS-HPV for the contract year following the initiation of clinical trials in India exceed certain specified thresholds. 

 

Biocon will also have a right of first refusal relating to the licensing of any new products in the Territory that Advaxis may develop during the term of the Biocon Agreement.

 

The term of the Biocon Agreement will be the later of twenty years or the last to expire patent or patent application. In addition, the Biocon Agreement may be terminated by either party upon thirty days’ written notice (i) in the event of a material breach by the other party of its obligations under the Biocon Agreement, (ii) if the other party becomes bankrupt or insolvent or (iii) if the other party undergoes a change in control.

 

6
 

 

RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED APRIL 30, 2014 AND 2013

 

Revenue

 

This period we transitioned from a development stage company to an operating company. On March 19, 2014, we and Aratana Therapeutics Inc. (“Aratana”) entered into a definitive Exclusive License Agreement (“Agreement”) pursuant to which we granted Aratana an exclusive, worldwide, royalty-bearing, license, with the right to sublicense, certain Advaxis proprietary technology that enables Aratana to develop and commercialize animal health products that will be targeted for treatment of osteosarcoma and other cancer indications in animals. Under the terms of the agreement. Aratana paid us an upfront payment of $1 million. As this license has stand-alone value to Aratana (who has the ability to sublicense) and was delivered to Aratana upon execution of the Agreement, we properly recorded the $1 million payment as licensing revenue in the three months ended April 30, 2014.

 

We did not record any revenue for the three months ended April 30, 2013.

 

Research and Development Expenses

 

We make significant investments in research and development in support of our development programs both clinically and pre-clinically. Research and development costs are expensed as incurred and primarily include salary and benefit costs, third-party grants, fees paid to clinical research organizations, and supply costs. Research and development expense was $1.5 million for the three months ended April 30, 2014, compared with $2.1 million for the three months ended April 30, 2013, a decrease of $0.6 million. The decrease was primarily a result of lower stock compensation costs and lower direct trial costs associated with the close-out of our India-based Phase 2 program, partially offset by higher consulting and professional fees.

 

We anticipate a significant increase in research and development expenses as a result of our intended expanded development and commercialization efforts primarily related to clinical trials and product development. In addition, we expect to incur expenses in the development of strategic and other relationships required to license manufacture and distribute our product candidates when they are approved.

 

General and Administrative Expenses

 

General and administrative expenses primarily include salary and benefit costs for employees included in our finance, legal and administrative organizations, costs related to the development of new products, outside legal and professional services, and facilities costs. General and administrative expense was $2.1 million for the three months ended April 30, 2014, compared with $3.4 million for the three months ended April 30, 2013, a decrease of $1.3 million. The decrease was primarily a result of lower stock compensation costs, slightly offset by higher severance costs related to a former employee.

 

Interest Expense

 

Interest expense was $3,238 for the three months ended April 30, 2014, compared with $95,986 for the three months ended April 30, 2013. The decrease was a result from the significant reduction in overall debt from approximately $2.2 million in outstanding principal at April 30, 2013 to $62,882 in outstanding principal at April 30, 2014. Substantially all of the outstanding principal at April 30, 2013 was converted or repaid during the fiscal year ended October 31, 2013, resulting in a significant decrease in interest expense for the three months ended April 30, 2014.

 

Other Income / (Expense)

 

Other income was $10,749 for the three months ended April 30, 2014, compared with $21,344 in income for the three months ended April 30, 2013. Interest income earned for the three months ended April 30, 2014 reflected interest income earned on the Company’s savings account balance. Interest income earned for the three months ended April 30, 2013 reflected the result of favorable changes in foreign exchange rates relating to transactions with certain vendors, as well as interest income from payments made to us under the terms of a convertible promissory note.

 

(Loss) Gain on Note Retirement and Accounts Payable

 

For the three months ended April 30, 2014, no expense or income was recorded. For the three months ended April 30, 2013, we recorded non-cash income of $194,795 primarily resulting from the settlement of outstanding payables at a discount.

 

Changes in Fair Values

 

For the three months ended April 30, 2014, we recorded non-cash income from changes in the fair value of the warrant liability of $273,849 resulting from a decrease in the fair value of each liability warrant due to a decrease in our share price from $4.49, at January 31, 2014 to $2.72 at April 30, 2014 in addition to a smaller range of share prices used in the calculation of the BSM volatility input.

 

 For the three months ended April 30, 2013, we recorded non-cash income from changes in the fair value of the warrant liability of $79,838 resulting from a decrease in the fair value of each liability warrant due to a decrease in our share price from $9.00, at January 31, 2013 to $8.25 at April 30, 2013 in addition to a smaller range of share prices used in the calculation of the BSM volatility input.

 

7
 

 

RESULTS OF OPERATIONS FOR THE SIX MONTHS ENDED APRIL 30, 2014 AND 2013

 

Revenue

 

This period we transitioned from a development stage company to an operating company. On March 19, 2014, we and Aratana Therapeutics Inc. (“Aratana”) entered into a definitive Exclusive License Agreement (“Agreement”) pursuant to which we granted Aratana an exclusive, worldwide, royalty-bearing, license, with the right to sublicense, certain, Advaxis proprietary technology that enables Aratana to develop and commercialize animal health products that will be targeted for treatment of osteosarcoma and other cancer indications in animals. Under the terms of the agreement, Aratana paid us an upfront payment of $1 million. As this license has stand-alone value to Aratana (who has the ability to sublicense) and was delivered to Aratana upon execution of the Agreement, we properly recorded the $1 million payment as licensing revenue for the six months ended April 30, 2014.

 

We did not record any revenue for the six months ended April 30, 2013.

 

Research and Development Expenses

 

We make significant investments in research and development in support of our development programs both clinically and pre-clinically. Research and development costs are expensed as incurred and primarily include salary and benefit costs, third-party grants, fees paid to clinical research organizations, and supply costs. Research and development expense was $3.1 million for the six months ended April 30, 2014, compared with $3.1 million for the six months ended April 30, 2013. While the results were essentially flat period over period, there was a decrease in stock compensation costs and lower direct trial costs associated with the close-out of our India-based Phase 2 program, which were offset by higher consulting and professional fees.

 

We anticipate a significant increase in research and development expenses as a result of our intended expanded development and commercialization efforts primarily related to clinical trials and product development. In addition, we expect to incur expenses in the development of strategic and other relationships required to license, manufacture and distribute our product candidates when they are approved.

 

General and Administrative Expenses

 

General and administrative expenses primarily include salary and benefit costs for employees included in our finance, legal and administrative organizations, costs related to the development of new products, outside legal and professional services, and facilities costs. General and administrative expense was $6.4 million for the six months ended April 30, 2014, compared with $4.6 million for the six months ended April 30, 2013, an increase of $1.8 million. The increase was primarily a result of higher consulting and professional fees, including the payout of aged payables in the current period. In addition, overall compensation expense was higher in the current period resulting from additional employees when compared with the same period a year ago as well as severance costs related to a former employee. 

 

Interest Expense

 

Interest expense was $5,253 for the six months ended April 30, 2014, compared with $457,162 for the six months ended April 30, 2013. The decrease was a result of the significant reduction in overall debt from approximately $2.2 million in outstanding principal at April 30, 2013 to $62,882 in outstanding principal at April 30, 2014. In addition, we recorded $157,150 in non-cash interest expense, in the prior period, related to the issuance of 3.5 million shares (Commitment Fee Shares) under the Hanover Purchase Agreement.

 

Other Income / (Expense)

 

Other income was $19,321 for the six months ended April 30, 2014, compared with $1,446 in income for the six months ended April 30, 2013. Interest income earned for the six months ended April 30, 2014 reflected interest income earned on the Company’s savings account balance. Interest income earned for the six months ended April 30, 2013 reflected the result of interest income from payments made to us under the terms of a convertible promissory note, slightly offset by expense related to unfavorable changes in foreign exchange rates relating to transactions with certain vendors.

 

(Loss) Gain on Note Retirement and Accounts Payable

 

For the six months ended April 30, 2014, we recorded non-cash income of $6,243 primarily resulting from the settlement of outstanding payables with shares of our common stock at a discount.

 

For the six months ended April 30, 2013, we recorded non-cash income of $347,286 primarily resulting from the settlement of outstanding payables with shares of our common stock at a discount. This income was partially offset by charges incurred related to the conversion of notes into shares of our common stock by investors.

 

8
 

 

Changes in Fair Values

 

 For the six months ended April 30, 2014, we recorded non-cash income from changes in the fair value of the warrant liability of $405,797 resulting from a decrease in the fair value of each liability warrant due to a decrease in our share price from $3.74 at October 31, 2013 to $2.72 at April 30, 2014 in addition to a smaller range of share prices used in the calculation of the BSM volatility input.

 

For the six months ended April 30, 2013, we recorded non-cash expense from changes in the fair value of the warrant liability of $3,943,761 resulting from an increase in the fair value of each liability warrant due to an increase in our share price from $5.63, at October 31, 2012 to $8.31 at April 30, 2013.

 

Potential future increases or decreases in our stock price will result in increased or decreased warrant and embedded derivative liabilities, respectively, on our balance sheet and therefore increased or decreased expenses being recognized in our statement of operations in future periods.

 

Income Tax Benefit

 

We may be eligible, from time to time, to receive cash from the sale of our Net Operating Losses, or NOLs, under the State of New Jersey NOL Transfer Program.   In the six months ended April 30, 2014, we received a net cash amount of $625,563 from the sale of our state NOLs and research & development tax credits for the periods ended October 31, 2010 and 2011.

 

In the six months ended April 30, 2013, we received a net cash amount of $725,190 from the sale of our state NOLs and research & development tax credits for the periods through October 31, 2010.

 

Liquidity and Capital Resources

 

Since our inception through April 30, 2014, the Company has reported accumulated net losses of $78.0 million and recurring negative cash flows from operations. We anticipate that we will continue to generate significant losses from operations for the foreseeable future.

 

Cash used in operating activities, for the six months ending April 30, 2014, was $7.5 million (including proceeds from the sale of our state NOLs and R&D tax credits of approximately $0.6 million) primarily from spending associated with our clinical trial programs and general & administrative spending. Total spending approximated $8.1 million, including one-time non-recurring costs associated with our October 2013 financing, certain compensation costs and the settlement of a legal claim.

 

Cash used in investing activities, for the six months ended April 30, 2014, was $210,255 resulting from legal cost spending in support of our intangible assets (patents) and costs paid to Penn for patents.

 

Cash provided by financing activities, for the six months ended April 30, 2014, was $14.8 million, primarily resulting from the public offering of 4,692,000 shares of common stock at $3.00 per share, resulting in net proceeds of $12.6 million. In addition, the Company sold 306,122 shares of Advaxis’ common stock to Aratana at a price of $4.90 per share, resulting in net proceeds of $1.5 million. The Company also received $0.4 million from the sale of common stock under Stock Purchase Agreement with Global BioPharma (GBP) and issued GBP 108,724 shares of our common stock.

   

For the six months ending April 30, 2013, we issued to certain accredited investors (including JMJ Financial as described below) convertible promissory notes in the aggregate principal amount of approximately $1,453,500 for an aggregate net purchase price of approximately $1,450,000. These convertible promissory notes were issued with either original issue discounts ranging from 15% to 25% or are interest-bearing and are convertible into shares of our common stock. Some of these convertible promissory notes were issued along with warrants. These convertible promissory notes mature between January and December of 2014. In addition, during the six months ended April 30, 2013, Mr. Moore loaned our company $11,200 under the Moore Notes. The Company repaid Mr. Moore $85,700 under the Moore Notes.

 

During the six months ended April 30, 2013, we issued 17,657 shares of our common stock, to accredited investors, at a price per share of $4.375, resulting in total net proceeds of $77,250.

 

During the six months ended April 30, 2013, we issued 345,524 shares of our common stock to Hanover in connection with the settlement of drawdowns pursuant to the Hanover Purchase Agreement, at prices ranging from approximately $3.325 to $4.675 per share. The per share price for such shares was established under the terms of the Hanover Purchase Agreement. We received total net proceeds of $2,910,684 in connection with these drawdowns.

 

9
 

 

Our limited capital resources and operations to date have been funded primarily with the proceeds from public and private equity, debt financings, NOL tax sales and income earned on investments and grants. We have sustained losses from operations in each fiscal year since our inception, and we expect losses to continue for the indefinite future, due to the substantial investment in research and development. As of April 30, 2014 and October 31, 2013, we had an accumulated deficit of $77,967,832 and $70,465,823, respectively and shareholders’ equity of $27,499,862 and $18,002,142, respectively.

 

The Company believes its current cash position is sufficient to fund its business plan through our fiscal year ending October 31, 2015. This assessment is based on current estimates and assumptions regarding our clinical development program and business needs. Actual results could differ materially from this projection. Subsequent to April 30, 2014, the Company may plan to continue to raise additional funds through the sales of debt and/or equity securities as needed.

 

The Company recognizes it will need to raise additional capital over and above the amounts raised both during October 2013 and March 2014 in order to continue to execute its business plan. There is no assurance that additional financing will be available when needed or that management will be able to obtain financing on terms acceptable to the Company or whether the Company will become profitable and generate positive operating cash flow. If the Company is unable to raise sufficient additional funds, it will have to scale back its business plan, extend payables and reduce overhead until sufficient additional capital is raised to support further operations. There can be no assurance that such a plan will be successful.

 

Off-Balance Sheet Arrangements

 

As of April 30, 2014, we had no off-balance sheet arrangements.

 

Critical Accounting Estimates

 

 The preparation of financial statements in accordance with GAAP accepted in the U.S. requires management to make estimates and assumptions that affect the reported amounts and related disclosures in the financial statements. Management considers an accounting estimate to be critical if:

 

it requires assumptions to be made that were uncertain at the time the estimate was made, and
   
changes in the estimate of difference estimates that could have been selected could have material impact in our results of operations or financial condition.

 

While we base our estimates and judgments on our experience and on various other factors that we believe to be reasonable under the circumstances, actual results could differ from those estimates and the differences could be material. The most significant estimates impact the following transactions or account balances: stock compensation, warrant valuation and dilution caused by anti-dilution provisions in the warrants and other agreements.

 

Stock Based Compensation

 

We account for stock-based compensation using fair value recognition and record stock-based compensation as a charge to earnings net of the estimated impact of forfeited awards. As such, we recognize stock-based compensation cost only for those stock-based awards that are estimated to ultimately vest over their requisite service period, based on the vesting provisions of the individual grants.

 

The process of estimating the fair value of stock-based compensation awards and recognizing stock-based compensation cost over their requisite service period involves significant assumptions and judgments. We estimate the fair value of stock option awards on the date of grant using the BSM for the remaining awards, which requires that we make certain assumptions regarding: (i) the expected volatility in the market price of our common stock; (ii) dividend yield; (iii) risk-free interest rates; and (iv) the period of time employees are expected to hold the award prior to exercise (referred to as the expected holding period). As a result, if we revise our assumptions and estimates, our stock-based compensation expense could change materially for future grants.

 

Stock-based compensation for employees, executives and directors is measured based on the fair value of the shares issued on the date of grant and is to be recognized over the requisite service period in both research and development expenses and general and administrative expenses on the statement of operations.

 

10
 

 

Fair Value of Financial Instruments

 

The carrying amounts of financial instruments, including cash, receivables, accounts payable and accrued expenses approximated fair value, as of the balance sheet date presented, because of the relatively short maturity dates on these instruments. The carrying amounts of the financing arrangements issued approximate fair value, as of the balance sheet date presented, because interest rates on these instruments approximate market interest rates after consideration of stated interest rates, anti-dilution protection and associated warrants. The estimate of fair value of such financial instruments involves the exercise of significant judgment and the use of estimates by management.

 

Derivative Financial instruments

 

We do not use derivative instruments to hedge exposures to cash flow, market or foreign currency risks. We evaluate all of our financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For derivative financial instruments that are accounted for as liabilities, the derivative instrument is initially recorded at its fair value and is then re-valued at each reporting date, with changes in the fair value reported in the statements of operations. The determination of fair value requires the use of judgment and estimates by management. For stock-based derivative financial instruments, we used the BSM which approximated the binomial lattice options pricing model to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the instrument could be required within 12 months of the balance sheet date. The variables used in the model are projected based on our historical data, experience, and other factors. Changes in any of these variables could result in material adjustments to the expense recognized for changes in the valuation of the warrant derivative liability.

 

New Accounting Pronouncements

 

Management does not believe that any other recently issued, but not yet effective accounting pronouncements, if adopted, would have a material impact on the accompanying consolidated financial statements.

 

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

 

Not Applicable

 

ITEM 4. CONTROLS AND PROCEDURES

 

Evaluation of Disclosure Controls and Procedures

 

As of the end of the period covered by this report, we conducted an evaluation, under the supervision and with the participation of our chief executive officer and chief financial officer of our disclosure controls and procedures (as defined in Rule 13a-15(e) and Rule 15d-15(e) of the Exchange Act). Based upon this evaluation, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is: (1) accumulated and communicated to our management, including our chief executive officer and chief financial officer, as appropriate to allow timely decisions regarding required disclosure; and (2) recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. In conjunction with this evaluation, we initiated the development of control design documents and are currently reviewing the recommendations and will implement change as appropriate.

 

Changes in Internal Control over Financial Reporting

 

In March 2014, our previous Chief Financial Officer left the Company and a new Chief Financial Officer was appointed. During the quarter ended April 30, 2014, there were no other significant changes in our internal control over financial reporting that have materially affected, or are reasonably likely to materially affect our internal control over financial reporting.

 

11
 

 

PART II - OTHER INFORMATION

 

ITEM 1. LEGAL PROCEEDINGS

 

The Company is from time to time involved in legal proceedings in the ordinary course of our business. The Company does not believe that any of these claims or proceedings against us is likely to have, individually or in the aggregate, a material adverse effect on the financial condition or results of operations. Refer to Footnote 10: Commitments and Contingencies for more information on legal proceedings.

 

ITEM 1A. RISK FACTORS  

 

Drug discovery and development is a complex, time-consuming and expensive process that is fraught with risk and a high rate of failure.

 

Product candidates are subject to extensive pre-clinical testing and clinical trials to demonstrate their safety and efficacy in humans. Conducting pre-clinical testing and clinical trials is a lengthy, time-consuming and expensive process that takes many years. We cannot be sure that pre-clinical testing or clinical trials of any of our product candidates will demonstrate the safety, efficacy and benefit-to-risk profile necessary to obtain marketing approvals. In addition, product candidates that experience success in pre-clinical testing and early-stage clinical trials will not necessarily experience the same success in late-stage clinical trials, which are required for marketing approval.

 

Even if we are successful in advancing a product candidate into the clinical development stage, before obtaining regulatory and marketing approvals, we must demonstrate through extensive human clinical trials that the product candidate is safe and effective for its intended use. Human clinical trials must be carried out under protocols that are acceptable to regulatory authorities and to the independent committees responsible for the ethical review of clinical studies. There may be delays in preparing protocols or receiving approval for them that may delay the start or completion of the clinical trials. In addition, clinical practices vary globally, and there is a lack of harmonization among the guidance provided by various regulatory bodies of different regions and countries with respect to the data that is required to receive marketing approval, which makes designing global trials increasingly complex. There are a number of additional factors that may cause our clinical trials to be delayed, prematurely terminated or deemed inadequate to support regulatory approval, such as:

 

● unforeseen safety issues (including those arising with respect to trials by third parties for compounds in a similar class as our product or product candidate), inadequate efficacy, or an unacceptable risk-benefit profile observed at any point during or after completion of the trials;

 

● slower than expected rates of patient enrollment, which could be due to any number of factors, including failure of our third-party vendors, including our CROs, to effectively perform their obligations to us, a lack of patients who meet the enrollment criteria or competition from clinical trials in similar product classes or patient populations;

 

● the risk of failure of our clinical investigational sites and related facilities to maintain compliance with the FDA’s cGMP regulations or similar regulations in countries outside of the U.S., including the risk that these sites fail to pass inspections by the appropriate governmental authority, which could invalidate the data collected at that site or place the entire clinical trial at risk;

 

● any inability to reach agreement or lengthy discussions with the FDA, equivalent regulatory authorities, or ethical review committees on trial design that we are able to execute;

 

● changes in laws, regulations, regulatory policy or clinical practices, especially if they occur during ongoing clinical trials or shortly after completion of such trials.

 

Any deficiency in the design, implementation or oversight of our development programs could cause us to incur significant additional costs, experience significant delays, prevent us from obtaining marketing approval for any product candidate or abandon development of certain product candidates, any of which could harm our business and cause our stock price to decline.

 

12
 

 

If our stockholders do not approve an amendment to our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of our common stock, and an amendment to our 2011 Omnibus Incentive Plan to increase the number of shares issuable thereunder, our ability to raise additional capital, competitively pursue future partnering and other business opportunities and provide adequate incentives to our employees could be materially adversely effected.

 

We have depleted almost all remaining authorized shares of our common stock available for issuance under our Amended and Restated Certificate of Incorporation. Furthermore, we have depleted significantly all of the shares of our common stock reserved for issuance under our 2011 Omnibus Incentive Plan. As a result, we are currently unable to offer equity incentives under our 2011 Omnibus Incentive Plan to new or existing employees. The unavailability of authorized shares of common stock places us in a competitive disadvantage since our ability to (i) raise additional capital through the sale of our common stock or securities exercisable or convertible into shares of our common stock, (ii) utilize our common stock for potential future partnering opportunities and other legitimate corporate business purposes, and (iii) attract and retain key personnel, is compromised. Our board of directors has approved both an amendment to our Amended and Restated Certificate of Incorporation to increase the number of authorized shares of common stock and an amendment to our 2011 Omnibus Incentive Plan to increase the number of shares of common stock issuable thereunder. We submitted such amendments to our stockholders for approval at our 2014 Annual Meeting of Stockholders. If stockholder approval is not received for these amendments, we believe it will compromise our ability to competitively pursue future business and financial endeavors with common stock or securities exercisable or convertible into or exchangable for shares of our common stock as consideration and to provide incentives to our employees, which could have an adverse effect on our business, financial position and results of operations.

 

Our internal control over financial reporting and our disclosure controls and procedures have been ineffective in the past, and may be ineffective again in the future, and failure to improve them at such time could lead to errors in our financial statements that could require a restatement or untimely filings, which could cause investors to lose confidence in our reported financial information, and a decline in our stock price.

 

Our internal control over financial reporting and our disclosure controls and procedures have been ineffective in the past. We have taken steps to improve our disclosure controls and procedures and our internal control over financial reporting, and as of January 31, 2014, our chief executive officer and chief financial officer concluded that our disclosure controls and procedures were effective. On February 26, 2014, we entered into an engagement letter to initiate SOX assessment services, including the development of control design documents and control test plans.

 

However, there is no assurance that our disclosure controls and procedures will remain effective or that there will be no material weaknesses in our internal control over financial reporting in the future. Additionally, as a result of the historical material weaknesses in our internal control over financial reporting and the historical ineffectiveness of our disclosure controls and procedures, current and potential stockholders could lose confidence in our financial reporting, which would harm our business and the trading price of our stock.

 

There have been no additional material changes in our risk factors disclosed in our Annual Report on Form 10-K for the year ended October 31, 2013.

 

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS.

 

During the period covered by this report, we have issued unregistered securities to the persons as described below. None of these transactions involved any underwriters, underwriting discounts or commissions, except as specified below, or any public offering, and we believe that each transaction was exempt from the registration requirements of the Securities Act of 1933 by virtue of Section 3(a)(9) or Section 4(2) thereof and/or Regulation D promulgated thereunder. All recipients had adequate access to information about us. We have not furnished information under this item to the extent that such information previously has been included under Item 3.02 in a Current Report on Form 8-K.

 

On February 14, 2014, the registrant issued 108,724 shares of common stock to an accredited investor pursuant for net proceeds of $0.4 million pursuant to the terms of a Stock Purchase Agreement.

 

On April 8, 2014, the registrant issued 66,667 shares of common stock to a former employee pursuant to the terms of a separation agreement (38,700 shares on a net basis after employee payroll taxes).

 

On April 24, 2014, the registrant issued 14,031 shares of its common stock to an accredited investor as payment for consulting services rendered.

 

On April 25, 2014, the registrant issued 17,072 shares of its common stock to an accredited investor as payment for consulting services rendered.

 

13
 

 

ITEM 5. OTHER INFORMATION

 

On June 5, 2014, the Company and each of Daniel J. O’Connor, Chief Executive Officer and President, Gregory T. Mayes III, Executive Vice President and Chief Operating Officer, Sara Bonstein, Senior Vice President and Chief Financial Officer, Robert G. Petit, Executive Vice President and Chief Scientific Officer and Chris L. French, Vice President, Regulatory & Medical Affairs, of the Company (each, an “Executive”) entered into an amendment (each, an “Amendment” and collectively, the “Amendments”) to their respective employment agreements (each, an “Employment Agreement”).

 

Pursuant to the Employment Agreements, the Executives had voluntarily agreed to utilize a percentage of their base salary to purchase common stock of the Company based on the fair market value of the Common Stock on the date of acquisition. The stock purchases were scheduled to occur on the last business day of each fiscal quarter of the Company in accordance with the terms and provisions of the Company’s 2011 Omnibus Incentive Plan (as such plan is amended from time to time). The allocation between the cash and equity components of each Executive’s base salary is as follows:

 

Executive   % of base salary
in cash
    % of base salary
in Common Stock
 
Daniel J. O’Connor     75.0       25.0  
Gregory T. Mayes, III     92.5       7.5  
Sara Bonstein     92.5       7.5  
Robert G. Petit     91.5       8.5  
Chris L. French     95.0       5.0  

 

The Amendments provide that such purchases of Common Stock will now occur on the last business day of each calendar month and will be effected through a direct purchase from the Company at a purchase price equal to the consolidated closing bid price of the Common Stock on the purchase date.

 

Pursuant to the terms of the Amendment entered into by and between the Company and Mr. O’Connor, Mr. O’Connor also agreed to forego the scheduled increases in his base salary that were contained in his Employment Agreement. These increases would have increased his base salary compensation to $350,000 on January 1, 2015 and $375,000 on January 1, 2016. Mr. O’Connor would also have been entitled to an immediate increase in his base salary compensation to $375,000 if certain financing or licensing milestones were achieved. As a result of the Amendment, Mr. O’Connor will only be entitled to receive a cost-of-living increase for 2015 and 2016.

 

The Amendment entered into by and between the Company and Ms. Bonstein clarified certain terms relating to an inducement grant that the Company had agreed to pay to Ms. Bonstein when she commenced her employment with the Company on February 24, 2014 but which was not paid. The grant will consist of 100,000 restricted shares of Common Stock, 33,333 shares of which will be fully vested and not subject to forfeiture as of the grant date, with the remaining shares vesting and not subject to forfeiture as follows: 33,333 on February 24, 2015 and 33,334 on February 24, 2016. Vesting will be accelerated in the event of Ms. Bonstein’s death or disability, or in the event of a “Change of Control” as defined in the related restricted stock award agreement included as an exhibit to Ms. Bonstein’s Amendment. The restricted stock award agreement also includes other terms and conditions and restrictions regarding the award.

 

14
 

  

ITEM 6. EXHIBITS.

 

1.1   Underwriting Agreement, dated March 26, 2014, by and between Aegis Capital Group and Advaxis, Inc. Incorporated by reference to Exhibit 1.1 to Current Report on Form 8K filed with the SEC on April 1, 2014.
     
3.1   Amended and Restated Certificate of Incorporation. Incorporated by reference to Annex C to DEF 14A Proxy Statement filed with the SEC on May 15, 2006.
     
3.2   Certificate of Designations of Preferences, Rights and Limitations of Series A Preferred Stock of the registrant, dated September 24, 2009. Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed with the SEC on September 25, 2009.
     
3.3   Certificate of Designations of Preferences, Rights and Limitations of Series B Preferred Stock of the registrant, dated July 19, 2010. Incorporated by reference to Exhibit 4.1 to Current Report on Form 8-K filed with the SEC on July 20, 2010.
     
3.4   Certificate of Amendment to Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on August 16, 2012. Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the SEC on August 17, 2012.
     
3.5   Certificate of Amendment of the Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 11, 2013 (reverse stock split).  Incorporated by reference to Exhibit 3.1 to Current Report on Form 8-K filed with the SEC on July 15, 2013.
     
3.6   Certificate of Amendment of the Amended and Restated Certificate of Incorporation filed with the Delaware Secretary of State on July 12, 2013 (reverse stock split).  Incorporated by reference to Exhibit 3.2 to Current Report on Form 8-K filed with the SEC on July 15, 2013.
     
3.7   Amended and Restated Bylaws. Incorporated by reference to Exhibit 10.4 to Quarterly Report on Form 10-QSB filed with the SEC on September 13, 2006.
     
4.1   Common Stock Purchase Warrant, dated as of March 19, 2014, by and between Advaxis, Inc. and Aratana Therapeutics, Inc.
     
4.2  

Form of Representative’s Warrant related to the Underwriting Agreement, dated as of March 31, 2014, by and between Advaxis, Inc. and Aegis Capital Group.

     
10.1***   Exclusive License Agreement, dated March 19, 2014, by and between Advaxis Inc. and Aratana Therapeutics, Inc. 
     
10.2‡ *   Employment Agreement, dated March 24, 2014, by and between Advaxis Inc. and Sara M. Bonstein
     

10.3‡*

Separation Agreement, dated March 24, 2014, between Advaxis Inc. and Mark J. Rosenblum

     
10.4‡*   Amendment No. 2, dated as of June 5, 2014, to the Employment Agreement by and between Advaxis, Inc. and Daniel J. O’Connor.
     
10.5‡*   Amendment No. 2, dated as of June 5, 2014, to the Employment Agreement by and between Advaxis, Inc. and Gregory T. Mayes.
     
10.6‡*   Amendment No. 2, dated as of June 5, 2014, to the Employment Agreement by and between Advaxis, Inc. and Robert G. Petit.
     
10.7‡*   Amendment No. 2, dated as of June 5, 2014, to the Employment Agreement by and between Advaxis, Inc. and Chris L. French.
     
10.8‡*   Amendment No. 1, dated as of June 5, 2014, to the Employment Agreement by and between Advaxis, Inc. and Sara M. Bonstein.
   

31.1*

 

Certification of Chief Executive Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002

     
31.2*   Certification of Chief Financial Officer pursuant to section 302 of the Sarbanes-Oxley Act of 2002
     
32.1*   Certification of Chief Executive Officer pursuant to section 906 of the Sarbanes-Oxley Act of 2002
     
32.2*   Certification of Chief Financial Officer  pursuant to section 906 of the Sarbanes-Oxley Act of 2002
     
101.INS**   XBRL INSTANCE DOCUMENT
     
101.SCH**   XBRL TAXONOMY EXTENSION SCHEMA DOCUMENT
     
101.CAL**   XBRL TAXONOMY EXTENSION CALCULATION LINKBASE DOCUMENT
     
101.DEF**   XBRL TAXONOMY EXTENSION DEFINITION LINKBASE DOCUMENT
     
101.LAB**   XBRL TAXONOMY EXTENSION LABEL LINKBASE DOCUMENT
     
101.PRE**   XBRL TAXONOMY EXTENSION PRESENTATION LINKBASE DOCUMENT

 

 

* Filed herewith

** Furnished herewith

*** Filed herewith. Confidential treatment requested under 17 C.F.R. §§200.80(b)(4) and Rule 24b-2. The confidential portions of this exhibit have been omitted and are marked accordingly. The confidential portions have been provided separately to the SEC pursuant to the confidential treatment request.

‡ Denotes management contract or compensatory plan or arrangement.

 

15
 

 

SIGNATURES

 

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

 

  ADVAXIS, INC.
  Registrant
     
Date: June 9, 2014 By:  /s/ Daniel J. O’Connor
    Daniel J. O’Connor
    Chief Executive Officer
     
  By: /s/ Sara M. Bonstein
    Sara M. Bonstein
    Chief Financial Officer

 

16
 

 

 

Annex A

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL. TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT EXCEPT IN ACCORDANCE WITH APPLICABLE FINRA CONDUCT RULES.

 

VOID AFTER 5:00 P.M., EASTERN TIME. MARCH 19, 2024.

 

COMMON STOCK PURCHASE WARRANT

 

For the Purchase of 153,061 Shares of Common Stock

of

ADVAXIS, INC.

 

1. Purchase Warrant . THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of ARATANA THERAPEUTICS, INC. or its assigns (“Holder”), as registered owner of this Purchase Warrant, to Advaxis, Inc., a Delaware corporation (the “Company”), Holder is entitled, at any time or from time to time from March 19, 2014 (the “Commencement Date”), and at or before 5:00 p.m., Eastern time, March 19, 2024 (the “Expiration Date”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to 153,061 shares of common stock of the Company, par value $0.001 per share (the “Shares”), subject to adjustment as provided in Section 5 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate this Purchase Warrant. This Purchase Warrant is exercisable at $4.90 per Share; provided , however , that upon the occurrence of any of the events specified in Section 5 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “Exercise Price” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

 

2. Exercise .

 

2.1 Exercise Form . In order to exercise this Purchase Warrant, the exercise form attached hereto as Exhibit I (the “Notice of Exercise”) must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and, unless a Cashless Exercise (as defined below) is elected, payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. Promptly upon receipt of the Notice of Exercise and the payment of the Exercise Price, if applicable, and in no event later than three (3) business days thereafter, the Company shall issue to the Holder a certificate for the number of Shares purchased or, if eligible and permitted by applicable securities laws, deliver such Shares to an account specified by the Holder through the Deposit Withdrawal at Custodian (DWAC) system of The Depository Trust Company. Subject to Section 2.3 below, if the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

 

D - 15
 

 

2.2 Cashless Exercise . Without limiting Section 2.1 above, the Holder of this Warrant may also exercise this Warrant as to any or all Shares and, in lieu of making the cash payment otherwise contemplated to be made to the Company upon such exercise in payment of the aggregate Exercise Price, elect instead to receive upon such exercise (a “Cashless Exercise”) a reduced number of Shares (the “Net Number”) determined according the following formula:

 

 Net Number = (AxB) - (AxC)

B

 

For purposes of the foregoing formula:

 

A = the total number of shares with respect to which this Purchase Warrant is then being exercised in a Cashless Exercise.

 

B = the Fair Market Value (as defined below) on the date the Notice of Exercise is delivered to the Company.

 

C = the Exercise Price then in effect at the time of such Cashless Exercise.

 

“Fair Market Value” means (a) if the Shares are traded on a securities exchange, the average of the closing prices over a five (5) trading day period ending three (3) trading days before the day the Fair Market Value of the Shares is being determined; or (b) if the Shares are traded over-the-counter, the average of the closing bid and asked prices quoted on the over-the- counter system over the five (5) trading day period ending three (3) trading days before the day the Fair Market Value of the Shares is being determined.

 

There cannot be a Cashless Exercise unless “B” exceeds “C”.

 

2.3 Exercise Prior to Expiration . To the extent this Purchase Warrant is not previously exercised as to all Shares subject hereto, and if the Fair Market Value of one Share is greater than the Exercise Price then in effect, this Purchase Warrant shall be deemed to have been automatically exercised by the Holder through a Cashless Exercise immediately before its expiration. To the extent this Purchase Warrant or any portion thereof is deemed automatically exercised pursuant to this Section 2.3, the Company agrees to promptly notify the Holder of the number of Shares, if any, the Holder is to receive by reason of such automatic exercise.

 

2.4 Legend . Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “Act”), or counsel for the Company determines that as a result of a Cashless Exercise, such legend is not required under the Act:

 

D - 16
 

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “Act”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act and applicable state law which, in the opinion of counsel to the Company, is available.”

 

3. Transfer .

 

3.1 General Restrictions . Subject to compliance with applicable federal and state securities laws, this Purchase Warrant and all rights hereunder are transferable, in whole or in part, without charge to the holder hereof (except for transfer taxes) upon surrender of this Purchase Warrant properly endorsed. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto as Exhibit II duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. Each taker and holder of this Purchase Warrant, by taking or holding the same, consents and agrees that this Purchase Warrant, when endorsed in blank, shall be deemed negotiable, and that the holder hereof, when this Purchase Warrant shall have been so endorsed and its transfer recorded on the Company’s books, shall be treated by the Company and all other persons dealing with this Purchase Warrant as the absolute owner hereof for any purpose and as the person entitled to exercise the rights represented by this Warrant. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.

 

3.2 Restrictions Imposed by the Securities Act . The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Securities Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement or a post-effective amendment to the Registration Statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the “Commission”) and compliance with applicable state securities law has been established.

 

4. New Purchase Warrants to be Issued .

 

4.1 Partial Exercise or Transfer . Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 3.1 hereto, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

 

D - 17
 

 

4.2 Lost Certificate . Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

5. Adjustments .

 

5.1 Adjustments to Exercise Price and Number of Securities . The Exercise Price and the number of Shares underlying this Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

 

5.1.1 Share Dividends; Split Ups . If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding Shares, and the Exercise Price shall be proportionately decreased.

 

5.1.2 Aggregation of Shares . If, after the date hereof, and subject to the provisions of Section 5.3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding Shares, and the Exercise Price shall be proportionately increased.

 

5.1.3 Replacement of Securities upon Reorganization, etc. In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 5.1.1 or 5.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share recapitalization or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share recapitalization or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share recapitalization or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 5.1.1 or 5.1.2, then such adjustment shall be made pursuant to Sections 5.1.1, 5.1.2 and this Section 5.1.3. The provisions of this Section 5.1.3 shall similarly apply to successive reclassifications, reorganizations, share recapitalizations or amalgamations, or consolidations, sales or other transfers.

 

D - 18
 

 

5.1.4 Changes in Form of Purchase Warrant . This form of Purchase Warrant need not be changed because of any change pursuant to this Section 5.1, and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

 

5.2 Substitute Purchase Warrant . In case of any consolidation of the Company with, or share recapitalization or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share recapitalization or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share recapitalization or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share recapitalization or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 5. The above provision of this Section shall similarly apply to successive consolidations or share recapitalizations or amalgamations.

 

5.3 Elimination of Fractional Interests . The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of this Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

 

6. Reservation and Listing . The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of this Purchase Warrant, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of this Purchase Warrant and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of this Purchase Warrant and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as this Purchase Warrant shall be outstanding, the Company shall use its best efforts to cause all Shares issuable upon exercise of this Purchase Warrant to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares may then be listed and/or quoted.

 

D - 19
 

 

7. Certain Notice Requirements .

 

7.1 Holder’s Right to Receive Notice . Nothing herein shall be construed as conferring upon the Holder the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of this Purchase Warrant or its exercise, any of the events described in Section 7.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books for the determination of the shareholders entitled to such dividend. distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale or event described in Section 5.1.3. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to the Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

 

7.2 Events Requiring Notice . The Company shall be required to give the notice described in this Section 7 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution, (ii) the Company shall offer to the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share recapitalization or amalgamation), any of the events described in Section 5.1.3 or a sale of all or substantially all of its property, assets and business shall be proposed.

 

7.3 Notice of Change in Exercise Price . The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 5 hereof, send notice to the Holder of such event and change (“Price Notice”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.

 

7.4 Transmittal of Notices . All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made when hand delivered, or mailed by express mail or private courier service: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holder:

 

D - 20
 

 

If to the Holder:
 
Aratana Therapeutics, Inc.
1901 Olathe Boulevard
Kansas City, KS 66103
Attention: Steven St. Peter, President and Chief Executive Officer
Telephone: (913) 951-2133
Facsimile: (913) 904-9641
 
With a required copy to:
 
Latham and Watkins
John Hancock Tower, 20th Floor
200 Clarendon Street
Boston, MA 02116
Attention: Judith Hasko and Pete Handrinos
Telephone: (617) 948-6000
Facsimile: (617) 948-6001
 
If to the Company:
 
Advaxis, Inc.
305 College Road East
Princeton, NJ 08540
Attn: Daniel J. O’Connor
Telephone: (609) 452-9813
Fax No.: (609) 452-9818
 
with a copy (which shall not constitute notice) to:
 
Wollmuth, Maher & Deutsch LLP
500 Fifth Avenue
New York, NY 10110
Attn: Sandip C. Bhattacharji
Telephone: (212) 382-3300
Fax No.: (212) 382-0050

 

8. Miscellaneous .

 

8.1 Amendments . The Company will not, by amendment of its Certificate of Incorporation or through any other means, avoid or seek to avoid the observance or performance of any of the terms of this Purchase Warrant, but will at all times in good faith assist in the carrying out of all such terms and in the taking of all such actions as may be necessary or appropriate in order to protect the rights of the Holder against impairment. All modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought. This Purchase Warrant shall be binding upon any successors or assigns of the Company.

 

D - 21
 

 

8.2 Headings . The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

 

8.3. Entire Agreement . This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

8.4 Severability . In the event any one or more of the provisions of this Purchase Warrant shall for any reason be held invalid, illegal or unenforceable, the remaining provisions of this Purchase Warrant shall be unimpaired, and the invalid, illegal or unenforceable provision shall be replaced by a mutually acceptable valid, legal and enforceable provision, which comes closest to the intention of the parties underlying the invalid, illegal or unenforceable provision.

 

8.5 Binding Effect . This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

 

8.6 Governing Law; Submission to Jurisdiction; Trial by Jury . This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of New York, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 7.3 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this agreement or the transactions contemplated hereby.

 

D - 22
 

 

8.7 Waiver, etc . The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

8.8 Counterparts . This Purchase Warrant and any amendments, waivers, consents or supplements hereto may be executed in any number of counterparts, and by different parties hereto in separate counterparts, each of which when so delivered shall be deemed an original, but all of which counterparts shall constitute but one and the same instrument.

 

8.9 Specific Performance . The parties hereto hereby declare that it is impossible to measure in money the damages which will accrue to Holder by reason of the Company’s failure to perform any of the obligations under this Purchase Warrant and agree that the terms of this Warrant shall be specifically enforceable by Holder. If Holder institutes any action or proceeding to specifically enforce the provisions hereof, any person against whom such action or proceeding is brought hereby waives the claim or defense therein that Holder has an adequate remedy at law, and such person shall not offer in any such action or proceeding the claim or defense that such remedy at law exists.

 

[ Signature Page Follows ]

 

D - 23
 

 

IN WITNESS WHEREOF, the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the 19 th day of March, 2014.

 

ADVAXIS, INC.  
     
By: /s/ DANIEL J. O’CONNOR  
Name: DANIEL J. O’CONNOR  
Title: PRESIDENT & CEO  

 

D - 24
 

 

EXHIBIT I

 

[ Form to be used to exercise Purchase Warrant ]

 

Date: __________, 20 __

 

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for__________________ shares of common stock, par value $0,001 per share (the “Shares”), of Advaxis, Inc., a Delaware corporation (the “Company”), and hereby

 

_______ makes payment of $____________ (at the rate of $________ per Share) in payment of the Exercise Price pursuant thereto or

 

_______ elects to make a Cashless Exercise with respect to________________ Shares.

 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

 

Signature______________________________________

 

Signature Guaranteed_______________________________

 

INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

Name:    
  (Print in Block Letters)  
     
Address:    
     
     

 

D - 25
 

 

DWAC Instructions (if Company is DWAC eligible at the time of exercise)

 

     
     
     

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

 

D - 26
 

 

EXHIBIT II

 

ASSIGNMENT

 

(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

FOR VALUE RECEIVED, ___________________ does hereby sell, assign and transfer unto ___________________ the right to purchase shares of common stock, par value $0,001 per share, of Advaxis, Inc., a Delaware corporation (the “Company”), evidenced by the within Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.

 

Dated:___________, 20 __

 

Signature______________________________________

 

Signature Guaranteed_______________________________

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

 

D - 27
 

 

 

Representative’s Warrant Agreement

 

THE REGISTERED HOLDER OF THIS PURCHASE WARRANT BY ITS ACCEPTANCE HEREOF, AGREES THAT IT WILL NOT SELL, TRANSFER OR ASSIGN THIS PURCHASE WARRANT EXCEPT AS HEREIN PROVIDED AND THE REGISTERED HOLDER OF THIS PURCHASE WARRANT AGREES THAT IT WILL NOT SELL, TRANSFER, ASSIGN, PLEDGE OR HYPOTHECATE THIS PURCHASE WARRANT FOR A PERIOD OF 180 DAYS FOLLOWING THE DATE OF THE UNDERWRITING AGREEMENT (DEFINED BELOW) TO ANYONE OTHER THAN (I) AEGIS CAPITAL CORP. OR AN UNDERWRITER OR A SELECTED DEALER IN CONNECTION WITH THE OFFERING, OR (II) A BONA FIDE OFFICER OR PARTNER OF AEGIS CAPITAL CORP. OR OF ANY SUCH UNDERWRITER OR SELECTED DEALER.

 

THIS PURCHASE WARRANT IS NOT EXERCISABLE PRIOR TO MARCH 26, 2015. VOID AFTER 5:00 P.M., EASTERN TIME, MARCH 26, 2019.

 

COMMON STOCK PURCHASE WARRANT

 

For the Purchase of ________ Shares of Common Stock

 

of

 

ADVAXIS, INC.

 

1. Purchase Warrant . THIS CERTIFIES THAT, in consideration of funds duly paid by or on behalf of ________________ (“ Holder ”), as registered owner of this Purchase Warrant, to Advaxis, Inc., a Delaware corporation (the “ Company ”), Holder is entitled, at any time or from time to time from March 26, 2015 (the “ Commencement Date ”), and at or before 5:00 p.m., Eastern time, March 26, 2019 (the “ Expiration Date ”), but not thereafter, to subscribe for, purchase and receive, in whole or in part, up to _________ shares of common stock of the Company, par value $0.001 per share (the “ Shares ”), subject to adjustment as provided in Section 6 hereof. If the Expiration Date is a day on which banking institutions are authorized by law to close, then this Purchase Warrant may be exercised on the next succeeding day which is not such a day in accordance with the terms herein. During the period ending on the Expiration Date, the Company agrees not to take any action that would terminate the Purchase Warrant. This Purchase Warrant is initially exercisable at $3.75 per Share (125% of the price of the Shares sold in the Offering); provided , however , that upon the occurrence of any of the events specified in Section 6 hereof, the rights granted by this Purchase Warrant, including the exercise price per Share and the number of Shares to be received upon such exercise, shall be adjusted as therein specified. The term “ Exercise Price ” shall mean the initial exercise price or the adjusted exercise price, depending on the context.

 

2. Exercise .

 

2.1 Exercise Form . In order to exercise this Purchase Warrant, the exercise form attached hereto must be duly executed and completed and delivered to the Company, together with this Purchase Warrant and payment of the Exercise Price for the Shares being purchased payable in cash by wire transfer of immediately available funds to an account designated by the Company or by certified check or official bank check. If the subscription rights represented hereby shall not be exercised at or before 5:00 p.m., Eastern time, on the Expiration Date, this Purchase Warrant shall become and be void without further force or effect, and all rights represented hereby shall cease and expire.

 

2.2 Cashless Exercise .  If at any time after the Commencement Date there is no effective registration statement registering, or no current prospectus available for, the resale of the Shares by the Holder, then in lieu of exercising this Purchase Warrant by payment of cash or check payable to the order of the Company pursuant to Section 2.1 above, Holder may elect to receive the number of Shares equal to the value of this Purchase Warrant (or the portion thereof being exercised), by surrender of this Purchase Warrant to the Company, together with the exercise form attached hereto, in which event the Company shall issue to Holder, Shares in accordance with the following formula:

 

 
 

 

X    =    Y(A-B)

A  

 

  Where, X = The number of Shares to be issued to Holder;
    Y = The number of Shares for which the Purchase Warrant is being exercised;
    A = The fair market value of one Share; and
    B = The Exercise Price.

 

For purposes of this Section 2.2 , the fair market value of a Share is defined as follows:

 

(i) if the Company’s common stock is traded on a securities exchange, the value shall be deemed to be the closing price on such exchange prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; or

 

(ii) if the Company’s common stock is actively traded over-the-counter, the value shall be deemed to be the closing bid price prior to the exercise form being submitted in connection with the exercise of the Purchase Warrant; if there is no active public market, the value shall be the fair market value thereof, as determined in good faith by the Company’s Board of Directors.

 

2.3 Legend . Each certificate for the securities purchased under this Purchase Warrant shall bear a legend as follows unless such securities have been registered under the Securities Act of 1933, as amended (the “ Act ”):

 

“The securities represented by this certificate have not been registered under the Securities Act of 1933, as amended (the “ Act ”), or applicable state law. Neither the securities nor any interest therein may be offered for sale, sold or otherwise transferred except pursuant to an effective registration statement under the Act, or pursuant to an exemption from registration under the Act and applicable state law which, in the opinion of counsel to the Company, is available.”

 

2.4 Stockholder Approval . Notwithstanding anything in this Purchase Warrant to the contrary, the exercise of this Purchase Warrant is subject to the approval by the stockholders of the Company of Proposal 2 set forth in the Company’s definitive proxy statement filed with the Commission (as defined below) on February 28, 2014, regarding the amendment to the Company’s Amended and Restated Certificate of Incorporation, as amended, to increase its authorized capital stock.

 

3. Transfer .

 

3.1 General Restrictions . The registered Holder of this Purchase Warrant agrees by his, her or its acceptance hereof, that such Holder will not: (a) sell, transfer, assign, pledge or hypothecate this Purchase Warrant for a period of 180 days following the date of the Underwriting Agreement by and between the Company and the Holder as representative of the underwriters, dated March 26, 2014 (the “ Underwriting Agreement ”), to anyone other than: (i) Aegis Capital Corp. (“ Aegis ”) or an underwriter or a selected dealer participating in the Offering, or (ii) a bona fide officer or partner of Aegis or of any such underwriter or selected dealer, in each case in accordance with FINRA Conduct Rule 5110(g)(1), or (b) cause this Purchase Warrant or the securities issuable hereunder to be the subject of any hedging, short sale, derivative, put or call transaction that would result in the effective economic disposition of this Purchase Warrant or the securities hereunder, except as provided for in FINRA Rule 5110(g)(2). On and after that date that is 180 days after the date of the Underwriting Agreement, transfers to others may be made subject to compliance with or exemptions from applicable securities laws. In order to make any permitted assignment, the Holder must deliver to the Company the assignment form attached hereto duly executed and completed, together with the Purchase Warrant and payment of all transfer taxes, if any, payable in connection therewith. The Company shall within five (5) Business Days transfer this Purchase Warrant on the books of the Company and shall execute and deliver a new Purchase Warrant or Purchase Warrants of like tenor to the appropriate assignee(s) expressly evidencing the right to purchase the aggregate number of Shares purchasable hereunder or such portion of such number as shall be contemplated by any such assignment.

 

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3.2 Restrictions Imposed by the Act . The securities evidenced by this Purchase Warrant shall not be transferred unless and until: (i) the Company has received the opinion of counsel for the Holder that the securities may be transferred pursuant to an exemption from registration under the Act and applicable state securities laws, the availability of which is established to the reasonable satisfaction of the Company, or (ii) a registration statement relating to the offer and sale of such securities has been filed by the Company and declared effective by the U.S. Securities and Exchange Commission (the “ Commission ”) and compliance with applicable state securities law has been established.

 

4. Registration Rights .

 

4.1 “Piggy-Back” Registration .

 

4.1.1 Grant of Right . The Holder shall have the right, for a period of four (4) years commencing one year after the date of the Underwriting Agreement, to include all or any portion of the Shares underlying the Purchase Warrants (collectively, the “ Registrable Securities ”) as part of any other registration of securities filed by the Company (other than in connection with a transaction contemplated by Rule 145 promulgated under the Act or pursuant to Form S-8 or any equivalent form); provided , however , that if, solely in connection with any primary underwritten public offering for the account of the Company, the managing underwriter(s) thereof shall, in its reasonable discretion, impose a limitation on the number of shares of Common Stock which may be included in the registration statement because, in such underwriter(s)’ judgment, marketing or other factors dictate such limitation is necessary to facilitate public distribution, then the Company shall be obligated to include in such registration statement only such limited portion of the Registrable Securities with respect to which the Holder requested inclusion hereunder as the underwriter shall reasonably permit. Any exclusion of Registrable Securities shall be made pro rata among the Holders seeking to include Registrable Securities in proportion to the number of Registrable Securities sought to be included by such Holders; provided , however , that the Company shall not exclude any Registrable Securities unless the Company has first excluded all outstanding securities, the holders of which are not entitled to inclusion of such securities in such registration statement or are not entitled to pro rata inclusion with the Registrable Securities.

 

4.1.2 Terms . The Company shall bear all fees and expenses attendant to registering the Registrable Securities pursuant to Section 4.1.1 hereof, but the Holders shall pay any and all underwriting commissions and the expenses of any legal counsel selected by the Holders to represent them in connection with the sale of the Registrable Securities. In the event of such a proposed registration, the Company shall furnish the then Holders of outstanding Registrable Securities with not less than thirty (30) days written notice prior to the proposed date of filing of such registration statement. Such notice to the Holders shall continue to be given for each registration statement filed by the Company until such time as all of the Registrable Securities have been sold by the Holder. The holders of the Registrable Securities shall exercise the “piggy-back” rights provided for herein by giving written notice, within ten (10) days of the receipt of the Company’s notice of its intention to file a registration statement. Except as otherwise provided in this Purchase Warrant, there shall be no limit on the number of times the Holder may request registration under this Section 4.1.2 ; provided, however, that such registration rights shall terminate on the sixth anniversary of the Commencement Date.

 

4.2 General Terms .

 

4.2.1 Indemnification . The Company shall indemnify the Holder(s) of the Registrable Securities to be sold pursuant to any registration statement hereunder and each person, if any, who controls such Holders within the meaning of Section 15 of the Act or Section 20 (a) of the Securities Exchange Act of 1934, as amended (“ Exchange Act ”), against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which any of them may become subject under the Act, the Exchange Act or otherwise, arising from such registration statement but only to the same extent and with the same effect as the provisions pursuant to which the Company has agreed to indemnify the Underwriters contained in Section 5.1 of the Underwriting Agreement. The Holder(s) of the Registrable Securities to be sold pursuant to such registration statement, and their successors and assigns, shall severally, and not jointly, indemnify the Company, against all loss, claim, damage, expense or liability (including all reasonable attorneys’ fees and other expenses reasonably incurred in investigating, preparing or defending against any claim whatsoever) to which they may become subject under the Act, the Exchange Act or otherwise, arising from information furnished by or on behalf of such Holders, or their successors or assigns, in writing, for specific inclusion in such registration statement to the same extent and with the same effect as the provisions contained in Section 5.2 of the Underwriting Agreement pursuant to which the Underwriters have agreed to indemnify the Company.

 

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4.2.2 Exercise of Purchase Warrants . Nothing contained in this Purchase Warrant shall be construed as requiring the Holder(s) to exercise their Purchase Warrants prior to or after the initial filing of any registration statement or the effectiveness thereof.

 

4.2.3 Documents Delivered to Holders . The Company shall furnish to each Holder participating in any of the foregoing offerings and to each underwriter of any such offering, if any, a signed counterpart, addressed to such Holder or underwriter, of: (i) an opinion of counsel to the Company, dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, an opinion dated the date of the closing under any underwriting agreement related thereto), and (ii) a “cold comfort” letter dated the effective date of such registration statement (and, if such registration includes an underwritten public offering, a letter dated the date of the closing under the underwriting agreement) signed by the independent registered public accounting firm which has issued a report on the Company’s financial statements included in such registration statement, in each case covering substantially the same matters with respect to such registration statement (and the prospectus included therein) and, in the case of such accountants’ letter, with respect to events subsequent to the date of such financial statements, as are customarily covered in opinions of issuer’s counsel and in accountants’ letters delivered to underwriters in underwritten public offerings of securities. The Company shall also deliver promptly to each Holder participating in the offering requesting the correspondence and memoranda described below and to the managing underwriter, if any, copies of all correspondence between the Commission and the Company, its counsel or auditors and all memoranda relating to discussions with the Commission or its staff with respect to the registration statement and permit each Holder and underwriter to do such investigation, upon reasonable advance notice, with respect to information contained in or omitted from the registration statement as it deems reasonably necessary to comply with applicable securities laws or rules of FINRA. Such investigation shall include access to books, records and properties and opportunities to discuss the business of the Company with its officers and independent auditors, all to such reasonable extent and at such reasonable times as any such Holder shall reasonably request.

 

4.2.4 Underwriting Agreement . The Company shall enter into an underwriting agreement with the managing underwriter(s), if any, selected by any Holders whose Registrable Securities are being registered pursuant to this Section 4 , which managing underwriter shall be reasonably satisfactory to the Company. Such agreement shall be reasonably satisfactory in form and substance to the Company, each Holder and such managing underwriters, and shall contain such representations, warranties and covenants by the Company and such other terms as are customarily contained in agreements of that type used by the managing underwriter. The Holders shall be parties to any underwriting agreement relating to an underwritten sale of their Registrable Securities and may, at their option, require that any or all the representations, warranties and covenants of the Company to or for the benefit of such underwriters shall also be made to and for the benefit of such Holders. Such Holders shall not be required to make any representations or warranties to or agreements with the Company or the underwriters except as they may relate to such Holders, their Shares and their intended methods of distribution.

 

4.2.5 Documents to be Delivered by Holder(s) . Each of the Holder(s) participating in any of the foregoing offerings shall furnish to the Company a completed and executed questionnaire provided by the Company requesting information customarily sought of selling security holders.

 

4.2.6 Damages . Should the registration or the effectiveness thereof required by Section 4.1 hereof be delayed by the Company or the Company otherwise fails to comply with such provisions, the Holder(s) shall, in addition to any other legal or other relief available to the Holder(s), be entitled to obtain specific performance or other equitable (including injunctive) relief against the threatened breach of such provisions or the continuation of any such breach, without the necessity of proving actual damages and without the necessity of posting bond or other security.

 

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5. New Purchase Warrants to be Issued .

 

5.1 Partial Exercise or Transfer . Subject to the restrictions in Section 3 hereof, this Purchase Warrant may be exercised or assigned in whole or in part. In the event of the exercise or assignment hereof in part only, upon surrender of this Purchase Warrant for cancellation, together with the duly executed exercise or assignment form and funds sufficient to pay any Exercise Price and/or transfer tax if exercised pursuant to Section 2.1 hereof, the Company shall cause to be delivered to the Holder without charge a new Purchase Warrant of like tenor to this Purchase Warrant in the name of the Holder evidencing the right of the Holder to purchase the number of Shares purchasable hereunder as to which this Purchase Warrant has not been exercised or assigned.

 

5.2 Lost Certificate . Upon receipt by the Company of evidence satisfactory to it of the loss, theft, destruction or mutilation of this Purchase Warrant and of reasonably satisfactory indemnification or the posting of a bond, the Company shall execute and deliver a new Purchase Warrant of like tenor and date. Any such new Purchase Warrant executed and delivered as a result of such loss, theft, mutilation or destruction shall constitute a substitute contractual obligation on the part of the Company.

 

6. Adjustments .

 

6.1 Adjustments to Exercise Price and Number of Securities . The Exercise Price and the number of Shares underlying the Purchase Warrant shall be subject to adjustment from time to time as hereinafter set forth:

 

6.1.1 Share Dividends; Split Ups . If, after the date hereof, and subject to the provisions of Section 6.3 below, the number of outstanding Shares is increased by a stock dividend payable in Shares or by a split up of Shares or other similar event, then, on the effective day thereof, the number of Shares purchasable hereunder shall be increased in proportion to such increase in outstanding shares, and the Exercise Price shall be proportionately decreased.

 

6.1.2 Aggregation of Shares . If, after the date hereof, and subject to the provisions of Section 6. 3 below, the number of outstanding Shares is decreased by a consolidation, combination or reclassification of Shares or other similar event, then, on the effective date thereof, the number of Shares purchasable hereunder shall be decreased in proportion to such decrease in outstanding shares, and the Exercise Price shall be proportionately increased.

 

6.1.3 Replacement of Securities upon Reorganization, etc . In case of any reclassification or reorganization of the outstanding Shares other than a change covered by Section 6.1.1 or Section 6.1.2 hereof or that solely affects the par value of such Shares, or in the case of any share reconstruction or amalgamation or consolidation of the Company with or into another corporation (other than a consolidation or share reconstruction or amalgamation in which the Company is the continuing corporation and that does not result in any reclassification or reorganization of the outstanding Shares), or in the case of any sale or conveyance to another corporation or entity of the property of the Company as an entirety or substantially as an entirety in connection with which the Company is dissolved, the Holder of this Purchase Warrant shall have the right thereafter (until the expiration of the right of exercise of this Purchase Warrant) to receive upon the exercise hereof, for the same aggregate Exercise Price payable hereunder immediately prior to such event, the kind and amount of shares of stock or other securities or property (including cash) receivable upon such reclassification, reorganization, share reconstruction or amalgamation, or consolidation, or upon a dissolution following any such sale or transfer, by a Holder of the number of Shares of the Company obtainable upon exercise of this Purchase Warrant immediately prior to such event; and if any reclassification also results in a change in Shares covered by Section 6.1.1 or Section 6.1.2 , then such adjustment shall be made pursuant to Section 6.1.1 , Section 6.1.2 and this Section 6.1.3 . The provisions of this Section 6.1.3 shall similarly apply to successive reclassifications, reorganizations, share reconstructions or amalgamations, or consolidations, sales or other transfers.

 

6.1.4 Changes in Form of Purchase Warrant . This form of Purchase Warrant need not be changed because of any change pursuant to this Section 6.1 , and Purchase Warrants issued after such change may state the same Exercise Price and the same number of Shares as are stated in the Purchase Warrants initially issued pursuant to this Agreement. The acceptance by any Holder of the issuance of new Purchase Warrants reflecting a required or permissive change shall not be deemed to waive any rights to an adjustment occurring after the Commencement Date or the computation thereof.

 

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6.2 Substitute Purchase Warrant . In case of any consolidation of the Company with, or share reconstruction or amalgamation of the Company with or into, another corporation (other than a consolidation or share reconstruction or amalgamation which does not result in any reclassification or change of the outstanding Shares), the corporation formed by such consolidation or share reconstruction or amalgamation shall execute and deliver to the Holder a supplemental Purchase Warrant providing that the holder of each Purchase Warrant then outstanding or to be outstanding shall have the right thereafter (until the stated expiration of such Purchase Warrant) to receive, upon exercise of such Purchase Warrant, the kind and amount of shares of stock and other securities and property receivable upon such consolidation or share reconstruction or amalgamation, by a holder of the number of Shares of the Company for which such Purchase Warrant might have been exercised immediately prior to such consolidation, share reconstruction or amalgamation, sale or transfer. Such supplemental Purchase Warrant shall provide for adjustments which shall be identical to the adjustments provided for in this Section 6 . The above provision of this Section 6 shall similarly apply to successive consolidations or share reconstructions or amalgamations.

 

6.3 Elimination of Fractional Interests . The Company shall not be required to issue certificates representing fractions of Shares upon the exercise of the Purchase Warrant, nor shall it be required to issue scrip or pay cash in lieu of any fractional interests, it being the intent of the parties that all fractional interests shall be eliminated by rounding any fraction up or down, as the case may be, to the nearest whole number of Shares or other securities, properties or rights.

 

7. Reservation and Listing . The Company shall at all times reserve and keep available out of its authorized Shares, solely for the purpose of issuance upon exercise of the Purchase Warrants, such number of Shares or other securities, properties or rights as shall be issuable upon the exercise thereof. The Company covenants and agrees that, upon exercise of the Purchase Warrants and payment of the Exercise Price therefor, in accordance with the terms hereby, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. The Company further covenants and agrees that upon exercise of the Purchase Warrants and payment of the exercise price therefor, all Shares and other securities issuable upon such exercise shall be duly and validly issued, fully paid and non-assessable and not subject to preemptive rights of any shareholder. As long as the Purchase Warrants shall be outstanding, the Company shall use its commercially reasonable efforts to cause all Shares issuable upon exercise of the Purchase Warrants to be listed (subject to official notice of issuance) on all national securities exchanges (or, if applicable, on the OTC Bulletin Board or any successor trading market) on which the Shares issued to the public in the Offering may then be listed and/or quoted.

 

8. Certain Notice Requirements .

 

8.1 Holder’s Right to Receive Notice . Nothing herein shall be construed as conferring upon the Holders the right to vote or consent or to receive notice as a shareholder for the election of directors or any other matter, or as having any rights whatsoever as a shareholder of the Company. If, however, at any time prior to the expiration of the Purchase Warrants and their exercise, any of the events described in Section 8.2 shall occur, then, in one or more of said events, the Company shall give written notice of such event at least fifteen days prior to the date fixed as a record date or the date of closing the transfer books (the “ Notice Date ”) for the determination of the shareholders entitled to such dividend, distribution, conversion or exchange of securities or subscription rights, or entitled to vote on such proposed dissolution, liquidation, winding up or sale. Such notice shall specify such record date or the date of the closing of the transfer books, as the case may be. Notwithstanding the foregoing, the Company shall deliver to each Holder a copy of each notice given to the other shareholders of the Company at the same time and in the same manner that such notice is given to the shareholders.

 

8.2 Events Requiring Notice . The Company shall be required to give the notice described in this Section 8 upon one or more of the following events: (i) if the Company shall take a record of the holders of its Shares for the purpose of entitling them to receive a dividend or distribution payable otherwise than in cash, or a cash dividend or distribution payable otherwise than out of retained earnings, as indicated by the accounting treatment of such dividend or distribution on the books of the Company, (ii) the Company shall offer to all the holders of its Shares any additional shares of capital stock of the Company or securities convertible into or exchangeable for shares of capital stock of the Company, or any option, right or warrant to subscribe therefor, or (iii) a dissolution, liquidation or winding up of the Company (other than in connection with a consolidation or share reconstruction or amalgamation) or a sale of all or substantially all of its property, assets and business shall be proposed.

 

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8.3 Notice of Change in Exercise Price . The Company shall, promptly after an event requiring a change in the Exercise Price pursuant to Section 6 hereof, send notice to the Holders of such event and change (“ Price Notice ”). The Price Notice shall describe the event causing the change and the method of calculating same and shall be certified as being true and accurate by the Company’s Chief Financial Officer.

 

8.4 Transmittal of Notices . All notices, requests, consents and other communications under this Purchase Warrant shall be in writing and shall be deemed to have been duly made (1) when hand delivered, (2) when mailed by express mail or private courier service or (3) when the event requiring notice is disclosed in all material respects and filed in a current report on Form 8-K or in a definitive proxy statement on Schedule 14A prior to the Notice Date: (i) if to the registered Holder of the Purchase Warrant, to the address of such Holder as shown on the books of the Company, or (ii) if to the Company, to following address or to such other address as the Company may designate by notice to the Holders:

 

If to the Holder:

 

Aegis Capital Corp.
810 Seventh Avenue, 11 th Floor
New York, New York 10019
Attn: Mr. David Bocchi, Managing Director of
                  Investment Banking
Fax No.: (212) 813-1047

 

With a copy (which shall not constitute notice) to:

 

Blank Rome LLP

405 Lexington Avenue

New York, NY 10174

Attn: Brad Shiffman, Esq.

Fax: (917) 332-3725

 

If to the Company:

 

Advaxis, Inc.

305 College Road East

Princeton, NJ 08540

Attention: Sara Bonstein, Chief Financial Officer

Fax No: (609) 452-9818

 

with a copy (which shall not constitute notice) to:

 

Reed Smith LLP

599 Lexington Avenue

New York, New York 10174

Attention: Yvan Claude-Pierre, Esq.

Fax No: (212) 521-5450

 

9. Miscellaneous .

 

9.1 Amendments . The Company and Aegis may from time to time supplement or amend this Purchase Warrant without the approval of any of the Holders in order to cure any ambiguity, to correct or supplement any provision contained herein that may be defective or inconsistent with any other provisions herein, or to make any other provisions in regard to matters or questions arising hereunder that the Company and Aegis may deem necessary or desirable and that the Company and Aegis deem shall not adversely affect the interest of the Holders. All other modifications or amendments shall require the written consent of and be signed by the party against whom enforcement of the modification or amendment is sought.

 

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9.2 Headings . The headings contained herein are for the sole purpose of convenience of reference, and shall not in any way limit or affect the meaning or interpretation of any of the terms or provisions of this Purchase Warrant.

 

9.3 Entire Agreement . This Purchase Warrant (together with the other agreements and documents being delivered pursuant to or in connection with this Purchase Warrant) constitutes the entire agreement of the parties hereto with respect to the subject matter hereof, and supersedes all prior agreements and understandings of the parties, oral and written, with respect to the subject matter hereof.

 

9.4 Binding Effect . This Purchase Warrant shall inure solely to the benefit of and shall be binding upon, the Holder and the Company and their permitted assignees, respective successors, legal representative and assigns, and no other person shall have or be construed to have any legal or equitable right, remedy or claim under or in respect of or by virtue of this Purchase Warrant or any provisions herein contained.

 

9.5 Governing Law; Submission to Jurisdiction . This Purchase Warrant shall be governed by and construed and enforced in accordance with the laws of the State of Delaware, without giving effect to conflict of laws principles thereof. The Company hereby agrees that any action, proceeding or claim against it arising out of, or relating in any way to this Purchase Warrant shall be brought and enforced in the New York Supreme Court, County of New York, or in the United States District Court for the Southern District of New York, and irrevocably submits to such jurisdiction, which jurisdiction shall be exclusive. The Company hereby waives any objection to such exclusive jurisdiction and that such courts represent an inconvenient forum. Any process or summons to be served upon the Company may be served by transmitting a copy thereof by registered or certified mail, return receipt requested, postage prepaid, addressed to it at the address set forth in Section 8 hereof. Such mailing shall be deemed personal service and shall be legal and binding upon the Company in any action, proceeding or claim. The Company and the Holder agree that the prevailing party(ies) in any such action shall be entitled to recover from the other party(ies) all of its reasonable attorneys’ fees and expenses relating to such action or proceeding and/or incurred in connection with the preparation therefor. The Company (on its behalf and, to the extent permitted by applicable law, on behalf of its stockholders and affiliates) and the Holder hereby irrevocably waive, to the fullest extent permitted by applicable law, any and all right to trial by jury in any legal proceeding arising out of or relating to this agreement or the transactions contemplated hereby.

 

9.6 Waiver, etc . The failure of the Company or the Holder to at any time enforce any of the provisions of this Purchase Warrant shall not be deemed or construed to be a waiver of any such provision, nor to in any way affect the validity of this Purchase Warrant or any provision hereof or the right of the Company or any Holder to thereafter enforce each and every provision of this Purchase Warrant. No waiver of any breach, non-compliance or non-fulfillment of any of the provisions of this Purchase Warrant shall be effective unless set forth in a written instrument executed by the party or parties against whom or which enforcement of such waiver is sought; and no waiver of any such breach, non-compliance or non-fulfillment shall be construed or deemed to be a waiver of any other or subsequent breach, non-compliance or non-fulfillment.

 

9.7 Execution in Counterparts . This Purchase Warrant may be executed in one or more counterparts, and by the different parties hereto in separate counterparts, each of which shall be deemed to be an original, but all of which taken together shall constitute one and the same agreement, and shall become effective when one or more counterparts has been signed by each of the parties hereto and delivered to each of the other parties hereto. Such counterparts may be delivered by facsimile transmission or other electronic transmission.

 

9.8 Exchange Agreement . As a condition of the Holder’s receipt and acceptance of this Purchase Warrant, Holder agrees that, at any time prior to the complete exercise of this Purchase Warrant by Holder, if the Company and Aegis enter into an agreement (“ Exchange Agreement ”) pursuant to which they agree that all outstanding Purchase Warrants will be exchanged for securities or cash or a combination of both, then Holder shall agree to such exchange and become a party to the Exchange Agreement.

 

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IN WITNESS WHEREOF , the Company has caused this Purchase Warrant to be signed by its duly authorized officer as of the ___ day of March, 2014.

 

ADVAXIS, INC.  
     
By:    
Name:    
Title:    

 

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Form to be used to exercise Purchase Warrant:

 

Date: __________, 20___

 

The undersigned hereby elects irrevocably to exercise the Purchase Warrant for ______ Shares of Advaxis, Inc., a Delaware corporation (the “ Company ”), and hereby makes payment of $____ (at the rate of $____ per Share) in payment of the Exercise Price pursuant thereto. Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been exercised.

 

or

 

The undersigned hereby elects irrevocably to convert its right to purchase ___ Shares under the Purchase Warrant for ______ Shares, as determined in accordance with the following formula:

 

  X = Y(A-B)  
  A  

  

  Where, X = The number of Shares to be issued to Holder;
    Y = The number of Shares for which the Purchase Warrant is being exercised;
    A = The fair market value of one Share which is equal to $_____; and
    B = The Exercise Price which is equal to $______ per share

 

The undersigned agrees and acknowledges that the calculation set forth above is subject to confirmation by the Company and any disagreement with respect to the calculation shall be resolved by the Company in its sole discretion.

 

Please issue the Shares as to which this Purchase Warrant is exercised in accordance with the instructions given below and, if applicable, a new Purchase Warrant representing the number of Shares for which this Purchase Warrant has not been converted.

 

Signature

 

Signature Guaranteed

 

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INSTRUCTIONS FOR REGISTRATION OF SECURITIES

 

Name:

(Print in Block Letters)

Address:

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

 

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Form to be used to assign Purchase Warrant:

ASSIGNMENT

 

(To be executed by the registered Holder to effect a transfer of the within Purchase Warrant):

 

FOR VALUE RECEIVED, __________________ does hereby sell, assign and transfer unto ___________ the right to purchase shares of Advaxis, Inc., a Delaware corporation (the “ Company ”), evidenced by the Purchase Warrant and does hereby authorize the Company to transfer such right on the books of the Company.

 

Dated: __________, 20__

 

Signature

 

Signature Guaranteed

 

NOTICE: The signature to this form must correspond with the name as written upon the face of the within Purchase Warrant without alteration or enlargement or any change whatsoever, and must be guaranteed by a bank, other than a savings bank, or by a trust company or by a firm having membership on a registered national securities exchange.

 

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Note: Certain portions of this document have been marked “[c.i.]” to indicate that confidential treatment has been requested for this confidential information. The confidential portions have been omitted and submitted separately with the Securities and Exchange Commission.

 

Execution Copy

 

EXCLUSIVE LICENSE AGREEMENT

 

This Exclusive License Agreement (this “Agreement” ) is made as of March 19, 2014 (the “Effective Date” ), by and between Aratana Therapeutics, Inc. , a Delaware corporation having its principal place of business at 1901 Olathe Boulevard, Kansas City, KS 66103 ( “Aratana” ), and Advaxis, Inc. , a Delaware corporation having its principal place of business at 305 College Road East, Princeton, New Jersey ( “Advaxis” ).

 

Whereas, Advaxis owns or has obtained a license to certain patents and patent applications covering technology that enables the design of an immunotherapy utilizing live attenuated Listeria monocytogenes (“ Lm ”) bioengineered to secrete fusion proteins consisting of antigen and adjuvant molecules, as more fully described below; and

 

Whereas, Aratana wishes to obtain, and Advaxis is willing to grant to Aratana, an exclusive, worldwide license to develop and commercialize products based upon Advaxis’ technology for use in animal health applications, on the terms and subject to the conditions set forth herein;

 

Now, therefore, in consideration of the premises and the mutual promises and covenants contained herein, the parties hereby agree as follows:

 

1. Definitions.

 

1.1 “Additional Constructs” shall have the meaning provided in Section 2.11.

 

1.2 “Administrator” shall have the meaning provided in Section 11.2(a).

 

1.3 “Advaxis Field” shall mean any and all uses outside of the Aratana Field, including, without limitation, all human health applications. For the avoidance of doubt, the Advaxis Field includes the conduct of nonclinical laboratory studies (including animal studies) that support, or are intended to support, applications to conduct clinical research in humans or to obtain marketing authorization for a human pharmaceutical product.

 

1.4 “Advaxis Indemnitees” shall have the meaning provided in Section 10.1.

 

1.5 “Advaxis Know-How” shall mean Information that Advaxis Controls as of the Effective Date that is necessary or useful for the development, manufacture or commercialization of Compounds, Products or Constructs, including, without limitation, Advaxis Inventions and Results, but excluding the Advaxis Patents and Joint Patents.

 

1.6 “Advaxis Patents” shall mean all Patents that Advaxis Controls during the Term that claim or cover the manufacture, use, sale, offer for sale or import of any Compounds, Products or Constructs, including, without limitation, Patents claiming Advaxis Inventions. Advaxis Patents will include without limitation those Patents on Exhibit A .

 

 
 

 

Execution Copy

 

1.7 “Advaxis Product” shall mean: (a) any Construct, (b) any Compound or (c) any product containing or incorporating any Construct or Compound in any form or formulation, including, without limitation, a Product.

 

1.8 “Advaxis Invention” shall mean any Invention, regardless of inventorship, that is directed to a Compound, Product or Construct, including, without limitation, the composition of matter or formulation of, or any method of making or using, any Compound, Product or Construct, whether in the Aratana Field or the Advaxis Field. Notwithstanding the foregoing, Advaxis Inventions shall exclude (i) any Invention that constitutes Veterinary Dosing Technology, and (ii) any Combination Invention.

 

1.9 “Advaxis Technology” shall mean Advaxis Patents and Advaxis Know-How.

 

1.10 “Affiliate” of shall mean any company or entity controlled by, controlling, or under common control with a party hereto. For the purpose of this definition, a business entity shall be deemed to “control” another business entity, if it owns directly or indirectly, more than 50% of the outstanding voting securities, capital stock, or other comparable equity or ownership interest of such business entity, or exercises equivalent influence over such entity.

 

1.11 “Alliance Manager” shall have the meaning provided in Section 2.10.

 

1.12 Applicable Laws ” means all laws, rules, regulations, including any rules, regulations, guidelines, guidances or other requirements of the United States, any foreign country or any domestic or foreign state, county, city or other political subdivision or of any court, governmental or administrative agency, including any Regulatory Authority, that may be in effect from time-to-time that are applicable to a party’s rights and obligations under this Agreement.

 

1.13 “Aratana Field” shall mean non-human animal health applications. Notwithstanding the foregoing, the Aratana Field shall exclude the conduct of GLP-compliant nonclinical laboratory studies that support, or are intended to support, applications to conduct human clinical research of an investigational human pharmaceutical product or to obtain marketing authorization for a human pharmaceutical product.

 

1.14 “Aratana Indemnitees” shall have the meaning provided in Section 10.2.

 

1.15 “Aratana Know-How” shall mean all Information that Aratana Controls during the Term that is necessary or useful for the development, manufacture or commercialization of Compounds, Products, or Constructs including, without limitation, Information within Sublicensee Technology, but excluding Advaxis Inventions, Results, Aratana Patents and Joint Patents.

 

1.16 “Aratana Patents” shall mean all Patents Controlled by Aratana during the Term that claim or cover the manufacture, use, sale, offer for sale or import of Products, including, without limitation, Patents within Sublicensee Technology, but excluding Patents claiming Advaxis Inventions.

 

1.17 “Aratana Product Marks” shall have the meaning provided in Section 6.7.

 

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Execution Copy

 

1.18 “Aratana Regulatory Filings” means any NADA, or other comparable filing or submission for approval to conduct clinical trials of or to obtain regulatory approval of the marketing, manufacture and sale in the U.S. and any equivalent filing(s) made with the Regulatory Authorities in any other country for regulatory approval of the marketing, manufacture and sale of a Product in the Aratana Field.

 

1.19 “Aratana Technology” shall mean Aratana Patents and Aratana Know-How.

 

1.20 “Bankruptcy Laws” shall have the meaning provided in Section 12.1.

 

1.21 “Combination Invention” shall mean any Invention constituting (a) a formulation of Compound, Product or Constructs with Veterinary Dosing Technology or any other combination of Compound, Product or Constructs with Veterinary Dosing Technology, (b) a method of making any such formulation or combination with Veterinary Dosing Technology, (c) a method of using any such formulation or combination, or (d) a method of using Veterinary Dosing Technology with Compound, Product or Constructs.

 

1.22 “Combination Product” shall have the meaning provided in Section 1.41.

 

1.23 “Compound” shall mean any one of the Constructs, and any molecular variants, mutants, progeny, clones and any and all portions, fragments, modifications or derivatives thereof.

 

1.24 “Confidential Information” shall have the meaning provided in Section 8.1.

 

1.25 “Construct” shall mean any of Advaxis’s proprietary constructs as listed in Exhibit B , as may be amended from time to time.

 

1.26 “Control” shall mean, with respect to any Information, Patents or other intellectual property rights, possession by a party of the right, power and authority (whether by ownership, license or otherwise) to grant access to, to grant use of, or to grant a license or a sublicense to such Information, Patents or intellectual property rights without violating the terms of any agreement or other arrangement with any Third Party.

 

1.27 “Disclosing Party” shall have the meaning provided in Section 8.1.

 

1.28 “EMA” shall mean the European Medicines Agency, or any successor agency thereto in the European Union.

 

1.29 European Union ” or “ EU ” means the economic, scientific and political organization of member states of the European Union, and which, as of the Effective Date, consists of Austria, Belgium, Bulgaria, Czech Republic, Denmark, Estonia, Finland, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, The Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden and the United Kingdom, and that certain portion of Cyprus included in such organization.

 

1.30 “FDA” shall mean the United States Food and Drug Administration, or any successor agency thereto in the United States of America.

 

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Execution Copy

 

1.31 GAAP ” shall mean generally accepted accounting principles in the United States, consistently applied by the party at issue.

 

1.32 “GLP” shall mean current good laboratory practices, as set forth in 21 CFR Part 58 (or its successor regulation) and as interpreted by relevant ICH guidelines; in each case, as amended from time to time.

 

1.33 “Indemnifying Party” shall have the meaning provided in Section 10.3.

 

1.34 “Indemnified Party” shall have the meaning provided in Section 10.3.

 

1.35 “Information” shall mean tangible and intangible techniques, technology, practices, trade secrets, inventions (whether patentable or not), methods, knowledge, know-how, skill, experience, test data and results (including, without limitation, biological, chemical, pharmacological, toxicological, pharmacokinetic, clinical, analytical, quality control, mechanical, software, electronic and other data, results and descriptions) and compositions of matter.

 

1.36 “Invention” shall mean any invention or discovery, whether or not patentable, that is made, in whole or in part, in the course and as a result of the conduct of the activities expressly contemplated by this Agreement.

 

1.37 “Joint Patents” shall mean all Patents claiming Inventions owned jointly by the parties pursuant to Section 6.2(a) or Section 6.2(c). For clarity, Joint Patents exclude Patents claiming Advaxis Inventions.

 

1.38 “JSC” shall have the meaning provided in Section 2.9.

 

1.39 “Losses” shall have the meaning provided in Section 10.1.

 

1.40 “NADA” shall mean a New Animal Drug Application filed with the FDA pursuant to 21 CFR Part 514 (or its successor regulation), or the equivalent application or filing filed with any equivalent regulatory agency or governmental authority outside the U.S. necessary to market and sell a new animal drug in such jurisdiction (including, without limitation, a marketing authorization application or dossier filed with the applicable regulatory agency of a European Union member state or with the EMA for a veterinary medicinal product).

 

1.41 “Net Sales” shall mean the gross amounts invoiced by Aratana and its Affiliates (but not sublicensees) for sales of Products to third parties, including without limitation distributors, less the following items, to the extent allocable to such Product (if not previously deducted from the amount invoiced): (a) reasonable and customary trade, quantity and cash discounts actually paid, granted or accrued; (b) rebates and retroactive price reductions or allowances actually paid, granted or accrued; (c) credits or allowances actually granted upon claims, rejections or returns of Product; (d) taxes, duties and other governmental charges imposed on the production, sale, delivery, use or importation of Product (including, without limitation, sales, use, excise or value added taxes, but excluding taxes based on income); (e) transportation charges relating to such Product, including handling charges and insurance premiums relating thereto, and (f) the actual amount of any write-offs for bad debt directly relating to sales of Product, taken in accordance with U.S. GAAP, consistently applied.

 

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For the avoidance of doubt no other costs including, but not limited to, costs associated with sales representatives, fees and costs incurred for sales and marketing, nor any related general, administrative or overhead costs shall be deducted or allocated against the gross invoiced sales price of any Products in order to calculate Net Sales. Products distributed as free promotional samples or used in research or development activities in the Aratana Field shall be disregarded in determining Net Sales.

 

If Aratana (or an applicable Affiliate or Sublicensee) should, in a given country during a given accounting period, sell a Product that contains one or more active ingredients in addition to a Compound (which may be either combined in a single formulation or bundled with separate formulations but sold as one product) (a “Combination Product” ), the Net Sales of such Combination Product will be calculated by multiplying the actual Net Sales of such Combination Product (as determined in accordance with this Section 1.41) by the fraction A/(A+B), where A is the average total invoice price of the Product (for the same dosage strength) in such period, and B is the average total invoice price of such other active ingredient or ingredients in the product, if sold separately (for the same dosage strength) in such period. If any other active ingredient in the combination is not sold separately, Net Sales will be calculated by multiplying actual Net Sales of such Combination Product (as determined in accordance with this Section 1.41) by a fraction A/C where A is the invoice price of the Product if sold separately, and C is the invoice price of the Combination Product. If neither the Product nor any other active ingredient in the Combination Product is sold separately, the adjustment to Net Sales will be determined by the parties in good faith to reasonably reflect the fair market value of the contribution of the Product in the Combination Product to the total fair market value of such Combination Product.

 

1.42 “Patents” shall mean patents and patent applications, including provisional applications, continuations, continuations-in-part, continued prosecution applications, divisions, substitutions, reissues, additions, renewals, reexaminations, extensions, term restorations, confirmations, registrations, revalidations, revisions, priority rights, requests for continued examination and supplementary protection certificates granted in relation thereto, as well as utility models, innovation patents, petty patents, patents of addition, inventor’s certificates, and equivalents in any country or jurisdiction.

 

1.43 “Product” shall mean any product in any form or formulation containing or incorporating a Compound.

 

1.44 “Receiving Party” shall have the meaning provided in Section 8.1.

 

1.45 Regulatory Authority ” or “ Regulatory Authorities ” shall mean the FDA or the USDA in the U.S., the EMA and EU Commission in the EU, and any health regulatory authority(ies) in any other country or legal jurisdiction in the world that is a counterpart to the FDA or EMA and holds responsibility for any approval, product and/or establishment license, registration or other authorization necessary for the development, manufacture and/or commercialization of a Compound or Product in the Aratana Field and any successor(s) thereto, as well as any state or local health regulatory authorities having jurisdiction over any activities contemplated by the Parties.

 

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1.46 “Results” shall mean all data and information generated by Aratana in the course of developing Constructs, Compounds and Products pursuant to this Agreement.

 

1.47 “Rules” shall have the meaning provided in Section 11.2(a).

 

1.48 “Sales-Based Payments” shall have the meaning provided in Section 5.1.

 

1.49 “Sublicensee” shall mean any Third Party to which Aratana or its Affiliate has directly or indirectly ( i.e. , through multiple tiers of sublicenses) granted a sublicense under all or any portion of the license granted to Aratana pursuant to Section 2.1.

 

1.50 “Sublicensee Royalties” shall mean all royalties received by Aratana or any of its Affiliates from Sublicensees with respect to such Sublicensees’ sales of Products.

 

1.51 “Sublicensee Technology” shall mean, with respect to any Affiliate to which Aratana grants a sublicense under all or any portion of the license granted to Aratana pursuant to Section 2.1, or any Sublicensee: (a) all Patents owned or otherwise controlled by such Affiliate or Sublicensee that claim or cover inventions made by or on behalf of such Affiliate or Sublicensee that are directed to a Construct, Compound or Product, including, without limitation, the composition of matter or formulation of, or any method of making or using, any Construct Compound or Product, whether in the Aratana Field or the Advaxis Field; and (b) all Information generated by or on behalf of such Affiliate or Sublicensee that is necessary or useful for the development, manufacture or commercialization of a Construct, Compound or Product, whether in the Aratana Field or the Advaxis Field.

 

1.52 Subscription Agreement ” shall mean the subscription agreement entered into by the parties on the Effective Date, for purchase of shares of common stock and warrants of Advaxis, as attached hereto as Exhibit D .

1.53 “Term” shall have the meaning provided in Section 9.1.

 

1.54 “Third Party” shall mean any entity other than the parties and their respective Affiliates.

 

1.55 “USDA” shall mean the United States Department of Agriculture, or any successor agency thereto in the United States of America.

 

1.56 United States ” or “ U.S. ” shall mean The United States of America, including its possessions, territories and commonwealths.

 

1.57 Valid Claim” shall mean (a) a claim of an issued and unexpired patent, or a supplementary protection certificate thereof, which has not been held permanently revoked, unenforceable or invalid by a decision of a court, patent office or other forum of competent jurisdiction, unappealable or unappealed within the time allowed for appeal and that is not admitted to be invalid or unenforceable through reissue, disclaimer or otherwise, or (b) a claim of a pending patent application that has not been abandoned, finally rejected or expired without the possibility of appeal or re-filing and that has not been pending for more than (i) six (6) years in the case of any U.S. patent application or (ii) nine (9) years in the case of a non-U.S. patent application, after the priority date of such patent application.

 

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1.58 “Veterinary Dosing Technology” shall mean (a) taste-masking technology that allows a veterinary medication to pass the taste buds undetected and/or to make such medication more palatable, (b) veterinary dosage form formulation technology, and/or (c) veterinary drug delivery technology.

 

1.59 “Warrant” shall mean the warrant to purchase common stock of Advaxis issued to Aratana pursuant to Section 4.1(b).

 

2. License.

 

2.1 License Grant. Subject to the terms and conditions of this Agreement, Advaxis hereby grants to Aratana an exclusive, worldwide, royalty bearing right and license, with the right to sublicense through multiple tiers of sublicenses in accordance with the terms of this Agreement, under the Advaxis Technology and Advaxis’s interest in any Joint Patents in order to (a) to make, have made, use, and import Constructs or Compounds for Product development purposes solely in the Aratana Field in accordance with this Agreement and (b) to make, have made, use, import, sell, have sold, offer for sale, and import Products solely in the Aratana Field under this Agreement.

 

2.2 Sublicensing. Aratana shall provide Advaxis with reasonable notice prior to entering into any sublicense agreement. Any and all sublicenses of the license granted to Aratana under Section 2.1 shall be in writing and shall be subject to, and consistent with, the terms and conditions of this Agreement, including the right to allow Advaxis to audit books and records. Aratana shall be responsible for the compliance of its Affiliates and Sublicensees with the terms and conditions of this Agreement. Within 30 days after execution, Aratana shall provide Advaxis with a full and complete copy of each sublicense agreement (provided that Aratana may redact any confidential information contained therein that is not necessary to ascertain compliance with this Agreement).

 

2.3 Sublicensee Technology for Use by Advaxis . In connection with any Sublicense entered into pursuant to Section 2.2, Aratana shall use commercially reasonable efforts to include in each sublicense agreement with an Affiliate of Aratana or with a Sublicensee a present grant by such Affiliate or Sublicensee to Aratana of an exclusive (even as to such Affiliate or Sublicensee), worldwide, royalty-free, fully-paid, irrevocable and perpetual license, with the right to sublicense through multiple tiers of sublicenses, under such Affiliate’s or Sublicensee’s Sublicensee Technology, to make, have made, use, sell, have sold, offer for sale, and import any Advaxis Product which may utilize or incorporate such Sublicensee Technology in the Advaxis Field.

 

2.4 Technology Transfer. Promptly following the Effective Date, and from time to time thereafter as new Advaxis Know-How becomes available, Advaxis will disclose to Aratana (to the extent not previously disclosed) all Advaxis Know-How available in written, electronic or other recorded form, including, without limitation: (a) the final reports of all in vitro and in vivo studies of Constructs and Compounds conducted by or on behalf of Advaxis; (b) raw data from any dog toxicology study of Constructs and Compounds conducted by or on behalf of Advaxis prior to the Effective Date; and (c) Advaxis Know-How related to the manufacture of Constructs and Compounds, including manufacturing processes used, scale-up information, analytical methods, and specifications, as well as the assistance and authorization described in Section 3.3 hereof.

 

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2.5 Negative Covenants. Aratana hereby covenants not to practice, and not to permit or cause any Aratana Affiliate, Sublicensee or other Third Party to practice, any Advaxis Technology for any purpose outside the express scope of the license granted under Section 2.1. Advaxis hereby covenants that, during the term of this Agreement, neither Advaxis nor its Affiliates will develop or commercialize any product containing a Construct or Compound for use in the Aratana Field, and that neither Advaxis nor its Affiliates will grant a license or other right to any Third Party to conduct any such activities.

 

2.6 Retained Rights. Advaxis will at all times retain the sole and exclusive right to practice and grant licenses to Third Parties under the Advaxis Technology for any and all uses in the Advaxis Field, including to make, have made, use, sell, have sold, offer for sale and import Constructs, Compounds and Products in the Advaxis Field. Without limiting the generality of the foregoing, Advaxis will at all times retain the sole and exclusive right under the Advaxis Technology to conduct or have conducted, and to license or authorize any Third Party to conduct or have conducted, any nonclinical laboratory study of a Compound or Product in support of, or that is intended to support, any application to conduct clinical research of Constructs, Compounds or Products in humans, or to obtain approval or authorization to market or sell Constructs, Compounds or Products for human use. In addition, and notwithstanding the exclusivity of the license granted pursuant to Section 2.1, Advaxis shall at all times retain the non-exclusive right under the Advaxis Technology and Advaxis’s interest in the Joint Patents: (a) to conduct basic non-GLP exploratory studies of Constructs, Compounds or Products in non-human animals to determine whether Constructs, Compounds or Products has any potential utility or to determine physical or chemical characteristics of Constructs, Compounds or Products; and (b) to make and have made Constructs, Compounds or Products for use in the studies described in the preceding clause (a).

 

2.7 License Grant-Back to Advaxis in Advaxis Field. Effective as of the Effective Date, Aratana shall, and it hereby does, grant to Advaxis an exclusive (even as to Aratana), worldwide, royalty-free, fully-paid, irrevocable and perpetual license, with the right to sublicense through multiple tiers of sublicenses, under the Aratana Technology and Aratana’s interest in the Joint Patents, to make, have made, use, sell, have sold, offer for sale, and import Advaxis Products which utilize or incorporate such Aratana Technology or the Joint Patents in the Advaxis Field. On an ongoing basis during the Term, Aratana shall promptly disclose to Advaxis all Aratana Know-How that is available in written, electronic or other recorded form. Without limiting the generality of the foregoing, Aratana shall provide to Advaxis, promptly following the availability thereof, true and complete copies of all written, graphic or electronic embodiments of data and information generated by or on behalf of Aratana, any of its Affiliates or any Sublicensee with respect to Constructs, Compounds or Products, including, without limitation, all draft and final reports of any test, study or trial of Constructs, Compounds or Products and all pharmacology, toxicology, pharmacokinetic and other data regarding Constructs, Compounds or Products, as well as true and complete copies of all Aratana Regulatory Filings.

 

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2.8 Right of Reference . Aratana hereby grants to Advaxis and its Affiliates, and to any Third Party licensee of Advaxis Technology in the Advaxis Field that is designated by Advaxis in writing to Aratana, an irrevocable right of reference, under and to: (a) the Regulatory Filings that Aratana or its Affiliates may Control with respect to Products in the Aratana Field; and (b) any and all data, information, reports, analyses, records, Results and materials from the non-clinical and clinical activities or from any post-marketing studies generated by or on behalf of Aratana that are filed with a Regulatory Authority; in each case, as necessary or desirable for purposes of developing and commercializing the Compounds, Constructs or other Advaxis products in the Advaxis Field. Aratana shall, promptly upon request of Advaxis, file with applicable Regulatory Authorities such letters of access or cross-reference as may be necessary to accomplish the intent of this Section 2.8.

 

2.9 Joint Steering Committee.

 

(a)  Overview. Aratana and Advaxis shall establish a joint oversight committee in accordance with this Section 2.9 (the “JSC” ). The JSC shall be formed within thirty (30) days following the Effective Date, and thereafter shall remain in effect. The JSC shall serve as a forum for discussing and sharing information relating to Aratana’s progress, itself and with or through Affiliates or Sublicensees, in the development, manufacture and commercialization of Products.

 

(b)  Composition of the JSC. Each party shall appoint two (2) representatives as its members of the JSC. The parties’ respective representatives shall jointly be responsible for calling meetings, setting the agenda, circulating the agenda and distributing minutes of the meetings following such meetings. Each party’s members of the JSC shall have substantial experience in pharmaceutical product research and development. Each party may replace its members of the JSC upon written notice to the other party. From time to time, the JSC may invite personnel of either party to participate in discussions of the JSC.

 

(c)  Responsibilities of the JSC. The JSC’s responsibilities will include (i) reviewing progress in development of Constructs, Compounds and Products in the Aratana Field, including reviewing progress toward obtaining regulatory approval of Products, review of development plans, and including review of relevant filings with Regulatory Authorities; (ii) discussing information with respect to developments with respect to the intellectual property landscape related to Products or competitive products, (iii) facilitating the exchange of information and materials with respect to the foregoing, and with respect to other information required to be provided to Advaxis under this Agreement, and (iv) performing such other functions as appropriate to further the purposes of this Agreement as determined by the parties. Notwithstanding the foregoing, the parties acknowledge that (A) Aratana must be enabled to comply with any confidentiality obligations to its Sublicensees and accordingly, the JSC shall structure its meetings so as to observe Aratana’s confidentiality obligations to its Sublicensees, provided that Aratana shall use commercially reasonable efforts to obtain from its Sublicensees permission to disclose the foregoing information to Advaxis, subject to Advaxis’s confidentiality obligations and (B) Advaxis’s JSC representatives may be excluded from access to any information or material of Aratana if Aratana determines in good faith that such exclusion is reasonably necessary to preserve the attorney-client privilege or to protect highly confidential proprietary information.

 

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(d) Meetings of the JSC. The JSC shall hold meetings at Aratana’s offices or at such other times and places as may be agreed by the members of the JSC, but in no event shall such meetings be held less frequently than once every three (3) months during time periods when it is in existence. Meetings of the JSC will be effective only if two (2) representatives of each party are in attendance or participating in the meeting. Each party will be responsible for the expenses incurred in connection with its employees, consultants and its members of the JSC attending or otherwise participating in JSC meetings.

 

2.10 Alliance Managers. Promptly after the Effective Date, each party shall appoint an individual (other than an existing member of the JSC) to act as the alliance manager for such party (each, an “Alliance Manager” ). Each Alliance Manager shall thereafter be permitted to attend meetings of the JSC as a nonvoting observer, subject to obligations of confidentiality and restrictions on use of such Confidential Information that are no less restrictive than the obligations in Article 8. The Alliance Managers shall be the primary point of contact for the parties regarding the activities contemplated by this Agreement and shall facilitate communication regarding all activities hereunder. The Alliance Managers shall lead the communications between the parties and shall be responsible for following-up on decisions made by the JSC. The name and contact information for such Alliance Manager, as well as any replacement(s) chosen by either party, in their sole discretion, from time to time, shall be promptly provided to the other party by written notice.

 

2.11 Additional Constructs. Upon request, Aratana may license from Advaxis additional constructs that are not Constructs as of the Effective Date and that could reasonably be believed to be suitable for treating [c.i.], osteosarcoma, [c.i.], [c.i.] (the “Additional Constructs” ) as follows: Advaxis shall notify Aratana in writing if it pursues preclinical development of any such Additional Construct. If Advaxis so notifies Aratana that it is developing an Additional Construct, then the parties shall negotiate the terms under which Aratana may add such Additional Construct(s) as Constructs under this Agreement for ninety (90) days. If Aratana and Advaxis agree upon the terms pursuant to which such Additional Construct(s) shall be added as Constructs under this Agreement during such time period, such Additional Constructs will be added to Exhibit B and become Constructs by virtue of an amendment to this Agreement. Additionally, if Aratana desires to have Advaxis develop Additional Constructs that Advaxis is not otherwise developing, Aratana shall so notify Advaxis in writing and specify the details of the development Aratana wishes Advaxis to perform. If Aratana requests Advaxis to develop Additional Constructs, the parties shall agree upon a mutually acceptable development plan and budget for such activities and Aratana would pay Advaxis for performance of all such requested development activities in accordance with such development plan and budget, with the costs of Advaxis’s activities to be equal to Advaxis’s direct costs of performing such activities (calculated on a full-time equivalent plus out of pocket cost basis), without any additional mark-up. Any such Additional Constructs would be added to Exhibit B and become “Constructs” by virtue of an amendment to this Agreement. For clarity, Advaxis shall not offer to any Third Party the opportunity to obtain a license or other right to any Additional Constructs for development and commercialization of products including such constructs in the Aratana Field without first complying with this Section 2.11.

 

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3. Development and Commercialization of Products.

 

3.1 Development. Aratana shall use commercially reasonable efforts (a) to conduct such development activities as are necessary to support the filing of applications for regulatory approval in the Aratana Field for at least one (1) Product in the U.S. and at least three countries in the European Union, and (b) to obtain regulatory approval in the Aratana Field for at least one Product in the U.S. and at least three (3) countries in European Union. Aratana shall be solely responsible for world-wide Product development expenses in the Aratana Field.

 

(a) Aratana shall conduct all pre-clinical and clinical trials, including all target animal safety studies in good scientific manner, and in compliance in all material respects with all requirements of Applicable Laws to attempt to achieve the objectives of this Agreement efficiently and expeditiously.

 

(b) Aratana shall also maintain records, in reasonable detail and in good scientific manner, which shall be complete and accurate and shall fully and properly reflect all work done and results achieved in connection with its development efforts in the form required under all Applicable Laws.

 

3.2 Regulatory. Aratana (or its Affiliate or Sublicensee, as applicable) shall have the sole responsibility, at its sole expense, for all Aratana Regulatory Filings. If a determination is made by Regulatory Authorities in the United States that the regulatory approval of a Product in the Aratana Field will be within the jurisdiction of the FDA and not the USDA, then the parties will negotiate a reduction in the payments due to Advaxis pursuant to this Agreement to reflect the increased costs and expenses that Aratana, its Affiliates and Sublicensees will incur by reason of needing to perform activities in accordance with the FDA regulatory approval process for Products in the Aratana Field.

 

3.3 Manufacture and Supply. Aratana shall be solely responsible, at its sole expense, for all aspects of manufacturing of Constructs, Compounds and Products for clinical and commercial use in the Aratana Field. In furtherance of the foregoing, promptly following the Effective Date, Advaxis shall provide Aratana with an introduction to Advaxis’s Third Party contract manufacturer for Constructs, Compounds and Products and shall deliver to such contract manufacturer written authorization (a) to contract with Aratana for the manufacture and supply of Constructs, Compounds and Products, as applicable, (b) to manufacture Constructs, Compounds and Products on behalf of Aratana, and (c) to disclose to Aratana such Advaxis Know-How regarding manufacture of Constructs, Compounds and Products in the possession of such contract manufacturer as is necessary or useful for Aratana to develop, and to obtain and maintain regulatory approvals for, Constructs, Compounds and Products in the Aratana Field.

 

3.4 Commercialization. Aratana shall be solely responsible for worldwide commercialization of Products in the Aratana Field, and, following receipt of regulatory approval for a Product in the Aratana Field in any country or other regulatory jurisdiction, Aratana shall use commercially reasonable efforts to market and sell such Product in the Aratana Field in such country or other jurisdiction; in each case, at Aratana’s (or its Affiliates’ and Sublicensees’) sole expense.

 

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4. Financial Terms of License.

 

4.1 License Fee and Subscription Agreement at Signing. As partial consideration for the rights granted to Aratana pursuant to this Agreement, Aratana shall pay to Advaxis the following amounts:

 

(a) Payment of US $1,000,000 on the Effective Date of this Agreement.

 

(b) In addition to the foregoing, payment of US $1,500,000 on the Effective Date in accordance with the terms of the Subscription Agreement attached hereto as Exhibit D , which the parties shall enter into concurrently with the execution hereof, for the purchase of securities of Advaxis consisting of 306,122 shares of common stock and a warrant, in the form attached as Annex A to the Subscription Agreement, to purchase 153,061 shares of common stock with an exercise price equal to $4.90 per share.

 

4.2 Milestone Payments. Within thirty (30) days after the first achievement of each of the milestones described below by Aratana, its Affiliates or Sublicensees with respect to Products in the Aratana Field, Aratana shall pay to Advaxis the corresponding non-refundable, non-creditable milestone payment set forth in Exhibit C .

 

4.3 Royalties.

 

(a) Net Sales in the United States. As further consideration to Advaxis for the licenses and other rights granted to Aratana under this Agreement, Aratana shall pay royalties to Advaxis on aggregate annual Net Sales of Products by Aratana and its Affiliates (but not Sublicensees) in the United States in each calendar year at the applicable rate(s) set forth below:

 

(b) Net Sales Outside the United States. Aratana shall pay royalties to Advaxis on aggregate Net Sales of Products by Aratana and its Affiliates (but not Sublicensees) outside of the United States at a rate equal to half of the royalty rate payable by Aratana on Net Sales of Products in the United States as set forth in the table in Section 4.3(a).

 

For clarity, no royalties shall be payable under this Section 4.3(a) with respect to sales of Products by Sublicensees, which shall otherwise be subject to payments due to Advaxis under the provision of Section 4.5.

 

4.4 Royalty Term. Royalties under Section 4.3(a) shall be payable on a Product-by-Product and country-by-country basis from first commercial sale of a Product in a country until the later of (a) the tenth (10th) anniversary of first commercial sale of such Product by Aratana, its Affiliates or Sublicensees in the Aratana Field in such country or (b) the expiration of the last-to-expire Valid Claim of a Advaxis Patent or Joint Patent claiming or covering the composition of matter, formulation or method of use of such Product in such country.

 

4.5 Sublicensee Royalties. Aratana shall pay to Advaxis 50% of all Sublicensee Royalties received by Aratana and its Affiliates.

 

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5. Payments; Reports; Audits.

 

5.1 Payment; Reports. Royalties under Section 4.3(a) and payments under Section 4.5 (collectively, “Sales-Based Payments” ) shall be calculated and reported for each calendar quarter and shall be paid within sixty (60) days after the end of the calendar quarter. Each payment of Sales-Based Payments shall be accompanied by a report of Net Sales of Products by Aratana and its Affiliates and Sublicensee Royalties received by Aratana and its Affiliates in sufficient detail to permit confirmation of the accuracy of the payment made, including gross sales and Net Sales of Products on a Product-by-Product and country-by-country basis, the royalty payable, Sublicensee Royalties received (together with a copy of each royalty report received by Aratana or its Affiliate from any Sublicensee), and the exchange rates used. In the event that no royalties are payable in respect of a given calendar quarter, Aratana shall submit a royalty report so indicating. All other payments to be made under this Agreement shall be made in accordance with the terms set forth in the applicable Section(s) regarding such payments.

 

5.2 Manner and Place of Payment; Exchange Rate. All payment amounts specified in this Agreement are stated, and all payments hereunder shall be payable, in U.S. dollars. With respect to each calendar quarter, for countries other than the U.S., whenever conversion of payments from any foreign currency shall be required, such conversion shall be made at the average of the rates of exchange reported in The Wall Street Journal, U.S. Edition , for the last five (5) business days of the applicable calendar quarter. All payments owed under this Agreement shall be made by wire transfer to a bank and account designated in writing by Advaxis, unless otherwise specified in writing by Advaxis. Such payments shall be without deduction of currency conversion, collection or other charges except as may be required pursuant to Section 5.3.

 

5.3 Taxes . In the event that a party is mandated under the laws of a country to withhold any tax to the tax or revenue authorities in such country in connection with any payment to the other party, such amount shall be deducted from the payment to be made by such withholding party, provided, that the withholding party shall notify the other party of such withholding so that the other party may take lawful actions to avoid and minimize such withholding. The withholding party shall promptly furnish the other party with copies of any tax certificate or other documentation evidencing such withholding as necessary to enable the other party to support a claim, if permissible, for income tax credit in respect of any amount so withheld. Each party agrees to cooperate with the other party in claiming exemptions from such deductions or withholdings under any agreement or treaty in effect from time to time.

 

5.4 Audits. During the Term and for a period of three (3) years thereafter, Aratana shall keep, and shall cause its Affiliates to keep, complete and accurate records pertaining to the sale or other disposition of Products by Aratana and its Affiliates and the receipt of Sublicensee Royalties by Aratana and its Affiliates, in sufficient detail to permit Advaxis to confirm the accuracy of all payments due under Sections 4.1(b), 4.3 and 4.5. Advaxis shall have the right to cause an independent, certified public accountant reasonably acceptable to Aratana to audit such records to confirm Net Sales, royalties, and Sublicensee Royalties for a period covering not more than the preceding three (3) years. Aratana may require such accountant to execute a reasonable confidentiality agreement with Aratana prior to commencing the audit. Such audits may be conducted during normal business hours upon reasonable prior written notice to Aratana, but no more frequently than once per year. No accounting period of Aratana shall be subject to audit more than one (1) time by Advaxis. Prompt adjustments (including remittances of underpayments or overpayments disclosed by such audit) shall be made by the parties to reflect the results of such audit. Advaxis shall bear the full cost of such audit unless such audit discloses an underpayment by Aratana of (i) five percent (5%) or more of the amount of payments due under this Agreement, or (ii) $100,000, whichever is less, in which case Aratana shall bear the full cost of such audit.

 

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5.5 Late Payments. In the event that any payment due under this Agreement is not made when due, such payment shall accrue and be calculated on a daily basis (both before and after any judgment) at the rate of two percent (2%) per annum above the then-current prime rate quoted by Citibank in New York City for the period from the due date for payment until the date of actual payment; provided, however, that in no event shall such rate exceed the maximum legal annual interest rate. The payment of such interest shall not limit Advaxis from exercising any other rights it may have as a consequence of the lateness of any payment.

 

6. Intellectual Property.

 

6.1 Inventorship. Inventorship of any Invention shall be determined in accordance with U.S. patent laws. Regardless of inventorship, ownership of any Invention shall be determined in accordance with Section 6.2 below.

 

6.2 Ownership.

 

(a)  Inventions Generally. Except as expressly set forth in Sections 6.2(b) and 6.2(c) below, all Inventions made solely by one or more employees, officers or consultants of one party shall be owned solely by such party, and all Inventions made jointly by one or more employees, officers or consultants of Aratana and one or more employees, officers or consultants of Advaxis, shall be owned jointly by Aratana and Advaxis. Such jointly owned Inventions shall be without any duty of accounting to the other party or any obligation to obtain the consent of the other party to grant licenses thereunder or to enforce such rights. To the extent necessary to effect the foregoing each party grants to the other party a nonexclusive, world-wide, royalty-free, sublicenseable license under its interest in all such jointly owned Inventions.

 

(b)  Advaxis Inventions. All Advaxis Inventions, regardless of inventorship, shall be owned solely by Advaxis. Aratana hereby assigns to Advaxis all right, title and interest in and to all Advaxis Inventions, together with all Patent and other intellectual property rights therein (it being understood that Advaxis Inventions and Patents claiming Advaxis Inventions would be included in the Advaxis Technology licensed to Aratana). Aratana agrees promptly to disclose each Advaxis Invention to Advaxis in writing and to execute such documents and perform such other acts as Advaxis may reasonably request to obtain, perfect and enforce such rights to the Advaxis Inventions and the assignment thereof. Aratana also shall require that any employee, officer or consultant of Aratana that receives any Construct or Compound pursuant to this Agreement above shall agree to assign, and shall assign, to Aratana (or, at Advaxis’s request, directly to Advaxis) any Advaxis Invention made by such employee, officer or consultant. Advaxis may, in its sole discretion, file and prosecute in its own name and at its own expense, patent applications claiming Advaxis Inventions. Upon the request of Advaxis, and at Advaxis’s expense, Aratana will assist Advaxis in the preparation, filing and prosecution of such patent applications and shall execute and deliver any and all instruments necessary to enable Advaxis to file and prosecute such patent applications in any country.

 

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(c) Combination Inventions. All Combination Inventions, regardless of inventorship, shall be owned jointly by Aratana and Advaxis. Each party hereby assigns to the other party an equal, undivided joint ownership interest in and to all Combination Inventions, together with all Patent and other intellectual property rights therein (it being understood that Advaxis rights to Patents claiming Combination Inventions would be included in the Advaxis rights to Joint Patents licensed to Aratana pursuant to this Agreement), without any duty of accounting to the other party or any obligation to obtain the consent of the other party to grant licenses thereunder or to enforce such rights. To the extent necessary to effect the foregoing each party grants to the other party a nonexclusive, world-wide, royalty-free, sublicenseable license under its interest in all Combination Inventions. Each party agrees to execute such documents and perform such other acts as may be reasonably necessary to obtain, perfect and enforce the parties’ respective rights to the Combination Inventions and the assignment thereof to the parties jointly. Aratana also shall require that any employee, officer or consultant of Aratana that participates in development, manufacturing or commercialization of Constructs, Compounds or Products shall agree to assign, and shall assign, to Aratana (or, at Advaxis’s request, jointly to Aratana and Advaxis) any Combination Invention made by such employee, officer or consultant.

 

(d) Advaxis Technology. Aratana acknowledges that Advaxis is and shall at all times remain the sole and exclusive owner of the Advaxis Technology.

 

6.3 Patent Prosecution and Maintenance. For purposes of this Section 6.3, a party’s right to prosecute and maintain a Patent shall be deemed to include, without limitation, the right to control any interference, reexamination, reissue or opposition proceeding with respect to such Patent, and the right to seek patent term restorations, supplementary protection certificates and other forms of patent term extensions with respect to such Patent.

 

(a) Advaxis Patents. Advaxis shall have the sole right, but not the obligation, to control and manage the preparation, filing, prosecution and maintenance of all Advaxis Patents worldwide, at its sole cost and expense and by counsel of its own choice.

 

(b) Aratana Patents. Aratana shall have the sole right, but not the obligation, to control and manage the preparation, filing, prosecution and maintenance of all Aratana Patents, at its sole cost and expense and by counsel of its own choice.

 

(c) Joint Patents. Advaxis shall have the first right, but not the obligation, to control and manage the preparation, filing, prosecution and maintenance of all Joint Patents, at its sole cost and expense and by counsel of its own choice. Advaxis shall keep Aratana reasonably informed of progress with regard to the preparation, filing, prosecution and maintenance of Joint Patents and shall consult with, and consider in good faith the requests and suggestions of, Aratana with respect to strategies for filing and prosecuting Joint Patents worldwide. In the event that Advaxis desires to abandon or cease prosecution or maintenance of any Joint Patent in any country, Advaxis shall provide reasonable prior written notice to Aratana of such intention to abandon (which notice shall, to the extent possible, be given no later than thirty (30) days prior to the next deadline for any action that must be taken with respect to any such Joint Patent in the relevant patent office). In such case, at Aratana’s sole discretion, upon written notice to Advaxis, Aratana may elect to continue prosecution and/or maintenance of such Joint Patent, at its sole cost and expense and by counsel of its own choice.

 

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6.4 Cooperation. Each party agrees to cooperate fully in the preparation, filing, prosecution and maintenance of Patents under Section 6.3. Such cooperation includes, but is not limited to: (a) executing all papers and instruments, or requiring its employees or contractors, to execute such papers and instruments, so as to effectuate the ownership of Inventions set forth in Section 6.2, and Patents claiming or disclosing such Inventions, and to enable the other party to apply for and to prosecute patent applications in any country as permitted by Section 6.3; and (b) promptly informing the other party of any matters coming to such party’s attention that may affect the preparation, filing, prosecution or maintenance of any such patent applications.

 

6.5 Infringement by Third Parties. In the event that either Advaxis or Aratana becomes aware of any infringement or threatened infringement by a Third Party of any Advaxis Patent, Aratana Patent or Joint Patent, it shall promptly notify the other party in writing to that effect.

 

(a) Advaxis Patents. Advaxis shall have the sole right to bring and control any action or proceeding against a Third Party with respect to infringement of any Advaxis Patent in any country, at its sole cost and expense and by counsel of its own choice. However, after the Effective Date, in the event that:

 

(i) the applicable infringing activity in such country is competitive with a Product being developed or commercialized by Aratana, its Affiliate or a Sublicensee in the Aratana Field in such country; and

 

(ii) either (A) Advaxis has not granted any Third Party a license under such Advaxis Patent or (B) if Advaxis has granted such a license, Advaxis retains the right to enforce such Advaxis Patent in the Aratana Field; and

 

(iii) such Advaxis Patent does not cover any Advaxis Product being developed or commercialized by or on behalf of Advaxis, its Affiliates or Third Party licensees in the Advaxis Field;

 

then Advaxis shall consider in good faith a written request by Aratana for Advaxis’s consent to Aratana bringing and controlling an infringement action against such Third Party in such country, at Aratana’s sole expense and on terms and conditions to be mutually agreed by the parties; provided, however, that the giving or withholding of any such consent shall be at Advaxis’s sole discretion; and provided, further, that if (1) Advaxis withholds such consent, and (2) none of the composition of matter, formulation and method of use of the applicable Product is claimed or covered by any issued patent in such country except for the Advaxis Patent in question, then Aratana’s obligations under Section 4.3 or Section 4.5 (as applicable) with respect to such Product in such country shall be reduced by twenty-five percent (25%) for so long as such infringing activity continues.

 

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(b) Aratana Patents. Aratana shall have the sole right to bring and control any action or proceeding against a Third Party with respect to infringement of any Aratana Patent in any country, at its sole cost and expense and by counsel of its own choice.

 

(c) Joint Patents. With respect to any Third Party infringement of a Joint Patent by infringing activity in the Advaxis Field in any country, Advaxis shall have the sole right to bring and control any enforcement action or proceeding against such Third Party with respect to such infringement in the Advaxis Field, at its own expense and by counsel of its own choice. With respect to any Third Party infringement of a Joint Patent by infringing activity in the Aratana Field in any country, Aratana shall have the sole right to bring and control any enforcement action or proceeding against such Third Party with respect to such infringement in the Aratana Field, at its own expense and by counsel of its own choice. Notwithstanding the foregoing, in the case of Third Party infringement of a Joint Patent by infringing activity in both the Advaxis Field and the Aratana Field in any country, the parties may mutually agree on a another allocation of responsibility for initiating and prosecuting such action, and how costs and recoveries will be allocated between the parties.

 

(d) Cooperation; Award. In the event a party brings an infringement action in accordance with this Section 6.5, the other party shall cooperate fully, including, if required to bring such action, the furnishing of a power of attorney or being named as a party. Neither party shall enter into any settlement or compromise of any action under this Section 6.5 which would in any manner alter, diminish, or be in derogation of the other party’s rights under this Agreement without the prior written consent of such other party, which shall not be unreasonably withheld. Except as otherwise agreed by the parties in connection with a cost-sharing arrangement, any recovery realized by a party as a result of any action or proceeding pursuant to this Section 6.5, whether by way of settlement or otherwise, after reimbursement of any litigation expenses of the parties, shall be retained by the party that brought and controlled such action for purposes of this Agreement; provided, however, that any recovery realized by a party as a result of any action brought and controlled by such party pursuant to this Section 6.5 with respect to infringing activity in the Aratana Field (after reimbursement of the parties’ litigation expenses) shall be allocated as follows:

 

(i)  compensatory damages shall be treated as Sublicensee Royalties in the quarter in which such damages are received for purposes of Section 4.5, with Aratana paying to Advaxis, or Advaxis retaining (as applicable), the applicable percentage of such deemed Sublicensee Royalties set forth in Section 4.5; and

 

(ii) non-compensatory damages shall be treated as Net Sales for purposes of Section 4.3, with Aratana paying to Advaxis, or Advaxis retaining (as applicable), the applicable percentage of such deemed Net Sales set forth in Section 4.3.

 

6.6 Third Party Infringement Claims. Each party shall promptly notify the other in writing of any allegation by a Third Party that the activity of either of the parties pursuant to this Agreement infringes or may infringe the intellectual property rights of such Third Party. Advaxis shall have the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Advaxis’s activities at its own expense and by counsel of its own choice. Aratana shall have the sole right to control any defense of any such claim involving alleged infringement of Third Party rights by Aratana’s activities at its own expense and by counsel of its own choice. Neither party shall have the right to settle any patent infringement litigation under this Section 6.6 in a manner that diminishes the rights or interests of the other party without the written consent of such other party (which shall not be unreasonably withheld).

 

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6.7 Trademarks. Aratana shall have the sole right to select the trademarks for use with any Product for use by or on behalf of Aratana or any of its Affiliates or Sublicensees in connection with the marketing and sale of Products in the Aratana Field ( “Aratana Product Marks” ) and shall own and retain all right, title and interest in and to the Aratana Product Marks, and all goodwill associated with or attached to the Aratana Product Marks arising out of the use thereof by Aratana, its Affiliates and Sublicensees shall inure to the benefit of Aratana. Notwithstanding the foregoing, Aratana shall not select as an Aratana Product Mark any trademark that incorporates, or is confusingly similar to, any Advaxis trademark used by or on behalf of Advaxis or any of its Affiliates or Third Party licensees in connection with the marketing and sale of any Advaxis product or any corporate trade name, registered trademark or logo of Advaxis, in each case, without Advaxis’s prior written approval, which Advaxis may withhold in its sole discretion.

 

7. Representations and Warranties; Limitation of Liability.

 

7.1 Mutual Representations and Warranties. Each party represents and warrants to the other party that: (a) it is duly organized and validly existing under the laws of its jurisdiction of incorporation or formation, and has full corporate or other power and authority to enter into this Agreement and to carry out the provisions hereof; (b) it is duly authorized to execute and deliver this Agreement and to perform its obligations hereunder, and the person or persons executing this Agreement on its behalf has been duly authorized to do so by all requisite corporate or partnership action; and (c) this Agreement is legally binding upon it, enforceable in accordance with its terms, and does not conflict with any agreement, instrument or understanding, oral or written, to which it is a party or by which it may be bound, nor violate any material law or regulation of any court, governmental body or administrative or other agency having jurisdiction over it. Each party covenants to the other party that such party will not enter into any agreement that conflicts with this Agreement.

 

7.2 Advaxis Representations and Warranties. Advaxis hereby represents and warrants to Aratana, as of the Effective Date, that: (a)  Exhibit A attached hereto contains a true and complete list of the existing Advaxis Patents; (b) Advaxis is the sole owner of the Advaxis Patents; (c) Advaxis has not granted to any Third Party any license or other right with respect to the Advaxis Technology in the Aratana Field; (d) Advaxis is not a party to any legal action, suit or proceeding relating to the Advaxis Technology; and (e) Advaxis has not received any written communication from any Third Party claiming that the manufacture, use, import, offer for sale, and sale of Constructs, Compounds or Products in the Aratana Field infringes or misappropriates any Patent or other intellectual property rights of any Third Party.

 

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7.3 Debarment. During the Term, neither party shall, in the development of Compound or Product, use any employee or consultant that is debarred by any Regulatory Authority or, to its knowledge, is the subject of debarment proceedings by any Regulatory Authority.

 

7.4 Disclaimer. Except as expressly set forth in this Agreement, EACH PARTY EXPRESSLY DISCLAIMS ANY AND ALL WARRANTIES OF ANY KIND, EXPRESS OR IMPLIED, INCLUDING, WITHOUT LIMITATION, THE WARRANTIES OF DESIGN, MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE, VALIDITY OF PATENTS, NON-INFRINGEMENT OF THE INTELLECTUAL PROPERTY RIGHTS OF THIRD PARTIES, OR ARISING FROM A COURSE OF DEALING, USAGE OR TRADE PRACTICES.

 

7.5 Limitation of Liability. EXCEPT FOR LIABILITY FOR BREACH OF ARTICLE 8, NEITHER PARTY SHALL BE ENTITLED TO RECOVER FROM THE OTHER PARTY ANY SPECIAL, INCIDENTAL, CONSEQUENTIAL OR PUNITIVE DAMAGES IN CONNECTION WITH THIS AGREEMENT; provided, however, that this Section 7.5 shall not be construed to limit either party’s indemnification obligations under Article 10.

 

8. Confidentiality.

 

8.1 Confidential Information. Each party recognizes that it will receive access to Confidential Information (as defined below) of the other party, the unauthorized disclosure or unauthorized use of which may cause irreparable damage to the other party. “Confidential Information” shall mean all scientific, regulatory, marketing, financial, and commercial information or data, whether communicated in written, oral, graphic, electronic or visual form, that is provided by one party (the “Disclosing Party” ) to the other party (the “Receiving Party” ) in connection with this Agreement; provided, however, that: (a) all Results and all Combination Inventions shall be deemed Confidential Information of both parties, and each party shall be deemed both a Disclosing Party and a Receiving Party with respect thereto; and (b) all Advaxis Inventions shall be deemed the Confidential Information of Advaxis only, and Advaxis shall be deemed the Disclosing Party and Aratana the Receiving Party with respect thereto. Except as expressly set forth in this Agreement or as otherwise agreed in writing by the parties, the Receiving Party agrees that it will keep strictly confidential, in accordance with the terms and conditions of this Article 8, the Disclosing Party’s Confidential Information, shall use the Disclosing Party’s Confidential Information solely as expressly authorized by this Agreement, and shall not disclose the Confidential Information to any third party without the prior written consent of the Disclosing Party. The Receiving Party shall use at least the same degree of care to protect the Disclosing Party’s Confidential Information as the Receiving Party would use to protect its own Confidential Information, but no less than reasonable care. Notwithstanding the foregoing, the Receiving Party may share the Disclosing Party’s Confidential Information with those of its officers, directors, employees, consultants and other representatives that have a need to know such information for the purposes expressly authorized by this Agreement, have been advised by the Receiving Party of the Receiving Party’s obligations under this Agreement, and are contractually or legally bound by obligations of non-disclosure and non-use at least as stringent as those contained herein. The failure of any officer, director, employee, consultant or other representative of the Receiving Party to comply with the terms and conditions of this Agreement shall be considered a breach of this Agreement by the Receiving Party.

 

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8.2 Exceptions. Confidential Information of the Disclosing Party shall not include information that the Receiving Party can demonstrate by competent evidence: (a) was in the public domain at the time of disclosure by the Disclosing Party (or, in the case of Results, Advaxis Inventions or Combination Inventions, at the time of generation of such Results, Advaxis Inventions or Combination Inventions); (b) later became part of the public domain through no act or omission of the Receiving Party in breach of this Agreement; (c) is lawfully disclosed to the Receiving Party on a non-confidential basis by a third party having the right to disclose it; or (d) was already known by the Receiving Party at the time of receiving such information from the Disclosing Party, as evidenced by its pre-existing written records (provided that the exception set forth in this clause (d) shall not apply to Results, Advaxis Inventions or Combination Inventions).

 

8.3 Authorized Disclosure. The Receiving Party may disclose Confidential Information as expressly permitted by this Agreement, or if and to the extent such disclosure is reasonably necessary in the following instances:

 

(a) filing or prosecuting Patents as permitted by this Agreement;

 

(b) enforcing the Receiving Party’s rights under this Agreement;

 

(c) prosecuting or defending litigation as permitted by this Agreement;

 

(d) complying with applicable court orders or governmental regulations or rules of a securities exchange;

 

(e) in the case of Aratana, in regulatory filings and submissions with respect to Products in the Aratana Field;

 

(f) in the case of Advaxis, in regulatory filings and submissions with respect to Advaxis Products in the Advaxis Field;

 

(g) disclosure to the Receiving Party’s Affiliates, provided that Confidential Information so disclosed shall remain subject to this Article 8;

 

(h) in the case of Aratana, disclosure to Sublicensees and bona fide potential Sublicensees, on the condition that each such Third Party agrees to be bound by confidentiality and non-use obligations that are no less stringent than the terms of this Agreement;

 

(i) in the case of Advaxis, disclosure to licensees and bona fide potential licensees of Advaxis Products in the Advaxis Field, on the condition that each such Third Party agrees to be bound by confidentiality and non-use obligations that are no less stringent than the terms of this Agreement; and

 

(j) disclosure to Third Parties in connection with due diligence or similar investigations by such Third Parties, and disclosure to potential Third Party investors in confidential financing documents, provided, in each case, that any such Third Party agrees to be bound by reasonable obligations of confidentiality and non-use.

 

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Notwithstanding the foregoing, in the event the Receiving Party is required to make a disclosure of the other party’s Confidential Information pursuant to Section 8.3(c) or Section 8.3(d), it shall, except where impracticable, give reasonable advance notice to the Disclosing Party of such disclosure and use efforts to secure confidential treatment of such information at least as diligent as such party would use to protect its own confidential information, but in no event less than reasonable efforts. In any event, the Receiving Party agrees to take all reasonable action to avoid unauthorized disclosure and unauthorized use of Confidential Information.

 

8.4 Confidentiality of Agreement. Except as otherwise provided in this Article 8, each party agrees not to disclose to any Third Party the terms or existence of this Agreement without the prior written consent of the other party hereto, except that each party may make such disclosure to the extent permitted under Section 8.3 and, after the initial announcement of this Agreement pursuant to Section 8.6, each party may disclose the terms of this Agreement that have previously been made public as contemplated by Section 8.6. The parties will consult with each other on the provisions of this Agreement to be redacted in any filings made by either party with the Securities and Exchange Commission or as otherwise required by law.

 

8.5 Publications. Each party recognizes that, following the Effective Date, the publication of papers including Results and other information regarding Products in the Aratana Field, including oral presentations and abstracts, may be beneficial to both parties provided such publications are subject to reasonable controls to protect Confidential Information. Accordingly, Advaxis shall have the right to review and comment on any material proposed for disclosure or publication by Aratana, such as by oral presentation, manuscript or abstract, relating to the development, manufacture or commercialization of Products. Before any such material is submitted for publication, Aratana shall deliver a complete copy to Advaxis at least forty-five (45) days prior to submitting the material to a publisher or initiating any other disclosure. Advaxis shall review any such material and give its comments to Aratana within thirty (30) days of the delivery of such material to Advaxis. With respect to oral presentation materials and abstracts, Advaxis shall make reasonable efforts to expedite review of such materials and abstracts, and shall return such items as soon as practicable to Aratana with appropriate comments, if any, but in no event later than thirty (30) days from the date of delivery to Advaxis. Aratana shall comply with Advaxis’s request to delete references to Confidential Information of Advaxis (other than Results) in any such material and agrees to delay any submission for publication or other public disclosure for a period of up to an additional ninety (90) days for the purpose of permitting the preparation and filing of appropriate patent applications.

 

8.6 Publicity. The parties agree that no public announcement of this Agreement shall be made by either party unless and until the occurrence of the Effective Date, provided that if, prior to the Effective Date, a party determines, based on advice of counsel, that it is required by Applicable Laws or rules of a securities exchange to make any public announcement regarding this Agreement, such public announcement shall be subject to the provisions of this Section 8.6 that are applicable to public announcements after the Effective Date. Promptly following the Effective Date, the parties shall mutually agree in good faith upon the text of the initial press release announcing this Agreement. It is further acknowledged that each party may desire or be required to issue one or more subsequent press releases relating to this Agreement or activities hereunder. The parties agree to consult with each other reasonably and in good faith with respect to the text and timing of any such press release prior to the issuance thereof, provided that a party may not unreasonably withhold consent to such releases, and that either party may issue such press releases as it determines, based on advice of counsel, are reasonably necessary to comply with Applicable Law or with the requirements of any stock exchange on which securities issued by a party or its Affiliates are traded. In the event of such a required public announcement, to the extent practicable under the circumstances, the party making such announcement shall use commercially reasonable efforts to provide the other party with a copy of the proposed text of such announcement sufficiently in advance of the scheduled release to afford such other party a reasonable opportunity to review and comment upon the proposed text. Each party may make public statements regarding this Agreement in response to questions by the press, analysts, investors or those attending industry conferences or financial analyst calls, or issue press releases, so long as any such public statement or press release is consistent with prior public disclosures or public statements approved by the other party pursuant to this Section 8.6 or permitted by Section 8.3 and does not reveal non-public information about the other party. In addition, each party shall have the right, without the other party’s prior written consent, to disclose to Third Parties, and to make public disclosures (via any medium) of, any information relating to this Agreement or any activity hereunder that has already been publicly disclosed in accordance with the preceding provisions of this Section 8.6 or as permitted by Section 8.3.

 

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9. Term; Termination.

 

9.1 Term. The term of this Agreement (the “Term” ) shall begin on the Effective Date and, unless earlier terminated in accordance with this Article 9, shall expire upon expiration of all royalty payment obligations of Aratana under this Agreement.

 

9.2 Termination by Aratana At Will. Aratana shall have the right to terminate this Agreement at will at any time upon 90 days’ prior written notice of termination to Advaxis.

 

9.3 Termination for Breach. A party shall have the right to terminate this Agreement upon written notice to the other party if such other party is in material breach of this Agreement and has not cured such breach within sixty (60) days (or thirty (30) days with respect to any payment breach) after notice from the terminating party requesting cure of the breach. Any such termination shall become effective at the end of such sixty (60)-day (or thirty (30)-day with respect to any payment breach) period unless the breaching party has cured such breach prior to the end of such period. Any right to terminate under this Section 9.3 shall be stayed and the cure period tolled in the event that, during any cure period, the party alleged to have been in material breach shall have initiated dispute resolution in accordance with Article 11 with respect to the alleged breach, which stay and tolling shall continue until such dispute has been resolved in accordance with Article 11.

 

9.4 Termination for Patent Challenge. Advaxis shall have the right to terminate this Agreement immediately upon written notice to Aratana if Aratana or any of its Affiliates or Sublicensees, directly or indirectly through any Third Party, commences any interference or opposition proceeding with respect to, challenges the validity or enforceability of, or opposes any extension of or the grant of a supplementary protection certificate with respect to, any Advaxis Patent.

 

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9.5 Consequences of Expiration or Termination.

 

(a)  Expiration. Upon expiration of this Agreement pursuant to Section 9.1, the license granted to Aratana under Section 2.1 shall survive such expiration and become fully-paid, non-exclusive, irrevocable and perpetual basis. To that end, upon expiration of this Agreement, each party may hold and use all data, reports, records, information and materials that relate to or are prepared in the course of their development activities with respect to such Product and may in its sole discretion continue any sublicense granted by it under this Agreement. For the avoidance of doubt, Advaxis’s irrevocable right of reference under Section 2.8 shall survive expiration or any termination of this Agreement.

 

(b)  Termination. Upon any termination of this Agreement for any reason after the Effective Date, the license granted to Aratana under Section 2.1 shall terminate and all such license rights shall revert to Advaxis. Within thirty (30) days after such termination:

 

(i) Aratana shall return to Advaxis all Confidential Information of Advaxis and all Advaxis Technology that is in Aratana’s or its Affiliates’ possession, including any and all documentation and other tangible embodiments thereof, except that Aratana may retain one archival copy of Advaxis’s Confidential Information solely for purposes of monitoring compliance with its obligations hereunder; and

 

(ii) Advaxis shall return to Aratana all Confidential Information of Aratana and all Aratana Technology that is in Advaxis’s or its Affiliates’ possession, including any and all documentation and other tangible embodiments thereof, which Confidential Information or Aratana Technology is not necessary or useful for the exercise of the license granted to Advaxis pursuant to Section 2.7 or, if applicable, the license granted to Advaxis pursuant to Section 9.5(c)(i) below, except that Advaxis may retain one (1) archival copy of the Confidential Information that Advaxis is obligated to return to Aratana solely for purposes of monitoring compliance with its obligations hereunder. Advaxis may retain and use all Confidential Information of Aratana and all Aratana Technology that is in Advaxis’s or its Affiliates’ possession, including any and all documentation and other tangible embodiments thereof, as necessary or useful for the exercise of the license granted to Advaxis pursuant to Section 2.7 and/or, if applicable, the license granted to Advaxis pursuant to Section 9.5(c)(i) below, subject, in each case, to the surviving terms and conditions of this Agreement.

 

In addition to the foregoing, Aratana shall, as directed by Advaxis, either wind-down any ongoing development activities with respect to Compounds or Products in the Aratana Field in an orderly fashion or promptly transition such development activities to Advaxis or its designee, in compliance with all Applicable Laws, rules and regulations and international guidelines.

 

(c) Additional Consequences of Certain Terminations After Effective Date. In addition to the consequences set forth in Section 9.5(b), the following provisions shall apply solely in the event of termination of this Agreement either by Advaxis pursuant to Section 9.3 or Section 9.4, or by Aratana pursuant to Section 9.2 (but not termination of this Agreement by Aratana pursuant to Section 9.3):

 

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(i) effective as of such termination, Aratana shall, and it hereby does, grant to Advaxis a non-exclusive, royalty-free, fully-paid, irrevocable, perpetual license, with the right to sublicense through multiple tiers of sublicense, under the Aratana Technology actually practiced by Aratana in connection with Products pursuant to and during the term of this Agreement, and Aratana’s interest in the Joint Patents, solely to develop, make, have made, use, sell, offer for sale, and import Products in the Aratana Field (it being understood that the foregoing license shall include Sublicensee Technology only to the extent, if any, that Aratana has the right to sublicense such Sublicensee Technology in the Aratana Field); and

 

(ii) as promptly as practicable (and in any event within ninety (90) days) after such termination, Aratana shall: (A) to the extent not previously provided to Advaxis, deliver to Advaxis true, correct and complete copies of all Aratana Regulatory Filings and disclose to Advaxis all previously-disclosed Aratana Know-How; (B) transfer or assign, or cause to be transferred or assigned, to Advaxis or its designee (or to the extent not so assignable, take all reasonable actions to make available to Advaxis or its designee the benefits of) all Aratana Regulatory Filings held in the name of Aratana or any of its Affiliates; and (C) take such other actions and execute such other instruments, assignments and documents as may be necessary to effect, evidence, register and record the transfer, assignment or other conveyance of rights to Advaxis under this Section 9.5(c).

 

(d) Royalty and Payment Obligations. Termination of this Agreement by either party for any reason will not release Aratana from any obligation to pay royalties or milestones or to make any payments to Advaxis which were accrued prior to the effective date of termination (including for milestone events achieved prior to the date of termination) or that relate to Product(s) or country/countries to which such termination does not relate. However, termination of this Agreement by either party for any reason will release Aratana from any obligation to pay royalties or make any payments to Advaxis which would have otherwise become accrued after the effective date of termination (provided that Aratana shall be obligated to pay royalties after the effective date of termination for Products sold prior to such effective date).

 

(e) Non-Exclusive Remedy for Breach . The provisions of this Section 9 for breach of this Agreement are not intended to be exclusive and are without prejudice to the rights of the Parties to seek any other rights and remedies that they may have under this Agreement, at law or in equity or otherwise.

 

9.6 Surviving Obligations. Neither expiration nor termination of this Agreement shall relieve either party of any obligation accruing prior to such expiration or termination. In addition, Sections 2.5, 2.6, 2.7, 2.8, 5.3, 5.4, 5.5, 6.1, 6.2, 7.4, 7.5, 8.1, 8.2, 8.3, 8.4, 8.6, 9.5 and 9.6 and Articles 10, 11 and 12 shall survive any expiration or termination of this Agreement, in addition to any other obligations that are expressly provided for elsewhere in this Article 9 to survive expiration or termination of this Agreement.

 

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10. Indemnification.

 

10.1 Indemnification by Aratana. Aratana hereby agrees to save, defend, indemnify and hold harmless Advaxis, its Affiliates and their respective officers, directors, employees, consultants and agents (the “Advaxis Indemnitees” ) from and against any and all losses, damages, liabilities, expenses and costs, including reasonable legal expense and attorneys’ fees ( “Losses” ), to which any Advaxis Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise directly or indirectly out of (a) the development, manufacture, use, handling, storage, sale, distribution or other disposition of Compound, Constructs, Compounds or Products in the Aratana Field by or on behalf of Aratana or any of its Affiliates or Sublicensees, (b) the gross negligence or willful misconduct of any Aratana Indemnitee (defined below), or (c) the breach by Aratana of any warranty, representation, covenant or agreement made by it in this Agreement; except, in each case, to the extent such Losses result from the gross negligence or willful misconduct of any Advaxis Indemnitee or the breach by Advaxis of any warranty, representation, covenant or agreement made by it in this Agreement.

 

10.2 Indemnification by Advaxis. Advaxis hereby agrees to save, defend, indemnify and hold harmless Aratana, its Affiliates and their respective officers, directors, employees, consultants and agents (the “Aratana Indemnitees” ) from and against any and all Losses to which any Aratana Indemnitee may become subject as a result of any claim, demand, action or other proceeding by any Third Party to the extent such Losses arise directly or indirectly out of (a) the gross negligence or willful misconduct of any Advaxis Indemnitee, (b) the breach by Advaxis of any warranty, representation, covenant or agreement made by Advaxis in this Agreement, or (c) the development, manufacture, use, handling, storage, sale, distribution or other disposition of Constructs, Compounds or Products by or on behalf of Advaxis or any of its Affiliates or licensees in the Advaxis Field; in each case, except to the extent such Losses result from the gross negligence or willful misconduct of any Aratana Indemnitee or the breach by Aratana of any warranty, representation, covenant or agreement made by Aratana in this Agreement.

 

10.3 Control of Defense. In the event a party seeks indemnification under Section 10.1 or 10.2, it shall inform the other party (the “Indemnifying Party” ) of a claim as soon as reasonably practicable after such party (the “Indemnified Party” ) receives notice of the claim (it being understood and agreed, however, that the failure by an Indemnified Party to give notice of a claim as provided in this Section 10.3 shall not relieve the Indemnifying Party of its indemnification obligation under this Agreement except and only to the extent that such Indemnifying Party is actually damaged as a result of such failure to give notice), shall permit the Indemnifying Party to assume direction and control of the defense of the claim (including the right to settle the claim solely for monetary consideration), and shall cooperate as requested (at the expense of the Indemnifying Party) in the defense of the claim. The Indemnified Party shall not agree to any settlement of such action, suit, proceeding or claim without the prior written consent of the Indemnifying Party. The Indemnifying Party shall not agree to any settlement of such action, suit, proceeding or claim or consent to any judgment in respect thereof that does not include a complete and unconditional release of the Indemnified Party from all liability with respect thereto, that imposes any liability or obligation on the Indemnified Party or that acknowledges fault by the Indemnified Party; in each case, without the prior written consent of the Indemnified Party.

 

25
 

 

Execution Copy

 

11. Dispute Resolution.

 

11.1 Disputes. Subject to Section 11.4, upon the written request of either party to the other party, any claim, dispute, or controversy as to the breach, enforcement, interpretation or validity of this Agreement will be referred to the Chief Executive Officers of the parties for attempted resolution. In the event the Chief Executive Officers are unable to resolve such matter within thirty (30) days after the initial written request, then, upon the written demand of either party, the matter shall be subject to arbitration, as provided in Section 11.2, except as expressly set forth in Section 11.4.

 

11.2 Arbitration.

 

(a) Claims. Subject to Section 11.4 below, any dispute that is not resolved under Section 11.1 within 30 days after a party’s initial written request for resolution, shall be resolved by final and binding arbitration administered by JAMS (the “Administrator” ) in accordance with its Comprehensive Arbitration Rules and Procedures (the “Rules” ), except to the extent any such Rule conflicts with the express provisions of this Section 11.2. (Capitalized terms used but not otherwise defined in this Section 11.2 shall have the meanings provided in the Rules.) The Arbitration shall be conducted by one neutral arbitrator selected in accordance with the Rules, provided that such individual shall not be a current or former employee or director, or a current stockholder, of either party, any of their respective Affiliates or any Sublicensee. The Arbitration shall be held in Kansas City, Kansas, if Advaxis makes the demand for arbitration, and in Princeton, New Jersey, if Aratana makes the demand for arbitration.

 

(b) Discovery. Within forty-five (45) days after selection of the Arbitrator, the Arbitrator shall conduct the Preliminary Conference. In addressing any of the subjects within the scope of the Preliminary Conference, the Arbitrator shall take into account both the needs of the parties for an understanding of any legitimate issue raised in the Arbitration and the desirability of making discovery efficient and cost-effective. In that regard, the parties agree to the application of the E-Discovery procedures set forth in Rule 16.2(c) of JAMS’ Expedited Procedures. In addition, each party shall have the right to take up to forty (40) hours of deposition testimony, including expert deposition testimony. The parties agree that the Arbitrator shall set a discovery cutoff not to one-hundred twenty (120) (rather than one-hundred five (105)) calendar days after the Preliminary Conference. These dates may be extended by the Arbitrator for good cause shown.

 

(c) Hearing; Decision. The Hearing shall commence within sixty (60) calendar days after the discovery cutoff. The Arbitrator shall require that each party submit concise written statements of position and shall permit the submission of rebuttal statements, subject to reasonable limitations on the length of such statements to be established by the Arbitrator. The Hearing shall be no longer than 5 business days in duration. The Arbitrator shall also permit the submission of expert reports. The Arbitrator shall render the Award within thirty (30) days after the Arbitrator declares the Hearing closed, and the Award shall include a written statement describing the essential findings and conclusions on which the Award is based, including the calculation of any damages awarded. The Arbitrator will, in rendering his or her decision, apply the substantive law of the State of Delaware, without giving effect to its principles of conflicts of law, and without giving effect to any rules or laws relating to arbitration. The Arbitrator’s authority to award special, incidental, consequential or punitive damages shall be subject to the limitation set forth in Section 7.5. The Award rendered by the Arbitrator shall be final, binding and non-appealable, and judgment may be entered upon it in any court of competent jurisdiction.

 

26
 

 

Execution Copy

 

(d) Costs. Each party shall bear its own attorney’s fees, costs, and disbursements arising out of the Arbitration, and shall pay an equal share of the fees and costs of the Arbitrator; provided, however, the Arbitrator shall be authorized (but not required) to determine whether a party is the prevailing party, and if so, to award to that prevailing party reimbursement for all or any portion of its reasonable attorneys’ fees, costs and disbursements (including, for example, expert witness fees and expenses, photocopy charges, travel expenses, etc.), and/or the fees and costs of the Administrator and the Arbitrator.

 

11.3 Confidentiality of Arbitration. Except to the extent necessary to confirm or enforce the Arbitrator’s award, the existence, content and results of an Arbitration, including without limitation any and all proceedings and decisions of the Arbitrator, shall be deemed Confidential Information of each of the parties, and shall be subject to Article 8.

 

11.4 Injunctive Relief; Court Actions. Nothing in this Agreement shall prevent either party from seeking from any court of competent jurisdiction any injunctive or other equitable relief in the context of a bona fide emergency or prospective irreparable harm, and such an action may be filed and maintained notwithstanding any ongoing discussions between the parties or any ongoing arbitration proceeding. No such request shall be deemed incompatible with the parties’ agreement to Arbitration, nor shall it be deemed a waiver by either party of any right or remedy under this Agreement (including, without limitation, the right to arbitrate in accordance with Section 11.2). In addition, either party may bring an action in any court of competent jurisdiction to resolve disputes pertaining to the validity, construction, scope, enforceability, infringement or other violations of Patents or other intellectual property rights, and no such claim shall be subject to Arbitration pursuant to Section 11.2.

 

12. Miscellaneous.

 

12.1 Bankruptcy Code. All rights and licenses granted under or pursuant to this Agreement are, and shall otherwise be deemed to be, for purposes of Section 365(n) of Title 11 of the United States Code and other similar laws in any jurisdiction outside the U.S. (collectively, the “Bankruptcy Laws” ), licenses of rights to be “intellectual property” as defined under the Bankruptcy Laws. If a case is commenced during the Term by or against a party under Bankruptcy Laws then, unless and until this Agreement is rejected as provided in such Bankruptcy Laws, such party (in any capacity, including debtor-in-possession) and its successors and assigns (including a trustee) shall perform all of the obligations provided in this Agreement to be performed by such party. If a case is commenced during the Term by or against a party under the Bankruptcy Laws, this Agreement is rejected as provided in the Bankruptcy Laws and the other party elects to retain its rights hereunder as provided in the Bankruptcy Laws, then the party subject to such case under the Bankruptcy Laws (in any capacity, including debtor-in-possession) and its successors and assigns (including a Title 11 trustee), shall provide to the other party copies of all Information necessary for such other party to prosecute, maintain and enjoy its rights under the terms of this Agreement promptly upon such other party’s written request therefor. All rights, powers and remedies of the non-bankrupt party as provided herein are in addition to and not in substitution for any and all other rights, powers and remedies now or hereafter existing at law or in equity (including, without limitation, the Bankruptcy Laws) in the event of the commencement of a case by or against a party under the Bankruptcy Laws.

 

27
 

 

Execution Copy

 

12.2 No Implied License. No right or license under any Patents or Information of either party is granted or shall be granted by implication. All such rights or licenses are or shall be granted only as expressly provided in this Agreement.

 

12.3 Governing Law. This Agreement shall be governed and construed and the rights of the parties determined in accordance with the laws of the State of Delaware, without reference to its conflicts of law principles.

 

12.4 Entire Agreement; Modification. This Agreement (including the Exhibits hereto) is both a final expression of the parties’ agreement and a complete and exclusive statement with respect to all of its terms. This Agreement supersedes all prior and contemporaneous agreements and communications, whether oral, written or otherwise, concerning any and all matters contained herein, including without limitation the Nondisclosure Agreement between the parties dated October 31, 2013, with all information disclosed thereunder being deemed to be disclosed pursuant to this Agreement and subject to Article 8. This Agreement may only be modified or supplemented in a writing expressly stated for such purpose and signed by the parties to this Agreement.

 

12.5 Relationship between the Parties. The parties’ relationship, as established by this Agreement, is solely that of independent contractors. This Agreement does not create any partnership, joint venture or similar business relationship between the parties. Neither party is a legal representative of the other party and neither party can assume or create any obligation, representation, warranty or guarantee, express or implied, on behalf of the other party for any purpose whatsoever.

 

12.6 Non-Waiver. The failure of a party to insist upon strict performance of any provision of this Agreement or to exercise any right arising out of this Agreement shall neither impair that provision or right nor constitute a waiver of that provision or right, in whole or in part, in that instance or in any other instance. Any waiver by a party of a particular provision or right shall be in writing, shall be as to a particular matter and, if applicable, for a particular period of time and shall be signed by such party.

 

12.7 Assignment. Except as expressly provided hereunder, neither this Agreement nor any rights or obligations hereunder may be assigned or otherwise transferred by either party without the prior written consent of the other party (which consent shall not be unreasonably withheld); provided, however, that either party may assign this Agreement and its rights and obligations hereunder without the other party’s consent: (a) in connection with the transfer or sale of all or substantially all of the business of such party to which this Agreement relates to a Third Party, whether by merger, sale of stock, sale of assets or otherwise, provided that in the event of such a transaction (whether this Agreement is actually assigned or is assumed by the acquiring party by operation of law ( e.g. , in the context of a reverse triangular merger)), intellectual property rights of the acquiring party to such transaction (if other than one of the parties to this Agreement) shall not be included in the technology licensed hereunder or otherwise subject to this Agreement; or (b) to an Affiliate, provided that the assigning party shall remain liable and responsible to the non-assigning party hereto for the performance and observance of all such duties and obligations by such Affiliate. The rights and obligations of the parties under this Agreement shall be binding upon and inure to the benefit of the successors and permitted assigns of the parties, and the name of a party appearing herein will be deemed to include the name of such party’s successors and permitted assigns to the extent necessary to carry out the intent of this section. Any assignment not in accordance with this Agreement shall be void.

 

28
 

 

Execution Copy

 

12.8 No Third Party Beneficiaries. This Agreement is neither expressly nor impliedly made for the benefit of any party other than those executing it.

 

12.9 Severability. If, for any reason, any part of this Agreement is adjudicated invalid, unenforceable or illegal by a court of competent jurisdiction, then such adjudication shall not, to the extent feasible, affect or impair, in whole or in part, the validity, enforceability or legality of any remaining portions of this Agreement. All remaining portions shall remain in full force and effect as if the original Agreement had been executed without the invalidated, unenforceable or illegal part.

 

12.10 Notices. Any notice to be given under this Agreement must be in writing and delivered either in person, by any method of mail (postage prepaid) requiring return receipt, or by overnight courier, to the party to be notified at its address(es) given below, or at any address such party has previously designated by prior written notice to the other. Notice shall be deemed sufficiently given for all purposes upon the earliest of: (a) the date of actual receipt; (b) if mailed, three (3) days after the date of postmark; or (c) if delivered by overnight courier, the next business day the overnight courier regularly makes deliveries.

 

If to Aratana, notices must be addressed to:

 

Aratana Therapeutics, Inc.

1901 Olathe Boulevard

Kansas City, KS 66103

Attention: Steven St. Peter, President and Chief Executive Officer

Telephone: (913) 951-2133

Facsimile: (913) 904-9641

 

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Execution Copy

 

With a required copy to:

 

Latham and Watkins

John Hancock Tower, 20th Floor

200 Clarendon Street

Boston, MA 02116

Attention: Judith Hasko and Pete Handrinos

Telephone: (617) 948-6000

Facsimile: (617) 948-6001

 

If to Advaxis, notices must be addressed to:

 

305 College Road East

Princeton, New Jersey 08540

Attn: Daniel J. O’Connor

 

12.11 Force Majeure. Except for the obligation to make payment when due, each party shall be excused from liability for the failure or delay in performance of any obligation under this Agreement by reason of any event beyond such party’s reasonable control, including but not limited to acts of nature, fire, flood, explosion, earthquake, or other natural forces, war, civil unrest, acts of terrorism, accident, destruction or other casualty, any lack or failure of transportation facilities, any lack or failure of supply of raw materials, any strike or labor disturbance, or any other event similar to those enumerated above. Such excuse from liability shall be effective only to the extent and duration of the event(s) causing the failure or delay in performance and provided that the party has not caused such event(s) to occur. Notice of a party’s failure or delay in performance due to force majeure must be given to the other party within ten (10) days after its occurrence. All delivery dates under this Agreement that have been affected by force majeure shall be tolled for the duration of such force majeure. In no event shall any party be required to prevent or settle any labor disturbance or dispute.

 

12.12 Interpretation. The headings of clauses contained in this Agreement preceding the text of the sections, subsections and paragraphs hereof are inserted solely for convenience and ease of reference only and shall not constitute any part of this Agreement, or have any effect on its interpretation or construction. All references in this Agreement to the singular shall include the plural where applicable. Unless otherwise specified, references in this Agreement to any section shall include all subsections and paragraphs in such section and references in this Agreement to any subsection shall include all paragraphs in such subsection. All references to days in this Agreement shall mean calendar days, unless otherwise specified. Ambiguities and uncertainties in this Agreement, if any, shall not be interpreted against either party, irrespective of which party may be deemed to have caused the ambiguity or uncertainty to exist. This Agreement has been prepared in the English language and the English language shall control its interpretation. In addition, all notices required or permitted to be given hereunder, and all written, electronic, oral or other communications between the parties regarding this Agreement shall be in the English language.

 

12.13 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original document, and all of which, together with this writing, shall be deemed one instrument. This Agreement may be executed by facsimile or PDF signatures, which signatures shall have the same force and effect as original signatures.

 

[Signature page follows]

 

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Execution Copy

 

In Witness Whereof , the parties hereto hereby execute this Agreement as of the date first set forth above.

 

Advaxis , Inc.   Aratana Therapeutics, Inc.
     
By: /s/ Dan O’Connor   By: /s/ Steven St. Peter
Name: Dan O’Connor   Name: Steven St. Peter
Title: Chief Executive Officer   Title: President and CEO

 

31
 

 

Exhibit A

 

ADVAXIS PATENTS

 

Serial No.

  Title  

Status

  Filing Date   Patent No.  

Patent term*¥

* Not including PTA under 35 USC §156

¥ Including PTA under 35 USC §154

                     
08/366,477  

LIVE, RECOMBINANT LISTERIA MONOCYTOGENES AND PRODUCTION OF CYTOTOXIC T-CELL RESPONSE

  Granted   30-Dec-1994  

5,830,702

 

3-Nov-15

                     
09/535,212   METHODS AND COMPOSITIONS FOR IMMUNOTHERAPY OF CANCER   Granted  

27-Mar-00

  6,565,852   08-Nov-14
                     
10/441,851  

METHODS AND COMPOSITIONS FOR IMMUNOTHERAPY OF CANCER

 

Granted

  20-May-03   7,135,188  

8-Nov-14

                     
10/949,667  

METHODS AND COMPOSITIONS FOR IMMUNOTHERAPY OF CANCER

 

Granted

  24-Sep-04   7,794,729  

13-Jul-16

                     
11/223,945   LISTERIA-BASED AND LLO-BASED VACCINES  

Granted

  13-Sep-05   7,820,180  

13-Jul-16

                     
11/715,497  

COMPOSITIONS AND METHODS FOR TREATMENT OF CERVICAL CANCER

 

Granted

 

8-Mar-07

  8,114,414  

11-Sep-15

 

A- 1
 

 

13/314,583  

COMPOSITIONS AND METHODS FOR TREATMENT OF CERVICAL DYSPLASIA

 

Pending

  08-Dec-11      

24-Sep-24

(approximate)

                     
13/090,159  

IMMUNOTHERAPEUTIC, ANTI-TUMORIGENIC COMPOSITIONS AND METHODS OF USE THEREOF

  Pending   19-Apr-2011      

19-Apr-2031

(approximate)

 

                     
08/336,372  

SPECIFIC IMMUNOTHERAPY OF CANCER USING A LIVE RECOMBINANT BACTERIAL VACCINE VECTOR

  Granted   08-Nov- 94   6,051,237  

18-Apr-17

 

                     
10/541,614  

COMPOSITIONS, METHODS AND KITS FOR ENHANCING THE IMMUNOGENICITY OF A BACTERIAL VACCINE VECTOR

 

Granted

 

 

27-Apr-06

 

  8,337,861  

1-Jan-26

 

                     
13/876,810  

THE USE OF LISTERIA VACCINE VECTORS TO REVERSE VACCINE UNRESPONSIVENESS IN PARASITICALLY INFECTED INDIVIDUALS

 

Pending

 

  13-Jun-13      

03-Oct-2031

(approximate)

 

                     
08/972,902  

IMMUNOGENIC COMPOSITIONS COMPRISING DAL/DAT DOUBLE-MUTANT, AUXOTROPHIC, ATTENUATED STRAINS OF LISTERIA AND THEIR METHODS OF USE

 

Granted

 

  18-Nov-97   6,099,848  

18-Nov-17

 

                     

10/660,194

 

 

IMMUNOGENIC COMPOSITIONS COMPRISING DAL/DAT DOUBLE MUTANT, AUXOTROPHOIC ATTENUATED STRAINS OF LISTERIA AND THEIR METHODS OF USE

 

Granted

 

11-Sep-03

 

  7,488,487   18-Nov-17

 

A- 2
 

 

 

Serial No.

  Title  

Status

  Filing date   Patent No.  

Patent term*¥

* Not including PTA under 35 USC §156

¥ Including PTA under 35 USC §154

                     
11/203,415  

METHODS FOR CONSTRUCTING ANTIBIOTIC RESISTANCE FREE VACCINES

 

Pending

  13-Aug-05      

13-Aug-25

(approximate)

                     

11/785,249

 

 

ANTIBIOTIC RESISTANCE FREE VACCINES AND METHODS FOR CONSTRUCTING AND USING SAME

 

Granted

 

 

16-Apr-07

 

  7,855,064  

30-Jan-26

 

                     

11/818,965

 

 

ANTIBIOTIC RESISTANCE FREE LISTERIA STRAINS AND METHODS FOR CONSTRUCTING AND USING SAME

 

Granted

 

 

27-Apr-07

 

  7,858,097  

14-Jan-27

 

                     
11/798,177  

COMPOSITIONS AND METHODS COMPRISING KLK3 OR FOLH1 ANTIGEN

  Pending   10-May-07      

27-Mar-20

(approximate)

                     

12/945,386

 

 

COMPOSITIONS AND METHODS FOR PREVENTION OF ESCAPE MUTATION IN THE TREATMENT OF HER2/NEU OVER-EXPRESSING TUMORS

 

Pending

 

  12-Nov-10   N/A  

12-Nov-30

(approximate)

 

                     
13/210,696  

COMPOSITIONS AND METHODS FOR PREVENTION OF ESCAPE MUTATION IN THE TREATMENT OF HER2/NEU OVER-EXPRESSING TUMORS

 

Pending

 

 

16-Aug-11

 

  N/A  

12-Nov-30

(approximate)

 

                     

[c.i.]

 

[c.i.]

 

[c.i.]

 

[c.i.]

 

[c.i.]

 

[c.i.]

 

A- 3
 

 

Serial No.   Title   Status   Filing date   Patent No.  

Patent term*¥

* Not including PTA under 35 USC §156

¥ Including PTA under 35 USC §154

                     

09/537,642

 

 

FUSION OF NON-HEMOLYTIC, TRUNCATED FORM OF LISTERIOLYSIN O TO ANTIGENS TO ENHANCE IMMUNOGENICITY

  Granted  

29-Mar-00

 

6,855,320

 

2-Aug-20

                     
09/735,450  

COMPOSITIONS AND METHODS FOR ENHANCING IMMUNOGENICITY OF ANTIGENS

  Granted  

13-Dec-00

 

  6,767,542  

13-Jun-20

                     
10/239,703  

COMPOSITIONS AND METHODS FOR ENHANCING IMMUNOGENICITY OF ANTIGENS

  Granted  

26-Mar-01

 

  7,635,479   13-Jun-20
                     
10/835,662  

COMPOSITIONS AND METHODS FOR ENHANCING IMMUNOGENICITY OF ANTIGENS

  Granted  

30-Apr-04

 

  7,588,930  

29-Mar-20