##### Table of Contents

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549



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FORM 10-QSB



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(Mark One)

|x | QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|- | ---------------------------------------------------------------------------------

For the quarterly period ended June 30, 2007



| ̈ | TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
|- | ---------------------------------------------------------------

Commission file number 033-17264-NY



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ImmunoCellular Therapeutics, Ltd.

(Exact name of small business issuer as specified in its charter)



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|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|DELAWARE                                                       |  | 11-2856146                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

1999 Avenue of the Stars, 11th Floor

Los Angeles, California 90067

(Address of principal executive offices)

(310) 789-1213

(Issuer s telephone number)



---

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

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

The Issuer had 11,731,382 shares of its common stock outstanding as of August 10, 2007.

Transitional Small Business Disclosure Format (Check one)    Yes ̈No  x



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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

FORM 10-QSB

Table of Contents



|             |  |                                                                                                                                                                                          |  |     
|------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|             |  |                                                                                                                                                                                          |  | Page
|PART I       |  | FINANCIAL INFORMATION                                                                                                                                                                    |  | 1   
|Item 1.      |  | Financial Statements                                                                                                                                                                     |  | 1   
|             |  | Condensed Balance Sheets as of June 30, 2007 (unaudited) and December 31, 2006                                                                                                           |  | 1   
|             |  | Condensed Statements of Operations for the Three and Six Months Ended June 30, 2007 (unaudited) and 2006 (unaudited) and from February 25, 2004 (Inception) to June 30, 2007 (unaudited) |  | 2   
|             |  | Condensed Statements of Shareholders Equity (Deficit) for the Six Months Ended June 30, 2007 (unaudited) and from February 25, 2004 (Inception) to December 31, 2006                    |  | 3   
|             |  | Condensed Statements of Cash Flows for the Six Months Ended June 30, 2007 (unaudited) and 2006 (unaudited) and from February 25, 2004 (Inception) to June 30, 2007 (unaudited)           |  | 4   
|             |  | Notes to Unaudited Condensed Financial Statements                                                                                                                                        |  | 5   
|Item 2.      |  | Managements Discussion and Analysis or Plan of Operation                                                                                                                                |  | 9   
|Item 3.      |  | Controls and Procedures                                                                                                                                                                  |  | 24  
|             |  |                                                                                                                                                                                         
|PART II      |  | OTHER INFORMATION                                                                                                                                                                        |  | 25  
|Item 1.      |  | Legal Proceedings                                                                                                                                                                        |  | 25  
|Item 2.      |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                              |  | 25  
|Item 3.      |  | Defaults Upon Senior Securities                                                                                                                                                          |  | 25  
|Item 4.      |  | Submission of Matters to a Vote of Security Holders                                                                                                                                      |  | 25  
|Item 5.      |  | Other Information                                                                                                                                                                        |  | 25  
|Item 6.      |  | Exhibits                                                                                                                                                                                 |  | 26  
|             | 
|SIGNATURES   |  | 27                                                                                                                                                                                      
|EXHIBIT LIST |  | 28                                                                                                                                                                                      



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##### Table of Contents

PART I

FINANCIAL INFORMATION



|Item 1. | Financial Statements
|------- | --------------------

ImmunoCellular
Therapeutics, Ltd.

(A Development Stage Company)

Condensed Balance Sheets



|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ---------------- | ---------- | - | ------------ | - | ---------- | -
|                                                                                                                                                                                     |  | December 31,2006 |            |   | June 30,2007 |  
|                                                                                                                                                                                     |  |                  |            |   | (unaudited)  |  
|Assets                                                                                                                                                                               |  |                  |            |   |              |   |            |  
|Current assets:                                                                                                                                                                      |  |                  |            |   |              |   |            |  
|Cash and cash equivalents                                                                                                                                                            |  | $                | 1,060,341  |   |              | $ | 5,445,154  |  
|Other assets                                                                                                                                                                         |  |                  | 9,399      |   |              |   | 72,725     |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Total current assets                                                                                                                                                                 |  |                  | 1,069,740  |   |              |   | 5,517,879  |  
|Other assets                                                                                                                                                                         |  |                  | 100        |   |              |   | 100        |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Total assets                                                                                                                                                                         |  | $                | 1,069,840  |   |              | $ | 5,517,979  |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Liability and Shareholders Equity (Deficit)                                                                                                                                         |  |                  |            |   |              |   |            |  
|Current liabilities:                                                                                                                                                                 |  |                  |            |   |              |   |            |  
|Accounts payable                                                                                                                                                                     |  | $                | 75,200     |   |              | $ | 57,450     |  
|Accrued liabilities                                                                                                                                                                  |  |                  | 27,578     |   |              |   | 58,410     |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Total current liabilities                                                                                                                                                            |  |                  | 102,778    |   |              |   | 115,860    |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Warrant derivatives                                                                                                                                                                  |  |                  | 777,400    |   |              |   |           |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Commitments and contingencies                                                                                                                                                        |  |                  |           |   |              |   |           |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|                                                                                                                                                                                     |  |                 
|Shareholders equity (deficit):                                                                                                                                                      |  |                  |            |   |              |   |            |  
|Common stock, $0.0001 par value; 74,000,000 shares authorized; 11,782,493 shares and 8,199,779 shares issued and outstanding as of
June 30, 2007 and December 31, 2006, respectively |  |                  | 8,200      |   |              |   | 11,782     |  
|Preferred stock $0.0001 par value, 1,000,000 shares authorized; 0 shares outstanding as of June 30, 2007 and December 31, 2006,
respectively                                         |  |                  |           |   |              |   |           |  
|Additional paid in capital                                                                                                                                                           |  |                  | 5,591,920  |   |              |   | 13,868,074 |  
|Deficit accumulated during the development stage                                                                                                                                     |  |                  | (5,410,458 | ) |              |   | (8,477,737 | )
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Total shareholders equity (deficit)                                                                                                                                                 |  |                  | 189,662    |   |              |   | 5,402,119  |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  
|Total liabilities and shareholders equity                                                                                                                                           |  | $                | 1,069,840  |   |              | $ | 5,517,979  |  
|                                                                                                                                                                                     |  |                  |            |   |              |   |            |  

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



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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Operations

(unaudited)



|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|----------------------------------------- |  | ------------------------------------- | --------- | - | ------------------------------------- | - | ---------- | ----------------------------------- |  | - | ----------------------------------- | - |  | ------------------------------------------ | ---------- | - |  | - | ---------- | -
|                                          |  | For the ThreeMonths EndedJune 30,2006 |           |   | For the ThreeMonths EndedJune 30,2007 |   |            | For the SixMonths EndedJune 30,2006 |  |   | For the SixMonths EndedJune 30,2007 |   |  | February 25,2004(Inception) toJune 30,2007 |           
|Revenues                                  |  | $                                     |          |   |                                       | $ |           |                                     |  | $ |                                    |   |  | $                                          |           |   |  | $ |           |  
|                                          |  |                                       |           |   |                                      
|Expenses:                                 |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Research and development                  |  |                                       |          |   |                                       |   | 65,571     |                                     |  |   | 16,200                              |   |  |                                            | 65,571     |   |  |   | 996,053    |  
|Merger costs                              |  |                                       |          |   |                                       |   |           |                                     |  |   | 34,859                              |   |  |                                            |           |   |  |   | 73,977     |  
|Stock based compensation                  |  |                                       |          |   |                                       |   | 56,450     |                                     |  |   |                                    |   |  |                                            | 1,153,650  |   |  |   | 5,257,295  |  
|General and administrative                |  |                                       | 67,143    |   |                                       |   | 239,211    |                                     |  |   | 196,192                             |   |  |                                            | 457,772    |   |  |   | 977,380    |  
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Total expenses                            |  |                                       | 67,143    |   |                                       |   | 361,232    |                                     |  |   | 247,251                             |   |  |                                            | 1,676,993  |   |  |   | 7,304,705  |  
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Loss before other income and income taxes |  |                                       | (67,143   | ) |                                       |   | (361,232   | )                                   |  |   | (247,251                            | ) |  |                                            | (1,676,993 | ) |  |   | (7,304,705 | )
|                                          |  |                                       |           |   |                                      
|Interest income                           |  |                                       |          |   |                                       |   | 48,978     |                                     |  |   | 4,832                               |   |  |                                            | 65,914     |   |  |   | 95,968     |  
|Change in fair value of warrant liability |  |                                       |          |   |                                       |   | 515,800    |                                     |  |   |                                     |   |  |                                            | (1,456,200 | ) |  |   | (1,269,000 | )
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Loss before income taxes                  |  |                                       | (67,143   | ) |                                       |   | 203,546    |                                     |  |   | (242,419                            | ) |  |                                            | (3,067,279 | ) |  |   | (8,477,737 | )
|                                          |  |                                       |           |   |                                      
|Income taxes                              |  |                                       |          |   |                                       |   |           |                                     |  |   |                                    |   |  |                                            |           |   |  |   |           |  
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Net income (loss)                         |  | $                                     | (67,143   | ) |                                       | $ | 203,546    |                                     |  | $ | (242,419                            | ) |  | $                                          | (3,067,279 | ) |  | $ | (8,477,737 | )
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Weighted average number of shares:        |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Basic                                     |  |                                       | 9,444,597 |   |                                       |   | 11,065,345 |                                     |  |   | 9,051,174                           |   |  |                                            | 9,903,673  |   |  |   | 7,767,344  |  
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Diluted                                   |  |                                       | 9,444,597 |   |                                       |   | 13,461,907 |                                     |  |   | 9,051,174                           |   |  |                                            | 9,903,673  |   |  |   | 7,767,344  |  
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Earnings (loss) per share:                |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Basic                                     |  | $                                     | (0.01     | ) |                                       | $ | 0.02       |                                     |  | $ | (0.03                               | ) |  | $                                          | (0.31      | ) |  | $ | (1.09      | )
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  
|Diluted                                   |  | $                                     | (0.01     | ) |                                       | $ | 0.02       |                                     |  | $ | (0.03                               | ) |  | $                                          | (0.31      | ) |  | $ | (1.09      | )
|                                          |  |                                       |           |   |                                       |   |            |                                     |  |   |                                     |   |  |                                            |            |   |  |   |            |  

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



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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Shareholders Equity (Deficit)



|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ------------ | - |  | -------------------------- | ------ | - | --------------------------------------------- | - | ---------- | ----- |  | - | ---------- | - |  | - | ---------- | -
|                                                                                                      |  | Common Stock |   |  | Additional Paid-In Capital |        |   | DeficitAccumulatedDuring
theDevelopment Stage |   |            | Total | 
|                                                                                                      |  | Shares       |   |  | Amount                     |        |   |                                               |  
|Initial capitalization at $0.00002 per share                                                          |  | 6,256,500    |   |  | $                          | 97     |   |                                               | $ |           |       |  | $ |           |   |  | $ | 97         |  
|Common stock issued for cash during 2004 at $0.00078 per share                                        |  | 193,500      |   |  |                            | 150    |   |                                               |   |           |       |  |   |           |   |  |   | 150        |  
|Net loss                                                                                              |  |             |   |  |                            |       |   |                                               |   |           |       |  |   | (11,741    | ) |  |   | (11,741    | )
|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  
|Balance at December 31, 2004                                                                          |  | 6,450,000    |   |  |                            | 247    |   |                                               |   |           |       |  |   | (11,741    | ) |  |   | (11,494    | )
|Common stock issued for cash during 2005 at $0.19 per share                                           |  | 387,000      |   |  |                            | 6,590  |   |                                               |   | 68,410     |       |  |   |           |   |  |   | 75,000     |  
|Common stock issued for cash during 2005 at $0.32 per share                                           |  | 154,800      |   |  |                            | 155    |   |                                               |   | 49,845     |       |  |   |           |   |  |   | 50,000     |  
|Common stock issued for research and development during 2005 at $0.99 per share                       |  | 154,800      |   |  |                            | 155    |   |                                               |   | 152,605    |       |  |   |           |   |  |   | 152,760    |  
|Net loss                                                                                              |  |             |   |  |                            |       |   |                                               |   |           |       |  |   | (246,004   | ) |  |   | (246,004   | )
|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  
|Balance at December 31, 2005                                                                          |  | 7,146,600    |   |  |                            | 7,147  |   |                                               |   | 270,860    |       |  |   | (257,745   | ) |  |   | 20,262     |  
|Common stock issued for services during 2006 at $0.50 per share                                       |  | 73,093       |   |  |                            | 73     |   |                                               |   | 36,473     |       |  |   |           |   |  |   | 36,546     |  
|Common stock issued for cash during 2006 in private placements at $1.00 per share, net of redemptions |  | 1,510,000    |   |  |                            | 1,510  |   |                                               |   | 547,890    |       |  |   |           |   |  |   | 549,400    |  
|Common stock issued for research and development during 2006 at $1.00 per share                       |  | 694,000      |   |  |                            | 694    |   |                                               |   | 693,306    |       |  |   |           |   |  |   | 694,000    |  
|Shares issued in connection with reverse merger                                                       |  | 825,124      |   |  |                            | 825    |   |                                               |   | (825       | )     |  |   |           |   |  |   |           |  
|Shares cancelled in connection with the sale of OMI                                                   |  | (2,059,100   | ) |  |                            | (2,059 | ) |                                               |   | (62,941    | )     |  |   |           |   |  |   | (65,000    | )
|Exercise of stock options                                                                             |  | 10,062       |   |  |                            | 10     |   |                                               |   | 3,512      |       |  |   |           |   |  |   | 3,522      |  
|Stock based compensation (options)                                                                    |  |             |   |  |                            |       |   |                                               |   | 4,103,645  |       |  |   |           |   |  |   | 4,103,645  |  
|Net loss                                                                                              |  |             |   |  |                            |       |   |                                               |   |           |       |  |   | (5,152,713 | ) |  |   | (5,152,713 | )
|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  
|Balance at December 31, 2006                                                                          |  | 8,199,779    |   |  |                            | 8,200  |   |                                               |   | 5,591,920  |       |  |   | (5,410,458 | ) |  |   | 189,662    |  
|Common stock issued for cash during 2007 in private placements at $1.50 per share                     |  | 3,531,603    |   |  |                            | 3,531  |   |                                               |   | 4,888,955  |       |  |   |           |   |  |   | 4,892,486  |  
|Exercise of stock options                                                                             |  | 51,111       |   |  |                            | 51     |   |                                               |   | (51        | )     |  |   |           |   |  |   |           |  
|Reclassification of warrant derivative liability                                                      |  |             |   |  |                            |       |   |                                               |   | 2,233,600  |       |  |   |           |   |  |   | 2,233,600  |  
|Stock based compensation (options)                                                                    |  |             |   |  |                            |       |   |                                               |   | 1,153,650  |       |  |   |           |   |  |   | 1,153,650  |  
|Net loss                                                                                              |  |             |   |  |                            |       |   |                                               |   |           |       |  |   | (3,067,279 | ) |  |   | (3,067,279 | )
|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  
|Balance at June 30, 2007 (unaudited)                                                                  |  | 11,782,493   |   |  | $                          | 11,782 |   |                                               | $ | 13,868,074 |       |  | $ | (8,477,737 | ) |  | $ | 5,402,119  |  
|                                                                                                      |  |              |   |  |                            |        |   |                                               |   |            |       |  |   |            |   |  |   |            |  

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



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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Cash Flows

(unaudited)



|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|------------------------------------------------------------------------------ |  | ----------------------------------- | --------- | - | ------------------------------------ | - | ---------- | ------------------------------------------- |  | - | ---------- | -
|                                                                               |  | For the SixMonths EndedJune 30,2006 |           |   | For the SixMonths EndedJune 30, 2007 |   |            | February 25,2004 (Inception)to June 30,2007 | 
|Cash flows from operating activities:                                          |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Net loss                                                                       |  | $                                   | (242,419  | ) |                                      | $ | (3,067,279 | )                                           |  | $ | (8,477,737 | )
|Adjustments to reconcile net loss to net cash used in operating activities:    |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Depreciation and amortization                                                  |  |                                     |          |   |                                      |   |           |                                             |  |   |           |  
|Change in fair value of warrant liability                                      |  |                                     |          |   |                                      |   | 1,456,200  |                                             |  |   | 1,269,000  |  
|Sale of OMI                                                                    |  |                                     |          |   |                                      |   |           |                                             |  |   | (65,000    | )
|Stock-based compensation                                                       |  |                                     | 48,562    |   |                                      |   | 1,153,650  |                                             |  |   | 5,257,295  |  
|Common stock issued for services                                               |  |                                     | 36,547    |   |                                      |   |           |                                             |  |   | 36,546     |  
|Common stock issued for research and development                               |  |                                     |          |   |                                      |   |           |                                             |  |   | 846,760    |  
|Changes in assets and liabilities:                                             |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Other assets                                                                   |  |                                     | (28,893   | ) |                                      |   | (63,325    | )                                           |  |   | (72,824    | )
|Accounts payable                                                               |  |                                     | (6,567    | ) |                                      |   | (17,750    | )                                           |  |   | 57,450     |  
|Accrued liabilities                                                            |  |                                     | (31,503   | ) |                                      |   | 30,831     |                                             |  |   | 58,409     |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Net cash used in operating activities                                          |  |                                     | (224,273  | ) |                                      |   | (507,673   | )                                           |  |   | (1,090,101 | )
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Cash flows from investing activities:                                          |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Purchase of property and equipment                                             |  |                                     |          |   |                                      |   |           |                                             |  |   | (40,000    | )
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Cash flows from financing activities:                                          |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Exercise of stock options                                                      |  |                                     |          |   |                                      |   |           |                                             |  |   | 3,522      |  
|Proceeds from issuance of common stock under private placements                |  |                                     | 1,382,000 |   |                                      |   | 4,892,486  |                                             |  |   | 6,446,486  |  
|Proceeds from issuance of common stock                                         |  |                                     |          |   |                                      |   |           |                                             |  |   | 125,247    |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Net cash provided by financing activities                                      |  |                                     | 1,382,000 |   |                                      |   | 4,892,486  |                                             |  |   | 6,575,255  |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Increase in cash                                                               |  |                                     | 1,157,727 |   |                                      |   | 4,384,813  |                                             |  |   | 5,445,154  |  
|Cash at beginning of period                                                    |  |                                     | 30,538    |   |                                      |   | 1,060,341  |                                             |  |   |           |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Cash at end of period                                                          |  | $                                   | 1,188,265 |   |                                      | $ | 5,445,154  |                                             |  | $ | 5,445,154  |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|                                                                               |  |                                     |          
|Supplemental non-cash financing activities:                                    |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  
|Reclassification of warrant derivative liability to additional paid-in capital |  | $                                   |          |   |                                      | $ | 2,233,600  |                                             |  | $ | 2,233,600  |  
|                                                                               |  |                                     |           |   |                                      |   |            |                                             |  |   |            |  

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



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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Notes to Unaudited Condensed Financial Statements

1. Nature of Organization and Development Stage Operations

In January 2006, Spectral Molecular Imaging, Inc., a Nevada corporation
(SMI) that was incorporated and commenced operations on February 25, 2004, merged with Patco Industries, Ltd., which had no operations, assets or liabilities at the time of the merger. For accounting purposes, the financial
statements of Patco Industries, Ltd. (now known as ImmunoCellular Therapeutics, Ltd.) reflect the operations of SMI (the Company).

In May
2006, the Company decided to suspend its research and development activities on its spectral imaging technology, and on September 11, 2006, the Company sold all of the outstanding capital stock of SMI to Dr. Daniel Farkas, a co-founder of
SMI and inventor of this technology. In November 2006, the Company acquired from Cedars-Sinai Medical Center (Cedars-Sinai) an exclusive, worldwide license for a cancer vaccine therapy technology that the Company will be developing.

Interim Results

The accompanying condensed financial
statements at June 30, 2007 and for the three and six month periods ended June 30, 2006 and 2007 are unaudited, but include all adjustments, consisting of normal recurring entries, which the Companys management believes to be
necessary for a fair presentation of the periods presented. Interim results are not necessarily indicative of results for a full year. Balance sheet amounts as of December 31, 2006 have been derived from our audited financial statements as of
that date.

The financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange
Commission (SEC). Certain information and footnote disclosures normally included in financial statements prepared in accordance with accounting principles generally accepted in the U.S. have been condensed or omitted pursuant to such
rules and regulations. Certain prior year amounts have been reclassified to conform to the 2007 financial statement presentation. The financial statements should be read in conjunction with the Companys audited financial statements in its Form
10-KSB for the year ended December 31, 2006. The Companys operating results will fluctuate for the foreseeable future. Therefore, period-to-period comparisons should not be relied upon as predictive of the results in future periods.

2. Summary of Significant Accounting Policies

Cash
and Cash Equivalents  The Company considers all highly liquid debt instruments with an original maturity of 90 days or less to be cash equivalents. The Company had cash equivalents at June 30, 2007 and December 31, 2006 of
$5,397,654 and $977,774, respectively.

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

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



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Stock Based Compensation  In December 2004, the Financial Accounting Standards Board (FASB) issued SFAS
123R, Share Based Payment: An Amendment of FASB Statements No. 123 and 95 (SFAS 123R). This statement requires that the cost resulting for all share-based payment transactions be recognized in the Companys condensed financial statements.
In addition, in March 2005 the SEC released SEC Staff Accounting Bulletin No. 107, Share-Based Payment (SAB 107). SAB 107 provides the SECs staffs position regarding the application of SFAS 123R and certain SEC rules and
regulations, and also provides the staffs views regarding the valuation of share-based payment arrangements for public companies. Generally, the approach in SFAS 123R is similar to the approach described in SFAS 123. However, SFAS 123R
requires all share-based payments to employees, including grants of employee stock options, to be recognized in the statement of operations based on their fair values. Pro forma disclosure of fair value recognition, as prescribed under SFAS 123, is
no longer an alternative.

In the first quarter of 2006, the Company adopted the fair value recognition provisions of SFAS 123R utilizing the
modified-prospective-transition method, as prescribed by SFAS 123R. Under this transition method, compensation cost recognized during the year ended December 31, 2006 includes: (a) compensation cost for all share-based payments granted
prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with SFAS 123, and (b) compensation expense for all share-based payments granted subsequent to January 1, 2006, based on
the grant-date fair value estimated in accordance with the provisions of SFAS 123R. Under the modified-prospective-transition method, results for the prior periods have not been restated.

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



|                        |  |                               |   |  |                               |  
|----------------------- |  | ----------------------------- | - |  | ----------------------------- | -
|                        |  | Six Months EndedJune 30, 2006 |   |  | Six months EndedJune 31, 2007 |  
|Risk-free interest rate |  | 3.65                          | % |  | 4.75                          | %
|Expected dividend yield |  | None                          |   |  | None                          |  
|Expected life           |  | 3.0 years                     |   |  | 3.0 years                     |  
|Expected volatility     |  | 100.0                         | % |  | 100.0                         | %

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

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

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

Income Taxes  Income taxes are provided for the tax effects of transactions reported in the
financial statements and consist of taxes currently due plus deferred taxes, if any. Deferred taxes represent the net tax effects of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and
the amounts used for income tax purposes.

Fair Value of Financial Instruments  The carrying amounts reported in the balance sheets for cash
and accounts payable approximate their fair values.



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

Basic and Diluted Loss per Common Share  Basic and diluted
loss per common share are computed based on the weighted average number of common shares outstanding. Common share equivalents (which consist of options and warrants) are excluded from the computation of diluted loss per share since the effect would
be antidilutive. Common share equivalents at June 30, 2007 totaled 2,396,562 shares which were included in the diluted weighted average number of shares outstanding for the three months ended June 30, 2007 and common share equivalents
which could potentially dilute basic earnings per share in the future, and which were excluded from the computation of diluted loss per share totaled 8,624,084 shares at December 31, 2006.

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

3. Related-Party Transactions

Legal Costs

At June 30, 2007 and December 31, 2006, the Company was indebted to a shareholder for legal services for $58,410 and $27,578, respectively, which are included
in accrued expenses on the accompanying balance sheets.

Legal services provided by a shareholder for the period from February 25, 2004 (date of
inception) to June 30, 2007 was $425,000.

Rent

From February 25, 2004 (date of inception) to June 30, 2007, the Company used on a rent-free basis office space of a shareholder. Such costs are immaterial to the financial statements and, accordingly, have not been reflected
therein.

4. Shareholders Equity

Authorized
Shares

In May 2007, the Company increased the number of its authorized shares of common stock from 25,000,000 to 74,000,000.

Private Placements

In April 2007, the Company raised $300,000
(before offering expenses) from the sale of 200,000 shares of common stock and warrants to purchase 333,334 shares of common stock at $2.50 per share, to an institutional investor in a private placement. The warrants have a term of two years from
the date of issuance. In accordance with FAS 133 Accounting for Derivative Instruments and Hedging Activities, EITF 00-19 Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a
Companys Own Stock and EITF 05-04 The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument. Subject to EITF Issue No. 00-19, the Company did not allocate amounts to the warrants that
represent a derivative liability as no monetary damages will result as long as the Company uses its best efforts to register the shares underlying the warrants. These shares were registered in June 2007.

In April 2007, the Company raised $1,535,153 (before offering expenses) from the sale of 1,023,435 shares of common stock and warrants to purchase 1,023,435 shares of
common stock at $2.50 per share, to various investors in a private placement. The warrants have a term of two years from the date of issuance. In accordance with FAS 133 Accounting for Derivative Instruments and Hedging Activities,
EITF 00-19 Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Companys Own Stock and EITF 05-04 The Effect of a Liquidated Damages Clause on a Freestanding Financial Instrument.
Subject to EITF Issue No. 00-19, the Company did not allocate amounts to the warrants that represent a derivative liability as no monetary damages will result as long as the Company uses its best efforts to register the shares underlying
the warrants.



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In May 2007, the Company raised $2,262,252 (before offering expenses) from the sale of 1,508,168 shares of common stock
and warrants to purchase 1,508,168 shares of common stock at $2.50 per share, to various investors in a private placement. The warrants have a term of two years from the date of issuance. In accordance with FAS 133 Accounting for
Derivative Instruments and Hedging Activities, EITF 00-19 Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Companys Own Stock and EITF 05-04 The Effect of a Liquidated
Damages Clause on a Freestanding Financial Instrument. Subject to EITF Issue No. 00-19, the Company did not allocate amounts to the warrants that represent a derivative liability as no monetary damages will result as long as the Company
uses its best efforts to register the shares underlying the warrants.

Stock Option Plan

In February 2005, the Company adopted an Equity Incentive Plan (Plan). Pursuant to the Plan, a committee appointed by the Board of Directors may grant, at its
discretion, qualified or nonqualified stock options, stock appreciation rights and may grant or sell restricted stock to key individuals, including employees, nonemployee directors, consultants and advisors. Option prices for qualified incentive
stock options (which may only be granted to employees) issued under the Plan may not be less than 100% of the fair market value of the common stock on the date the option is granted (unless the option is granted to a person who, at the time of
grant, owns more than 10% of the total combined voting power of all classes of stock of the Company; in which case the option price may not be less than 110% of the fair market value of the common stock on the date the option is granted). Option
prices for nonqualified stock options issued under the Plan are at the discretion of the committee and may be equal to, greater or less than fair market value of the common stock on the date the option is granted. The options vest over periods
determined by the Board of Directors and are exercisable no later than ten years from date of grant (unless they are qualified incentive stock options granted to a person owning more than 10% of the total combined voting power of all classes of
stock of the Company, in which case the options are exercisable no later than five years from date of grant.) As of June 30, 2007, the Company has reserved 1,500,000 shares of common stock for issuance under the Plan and options to purchase
approximately 836,660 common shares have been granted and remain outstanding under the Plan.

The following table summarizes stock option activity under
the Plan during the three months ended June 30, 2007:



|                                            |  |         |  |                              |      |                                         |     |                                    |   |        
|------------------------------------------- |  | ------- |  | ---------------------------- | ---- | --------------------------------------- | --- | ---------------------------------- | - | -------
|                                            |  | Options |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm |     | AggregateIntrinsicValue(Thousands)
|Outstanding December 31, 2006               |  | 730,660 |  | $                            | 0.82 |                                         |     |                                    |   |        
|Granted                                     |  | 106,000 |  | $                            | 1.26 |                                         |     |                                    |   |        
|Exercised                                   |  |        |  | $                            |     |                                         |     |                                    |   |        
|Forfeited or expired                        |  |        |  | $                            |     |                                         |     |                                    |   |        
|                                            |  |         |  |                              |      |                                         |     |                                    |   |        
|Outstanding June 30, 2007                   |  | 836,660 |  | $                            | 0.88 |                                         | 6.0 |                                    | $ | 396,160
|                                            |  |         |  |                              |      |                                         |     |                                    |   |        
|Vested or expected to vest at June 30, 2007 |  | 595,660 |  | $                            | 0.78 |                                         | 6.1 |                                    | $ | 337,035



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A summary of the status of unvested stock options under the Plan as of June 30, 2007 and changes during the period
then ended, is presented below:



|                              |  |         |  |                                              |     
|----------------------------- |  | ------- |  | -------------------------------------------- | ----
|                              |  | Options |  | WeightedAverageGrant DateFair ValuePer Share
|Unvested at December 31, 2006 |  | 295,000 |  | $                                            | 1.00
|Granted                       |  | 106,000 |  | $                                            | 1.26
|Vested                        |  | 160,000 |  | $                                            | 1.01
|Forfeited                     |  |        |  | $                                            |    
|                              |  |         |  |                                              |     
|Unvested at June 30, 2007     |  | 241,000 |  | $                                            | 1.10
|                              |  |         |  |                                              |     

As of June 30, 2007 and 2006, the total remaining unrecognized compensation cost related to unvested stock
options amounted to $170,310 and $11,292, respectively, which will be amortized over the weighted-average remaining requisite service period of less than one year.

Warrant Derivatives

In connection with the Companys January 2006 private placement, the Company issued to the investors warrants to
purchase 1,400,000 shares of the Companys common stock at $2.50 per share and paid a finders fee in the form of warrants to purchase 300,000 shares of the Companys common stock at $0.15 per share. Of the total proceeds from the January
2006 private placement, approximately $914,000 was initially allocated to the freestanding warrants associated with the units based upon the fair value of the warrants. The assumptions used in the Black Scholes model for determining the initial fair
value of the warrants were as follows: (1) dividend yield of 0%; (2) expected volatility of 100%, (3) risk-free interest rate of 4.50%, and (4) expected life of 3 years. In accordance with FAS 133 Accounting for Derivative
Instruments and Hedging Activities, EITF 00-19 Accounting for Derivative Financial Instruments Indexed to and Potentially Settled in a Companys Own Stock and EITF 05-04 The Effect of a Liquidated Damages Clause on a
Freestanding Financial Instrument Subject to EITF Issue No. 00-19, the amounts allocated to the warrants represented a derivative liability that was recorded in the Companys prior balance sheets. For the six months ended June 30,
2007, the Company recorded a change in fair value of warrant liability totaling $1,456,200. Upon the declaration of effectiveness of the registration of the common shares underlying the warrants in June 2007, the carrying value of warrant
derivatives was reclassified to additional paid in capital in the accompanying balance sheet for the period ended June 30, 2007, as the warrants no longer required derivative liability treatment under EITF Issue No. 00-19.



|Item 2. | Managements Discussion and Analysis or Plan of Operation.
|------- | ----------------------------------------------------------

Throughout this Quarterly Report on Form 10-QSB, the terms we, us, our, and our company refer to ImmunoCellular Therapeutics, Ltd., a Delaware corporation formerly known as Optical
Molecular Imaging, Inc.

Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which reflect the views of our management with respect to future events and financial performance. These
forward-looking statements are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements. Forward-looking statements are identified by words such as anticipates,
believes, estimates, expects, plans, projects, targets and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which are
based on the information available to management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For a discussion of some of the factors that may cause actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information in the Risk Factors section below. The
identification in this Quarterly Report of factors that may affect future performance and the accuracy of forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the
understanding of their inherent uncertainty.



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Overview

On
January 31, 2006, we completed a merger pursuant to which Spectral Molecular Imaging, Inc. became our wholly owned subsidiary. At the time of the merger, we had virtually no assets or liabilities, and we had not conducted any business
operations for several years. In connection with the merger, we changed our name from Patco Industries, Ltd. to Optical Molecular Imaging, Inc. and replaced our officers and directors with those of Spectral Molecular Imaging. In May 2006, we decided
to suspend our research and development activities on Spectral Molecular Imagings spectral imaging technology, and on September 11, 2006, we sold all of the outstanding capital stock of Spectral Molecular Imaging to Dr. Daniel
Farkas, a co-founder of Spectral Molecular Imaging and inventor of its technology.

On September 15, 2006, we entered into a binding Memorandum of
Agreement with Cedars-Sinai Medical Center to acquire an exclusive, worldwide license for a cellular-based therapy technology that we will be developing for the potential treatment of brain tumors and other forms of cancer and neurodegenerative
disorders. We completed the acquisition of this technology license from Cedars-Sinai on November 17, 2006. We are funding a Phase I clinical trial of a vaccine product candidate for the treatment of brain tumors based on this technology that
commenced in May 2007.

We currently do not conduct any business other than development activities relating to our cellular-based therapy technology.

Although we acquired Spectral Molecular Imaging in the merger, for accounting purposes the merger was treated as a reverse merger since the stockholders
of Spectral Molecular Imaging acquired a majority of our outstanding shares of common stock and the directors and executive officers of Spectral Molecular Imaging became our directors and executive officers. Accordingly, our financial statements
contained in this Form 10-QSB and the description of our results of operations and financial condition, reflect the operations of Spectral Molecular Imaging.

You should read the information in this Item 2 together with our condensed financial statements and notes thereto that appear elsewhere in this Report.

Plan of Operation

We are a development stage company that is seeking
to develop and commercialize new cellular-based products to treat cancers and neurodegenerative disorders.

Since our companys inception on
February 25, 2004, we have been primarily engaged in the acquisition of certain intellectual property and have not generated any revenues. As a result, we have incurred operating losses and, as of June 30, 2007, we have an accumulated
deficit of $8,477,737. We expect to incur significant research, development and administrative expenses before any of our products can be launched and revenues generated.

For additional information about our plan of business operation, see Item 1 in our Annual Report on Form 10-KSB for the fiscal year ended December 31, 2006, entitled Description of Business.

Revenues

We had no revenues during the period for the
six months ended June 30, 2007 and 2006, respectively. We incurred a net loss of $3,067,279 and $242,419 for the six months ended June 30, 2007 and 2006, respectively. We do not expect to generate any operating revenues during 2007.



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Expenses

General and
administrative expenses for the six months ended June 30, 2007 and 2006 were $457,772 and $196,192, respectively. Research and development expenses for the six months ended June 30, 2007 and 2006 were $65,571 and $16,200, respectively.
Merger costs for the six months ended June 30, 2006 were $34,859. Stock based compensation for the six months ended June 30, 2007 and 2006 were $1,153,650 and none, respectively. We expect our general and administrative expenses to
significantly increase during 2007 as compared to 2006 as we initiate our Phase I clinical trial and expand the scope of our operations. We estimate that the cost of our Phase I clinical trial will be approximately $350,000 and we may incur
significant additional research and development expenses should we expand our research and development work on additional potential applications for our existing vaccine technologies or should we acquire additional technologies from one or more
third parties.

Liquidity and Capital Resources

As of
June 30, 2007, we had working capital of $5,402,019, compared to working capital of $966,962 on December 31, 2006. In 2007, we raised net proceeds of approximately $4,892,486 through the sale of our securities in private placements.

The estimated cost of completing the development of our current product candidate and of obtaining all required regulatory approvals to market that
product candidate is substantially greater than the amount of funds we currently have available. We believe that our existing cash balances will be sufficient to complete our current Phase I clinical trial and to fund our currently planned level of
operations through at least December 2008, although there is no assurance that such proceeds will be sufficient for this purpose.

We do not have any bank
credit lines. We currently plan to attempt to obtain additional financing through the sale of additional equity, although we may also in the future seek to obtain funding through strategic alliances with larger pharmaceutical or biomedical
companies. We have not yet identified, and cannot be sure that we will be able to obtain any additional funding from either of these sources, or that the terms under which we may be able to obtain such funding will be beneficial to us. If we are
unsuccessful or only partly successful in our efforts to secure additional financing, we may find it necessary to suspend or terminate some or all of our product development and other activities.

As of June 30, 2007, we had no long-term debt obligations, no capital lease obligations, no material purchase obligations or other similar long-term liabilities. In
addition, we have no financial guarantees, debt or lease agreements or other arrangements that could trigger a requirement for an early payment or that could change the value of our assets, and we do not engage in trading activities involving
non-exchange traded contracts.

RISK FACTORS

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

Risks Related to Our Business

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

We are a recently formed development-stage company that has not yet conducted any significant research and
development activity. There is no assurance that we will be able to satisfactorily develop the dendritic cell-based cancer vaccine technology, which we recently acquired, and to market our proposed product candidates or that our proposed product
candidates will generate revenues or that any revenues generated will be sufficient for us to become profitable or thereafter maintain profitability. We have not generated any revenues to date, and we do not expect to generate any such revenues for
a number of years.



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Our lead product candidate for the treatment of brain tumors is in an early stage of development, has
only been subjected to very limited preliminary human testing and will require extensive testing and regulatory marketing approvals before commercialization. Our dendritic cell-based vaccine technology initially will be our sole platform technology
and our commercial prospects will be heavily dependent on the outcome of the clinical trials for our lead product candidate. We have only one full-time employee, our President and Chief Operating Officer, have limited resources and may not possess
the ability to successfully overcome many of the risks and uncertainties frequently encountered by early stage companies involved in the new and rapidly evolving field of biotechnology in general and cancer immunotherapies in particular. You must
consider that we may not be able to:



| |  |  | obtain additional financial resources necessary to develop, test, manufacture and market our lead product candidate or any future product candidates;
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | engage corporate partners to assist in developing, testing, manufacturing and marketing our lead product candidate or any future product candidates;
| | - |  | ----------------------------------------------------------------------------------------------------------------------------------------------------



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



| |  |  | establish and demonstrate or satisfactorily complete the research to demonstrate at various stages the pre-clinical and clinical efficacy and safety of our lead
product candidate or any future product candidates; and
| | - |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| |  |  | market our lead product candidate or any future product candidates to achieve acceptance and use by the medical community and patients in general and produce
revenues.
| | - |  | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------

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

We have not generated any revenues and have incurred operating losses since our inception and we expect to continue to incur operating
losses for the foreseeable future. There is no assurance that we will be able to develop or market products in the future that will generate revenues or that any revenues generated will be sufficient for us to become profitable or thereafter
maintain profitability. In the event that our operating losses are greater than anticipated or continue for longer than anticipated, we will need to raise significant additional capital sooner, or in greater amounts, than otherwise anticipated in
order to be able to continue development of our proposed product candidates and maintain our operations.

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

We believe that our existing cash balances will be sufficient
to complete our current Phase I clinical trial and to fund our currently planned level of operations until at least December 2008. We will need significant funding to carry out all of our planned development work on our lead product candidate
and future product candidates and to expand the scope of our operations (including seeking to employ a CEO and additional support personnel on a full-time basis). If we are unable to obtain sufficient capital on a timely basis, the development of
our lead or any future product candidates could be delayed, and we could be forced to reduce the scope of our research and development projects or otherwise limit or terminate our operations altogether.



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

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

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

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

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

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



| |  |  | survive and persist in the desired location;
| | - |  | --------------------------------------------



| |  |  | provide the intended therapeutic benefits;
| | - |  | ------------------------------------------



| |  |  | properly integrate into existing tissue in the desired manner; or
| | - |  | -----------------------------------------------------------------



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

In addition, our product candidates may cause undesirable side effects. Results of preclinical research with our lead or any future product candidates or
clinical results with formulations used in earlier trials that are similar but not identical to our lead product candidate formulation may not be indicative of the results that will be obtained in later stages of preclinical or clinical research on
our product candidates. If regulatory authorities do not approve our products or if we fail to maintain regulatory compliance, we would be



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unable to commercialize our products, and our business and results of operations would be harmed. Furthermore, because dendritic cells represent a new form
of therapy, the marketplace may not accept any products we may develop. If we do succeed in developing products, we will face many potential obstacles, such as the need to obtain regulatory approvals and to develop or obtain manufacturing, marketing
and distribution capabilities. In addition, we will face substantial additional risks, such as product liability claims.

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

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

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

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

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

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



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

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

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

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

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

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

There is no assurance that the approaches offered by our lead product candidate or any future product candidates will gain broad acceptance among doctors
or patients or that governmental agencies or third party medical insurers will be willing to provide reimbursement coverage for our proposed product candidates. Moreover, we do not have internal marketing data research resources and are not certain
of and have not attempted to independently verify the potential size of the commercial markets for our lead product candidate or any future product candidates. Since our lead product candidate and any future product candidates will represent



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new approaches to treating various conditions, it may be difficult, in any event, to accurately estimate the potential revenues from these product
candidates. We may spend large amounts of money trying to obtain approval for these product candidates, and never succeed in doing so. In addition, these product candidates may not demonstrate in large sets of patients the pharmacological properties
ascribed to them in the laboratory studies or smaller groups of patients, and they may interact with human biological systems in unforeseen, ineffective or even harmful ways either before or after they are approved to be marketed. We do not yet have
sufficient information to reliably estimate what it will cost to commercially manufacture our lead product candidate or any future product candidates, and the actual cost to manufacture these products could materially and adversely affect the
commercial viability of these products. As a result, we may never succeed in developing a marketable product. If we do not successfully develop and commercialize products based upon our approach, we will not become profitable, which would
materially, adversely affect the value of our common stock.

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



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



| |  |  | the safety, efficacy and ease of administration;
| | - |  | ------------------------------------------------



| |  |  | the availability of government and third-party payor reimbursement;
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| |  |  | the pricing of our product candidates, particularly as compared to alternative treatments; and
| | - |  | ----------------------------------------------------------------------------------------------



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

Adverse publicity regarding cellular therapies could impact our business.

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

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

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

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



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

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

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

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

We do not have the required financial and human resources to carry out on our own all the pre-clinical and clinical development for our lead product candidate or any future product candidates, and do not have the capability and resources to
manufacture, market or sell our lead product candidate or any future product candidates. Vaccines are often administered with one or more adjuvants, which if necessary we will have to procure from a third-party source. Our business model calls for
the outsourcing of the clinical and other development and manufacturing, sales and marketing of our product candidates in order to reduce our capital and infrastructure costs as a means of potentially improving our financial position. Accordingly,
we will seek to enter, at the appropriate time, into agreements with other companies that can assist us and provide certain capabilities that we do not possess. We have not yet identified or entered into discussions with any company for any
strategic alliances or other licensing or contract arrangements. Even if we do succeed in securing these alliances, we may not be able to maintain them if, for example, development results are disappointing or approval of a product is delayed or
sales of an approved product are below expectations. Furthermore, any delay in entering into agreements could delay the development and commercialization of our products and reduce their competitiveness even if they reach the market. Any such delay
related to our agreements could adversely affect our business.



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

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

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

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

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

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



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

Our patents may not protect the proprietorship of our products.

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

Issuance of patents based upon the various patent applications licensed from Cedars-Sinai will depend upon the U.S. and foreign patent agencies being able to determine that the claims made in these applications were not already publicly
known or were not obvious from prior published patents and literature, including the extensive previous vaccine work performed and published by Dr. John Yu and other researchers at Cedars-Sinai. One of the provisional applications in the
licensed portfolio covers the use of a specific antigen, TRP-2, in vaccines. We have decided that in light of our present research interests and commercial strategies, as well as prior published literature, we will not pursue this application.
Although TRP-2 is one of the antigens used in our lead vaccine product candidate, we have been seeking patent protection for this vaccine through our licensed multiple antigen patent application and not through the withdrawn TRP-2 patent
application. The TRP-2 patent application does not cover in any material respect the technology incorporated in any other potential vaccine product candidate that we are currently contemplating for future development.

Even if we are able to obtain patent protection for our lead product candidate or any future product candidates, there is no guarantee that the coverage
of these patents will be sufficiently broad to protect us from competitors or that we will be able to enforce our patents against potential infringement by third parties or protect us against our infringement of the proprietary rights of third
parties. Patent litigation is expensive, and we may not be able to afford the costs. We may not become aware on a timely basis that products we are developing or marketing infringe the rights of others, nor may we be able to detect unauthorized use
or take appropriate and timely steps to enforce our own intellectual property rights. Protecting our intellectual property rights may also consume significant management time and resources. Dr. John Yu, a co-inventor of our cellular-based
therapy technology who serves as our Chairman of the Board, is employed by Cedars-Sinai, which may assert that future intellectual property generated by Dr. Yu belongs to that institution rather than to us, and we may be required to seek a
license from Cedars-Sinai for any such rights.

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

In order to protect our proprietary technology and processes, we will also rely in part on
nondisclosure agreements with our employees, licensing partners, consultants, agents and other organizations to which we disclose our proprietary information. These agreements may not effectively prevent disclosure of confidential information, may
be limited as to their term, and may not provide an adequate remedy in the event of unauthorized disclosure of confidential information. In addition, others may independently discover trade secrets and proprietary information, and in such cases we
could not assert any trade secret rights against such party. Costly and time-consuming litigation could be necessary to enforce and determine the scope of our proprietary rights, and failure to obtain or maintain trade secret protection could
adversely affect our competitive business position. Since we will rely on trade secrets



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and nondisclosure agreements, in addition to patents, to protect some of our intellectual property, there is a risk that third parties may obtain and
improperly utilize our proprietary information to our competitive disadvantage. We may not be able to detect unauthorized use or take appropriate and timely steps to enforce our intellectual property rights.

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

Should third parties patent specific cells, systems, receptors, or other items
that we are seeking to utilize in our development activities, we may be forced to license rights from these parties or abandon our development activities if we are unable to secure these rights on attractive terms or at all. In light of the large
number of companies and institutions engaged in research and development in the cellular therapy field, we anticipate that many parties will be seeking patent rights for many cellular technologies and that licensing and cross licensing of these
rights among various competitors may arise. It may be necessary for us to license certain rights from others for their technologies so that we can develop our lead product candidate or any future product candidates, but we may not be able to do so
on attractive terms or at all. Cedars-Sinai has previously granted another institution rights to the use of certain peptide materials that we may seek to incorporate into one or more of our cellular-based therapy product candidates. We may be
required to obtain a license from that other institution if we wish to use these materials. If we are unable to obtain this license, we would be required to develop vaccine products without the potential enhanced benefits that could be provided by
these materials.

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



| |  |  | incur substantial monetary damages;
| | - |  | -----------------------------------



| |  |  | encounter significant delays in marketing our lead product candidates or any future product candidates;
| | - |  | -------------------------------------------------------------------------------------------------------



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



| |  |  | lose patent protection for our inventions and products; or
| | - |  | ----------------------------------------------------------



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

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

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

Except for David Wohlberg, our
President and Chief Operating Officer, we do not have any full-time management personnel. We are dependent on our officers and directors for their scientific or managerial skills, including Dr. John Yu, our Chairman of the Board. However, these
individuals are associated with us on a part-time basis only. We do not currently maintain key man life insurance on Dr. Yu, and the loss of his services would materially, adversely affect our business.



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We plan to expand the scope of our operations, and therefore, we will need to obtain the full-time
services of a Chief Executive Officer. Competition for such a person is intense, and there is no assurance that we will be able to attract or retain qualified senior personnel and our failure to do so could have an adverse effect on our ability to
implement our business plan. As we retain full-time senior personnel, our overhead expenses for salaries and related items will increase substantially from current levels.

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

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

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

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

The development and sale of medical products in general, and vaccines in particular, expose us to the risk of significant damages from product
liability and other claims. Product liability claims could delay or prevent completion of our clinical development programs. If we succeed in marketing our proposed lead product candidate or any future product candidates, such claims could result in
an FDA investigation of the safety and effectiveness of our products or our marketing programs, and potentially a recall of our products or more serious enforcement action, or limitations on the indications for which they may be used, or suspension
or withdrawal of approval. We have obtained for our current clinical trial and plan to obtain for our future clinical trial activities product liability insurance coverage. There is no assurance that we will be able to secure such insurance in the
amounts we are seeking or at all for any of the trials for our proposed lead product candidate or any future product candidates. We intend to obtain coverage for our products when they enter the marketplace (as well as requiring the manufacturers of
our products to maintain insurance), but we do not know if insurance will be



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available to us at acceptable costs or at all. The costs for many forms of liability insurance have risen substantially in recent years and the costs for
insuring a vaccine type product may be higher than other pharmaceutical products, and such costs may continue to increase in the future, which could materially impact our costs for clinical or product liability insurance. If the cost is too high, we
will have to self-insure, and we may have inadequate financial resources to pay the costs of any claims. A successful claim in excess of our product liability coverage could have a material adverse effect on our business, financial condition and
results of operations.

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

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

Risks Related to Our Securities

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

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

You may have difficulty selling our shares because they are deemed penny stocks.

Since our common stock is not
listed on the Nasdaq Stock Market, if the trading price of our common stock remains below $5.00 per share, trading in our common stock will be subject to the requirements of certain rules promulgated under the Securities Exchange Act of 1934, as
amended (the Exchange Act), which require additional disclosure by broker-dealers in connection with any trades involving a stock defined as a penny stock (generally, any non-Nasdaq equity security that has a market price of less
than $5.00 per share, subject to certain exceptions). Such rules require the delivery, prior to any penny stock transaction, of a disclosure schedule explaining the penny stock market and the risks associated therewith and impose various sales
practice requirements on broker-dealers who sell penny stocks to persons other than established customers and accredited investors (generally defined as an investor with a net worth in excess of $1,000,000 or annual income exceeding $200,000
individually or $300,000 together with a spouse). For these types of transactions, the broker-dealer must make a special suitability determination for the purchaser and have received the purchasers written consent to the transaction prior to
the sale. The broker-dealer also must disclose the commissions



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payable to the broker-dealer, current bid and offer quotations for the penny stock and, if the broker-dealer is the sole market-maker, the broker-dealer must
disclose this fact and the broker-dealers presumed control over the market. Such information must be provided to the customer orally or in writing before or with the written confirmation of trade sent to the customer. Monthly statements must
be sent disclosing recent price information for the penny stock held in the account and information on the limited market in penny stocks. The additional burdens imposed upon broker-dealers by such requirements could discourage broker-dealers from
effecting transactions in our common stock, which could severely limit the market liquidity of the common stock and the ability of holders of the common stock to sell their shares.

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

As of August 10, 2007, our directors and executive officers and their affiliates beneficially owned approximately 52% of our
outstanding common stock. Dr. John Yu also currently is entitled to serve as a director and to designate two of our other directors. These stockholders, if they act together, and Dr. Yu, through his right to name three of our directors,
may be able to direct the outcome of matters, including the election of our directors and other corporate actions such as:



| |  |  | our merger with or into another company;
| | - |  | ----------------------------------------



| |  |  | a sale of substantially all of our assets; and
| | - |  | ----------------------------------------------



| |  |  | amendments to our certificate of incorporation.
| | - |  | -----------------------------------------------

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

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

Dr. John
Yu, our Chairman of the Board, and Dr. Keith Black, the Chairman of our Scientific Advisory Board, are full-time employees of Cedars-Sinai, which owns shares of our common stock and where we plan to conduct certain research and development
work. Potential conflicts of interest could arise as a result, including for Dr. Yu and Dr. Black in performing services for us and for Cedars-Sinai, in establishing the terms under which Cedars-Sinai performs work for us, and in
Cedars-Sinai conducting the research. Sanford Hillsberg, one of our directors, and David Wohlberg, our President and Chief Operating Officer, are a member and of counsel, respectively, of Troy & Gould Professional Corporation, which owns
shares of our common stock and performs certain legal services for us. Potential conflicts of interest could arise as a result, including for Mr. Hillsberg in performing services for us and for Troy & Gould, in establishing the terms
under which Troy & Gould provides services for us, and in Troy & Gould conducting work for us.

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

Currently, approximately 6,655,717 shares of our common stock are eligible to be sold in
the public market under Rule 144. In June 2007, two registration statements covering 8,915,704 shares of our common stock and an additional 10,960,092 shares of our common stock issuable upon the exercise of warrants and options became
effective. Following the effectiveness of an additional registration statement that we have filed, 11,782,493 shares of our currently outstanding shares of common stock and another 13,896,007 shares of our common stock issuable upon exercise of
warrants and options will be eligible to be sold pursuant to the registration statement or Rule 144 or other currently effective registration statements.



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The possibility that substantial amounts of our common stock may be sold in the public market may
adversely affect prevailing market prices for our common stock and could impair our ability to raise capital through the sale of our equity securities.

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

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

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

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



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



| |  |  | developments with respect to patents or proprietary rights;
| | - |  | -----------------------------------------------------------



| |  |  | announcements of technological innovations by us or our competitors;
| | - |  | --------------------------------------------------------------------



| |  |  | announcements of new products or new contracts by us or our competitors;
| | - |  | ------------------------------------------------------------------------



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



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



| |  |  | conditions and trends in the pharmaceutical and other industries;
| | - |  | -----------------------------------------------------------------



| |  |  | new accounting standards;
| | - |  | -------------------------



| |  |  | general economic, political and market conditions and other factors; and
| | - |  | ------------------------------------------------------------------------



| |  |  | the occurrence of any of the risks described in this report.
| | - |  | ------------------------------------------------------------



|Item 3. | Controls and Procedures
|------- | -----------------------

As of the end of the fiscal quarter
covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, regarding the effectiveness of the design and operation of our disclosure
controls and procedures pursuant to SEC Rule 15d-15(b) of the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that our disclosure controls and procedures are effective to
ensure



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that information that is required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported or
submitted within the time period specified in the rules and forms of the SEC. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially affected, or are
reasonably likely to materially affect, our internal control over financial reporting.

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

PART II

OTHER INFORMATION



|Item 1. | Legal Proceedings
|------- | -----------------

None.



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

The Company did not issue any unregistered securities during the three month period ended June 30, 2007 that were not previously reported in a Current Report on Form 8-K except as follows.

In April, 2007, the Company sold 200,000 shares of common stock and two-year warrants to purchase an additional 333,334 shares of common stock at an
exercise price of $2.50 per share to RAB Special Situations (Master) Fund Limited for total consideration of $300,000. In connection with this sale, the Company issued to an individual who assisted it in identifying this fund two-year warrants to
purchase 24,000 shares of the its common stock at an exercise price of $2.50 per share. Both issuees of these securities were accredited investors. These securities were issued by the Company in reliance upon an exemption from registration under
Section 4(2) of the Securities Act.

In May, 2007 the Company issued 51,111 shares of its common stock to Keith Black upon his
exercising a portion of an option covering 100,000 shares of the Companys common stock in a cashless exercise transaction. These securities were issued by us in reliance upon an exemption from registration under Section 4(2) of the
Securities Act.



|Item 3. | Defaults Upon Senior Securities
|------- | -------------------------------

None.



|Item 4. | Submission of Matters to a Vote of Security Holders
|------- | ---------------------------------------------------

None.



|Item 5. | Other Information
|------- | -----------------

None.



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##### Table of Contents

|Item 6. | Exhibits
|------- | --------



|            |  |                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                         
|3.1         |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company. (2)                                                                                                                                                                                   
|4.1         |  | Subscription Agreement dated April 19, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (1)                                                                                                                                         
|4.2         |  | Warrant dated April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the
purchase of 200,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (1)
|4.3         |  | Warrant dated April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the
purchase of 133,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (1)
|4.4         |  | Form of Subscription Agreement containing registration rights between the participants in the April/May 2007 private placement of the Registrant. (3)                                                                                                                               
|4.5         |  | Form of Warrant issued to participants in the April/May 2007 private placement to purchase shares of the common stock of the Registrant. (3)                                                                                                                                        
|10.1        |  | Amendment to Agreement, dated June 28, 2007, by and between David Wohlberg and Registrant.*(3)                                                                                                                                                                                      
|31.1        |  | Certification of the Registrants Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|31.2        |  | Certification of the Registrants Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|32.1        |  | Certification of the Registrants Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                   
|32.2        |  | Certification of the Registrants Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                   

---

|* | Indicates a management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------------------

|(1) | Previously filed by us on May 1, 2007 as an exhibit to our Registration Statement on Form SB-2 and incorporated herein by reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(2) | Previously filed by us on May 9, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.
|--- | ---------------------------------------------------------------------------------------------------------------------------

|(3) | Previously filed by us on July 12, 2007 as an exhibit to our Registration Statement on Form SB-2 and incorporated herein by reference.
|--- | --------------------------------------------------------------------------------------------------------------------------------------



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##### Table of Contents

SIGNATURES

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



|                       |  |  |  |                                   |  |                     |  |                                             
|---------------------- |  |  |  | --------------------------------- |  | ------------------- |  | --------------------------------------------
|Dated: August 14, 2007 |  |  |  | IMMUNOCELLULAR THERAPEUTICS, LTD.
|                       |  |  | 
|                       |  |  |  | By:                               |  | /s/ David Wohlberg 
|                       |  |  |  |                                   |  | Name:               |  | David Wohlberg                              
|                       |  |  |  |                                   |  | Title:              |  | President (Principal Executive Officer)     
|                       |  |  | 
|                       |  |  |  | By:                               |  | /s/ C. Kirk Peacock
|                       |  |  |  |                                   |  | Name:               |  | C. Kirk Peacock                             
|                       |  |  |  |                                   |  | Title:              |  | Chief Financial Officer and Treasurer       
|                       |  |  |  |                                   |  |                     |  | (Principal financial and accounting officer)



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##### Table of Contents

EXHIBIT INDEX

IMMUNOCELLULAR THERAPEUTICS, LTD.

FORM 10-QSB FOR QUARTER ENDED JUNE 30, 2007



|            |  |                                                                                                                                                                                                                                                                                     
|----------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                                                                                                                                         
|3.1         |  | Certificate of Amendment to Amended and Restated Certificate of Incorporation of the Company. (2)                                                                                                                                                                                   
|4.1         |  | Subscription Agreement dated April 19, 2007 between ImmunoCellular Therapeutics, Ltd. and RAB Special Situations (Master) Fund Limited. (1)                                                                                                                                         
|4.2         |  | Warrant dated April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the
purchase of 200,000 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (1)
|4.3         |  | Warrant dated April 19, 2007 issued by ImmunoCellular Therapeutics, Ltd. to Credit Suisse Client Nominees (UK) Limited, as nominee for RAB Special Situations (Master) Fund Limited, for the
purchase of 133,334 shares of the common stock of ImmunoCellular Therapeutics, Ltd. (1)
|4.4         |  | Form of Subscription Agreement containing registration rights between the participants in the April/May 2007 private placement of the Registrant. (3)                                                                                                                               
|4.5         |  | Form of Warrant issued to participants in the April/May 2007 private placement to purchase shares of the common stock of the Registrant. (3)                                                                                                                                        
|10.1        |  | Amendment to Agreement, dated June 28, 2007, by and between David Wohlberg and Registrant.*(3)                                                                                                                                                                                      
|31.1        |  | Certification of the Registrants Principal Executive Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|31.2        |  | Certification of the Registrants Principal Financial Officer under Exchange Act Rule 15d-14(a), as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                                                                              
|32.1        |  | Certification of the Registrants Principal Executive Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                   
|32.2        |  | Certification of the Registrants Principal Financial Officer under 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.                                                                                                                   

---

|* | Indicates a management contract or compensatory plan or arrangement.
|- | --------------------------------------------------------------------

|(1) | Previously filed by us on May 1, 2007 as an exhibit to our Registration Statement on Form SB-2 and incorporated herein by reference.
|--- | ------------------------------------------------------------------------------------------------------------------------------------

|(2) | Previously filed by us on May 9, 2007 as an exhibit to our Current Report on Form 8-K and incorporated herein by reference.
|--- | ---------------------------------------------------------------------------------------------------------------------------

|(3) | Previously filed by us on July 12, 2007 as an exhibit to our Registration Statement on Form SB-2 and incorporated herein by reference.
|--- | --------------------------------------------------------------------------------------------------------------------------------------



28