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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549





FORM 10-Q





(Mark One)



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

For the quarterly period ended September 30, 2008



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

Commission file number 033-17264-NY





ImmunoCellular Therapeutics,
Ltd.

(Exact name of registrant as specified in its charter)







|                                                               |  |                                  
|-------------------------------------------------------------- |  | ---------------------------------
|DELAWARE                                                       |  | 93-1301885                       
|(State or other jurisdiction of incorporation or organization) |  | (IRS Employer Identification No.)

21900 Burbank Boulevard, 3rdFloor

Woodland Hills, California
91367

(Address of principal executive offices)

(818) 992-2907

(Registrant s telephone number, including area code)





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

Indicate by check mark whether the registrant is a
large accelerated filer, an accelerated filer, a non-accelerated filer or a smaller reporting company.



|                        |  |   |  |                           |  |  
|----------------------- |  | - |  | ------------------------- |  | -
|Large accelerated filer |  |  ̈ |  | Accelerated Filer         |  |  ̈
|Non-accelerated filer   |  |  ̈ |  | Smaller reporting company |  | x

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

The Issuer had 12,682,493 shares of its common stock outstanding as of November 10, 2008.









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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

FORM 10-Q

Table of Contents



|                             |  |          |  |                                                                                                                                                                                                      |  |     
|---------------------------- |  | -------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ----
|                             |  |          |  |                                                                                                                                                                                                      |  | Page
|PART I FINANCIAL INFORMATION |  | 1       
|                             |  |          | 
|                             |  | Item 1.  |  | Financial Statements                                                                                                                                                                                 |  | 1   
|                             |  |          |  | Condensed Balance Sheets as of December 31, 2007 and September 30, 2008 (unaudited)                                                                                                                  |  | 1   
|                             |  |          |  | Condensed Statements of Operations for the Three and Nine Months Ended September 30, 2007 (unaudited) and 2008 (unaudited)
 and from February 25, 2004 (Inception) to September 30, 2008 (unaudited) |  | 2   
|                             |  |          |  | Condensed Statements of Shareholders Equity (Deficit) for the Nine Months Ended September 30, 2008 (unaudited) and
 from February 25, 2004 (Inception) to December 31, 2007                         |  | 3   
|                             |  |          |  | Condensed Statements of Cash Flows for the Nine Months Ended September 30, 2007 (unaudited) and 2008 (unaudited) and from
 February 25, 2004 (Inception) to September 30, 2008 (unaudited)           |  | 4   
|                             |  |          |  | Notes to Unaudited Condensed Financial Statements                                                                                                                                                    |  | 5   
|                             |  | Item 2.  |  | Managements Discussion and Analysis of Financial Condition and Results of Operations                                                                                                                |  | 13  
|                             |  | Item 3.  |  | Quantitative and Qualitative Disclosure About Market Risk                                                                                                                                            |  | 17  
|                             |  | Item 4.  |  | Controls and Procedures                                                                                                                                                                              |  | 18  
|                             | 
|PART II OTHER INFORMATION    |  | 18      
|                             |  |          | 
|                             |  | Item 1.  |  | Legal Proceedings                                                                                                                                                                                    |  | 18  
|                             |  | Item 1A. |  | Risk Factors                                                                                                                                                                                         |  | 18  
|                             |  | Item 2.  |  | Unregistered Sales of Equity Securities and Use of Proceeds                                                                                                                                          |  | 21  
|                             |  | Item 3.  |  | Defaults Upon Senior Securities                                                                                                                                                                      |  | 21  
|                             |  | Item 4.  |  | Submission of Matters to a Vote of Security Holders                                                                                                                                                  |  | 21  
|                             |  | Item 5.  |  | Other Information                                                                                                                                                                                    |  | 22  
|                             |  | Item 6.  |  | Exhibits                                                                                                                                                                                             |  | 22  
|                             | 
|SIGNATURES                   |  | 23      
|EXHIBIT LIST                 |  | 24      



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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 31,2007 |            |   | September 30,2008 |  
|                                                                                                                                                                                            |  |                  |            |   | (unaudited)       |  
|Assets                                                                                                                                                                                      |  |                  |            |   |                   |   |             |  
|Current assets:                                                                                                                                                                             |  |                  |            |   |                   |   |             |  
|Cash and cash equivalents                                                                                                                                                                   |  | $                | 5,040,824  |   |                   | $ | 3,509,669   |  
|Other assets                                                                                                                                                                                |  |                  | 29,540     |   |                   |   | 70,974      |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Total current assets                                                                                                                                                                        |  |                  | 5,070,364  |   |                   |   | 3,580,643   |  
|Fixed assets, net                                                                                                                                                                           |  |                  |           |   |                   |   | 7,211       |  
|Other assets                                                                                                                                                                                |  |                  | 100        |   |                   |   | 7,438       |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Total assets                                                                                                                                                                                |  | $                | 5,070,464  |   |                   | $ | 3,595,292   |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Liability and Shareholders Equity (Deficit)                                                                                                                                                |  |                  |            |   |                   |   |             |  
|Current liabilities:                                                                                                                                                                        |  |                  |            |   |                   |   |             |  
|Accounts payable                                                                                                                                                                            |  | $                | 30,196     |   |                   | $ | 25,494      |  
|Accrued liabilities                                                                                                                                                                         |  |                  | 42,559     |   |                   |   | 51,898      |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Total current liabilities                                                                                                                                                                   |  |                  | 72,755     |   |                   |   | 77,392      |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Commitments and contingencies                                                                                                                                                               |  |                  |           |   |                   |   |            |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Shareholders equity (deficit):                                                                                                                                                             |  |                  |            |   |                   |   |             |  
|Common stock, $0.0001 par value; 74,000,000 shares authorized; 11,782,493 shares and 12,682,493 shares issued and outstanding as of
December 31, 2007 and September 30, 2008, respectively. |  |                  | 11,782     |   |                   |   | 12,682      |  
|Preferred stock $0.0001 par value, 1,000,000 shares authorized; 0 shares outstanding as of December 31, 2007 and September 30, 2008.                                                        |  |                  |           |   |                   |   |            |  
|Additional paid in capital                                                                                                                                                                  |  |                  | 14,011,138 |   |                   |   | 14,893,681  |  
|Deficit accumulated during the development stage                                                                                                                                            |  |                  | (9,025,211 | ) |                   |   | (11,388,463 | )
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Total shareholders equity (deficit)                                                                                                                                                        |  |                  | 4,997,709  |   |                   |   | 3,517,900   |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  
|Total liabilities and shareholders equity                                                                                                                                                  |  | $                | 5,070,464  |   |                   | $ | 3,595,292   |  
|                                                                                                                                                                                            |  |                  |            |   |                   |   |             |  

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



1



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##### Table of Contents

ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Operations

(unaudited)



|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|----------------------------------------- |  | ------------------------------------------ | ---------- | - | ------------------------------------------ | - | ---------- | ----------------------------------------- |  | - | ----------------------------------------- | - |  | ----------------------------------------------- | ---------- | - |  | - | ----------- | -
|                                          |  | For the ThreeMonths EndedSeptember 30,2007 |            |   | For the ThreeMonths EndedSeptember 30,2008 |   |            | For the NineMonths EndedSeptember 30,2007 |  |   | For the NineMonths EndedSeptember 30,2008 |   |  | February 25,2004(Inception) toSeptember 30,2008 |           
|Revenues                                  |  | $                                          |           |   |                                            | $ |           |                                           |  | $ |                                          |   |  | $                                               |           |   |  | $ |            |  
|Expenses:                                 |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Research and development                  |  |                                            | 6,143      |   |                                            |   | 130,065    |                                           |  |   | 71,714                                    |   |  |                                                 | 1,068,159  |   |  |   | 2,076,498   |  
|Merger costs                              |  |                                            |           |   |                                            |   |           |                                           |  |   |                                          |   |  |                                                 |           |   |  |   | 73,977      |  
|Stock based compensation                  |  |                                            | 75,740     |   |                                            |   | 104,086    |                                           |  |   | 1,229,390                                 |   |  |                                                 | 394,443    |   |  |   | 5,794,802   |  
|General and administrative                |  |                                            | 201,878    |   |                                            |   | 355,293    |                                           |  |   | 659,650                                   |   |  |                                                 | 1,013,337  |   |  |   | 2,478,967   |  
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Total expenses                            |  |                                            | 283,761    |   |                                            |   | 589,444    |                                           |  |   | 1,960,754                                 |   |  |                                                 | 2,475,939  |   |  |   | 10,424,244  |  
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Loss before other income and income taxes |  |                                            | (283,761   | ) |                                            |   | (589,444   | )                                         |  |   | (1,960,754                                | ) |  |                                                 | (2,475,939 | ) |  |   | (10,424,244 | )
|Interest income                           |  |                                            | 61,488     |   |                                            |   | 25,293     |                                           |  |   | 127,402                                   |   |  |                                                 | 112,687    |   |  |   | 304,781     |  
|Change in fair value of warrant liability |  |                                            |           |   |                                            |   |           |                                           |  |   | (1,456,200                                | ) |  |                                                 |           |   |  |   | (1,269,000  | )
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Income (loss) before income taxes         |  |                                            | (222,273   | ) |                                            |   | (564,151   | )                                         |  |   | (3,289,552                                | ) |  |                                                 | (2,363,252 | ) |  |   | (11,388,463 | )
|Income taxes                              |  |                                            |           |   |                                            |   |           |                                           |  |   |                                          |   |  |                                                 |           |   |  |   |            |  
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Net income (loss)                         |  | $                                          | (222,273   | ) |                                            | $ | (564,151   | )                                         |  | $ | (3,289,552                                | ) |  | $                                               | (2,363,252 | ) |  | $ | (11,388,463 | )
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Weighted average number of shares:        |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Basic and diluted                         |  |                                            | 11,782,493 |   |                                            |   | 12,682,493 |                                           |  |   | 10,539,156                                |   |  |                                                 | 12,492,383 |   |  |   | 8,978,749   |  
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Earnings (loss) per share:                |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  
|Basic and diluted                         |  | $                                          | (0.02      | ) |                                            | $ | (0.04      | )                                         |  | $ | (0.31                                     | ) |  | $                                               | (0.19      | ) |  | $ | (1.27       | )
|                                          |  |                                            |            |   |                                            |   |            |                                           |  |   |                                           |   |  |                                                 |            |   |  |   |             |  

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



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ImmunoCellular Therapeutics, Ltd.

(A Development Stage Company)

Condensed Statements of Shareholders Equity (Deficit)



|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  
|----------------------------------------------------------------------------------------------------- |  | ------------ | - |  | ------------------- | ------ | - | --------------------------------------- | - | ---------- | ----- |  | - | ----------- | - |  | - | ---------- | -
|                                                                                                      |  | Common Stock |   |  | AdditionalPaid  In |        |   | DeficitAccumulatedDuring theDevelopment |   |            |       | 
|                                                                                                      |  | Shares       |   |  | Amount              |        |   | Capital                                 |   |            | Stage |  |   | Total       |  
|Initial capitalization at $0.00002 per share                                                          |  | 6,256,500    |   |  | $                   | 97     |   |                                         | $ |           |       |  | $ |            |   |  | $ | 97         |  
|Common stock issued for cash during 2004 at $0.00078 per share                                        |  | 193,500      |   |  |                     | 150    |   |                                         |   |           |       |  |   |            |   |  |   | 150        |  
|Net loss                                                                                              |  |             |   |  |                     |       |   |                                         |   |           |       |  |   | (11,741     | ) |  |   | (11,741    | )
|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  
|Balance at December 31, 2004                                                                          |  | 6,450,000    |   |  |                     | 247    |   |                                         |   |           |       |  |   | (11,741     | ) |  |   | (11,494    | )
|Common stock issued for cash during 2005 at $0.19 per share                                           |  | 387,000      |   |  |                     | 6,590  |   |                                         |   | 68,410     |       |  |   |            |   |  |   | 75,000     |  
|Common stock issued for cash during 2005 at $0.32 per share                                           |  | 154,800      |   |  |                     | 155    |   |                                         |   | 49,845     |       |  |   |            |   |  |   | 50,000     |  
|Common stock issued for research and development during 2005 at $0.99 per share                       |  | 154,800      |   |  |                     | 155    |   |                                         |   | 152,605    |       |  |   |            |   |  |   | 152,760    |  
|Net loss                                                                                              |  |             |   |  |                     |       |   |                                         |   |           |       |  |   | (246,004    | ) |  |   | (246,004   | )
|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  
|Balance at December 31, 2005                                                                          |  | 7,146,600    |   |  |                     | 7,147  |   |                                         |   | 270,860    |       |  |   | (257,745    | ) |  |   | 20,262     |  
|Common stock issued for services during 2006 at $0.50 per share                                       |  | 73,093       |   |  |                     | 73     |   |                                         |   | 36,473     |       |  |   |            |   |  |   | 36,546     |  
|Common stock issued for cash during 2006 in private placements at $1.00 per share, net of redemptions |  | 1,510,000    |   |  |                     | 1,510  |   |                                         |   | 547,890    |       |  |   |            |   |  |   | 549,400    |  
|Common stock issued for research and development during 2006 at $1.00 per share                       |  | 694,000      |   |  |                     | 694    |   |                                         |   | 693,306    |       |  |   |            |   |  |   | 694,000    |  
|Shares issued in connection with reverse merger                                                       |  | 825,124      |   |  |                     | 825    |   |                                         |   | (825       | )     |  |   |            |   |  |   |           |  
|Shares cancelled in connection with the sale of 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)                                                                    |  |             |   |  |                     |       |   |                                         |   | 1,296,714  |       |  |   |            |   |  |   | 1,296,714  |  
|Net loss                                                                                              |  |             |   |  |                     |       |   |                                         |   |           |       |  |   | (3,614,753  | ) |  |   | (3,614,753 | )
|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  
|Balance at December 31, 2007                                                                          |  | 11,782,493   |   |  |                     | 11,782 |   |                                         |   | 14,011,138 |       |  |   | (9,025,211  | ) |  |   | 4,997,709  |  
|Common stock issued for research and development during 2008 at $0.53 per share (unaudited)           |  | 800,000      |   |  |                     | 800    |   |                                         |   | 423,200    |       |  |   |            |   |  |   | 424,000    |  
|Common stock issued for research and development during 2008 at $0.65 per share (unaudited)           |  | 100,000      |   |  |                     | 100    |   |                                         |   | 64,900     |       |  |   |            |   |  |   | 65,000     |  
|Stock based compensation (options) (unaudited)                                                        |  |             |   |  |                     |       |   |                                         |   | 394,443    |       |  |   |            |   |  |   | 394,443    |  
|Net loss (unaudited)                                                                                  |  |             |   |  |                     |       |   |                                         |   |           |       |  |   | (2,363,252  | ) |  |   | (2,363,252 | )
|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  
|Balance at September 30, 2008 (unaudited)                                                             |  | 12,682,493   |   |  | $                   | 12,682 |   |                                         | $ | 14,893,681 |       |  | $ | (11,388,463 | ) |  | $ | 3,517,900  |  
|                                                                                                      |  |              |   |  |                     |        |   |                                         |   |            |       |  |   |             |   |  |   |            |  

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 NineMonths EndedSeptember 30,2007 |            |   | For the NineMonths EndedSeptember 30,2008 |   |            | February 25,2004 (Inception)to September 30,2008 | 
|Cash flows from operating activities:                                          |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Net loss                                                                       |  | $                                         | (3,289,552 | ) |                                           | $ | (2,363,252 | )                                                |  | $ | (11,388,463 | )
|Adjustments to reconcile net loss to net cash used in operating activities:    |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Depreciation and amortization                                                  |  |                                           |           |   |                                           |   | 1,300      |                                                  |  |   | 1,300       |  
|Change in fair value of warrant liability                                      |  |                                           | 1,456,200  |   |                                           |   |           |                                                  |  |   | 1,269,000   |  
|Stock-based compensation                                                       |  |                                           | 1,229,390  |   |                                           |   | 394,443    |                                                  |  |   | 5,794,802   |  
|Common stock issued for services                                               |  |                                           |           |   |                                           |   |           |                                                  |  |   | 36,546      |  
|Common stock issued for research and development                               |  |                                           |           |   |                                           |   | 489,000    |                                                  |  |   | 1,335,760   |  
|Changes in assets and liabilities:                                             |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Other assets                                                                   |  |                                           | (29,558    | ) |                                           |   | (48,772    | )                                                |  |   | (78,412     | )
|Accounts payable                                                               |  |                                           | 16,607     |   |                                           |   | (4,702     | )                                                |  |   | 25,494      |  
|Accrued liabilities                                                            |  |                                           | 29,478     |   |                                           |   | 9,339      |                                                  |  |   | 51,898      |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Net cash used in operating activities                                          |  |                                           | (587,435   | ) |                                           |   | (1,522,644 | )                                                |  |   | (2,952,075  | )
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Cash flows from investing activities:                                          |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Purchase of property and equipment                                             |  |                                           |           |   |                                           |   | (8,511     | )                                                |  |   | (48,511     | )
|Cash paid for sale of OMI                                                      |  |                                           |           |   |                                           |   |           |                                                  |  |   | (25,000     | )
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|                                                                               |  |                                           |           |   |                                           |   | (8,511     | )                                                |  |   | (73,511     | )
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Cash flows from financing activities:                                          |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Exercise of stock options                                                      |  |                                           |           |   |                                           |   |           |                                                  |  |   | 3,522       |  
|Proceeds from issuance of common stock under private placements                |  |                                           | 4,892,486  |   |                                           |   |           |                                                  |  |   | 6,406,486   |  
|Proceeds from issuance of common stock                                         |  |                                           |           |   |                                           |   |           |                                                  |  |   | 125,247     |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Net cash provided by financing activities                                      |  |                                           | 4,892,486  |   |                                           |   |           |                                                  |  |   | 6,535,255   |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Increase in cash                                                               |  |                                           | 4,305,051  |   |                                           |   | (1,531,155 | )                                                |  |   | 3,509,669   |  
|Cash at beginning of period                                                    |  |                                           | 1,060,341  |   |                                           |   | 5,040,824  |                                                  |  |   |            |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Cash at end of period                                                          |  | $                                         | 5,365,392  |   |                                           | $ | 3,509,669  |                                                  |  | $ | 3,509,669   |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Supplemental non-cash financing activities:                                    |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Reclassification of warrant derivative liability to additional paid-in capital |  | $                                         | 2,233,600  |   |                                           | $ |           |                                                  |  | $ | 2,233,600   |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Supplemental cash flows disclosures:                                           |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Interest expense paid                                                          |  | $                                         |           |   |                                           | $ |           |                                                  |  | $ |            |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  
|Income taxes paid                                                              |  | $                                         |           |   |                                           | $ |           |                                                  |  | $ |            |  
|                                                                               |  |                                           |            |   |                                           |   |            |                                                  |  |   |             |  

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 an exclusive, worldwide license from Cedars-Sinai Medical Center for certain cellular-based therapy technology that the Company will be developing for the potential treatment of brain tumors and other forms of cancer and
neurodegenerative disorders. The Company currently is funding a Phase I clinical trial of a vaccine product candidate for the treatment of glioblastoma multiforme based on this technology that the Company anticipates will be completed by the
first half of 2009.

On February 14, 2008, the Company entered into an Agreement with Molecular DiscoveriesLLC
(Molecular Discoveries), covering the Companys acquisition of certain monoclonal antibody related technology owned by Molecular Discoveries and completed the acquisition of the technology on that date. The technology
acquired under the Molecular Discoveries agreement and now owned by the Company consists of (i) a platform technology referred to by Molecular Discoveries as DIAAD for the potentially rapid discovery of monoclonal antibodies to detect and treat
cancer and other chronic diseases and (ii) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers. The monoclonal antibodies are covered by issued
patents and pending patent applications in the fields of multiple myeloma, small cell lung and ovarian cancers.

The Company has commenced
the initial phase of development of a diagnostic/prognostic product for small cell lung cancer and a therapeutic product for the treatment of small cell lung and pancreatic cancers, based upon the acquired monoclonal antibody candidates. The
monoclonal antibody technology is at a pre-clinical stage of development and will require further development before an IND can potentially be filed for human testing of any of the acquired product candidates. See Note 6.

Interim Results

The accompanying condensed financial
statements at September 30, 2008 and for the three and nine month periods ended September 30, 2007 and 2008 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, 2007 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 2008 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, 2007. 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.



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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 $5,026,780 and $0 of cash equivalents, consisting of certificates of deposit with an original maturity of 90 days or less, at December 31, 2007 and September 30, 2008, 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. The Company expenses acquired in-process research and development (IPR&D) upon acquisition as it represents incomplete
research and development that had not reached technological feasibility and had no alternative future use as of the date of acquisition. Technological feasibility is established when an enterprise has completed all planning, designing, coding, and
testing activities that are necessary to establish that a product can be produced to meet its design specifications including functions, features, and technical performance requirements. On February 14, 2008, the Company recorded an IPR&D
charge of $688,250 based on the cash paid plus the value of the shares of the Companys common stock issued at the date of acquisition for the Molecular Discoveries technology. On June 16, 2008, the Company recorded an IPR&D charge of
$65,000 based upon the value of the 100,000 shares of the Companys common stock issued in connection with the First Amendment to Exclusive License Agreement with Cedars-Sinai (see Note 4).

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 consolidated 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.



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



|                        |  |                                    |   |  |                                    |  
|----------------------- |  | ---------------------------------- | - |  | ---------------------------------- | -
|                        |  | Nine MonthsEnded September 30,2007 |   |  | Nine MonthsEnded September 30,2008 |  
|Risk-free interest rate |  | 4.75                               | % |  | 2.67                               | %
|Expected dividend yield |  | None                               |   |  | None                               |  
|Expected life           |  | 3.0 years                          |   |  | 3.9 years                          |  
|Expected volatility     |  | 100.0                              | % |  | 92.0                               | %

The weighted-average grant-date fair value of options granted during the nine months ended
September 30, 2007 and September 30, 2008 was $0.71 and $0.36, respectively.

The risk-free interest rate used in the
Black-Scholes valuation method is based on the implied yield currently available in U.S. Treasury securities at maturity with an equivalent term. We have not declared or paid any dividends and do 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 shares for comparable entities within our industry.

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

When
options are exercised, our policy is to issue previously unissued shares of common stock to satisfy share option exercises. As of September 30, 2008, we had 61.3 million shares of unissued shares of common stock.

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

Income Taxes  The Company accounts for federal and state income taxes in accordance with SFAS No. 109,
Accounting for Income Taxes. Under the liability method specified by SFAS No. 109, a deferred tax asset or liability is determined based on the difference between the financial statement and tax basis of assets and liabilities, as
measured by the enacted tax rates. The Companys provision for income taxes represents the amount of taxes currently payable, if any, plus the change in the amount of net deferred tax assets or liabilities. A valuation allowance is provided
against net deferred tax assets if recoverability is uncertain on a more likely than not basis. In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation (FIN) No. 48, Accounting for
Uncertainty in Income Taxes (FIN 48), which clarifies the accounting for uncertainty in income taxes recognized in an entitys financial statements in accordance with SFAS No. 109. FIN 48 prescribes a recognition
threshold and measurement attribute for the financial statement recognition and measurement of a tax position taken or expected to be taken in a tax return. In addition, FIN 48 provides guidance on derecognition, classification, interest and
penalties, accounting in interim periods, disclosure and transition. FIN 48 is effective for fiscal years beginning after December 15, 2006. The Company adopted FIN 48 on January 1, 2007. The adoption of FIN 48 did not have a material
impact on the Companys financial position or results of operations. Upon adoption of FIN 48 and as of September 30, 2008, the Company had no unrecognized tax benefits recorded.

The Company recognizes interest and penalties for uncertain tax positions in income tax expense. Upon adoption and as of September 30, 2008, the
Company had no interest and penalty accrual or expense.



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

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

Basic and Diluted Loss per Common Share  Basic and diluted loss per common share are computed based on the weighted average number of common shares outstanding. Common share equivalents (which consist of options and warrants)
are excluded from the computation of diluted loss per share since the effect would be antidilutive. Common share equivalents which could potentially dilute basic earnings per share in the future, and which were excluded from the computation of
diluted loss per share, totaled 14,732,667 shares and 16,053,917 shares at September 30, 2007 and September 30, 2008, respectively.

Recently Issued Accounting StandardsIn September 2006, the FASB issued SFAS No. 157, Fair Value Measurements, or SFAS 157, which provides guidance on how to measure assets and liabilities that use fair
value. This statement clarifies the principle that fair value should be based on the assumptions market participants would use when pricing an asset or liability and establishes a fair value hierarchy that prioritizes the information used to develop
those assumptions. SFAS 157 will apply whenever another generally accepted accounting principle requires, or permits, assets or liabilities to be measured at fair value but does not expand the use of fair value to any new circumstances. This
statement will also require additional disclosures in both annual and quarterly reports. SFAS 157 is effective for fiscal years beginning after November 2007. On January 1, 2008, we adopted SFAS 157 and the impact on our financial statements
was not material.

In February 2007, the FASB issued Statement 159, The Fair Value Option for Financial Assets and Financial Liabilities
 Including an Amendment of SFAS 115 (Statement 159), which permits but does not require the Company to measure financial instruments and certain other items at fair value. Unrealized gains and losses on items for which the fair
value option has been elected are reported in earnings. This statement is effective for financial statements issued for fiscal years beginning after November 15, 2007. On January 1, 2008, we adopted SFAS 159 and the impact on our financial
statements was not material.

In December 2007, the FASB issued Statement No. 141(R), Business Combinations (Statement
141(R)), a replacement of FASB Statement No. 141. Statement 141(R) is effective for fiscal years beginning on or after December 15, 2008 and applies to all business combinations. Statement 141(R) provides that, upon initially
obtaining control, an acquirer shall recognize 100% of the fair values of acquired assets, including goodwill, and assumed liabilities, with only limited exceptions, even if the acquirer has not acquired 100% of its target. As a consequence, the
current step acquisition model will be eliminated. Additionally, Statement 141(R) changes current practice, in part, as follows: (1) contingent consideration arrangements will be fair valued at the acquisition date and included on that basis in
the purchase price consideration; (2) transaction costs will be expensed as incurred, rather than capitalized as part of the purchase price; (3) pre-acquisition contingencies, such as legal issues, will generally have to be accounted for
in purchase accounting at fair value; and (4) in order to accrue for a restructuring plan in purchase accounting, the requirements in FASB Statement No. 146, Accounting for Costs Associated with Exit or Disposal Activities, would
have to be met at the acquisition date. While there is no expected impact to our consolidated financial statements on the accounting for acquisitions completed prior to December 31, 2008, the adoption of Statement 141(R) on January 1, 2009
could materially change the accounting for business combinations consummated subsequent to that date.

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



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3. Property and Equipment

As of December 31, 2007 and September 30, 2008, the Company had none and $8,511 of equipment, respectively. Depreciation expense for the nine months ended September 30, 2008 was $1,300. No equipment was
placed into service prior March 31, 2008, therefore, no depreciation was recorded in the nine months ended September 30, 2007.

4.
Related-Party Transactions

Cedars-Sinai Medical Center License Agreement

In November 2006, the Company entered into a license agreement with Cedars-Sinai Medical Center (Cedars-Sinai) under which the Company
acquired an exclusive, worldwide license to its technology for use as cellular therapies, including dendritic cell-based vaccines for neurological disorders that include brain tumors and neurodegenerative disorders and other cancers. This technology
is covered by a number of pending U.S. and foreign patent applications, and the term of the license will be until the last to expire of any patents that are issued covering this technology.

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

The Company has agreed to pay Cedars-Sinai specified percentages of all of its sublicensing income and gross revenues from sales of products based on the
licensed technology, subject to a reduction if it must make any payments to any third party whose proprietary rights would be infringed by sale of the products. To maintain its rights to the licensed technology, the Company must meet certain
development and funding milestones. These milestones include, among others, commencing a Phase I clinical trial for a product candidate by March 31, 2007, commencing a Phase II clinical trial for a product candidate by December 31,
2008 and raising at least $5,000,000 in funding from equity or other sources by December 31, 2008. The Company satisfied the foregoing funding requirement in 2007 and commenced a Phase I clinical trial in May 2007, which was within the
applicable cure period for the milestone requirement. Through September 30, 2008, the Company has paid Cedars-Sinai a total of $125,000 in connection with the Phase I clinical trial.

On June 16, 2008, the Company entered into a First Amendment to Exclusive License Agreement (the Amendment) with Cedars-Sinai. The
Amendment amended the License Agreement to include in the Companys exclusive license from Cedars-Sinai under that agreement an epitope to CD133 and certain related intellectual property. This technology is covered by a U.S. patent application
that was filed by the parties. Pursuant to the Amendment, the Company issued Cedars-Sinai 100,000 shares of the Companys common stock as an additional license fee for the licensed CD 133 epitope technology, which will be subject to the royalty
and other terms of the License Agreement.

Legal Costs

At December 31, 2007 and September 30, 2008, the Company was indebted to a shareholder for legal services for $42,559 and $14,458, respectively, which are included in accrued expenses on the accompanying
balance sheets. Legal services provided by the shareholder for the period from February 25, 2004 (date of inception) to September 30, 2008 was approximately $779,000.



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Rent

From February 25, 2004 (date of inception) to October 29, 2007, the Company used on a rent-free basis office space of a shareholder. Such costs were immaterial to the financial statements and, accordingly, have not been reflected
therein.

5. Commitments and Contingencies:

Operating Lease

Effective March 1, 2008, the Company entered into a one-year lease, as amended, at a monthly rental
rate of $3,604.

Employment Agreement

Effective as of February 18, 2008, the Company entered into an Employment Agreement with Dr. Manish Singh pursuant to which Dr. Singh will serve on a full-time basis as the Companys President and Chief Executive Officer
for a one-year term. The Company is required under the Employment Agreement to use its commercially reasonable efforts to have Dr. Singh serve as a member of the Companys Board of Directors during the term of the Employment Agreement. The
Employment Agreement provides for an annual base salary of $200,000, payable monthly, and a $100,000 bonus if the Company generates aggregate net financing proceeds of at least $5,000,000 during the term of the agreement and an additional bonus of
$100,000 if the Company generates aggregate net financing proceeds of at least $10,000,000 during the term of the agreement. Pursuant to the Employment Agreement, the Company granted Dr. Singh a seven-year nonqualified stock option on
February 18, 2008 under the Companys 2006 Equity Incentive Plan to purchase 600,000 shares of the Companys common stock at an exercise price of $1.00 per share. The option vests in twelve equal monthly installments over the one-year
term of the agreement. The option may be exercised during the period that Dr. Singh provides services to the Company and for 24 months after termination for any reason except termination for cause by the Company, provided that such exercise is
within the seven-year term of the option.

Consulting Agreements

Effective September 1, 2008, the Company entered into a consulting agreement with James Bender, Ph.D. under which Dr. Bender agreed to serve as Vice President  Clinical Development for a one-year term,
subject to earlier termination by the Company or Dr. Bender on 15 days notice. Dr. Bender will provide his services to the Company on a part-time basis. For these services, the Company (i) will pay $6,000 per month, (ii) will pay
Dr. Bender a success payment of $10,000 if the Companys IND for a Phase I cancer stem cell vaccine is cleared by March 31, 2009 and $20,000 if the Companys Phase II clinical trial for its dendritic cell-based vaccine is
initiated by June 30, 2009, (iii) issued Dr. Bender a seven-year option under the Companys stock option plan to purchase 66,000 shares of the Companys common stock at a purchase price of $0.68 per share, which was equal to
the closing price of the Companys common stock on the grant date, with such option to vest at the rate of 3,000 shares each month during the term of the consulting agreement and with 10,000 shares to vest if the Companys IND for a Phase
I cancer stem cell vaccine is cleared by March 31, 2009 and 20,000 shares to vest if the Companys Phase II clinical trial for its dendritic cell-based vaccine is initiated by June 30, 2009.

As contemplated by the Molecular Discoveries agreement, the Company entered into a consulting agreement with Dr. Gelber concurrently with the
Companys acquisition of the monoclonal antibody related technology from Molecular Discoveries under which she will provide certain consulting services to the Company on a part-time basis in connection with its development of the acquired
technology during the ten-month period from the closing of the acquisition. For these services, the Company (i) paid Dr. Gelber $30,000 per month for February 2008 and March 2008 and $10,000 per month for April 2008 through July 2008 (a
total of $100,000)



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and (ii) issued Dr. Gelber a five-year option under the Companys stock option plan to purchase 75,000 shares of the Companys common
stock at a purchase price of $0.53 per share, which was equal to the closing price of the Companys common stock on the date of the closing of the acquisition, with such option having vested at the rate of 5,000 shares each month during the
term of the consulting agreement and with 25,000 shares being cancelled due to a vesting milestone not being achieved. Effective August 1, 2008, the Company entered into a new consulting agreement with Dr. Gelber terminating and replacing the
existing agreement. Under the new consulting agreement, Dr. Gelber will continue to provide her services to the Company on a part-time basis for one-year. For these services, the Company (i) will pay Dr. Gelber $4,166 per month,
(ii) will pay Dr. Gelber a success payment of $28,000 if Dr. Gelber is able during the term of the consulting agreement to meet certain milestones and (iii) issued Dr. Gelber a five-year option under the Companys stock
option plan to purchase 84,000 shares of the Companys common stock at a purchase price of $0.68 per share, which was equal to the closing price of the Companys common stock on the grant date, with such option to vest at the rate of 3,000
shares each month during the term of the consulting agreement and with 48,000 shares to vest upon meeting certain milestones described above.

Effective as of November 5, 2007, the Company entered into a new consulting agreement with C. Kirk Peacock under which Mr. Peacock agreed to serve as Chief Financial Officer for a one-year term, subject to earlier termination by
the Company or Mr. Peacock on 30 days notice. Mr. Peacock will provide his services to the Company on a part-time basis. Under the agreement with Mr. Peacock, Mr. Peacock will be paid $8,000 per month and was granted an option to
purchase 50,000 shares of common stock, at a purchase price of $1.30 per share, which was equal to the closing price of the Companys common stock on the grant date, and which will vest monthly over a one-year period, and exercisable within its
term during the period Mr. Peacock provides services to the Company and for 24 months after the grantee ceases providing services for any reason other than termination by the Company for cause.

Research and Development

In connection with the
Cedars-Sinai Medical Center License Agreement, the Company has certain commitments as described in Note 4.

6. Shareholders Equity

Equity Investment

On June 16,
2008, the Company entered into the Amendment of the License Agreement with Cedars-Sinai. The Amendment amended the License Agreement to include in the Companys exclusive license from Cedars-Sinai under that agreement an epitope to CD133 and
certain related intellectual property. This technology will be covered by a U.S. patent application that will be filed by the parties. Pursuant to the Amendment, the Company issued Cedars-Sinai 100,000 shares of the Companys common stock as an
additional license fee for the licensed CD 133 epitope technology, which will be subject to the royalty and other terms of the License Agreement.

On February 14, 2008, the Company acquired from Molecular Discoveries, the intellectual property and related assets comprising the technology the compensation consisted of (i) the issuance of 800,000 shares of the Companys
common stock to Molecular Discoveries and (ii) the reimbursement by the Company to Molecular Discoveries or its managing member of $250,000 of previously incurred patent expenses. The Company has registered the shares issued to Molecular
Discoveries, but Molecular Discoveries has agreed that it will not publicly resell any of these shares until after such registration is completed and not more than 100,000 shares in any 90-day period thereafter. To secure Molecular Discoveries
potential obligations to the Company under the Molecular Discoveries agreement, all of the shares have been placed in escrow, with 400,000 shares subject to release after one year and the balance after two years from the closing of the transaction.



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Private Placements

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 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 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 February 2007, the Company raised $1,200,000 (before offering expenses) from the sale of 800,000 shares of common stock and warrants to purchase
1,333,334 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 issued in connection
with the 2007 private placements 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
September 30, 2008, the Company has reserved 3,400,000 shares of common stock for issuance under the plan and options to purchase 2,157,910 common shares have been granted under the stock option plan that are currently outstanding.

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

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

In November 2006, the Company granted an option to purchase 300,000 shares of its common
stock at an exercise price of $1.00 per share to a Board member.



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

The following table
summarizes stock option activity during the nine months ended September 30, 2008:



|                                                 |  |           |   |  |                              |      |                                         |     |                         |   |  
|------------------------------------------------ |  | --------- | - |  | ---------------------------- | ---- | --------------------------------------- | --- | ----------------------- | - | -
|                                                 |  | Options   |   |  | WeightedAverageExercisePrice |      | WeightedAverageRemainingContractualTerm |     | AggregateIntrinsicValue
|Outstanding December 31, 2007                    |  | 8,645,084 |   |  | $                            | 1.02 |                                         |     |                         |   |  
|Granted                                          |  | 1,040,000 |   |  | $                            | 0.79 |                                         |     |                         |   |  
|Exercised                                        |  |          |   |  | $                            |     |                                         |     |                         |   |  
|Forfeited or expired                             |  | (43,750   | ) |  | $                            | 0.86 |                                         |     |                         |   |  
|                                                 |  |           |   |  |                              |      |                                         |     |                         |   |  
|Outstanding September 30, 2008                   |  | 9,641,334 |   |  | $                            | 0.99 |                                         | 7.5 |                         | $ | 
|                                                 |  |           |   |  |                              |      |                                         |     |                         |   |  
|Vested or expected to vest at September 30, 2008 |  | 9,029,918 |   |  | $                            | 1.01 |                                         | 7.5 |                         | $ | 

As of September 30, 2008, the total unrecognized compensation cost related to unvested stock
options amounted to $231,811, 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, net of repurchases, $964,600 was 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) contractual 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 nine months ended
September 30, 2007, the Company recorded a change in fair value of warrant derivatives of $(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, as the warrants no longer required derivative liability treatment under EITF Issue No. 00-19.



|Item 2. | Managements Discussion and Analysis of Financial Condition and Results of Operations.
|------- | --------------------------------------------------------------------------------------

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



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Cautionary Statement Regarding Forward-Looking Statements

This Quarterly Report contains forward-looking statements, which reflect the views of our management with respect to future events and financial performance. These
forward-looking statements are subject to a number of uncertainties and other factors that could cause actual results to differ materially from such statements. Forward-looking statements are identified by words such as anticipates,
believes, estimates, expects, plans, projects, targets and similar expressions. Readers are cautioned not to place undue reliance on these forward-looking statements, which are
based on the information available to management at this time and which speak only as of this date. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.
For a discussion of some of the factors that may cause actual results to differ materially from those suggested by the forward-looking statements, please read carefully the information in the Risk Factors section in our Form 10-KSB for
the year ended December 31, 2007 and the Risk Factors section set forth in Item 1A of Part II of this Report. The identification in this Quarterly Report of factors that may affect future performance and the accuracy of
forward-looking statements is meant to be illustrative and by no means exhaustive. All forward-looking statements should be evaluated with the understanding of their inherent uncertainty.

Overview

In January 2006, we completed a merger
pursuant to which Spectral Molecular Imaging, Inc. became our wholly owned subsidiary. At the time of the merger, we had virtually no assets or liabilities, and we had not conducted any business operations for several years. In connection with the
merger, we changed our name from Patco Industries, Ltd. to Optical Molecular Imaging, Inc. and replaced our officers and directors with those of Spectral Molecular Imaging. Although we acquired Spectral Molecular Imaging in the merger, for
accounting purposes the merger was treated as a reverse merger since the stockholders of Spectral Molecular Imaging acquired a majority of our outstanding shares of common stock and the directors and executive officers of Spectral Molecular Imaging
became our directors and executive officers. Accordingly, our financial statements contained in this Annual Report and the description of our results of operations and financial condition, reflect the operations of Spectral Molecular Imaging.

In May 2006, we decided to suspend our research and development activities on Spectral Molecular Imagings spectral imaging
technology, and on September 11, 2006, we sold all of the outstanding capital stock of Spectral Molecular Imaging to Dr. Daniel Farkas, a co-founder of Spectral Molecular Imaging and inventor of its technology.

In November 2006, we acquired an exclusive, worldwide license from Cedars-Sinai Medical Center for certain cellular-based therapy technology that we will
be developing for the potential treatment of brain tumors and other forms of cancer and neurodegenerative disorders. We are currently funding a Phase I clinical trial of a vaccine product candidate for the treatment of glioblastoma multiforme
based on this technology that we anticipate will be completed by the first half of 2009.

In February 2008, we acquired certain monoclonal
antibody related technology owned by Molecular Discoveries LLC. This technology consists of (i) a platform technology referred to by Molecular Discoveries as DIAAD for the potentially rapid discovery of targets (antigens) and monoclonal
antibodies for diagnosis and treatment of diverse human diseases and (ii) certain monoclonal antibody candidates for the potential detection and treatment of multiple myeloma, small cell lung, pancreatic and ovarian cancers. We have commenced
preliminary pre-clinical development work on two of these antibody candidates and currently plan to seek a partner to fund future pre-clinical and clinical development work on these initial candidates.

We are a development stage company that is seeking to develop and commercialize new therapeutics to fight cancer using the immune system. Since our
companys inception on February 25, 2004, we have been primarily engaged in the acquisition of certain intellectual property, together with the recent clinical testing activities for our lead vaccine product candidate and pre-clinical
development of certain monoclonal antibody candidates, and have not generated any revenues. As a result, we have incurred



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operating losses and, as of September 30, 2008, we had an accumulated deficit of $11,388,463. We expect to incur significant research, development and
administrative expenses before such time, if ever, that any of our products can be launched and revenues generated.

Critical Accounting Policies

Managements discussion and analysis of our financial condition and results of operations are based on our consolidated financial
statements, which have been prepared in accordance with accounting principles generally accepted in the United States. The preparation of these financial statements requires management to make estimates and judgments that affect the reported amounts
of assets, liabilities, revenues and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, management evaluates its estimates, including those related to impairment of long-lived assets, including finite lived
intangible assets, accrued liabilities and certain expenses. We base our estimates on historical experience and on various other assumptions that we believe to be reasonable under the circumstances, the results of which form the basis for making
judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ materially from these estimates under different assumptions or conditions.

Our significant accounting policies are summarized in Note 2 of our interim financial statements for the period ended September 30, 2008. We
believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our financial statements:

Development Stage Enterprise

We are a development stage enterprise as defined by the
Financial Accounting Standards Boards (FASB) Statement of Financial Accounting Standards (SFAS) No. 7, Accounting and Reporting by Development Stage Enterprises. We are devoting substantially all of our
present efforts to research and development. All losses accumulated since inception have been considered as part of our development stage activities.

Research and Development Costs

Although we believe that our research and development
activities and underlying technologies have continuing value, the amount of future benefits to be derived from them is uncertain. Research and development costs are therefore expensed as incurred rather than capitalized. We expense acquired
in-process research and development (IPR&D) upon acquisition as it represents incomplete research and development that had not reached technological feasibility and had no alternative future use as of the date of our acquisition. Technological
feasibility is established when an enterprise has completed all planning, designing, coding, and testing activities that are necessary to establish that a product can be produced to meet its design specifications including functions, features, and
technical performance requirements.

During the three months ended September 30, 2007 and 2008, we recorded an expense of $6,143 and
$130,065, respectively, related to research and development activities. During the nine months ended September 30, 2007 and 2008, we recorded an expense of $71,714 and $1,068,159, respectively, related to research and development activities. On
June 16, 2008, we recorded a $65,000 IPR&D charge associated with the issuance of 100,000 common shares of our common stock to Cedars-Sinai for the exclusive license of an epitope to CD133 and certain related intellectual property for our
cancer stem cell vaccine program. On February 14, 2008, we recorded an IPR&D charge of $688,250 based on the cash paid plus the value of the shares of our common stock issued at the date of acquisition for the Molecular Discoveries
technology.



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Stock-Based Compensation

In December 2004, the 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 from all share-based payment transactions be recognized in our consolidated financial statements. In addition, in March 2005 the Securities and Exchange Commission (the SEC) released SEC Staff Accounting Bulletin
No. 107, Share-Based Payment (SAB 107), and later amended certain sections of SAB 107 by issuing SAB 110. SAB 107 and SAB 110 provides the SEC staffs position regarding the application of SFAS 123R and certain SEC rules and
regulations, and also provides the SEC 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, we adopted the fair value recognition provisions of SFAS 123R utilizing the
modified-prospective-transition method, as prescribed by SFAS 123R. Under this transition method, compensation cost recognized during the twelve months ended December 31, 2006 includes: (a) compensation cost for all share-based payments
granted prior to, but not yet vested as of January 1, 2006, based on the grant date fair value estimated in accordance with SFAS 123, and (b) compensation expense for all share-based payments granted subsequent to January 1, 2006,
based on the grant-date fair value estimated in accordance with the provisions of SFAS 123R. Under the modified-prospective-transition method, results for the prior periods have not been restated.

Results of Operations

Revenues

We had no revenues during the period for the three and nine months ended September 30, 2007 and 2008, respectively. We do not
expect to generate any operating revenues during 2008.

Expenses

General and administrative expenses for the three months ended September 30, 2007 and 2008 were $201,878 and $355,293 respectively. The increase in
general and administrative expenses is primarily due to increased personnel and occupancy costs. Research and development expenses for the three months ended September 30, 2007 and 2008 were $6,143 and $130,065, respectively. The increase in
research and development expenses is due to research and development costs associated with the acquired Molecular Discoveries technologies. We had $104,086 of non-cash expense for the three months ended September 30, 2008, consisting of stock
based compensation, compared to $75,740 of non-cash expense stock based compensation for the three months ended September 30, 2007.

General and administrative expenses for the nine months ended September 30, 2007 and 2008 were $659,650 and $1,013,337, respectively. The increase in general and administrative expenses is primarily due to increased personnel and
occupancy costs partially offset by a reduction in professional fees related to no new financings in 2008. Research and development expenses for the nine months ended September 30, 2007 and 2008 were $71,714 and $1,068,159, respectively. The
increase in research and development expenses is related to $688,250 in-process research and development costs associated with the acquired Molecular Discoveries technologies, $65,000 in-process research and development costs associated with the
acquisition of an additional exclusive license from Cedars-Sinai for our cancer stem cell vaccine program and to costs associated with our current Phase I clinical trial. We had $883,443 of non-cash expense for the nine months ended
September 30, 2008, consisting of $394,443 in stock based compensation and $489,000 paid in common stock for IPR&D, compared to $2,685,590 of non-cash expense consisted of $1,229,390 of stock based compensation and change in fair value of
warrant liability of $1,456,200 for the nine months ended September 30, 2007.



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Loss

We incurred a net loss of $222,273 and $564,151 for the three months ended September 30, 2007 and 2008, respectively. We incurred a net loss of $3,289,552 and $2,363,252 for the nine months ended
September 30, 2007 and 2008, respectively.

Liquidity and Capital Resources

As of September 30, 2008, we had working capital of $3,503,251, compared to working capital of $4,997,609 on December 31, 2007. 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 lead vaccine product candidate and of obtaining all required regulatory approvals to market that product candidate is substantially greater than the amount of funds we currently have available. We believe that our existing
cash balances will be sufficient to complete our current Phase I clinical trial and to fund our currently planned level of operations through at least June 2010, although there is no assurance that such proceeds will be sufficient for this purpose.

We do not have any bank credit lines. We currently anticipate seeking to obtain additional financing in the future through the sale of
additional equity, although we may also 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 September 30, 2008, we had no long-term debt
obligations, no capital lease obligations, no material purchase obligations or other similar long-term liabilities. In addition, we have no financial guarantees, debt or lease agreements or other arrangements that could trigger a requirement for an
early payment or that could change the value of our assets, and we do not engage in trading activities involving non-exchange traded contracts.

Cash
Flows

We used $1,522,644 of cash in our operations for the nine months ended September 30, 2008, compared to $587,435 for the nine
months ended September 30, 2007, as the non-cash portion of our net loss for the 2008 period was $883,443 and the non-cash portion of our net loss for the 2007 period was $2,685,590. We used $8,511 of cash in our investing activities for the
nine months ended September 30, 2008 and none for this purpose for the nine months ended September 30, 2007. We received no cash from financing activities for the nine months ended September 30, 2008 and $4,892,486 from the private
placements of our securities that we completed during the nine months ended September 30, 2007.

Inflation and changing prices have
had no effect on our net sales and revenues or on our income from continuing operations over our two most recent fiscal years.



|Item 3. | Quantitative and Qualitative Disclosure About Market Risk
|------- | ---------------------------------------------------------

Not Applicable.



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|Item 4. | Controls and Procedures
|------- | -----------------------

As of the end of the
fiscal quarter covered by this report, we carried out an evaluation, under the supervision and with the participation of our principal executive officer and principal financial officer, regarding the effectiveness of the design and operation of our
disclosure controls and procedures pursuant to SEC Rule 15d-15(b) of the Exchange Act. Based upon that evaluation, our principal executive officer and principal financial officer concluded that (i) our disclosure controls and procedures
are effective to ensure that information that is required to be disclosed by us in reports that we file under the Exchange Act is recorded, processed, summarized and reported or submitted within the time period specified in the rules and forms of
the SEC and (ii) our disclosure controls and procedures were effective to provide reasonable assurance that material information required to be disclosed by us in the reports we file or submit under the Exchange Act was accumulated and
communicated to our management as appropriate to allow timely decisions regarding required disclosure. There were no changes in our internal control over financial reporting that occurred during the period covered by this report that have materially
affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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

PART II

OTHER INFORMATION



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

None.



|Item 1A. | Risk Factors
|-------- | ------------

There has been no material change in
the Risk Factors set forth in the Risk Factors section of the Companys Form 10-KSB for the year ended December 31, 2007, except that the following risk factors have been updated:

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



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

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

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

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

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

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



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rights. Although Cedars-Sinai as our licensor has filed applications relative to our cancer vaccine technology, we are responsible going forward to prosecute
these patent applications. We do not currently own or have licensed rights to any issued patents covering our cancer vaccine technology, and there is no guarantee that these patent applications will lead to issued patents.

Issuance of patents based upon the various patent applications licensed from Cedars-Sinai will depend upon the U.S. and foreign patent agencies being
able to determine that the claims made in these applications were not already publicly known or were not obvious from prior published patents and literature, including the extensive previous vaccine work performed and published by Dr. John Yu
and other researchers at Cedars-Sinai. One of the provisional applications in the licensed portfolio covered 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 did not cover in any material respect the technology incorporated in any other potential vaccine product candidate that we are
currently contemplating for future development. Another patent application that we licensed from Cedars-Sinai and that we have been pursuing was recently rejected by the U.S. Patent and Trademark Office based on prior art. This patent application
covers the treatment of brain and other cancers by a combination of a dendritic cell-based vaccine and chemotherapy. We are seeking patent protection for our lead vaccine product candidate primarily through our licensed multiple antigen patent
application. While we are continuing to pursue claims in our recently rejected combination therapy application, we are not dependent on any of the claims in the combination therapy application being granted in order to complete the development of or
to commercialize our lead vaccine product candidate or any other potential vaccine product that we are currently contemplating for future development.

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

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

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

Should third parties patent specific cells, systems, receptors, molecular antibodies or other items that we are seeking to utilize in our development activities, we may be forced to license rights from these parties
or abandon our development activities if we are unable to secure these rights on attractive terms or at all. In light of the large number of companies and institutions engaged in research and development in the cellular therapy and molecular
antibody fields, we anticipate that many parties will be seeking patent rights for many cellular or molecular antibody based technologies and that licensing and cross licensing of these rights among various



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competitors may arise. Our lead vaccine product candidate utilizes six antigens for which we will be required to obtain licenses from a number of other
parties before we can commercialize this product candidate. There is no assurance that we will be able to obtain these licenses on attractive terms or at all, which could result in our having to reformulate or abandon this product candidate. In
addition, Cedars-Sinai has previously granted another institution rights to the use of certain peptide materials that we may seek to incorporate into one or more of our cellular-based therapy product candidates. We may be required to obtain a
license from that other institution if we wish to use these materials. If we are unable to obtain this license, we would be required to develop vaccine products without the potential enhanced benefits that could be provided by these materials.

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



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



| |  |  | encounter significant delays in marketing our current 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
current product candidates or any future product candidates in the United States and abroad and could result in the award of substantial damages. Defense of any lawsuit or failure to obtain any such license could substantially harm to us.
Litigation, regardless of outcome, could result in substantial cost to and a diversion of efforts by us.



|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 September 30, 2008 that were not previously reported in a Current Report on Form 8-K, and the Company did not repurchase any securities during
that period.



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

None.



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

Our annual meeting of stockholders was held on September 29, 2008. The following summarizes the proposals voted on at that meeting.



|                |  |                                                                                                                                                                                                                                              
|--------------- |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Proposal 1    - |  | The election of Jacqueline Brandwynne, Richard A. Cowell, Navdeep Jaikaria, Ph.D., Robert L. Martuza, M. D., Manish Singh, Ph.D., and John Yu, M.D. to serve as all of the members of the Board of
Directors, with the following vote totals:
|                | 
|               |  | 5,406,089 votes were cast for the election of Ms. Brandwynne to the Companys Board of Directors and 1,601,419 votes were withheld.                                                                                                          



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|                |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                       
|--------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|                | 
|               |  | 5,964,782 votes were cast for the election of Mr. Cowell to the Companys Board of Directors and 1,042,726 votes were withheld.                                                                                                                                                                                                                                                                                                                       
|                | 
|               |  | 5,954,956 votes were cast for the election of Dr. Jaikaria to the Companys Board of Directors and 1,052,552 votes were withheld.                                                                                                                                                                                                                                                                                                                     
|                | 
|               |  | 5,964,956 votes were cast for the election of Dr. Martuza to the Companys Board of Directors and 1,042,552 votes were withheld.                                                                                                                                                                                                                                                                                                                      
|                | 
|               |  | 6,192,790 votes were cast for the election of Dr. Singh to the Companys Board of Directors and 814,718 votes were withheld.                                                                                                                                                                                                                                                                                                                          
|                | 
|               |  | 5,964,956 votes were cast for the election of Dr. Yu to the Companys Board of Directors and 1,042,552 votes were withheld.                                                                                                                                                                                                                                                                                                                           
|                | 
|Proposal 2    - |  | The approval of the amendment to the 2006 Equity Incentive Plan to increase the number of shares of common stock authorized for issuance under the Plan from 1,500,000 to 3,400,000 and to
increase the number of shares a Plan participant is eligible to receive in option or other awards in any twelve-month period from 400,000 to 600,000 was approved with 4,255,492 votes cast for, 781,205 votes cast against and 1,314,317 votes
abstaining.
|                | 
|Proposal 3    - |  | The ratification of the appointment of Stonefield Josephson, Inc. as the Companys independent registered public accounting firm for the year ended December 31, 2008 was approved with
6,203,703 votes cast for, 87 votes cast against, and 803,718 votes abstaining.                                                                                                                                                                                



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

None.



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



|            |  |                                                                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                           
|            | 
|10.1        |  | Agreement dated September 1, 2008 between Dr. James Bender and ImmunoCellular Therapeutics, Ltd.*                                                                     
|            | 
|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.
|- | --------------------------------------------------------------------



22



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##### Table of Contents

SIGNATURES

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



|                         |  |  |  |                                   |  |                                             
|------------------------ |  |  |  | --------------------------------- |  | --------------------------------------------
|                         |  |  |  | IMMUNOCELLULAR THERAPEUTICS, LTD.
|Dated: November 13, 2008 |  |  |  |                                   |  |                                             
|                         |  |  |  | By:                               |  | /s/ Manish Singh                            
|                         |  |  |  |                                   |  | Name: Manish Singh, Ph.D.                   
|                         |  |  |  |                                   |  | Title: President and Chief Executive Officer
|                         |  |  |  |                                   |  | (Principal Executive Officer)               



23



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##### Table of Contents

EXHIBIT INDEX

IMMUNOCELLULAR THERAPEUTICS, LTD.

FORM 10-Q FOR QUARTER ENDED SEPTEMBER 30,
2008



|            |  |                                                                                                                                                                       
|----------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------
|Exhibit No. |  | Description                                                                                                                                                           
|            | 
|10.1        |  | Agreement dated September 1, 2008 between Dr. James Bender and ImmunoCellular Therapeutics, Ltd.*                                                                     
|            | 
|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.
|- | --------------------------------------------------------------------



24