XML 30 R16.htm IDEA: XBRL DOCUMENT v3.7.0.1
Subsequent Events
6 Months Ended
Jun. 30, 2017
Subsequent Events [Abstract]  
Subsequent Events
Subsequent Events

Underwritten Public Offering

Subsequent to June 30, 2017, the Company entered into an underwriting agreement with Maxim Group, LLC, pursuant to which the Company sold 5,000 shares of Series B 8% Mandatorily Convertible Preferred Stock (the Preferred Stock) and related warrants (the “Warrants”) to purchase up to 9,000 shares of Preferred Stock for gross proceeds of $5.0 million, prior to deducting underwriting discounts, commissions and offering expenses payable by the Company and excluding the proceeds from the exercise of the Warrants. The Preferred Stock is convertible into common stock using a conversion price equal to the lesser of (i) $1.22, subject to certain adjustments, and (ii) 87.5% of the lowest volume weighted average price of our common stock during the ten trading days ending on, and including, the date of the notice of conversion. The conversion price described in (ii) is subject to a floor of $0.35, except in the event of anti-dilution adjustments.

The Warrants consist of three tranches with expirations in October 2017, January 2018 and July 2018. Each tranche allows the holders to purchase up to 3,000 shares of Preferred Stock at a price of $1,000 per share. If fully exercised, each tranche would provide the Company with $3.0 million of additional financing ($9.0 million in total). Upon exercise, the Warrant holders receive shares of Preferred Stock. The Preferred Stock is convertible in common stock using a conversion price equal to 87.5% of the lowest volume weighted average price of our common stock during the ten trading days ending on, and including, the date of the notice conversion. The conversion price is subject to a floor of $0.35.

Through August 4, 2017, holders of Preferred Stock converted 4,351 shares of the Preferred Stock into 11,904,984 shares of the Company’s Common Stock. Additionally, Warrant holders exercised Warrants for the issuance of 120 shares of Preferred Stock and simultaneously converted those shares into 370,284 shares of common stock. The Company received gross proceeds of $120,000 from the exercise of the Warrants.

The Company has not finalized the accounting for this transaction.

Legal Proceedings

As described in Note 5, Commitments and Contingencies, on July 27, 2017, a shareholder filed a derivative class action lawsuit in the Superior Court for the State of California in the County of Los Angeles, captioned David Wiener, Derivatively and on Behalf of ImmunoCellular Therapeutics, Ltd. v. certain former and current officers and directors (Case No. BC670134). The complaint sets forth violations of, 1) breach of fiduciary duty, 2) unjust enrichment, 3) abuse of control, 4) gross mismanagement and 5) waste of corporate assets. The complaint alleges that the lack of oversight allowed the publication of articles about ICT-107 without disclosing that the articles were either directly, or indirectly, paid for by the Company. The complaint further alleges that, from May 1 2012 to April 2017, certain of its current and former officers and directors failed to disclose that the stock promotion scheme in fact occurred or was occurring, the extent of it, as well as the Company's involvement. The plaintiff seeks an award of unspecified damages, prejudgment and post-judgment interest, as well as reasonable attorneys’ fees, and other costs. The Company intends to vigorously defend against the claims. The Company may be obligated to indemnify its officers and directors in connection with this matter.