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Document and Entity Information - USD ($)	9 Months Ended
Sep. 30, 2011	Nov. 18, 2011
Document And Entity Information
Entity Registrant Name	Genesis Biopharma, Inc
Entity Central Index Key	0001425205
Document Type	10-Q
Document Period End Date	Sep. 30, 2011
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer?	No
Is Entity a Voluntary Filer?	No
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Smaller Reporting Company
Entity Public Float		$ 73,297,208
Entity Common Stock, Shares Outstanding		73,638,349
Document Fiscal Period Focus	Q3
Document Fiscal Year Focus	2011

Balance Sheets (Unaudited) - USD ($)	Sep. 30, 2011	Dec. 31, 2010
ASSETS
Cash and cash equivalents	$ 910,608	$ 1,292,469
Restricted cash	2,320,000	0
Advances to related party	50,000	0
Deposit	17,500	5,000
Prepaid expenses	0	3,447
Total current assets	3,298,108	1,300,916
Property and equipment, net of accumulated depreciation of $1,513 and $0	18,803	0
Intellectual property licenses, net of accumulated amortization of $111,723 and $57,372	105,685	160,036
Rent Deposit	16,000	0
Total assets	3,438,596	1,460,952
LIABILITIES AND STOCKHOLDER'S EQUITY (DEFICIT)
Accounts payable	206,864	30,292
Accrued interest	31,644	0
Unsecured convertible promissory notes, net of discount	2,598,425	0
Derivative liabilities	6,292,388	792,575
Total current liabilities	9,129,321	822,867
Stockholder's equity (Deficiency)
Common stock, par value $0.000041666; 1,800,000,000 shares authorized; 78,993,591 and 73,638,349 shares issued and outstanding, respectively	3,291	3,068
Additional paid-in capital	13,330,974	2,317,493
Accumulated deficit	(19,024,990)	(1,682,476)
Total stockholder's equity (deficiency)	(5,690,725)	638,085
Total liabilities and stockholder's equity (deficiency)	$ 3,438,596	$ 1,460,952

Statements of Operations (Unaudited) - USD ($)	3 Months Ended		9 Months Ended		48 Months Ended
Statements of Operations (Unaudited) - USD ($)	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
Income Statement [Abstract]
REVENUES	$ 0	$ 0	$ 0	$ 0	$ 0
OPERATING EXPENSES	5,814,141	167,027	17,033,575	319,336	17,923,476
LOSS FROM OPERATIONS	(5,814,141)	(167,027)	(17,033,575)	(319,336)	(17,923,476)
Change in fair value of derivative liability	3,546,042	16,618	3,241,440	16,618	3,012,213
Interest expense	(31,644)	0	(31,644)	0	(31,644)
Amortization of discount on convertible debentures and notes and other debt	(2,598,425)	0	(2,598,425)	0	(2,598,425)
Private placement costs	(920,310)	(563,348)	(920,310)	(563,348)	(1,483,658)
Total other income (expense)	(4,337)	(546,730)	(308,939)	(546,730)	(1,101,514)
NET LOSS	$ (5,818,478)	$ (713,757)	$ (17,342,514)	$ (866,066)	$ (19,024,990)
NET LOSS PER SHARE, BASIC AND DILUTED	$ (0.07)	$ (0.01)	$ (0.23)	$ (0.01)
WEIGHTED AVERAGE SHARES OUTSTANDING; BASIC AND DILUTED	78,299,552	72,002,038	74,755,732	85,165,525

Shareholders Equity (Unaudited) - 9 months ended Sep. 30, 2011 - USD ($)	Common Stock	Additional Paid-In Capital	Retained Earnings / Accumulated Deficit	Total
Beginning Balance Shares at Dec. 31, 2010	73,638,349
Beginning Balance Amount at Dec. 31, 2010	$ 3,068	$ 2,317,493	$ (1,682,476)	$ 638,085
Common Stock sold in Private Placement at $1.00 per share, January 2011, Shares	45,000
Common Stock sold in Private Placement at $1.00 per share, January 2011, Amount	$ 2	44,998	0	45,000
Common Stock sold in Private Placement at $1.00 per share, April to June 2011, Shares	850,000
Common Stock sold in Private Placement at $1.00 per share, April to June 2011, Amount	$ 35	185,669		185,704
Common stock issued to consultants for services, Shares	1,460,242
Common stock issued to consultants for services, Amount	$ 61	1,538,391	0	1,538,452
Cancellation of shares, Shares	(3,000,000)
Cancellation of shares, Amount	$ (125)	125	0	0
Fair value of common stock issued to officer for services, Shares	6,000,000
Fair value of common stock issued to officer for services, Amount	$ 250	8,009,750		8,010,000
Fair value of common stock transferred to officer		702,037		702,037
Fair value of vested stock options and warrants		532,511		532,511
Net loss for the period			(17,342,514)	(17,342,514)
Ending Balance Shares at Sep. 30, 2011	78,993,591
Ending Balance Amount at Sep. 30, 2011	$ 3,291	$ 13,330,974	$ (19,024,990)	$ (5,690,725)

Statements of Cash Flows (Unaudited) - USD ($)	9 Months Ended		48 Months Ended
Statements of Cash Flows (Unaudited) - USD ($)	Sep. 30, 2011	Sep. 30, 2010	Sep. 30, 2011
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (17,342,514)	$ (866,066)	$ (19,024,990)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	55,864	2,472	117,236
Fair value of vested stock options and warrants	532,511	45,159	646,527
Fair value of derivative liability recorded upon issuance of warrants	2,563,647	0	2,563,647
Amortization of discount on convertible notes	2,598,425	0	2,598,425
Private placement costs	920,310	563,348	1,483,658
Change in fair value of derivative liabilities	(3,241,440)	(16,618)	(3,012,213)
Common stock issued to officer for services	8,010,000	0	8,010,000
Common stock issued for services	1,538,452	0	1,538,452
Fair value of common stock transferred to officer	702,037	0	702,037
Changes in operating assets and liabilities:
Deposit	(12,500)	0	(17,500)
Prepaid expenses	3,447	(5,000)	0
Other assets	(16,000)	0	(16,000)
Accounts payable and accrued liabilities	208,216	25,492	238,508
Net cash used in operating activities	(3,479,545)	(251,213)	(4,172,213)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment	(20,316)	(2,981)	(24,316)
Net cash used in investing activities	(20,316)	(2,981)	(24,316)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of convertible notes, net	2,295,000	0	2,295,000
Proceeds from issuance of common stock	873,000	1,065,000	2,844,000
Due to director	0	(23,120)	18,137
Advances to related party	(50,000)	0	(50,000)
Net cash provided by financing activities	3,118,000	1,041,880	5,107,137
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	(381,861)	787,686	910,608
CASH AND CASH EQUIVALENTS, Beginning of period	1,292,469	8,257
CASH AND CASH EQUIVALENTS, End of period	910,608	795,943	910,608
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Proceeds from convertible notes held in escrow account	2,320,000	0	2,320,000
Derivative liability recorded upon issuance of convertible notes and attached warrants	4,615,000	0	4,615,000
Derivative liability recorded as private placement cost	642,296		642,296
Common stock issued for intellectual property	$ 0	$ 217,408	$ 217,408

GENERAL ORGANIZATION AND BUSINESS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

GENERAL ORGANIZATION AND BUSINESS

Genesis Biopharma, Inc. (formerly named Freight Management Corp.) was incorporated in the State of Nevada on September 17, 2007 to engage in the development of an internet-based, intelligent online system for business owners, freight forwarders, and business people in the shipping/freight industry and export/import industry who require assistance with their freight and shipping related inquiries. We never engaged in the online freight business, and were an inactive company until March 15, 2010. We owned all of the issued and outstanding shares of Genesis Biopharma, Inc., a Nevada corporation (the “Subsidiary”). On March 15, 2010, the Subsidiary merged with and into Genesis (the “Consolidation”), with Genesis as the surviving corporation. Genesis and Subsidiary filed Articles of Merger on March 15, 2010 with the Secretary of State of Nevada, along with the Agreement and Plan of Merger entered into by the two parties effective as of March 15, 2010 (the “Merger Agreement”). The Merger Agreement and the Articles of Merger amended the Company’s Articles of Incorporation, and changed the Company’s name to “Genesis Biopharma, Inc.” Effective March 15, 2010, prior to the Consolidation, we and our Subsidiary entered into an Asset Purchase Agreement (the “Purchase Agreement”) with Hamilton Atlantic, a Cayman Islands company (“Hamilton”), whereby Hamilton sold, and Subsidiary acquired, all of Hamilton’s rights, title and interest to certain assets, including certain patents, patent applications, materials and know-how, related to the development and commercialization of biotechnology drugs, primarily anti-CD55+ therapeutic antibody for the treatment of cancer. As a result of the Consolidation, Genesis acquired all of the assets and contractual rights, and assumed all of the liabilities, of Subsidiary, including all of the assets acquired pursuant to the Purchase Agreement. On March 15, 2010, after the effectiveness of the Consolidation, we entered into a Patent and Know How License (the “License Agreement”) with Cancer Research Technology Limited, a company registered in England and Wales (“CRT”). Pursuant to the License Agreement, we were granted an exclusive, worldwide right and license in certain intellectual property related to a proprietary, therapeutic use of anti-CD55+ antibodies, including rights to patents and patent applications related thereto, to research, develop, use, make, distribute, and sell products utilizing the licensed intellectual property. The License Agreement expires on the later to occur of the expiration of the relevant licensed patent in the relevant country, or ten (10) years after the date that the first therapeutic product was placed on the market in such country. In consideration for the license, we paid CRT 30,000 pounds sterling on the effective date of the License Agreement, and agreed to pay CRT additional royalties based on the achievement of certain milestones, including the consummation of financing by us and other milestones relating to the commencement of Phase III clinical studies, the filing of new drug applications, and the grant of marketing approval related to the licensed products. As a result of the acquisition of the assets related to the Anti-CD55+ Antibody Program and the License Agreement, we abandoned our plan to engage in the internetbased, freight forwarders’ shipping/freight business, and commenced operations as a biopharmaceutical company engaged in the development and commercialization of therapeutics for the treatment of cancer.

Effective August 5, 2011, we signed a Cooperative Research and Development Agreement (CRADA) with the National Institutes of Health and the National Cancer Institute (“NCI”). Under the terms of the five-year cooperative research and development agreement, we will work with Steven A. Rosenberg, M.D., Ph.D., chief of NCI’s Surgery Branch, to develop adoptive cell immunotherapies that are designed to destroy metastatic melanoma cells using a patient’s tumor infiltrating lymphocytes. We will provide funds in the amount of $1,000,000 per year of the CRADA for Dr. Rosenberg to use to acquire technical, statistical, and administrative support for the research activities, as well as to pay for supplies and travel expenses. We have also agreed that Dr. Rosenberg can allocate the funding between the various categories in support of the CRADA research as he sees fit (see Note 7).

Effective October 5, 2011, we entered into a Patent License Agreement (the “License Agreement”) with the National Institutes of Health, an agency of the United States Public Health Service within the Department of Health and Human Services (“NIH”). Pursuant to the License Agreement, NIH granted us a nonexclusive worldwide right and license to develop and manufacture certain proprietary autologous tumor infiltrating lymphocyte adoptive cell therapy products for the treatment of metastatic melanoma, ovarian cancer, breast cancer, and colorectal cancer. The intellectual property subject to the License Agreement is covered by 43 patents and patent applications, consisting of nine issued United States patents, 13 pending patent applications in the United States, and 21 foreign patents and patent applications as counterparts of U.S. patents/patent applications. We also have limited rights to sublicense the intellectual property subject to the License Agreement. The License Agreement will expire on a product-by-product basis upon the expiration of the subject patent rights. These technologies were also the subject of the CRADA, effective August 5, 2011. In consideration for the rights granted pursuant to the License Agreement, we agreed to pay an estimated $1,200,000 of upfront licensing fees and expense reimbursements within 60 days of the effectiveness of the License Agreement. In addition, we will have to pay royalties of six percent (6%) of net sales (subject to certain annual minimum royalty payments), a percentage of revenues from sublicensing arrangements, and lump sum benchmark royalty payments on the achievement of certain clinical and regulatory milestones for each of the various indications. If the Company achieves all benchmarks for all four (4) licensed indications, the aggregate amount of benchmark royalty payments that the Company will have to make to NIH will be $36,300,000 (see Note 9).

On October 5, 2011, we decided to terminate our efforts to develop anti-CD55+ antibodies for the treatment of cancer. As a result, we are terminating our exclusive license agreement with CRT, and will return all rights thereunder to certain patents and patent applications to CRT (see Note 7).

Basis of Presentation of Unaudited Condensed Financial Information The unaudited financial statements of the Company for the three months and nine months ended September 30, 2011 and 2010 have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the requirements for reporting on Form 10-Q and Regulation S-K for scaled disclosures for smaller reporting companies. Accordingly, they do not include all the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. However, such information reflects all adjustments (consisting solely of normal recurring adjustments), which are, in the opinion of management, necessary for the fair presentation of the financial position and the results of operations. Results shown for interim periods are not necessarily indicative of the results to be obtained for a full fiscal year. The balance sheet information as of December 31, 2010 was derived from the audited financial statements included in the Company's financial statements as of and for the year ended December 31, 2010 included in the Company’s Annual Report on Form 10-K filed with the Securities and Exchange Commission (the “SEC”) on April 14, 2011. These financial statements should be read in conjunction with that report.

Going Concern

As shown in the accompanying financial statements, the Company has a stockholders’ deficiency of $5,690,725 through September 30, 2011 and utilized cash in operations of $3,479,545 during the nine months ended September 30, 2011. The Company had cash and cash equivalents of $910,608 at September 30, 2011. The Company’s ability to continue as a going concern is dependent upon its ability to develop additional sources of capital and to ultimately achieve sustainable revenues and profitable operations. The Company’s financial statements do not include any adjustments that might result from the outcome of these uncertainties. At September 30, 2011, the Company had not yet commenced any revenue-generating operations. As such, the Company has yet to generate any cash flows from operations, and is dependent on debt and equity funding from both related and unrelated parties to finance its operations.

As of the date of this report, we do not have sufficient funds to repay the $5,000,000 convertible Notes that are due on November 30, 2011 (see Note 4). In addition, our current cash position will be further reduced by the approximately $1,200,000 payment that is due to the NIH in early December 2011 (see Note 9) and by the next $250,000 quarterly installment that we are required to pay under the CRADA (see Note 7) as well as a reservation fee of $500,000 payable in the form of two equal payments with the final payment to be made on or before December 12, 2012 pursuant to a letter of intent that we entered into with Lonza Walkersville, Inc. effective November 4, 2011 (see Note 9). As a result, in the event the holders of the Notes do not elect to convert their Notes or agree to an extension of the maturity date of the Notes, unless we are able to obtain at least $5,000,000 of new funding by November 30, 2011, we will be in default on our payment obligations under the Notes commencing on December 1, 2011. A default will significantly increase the cost of the Notes and will permit the holders of the Notes to pursue collection actions against us. Furthermore, even if the holders of the Notes were to agree to extend the maturity date of the Notes or elect to convert the Notes, based on our internally prepared budget, our current financial resources are only sufficient to fund our operations through the middle of March 2012. Finally, in order to develop our Contego™ program in accordance with our business plan and our agreement with the NIH we believe that we would have to spend in excess of $35 million during the next twelve months. Accordingly, in order to operate our business, we have to obtain substantial additional proceeds in the near future.

Our goal is to attempt to obtain the additional funds that we need through the sale of additional debt or equity securities. The sale of additional equity or convertible debt securities will result in additional dilution to our shareholders. The issuance of additional debt will result in increased expenses and could subject us to covenants that may have the effect of restricting our operations. We may also in the future seek to obtain funding through strategic alliances with larger pharmaceutical or biomedical companies. However, we currently have no agreements in place with any funding sources or with any strategic partners that could provide us with some or all of the funding that we need. Accordingly, we can provide no assurance that additional financing will be available to us in an amount or on terms acceptable to us, if at all. Even if we are able to obtain additional funding from either financings or alliances, no assurance can be given that the terms of such funding will be beneficial to us or our stockholders. 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.

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

SUMMARY OF SIGNIFICANT ACCOUNTING PRACTICES

Loss per Share

Basic loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during the period. Diluted loss per share is computed by dividing the net loss applicable to common stockholders by the weighted average number of common shares outstanding plus the number of additional common shares that would have been outstanding if all dilutive potential common shares had been issued. Potential common shares are excluded from the computation as their effect is antidilutive.

For the three months and nine months ended September 30, 2011 and 2010, the calculations of basic and diluted loss per share are the same because potential dilutive securities would have an anti-dilutive effect. The potentially dilutive securities at September 30, 2011 consist of options to acquire 2,425,000 shares of common stock, warrants to acquire 9,680,022 shares of common stock, and 4,000,000 shares of common stock issuable upon the conversion of promissory notes.

Fair Value Measurements

The Company uses various inputs in determining the fair value of its investments and measures these assets on a recurring basis. Financial assets recorded at fair value in the balance sheets are categorized by the level of objectivity associated with the inputs used to measure their fair value. Authoritative guidance provided by the Financial Accounting Standards Board (the “FASB”) defines the following levels directly related to the amount of subjectivity associated with the inputs to fair valuation of these financial assets:

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

Level 2—Inputs, other than the quoted prices in active markets, that are observable either directly or indirectly.

Level 3—Unobservable inputs based on the Company's assumptions.

The following table presents certain investments and liabilities of the Company’s financial assets measured and recorded at fair value on the Company’s balance sheets on a recurring basis and their level within the fair value hierarchy as of September 30, 2011 and December 31, 2010.

Description	Level 1		Level 2		Level 3		Total
Fair value of derivative liability – September 30, 2011	$	—	$	—	$	6,292,388	$	6,292,388
Fair value of derivative liability – December 31, 2010	$	—	$	—	$	792,575	$	792,575

Derivative financial instruments

The Company evaluates all of its financial instruments to determine if such instruments are derivatives or contain features that qualify as embedded derivatives. For stock-based derivative financial instruments, the Company uses probability weighted average Black-Scholes-Merton to value the derivative instruments at inception and on subsequent valuation dates. The classification of derivative instruments, including whether such instruments should be recorded as liabilities or as equity, is evaluated at the end of each reporting period. Derivative instrument liabilities are classified in the balance sheet as current or non-current based on whether or not net-cash settlement of the derivative instrument could be required within 12 months of the balance sheet date.

Intangible Assets

The Company records intangible assets in accordance with guidance of the FASB. Intangible assets consist mostly of intellectual property rights that were acquired from an affiliated entity and recorded at their historical cost, and are being amortized over a three year life. The Company reviews intangible assets subject to amortization at least annually to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. If the carrying value of the assets is determined not to be recoverable, the Company records an impairment loss equal to the excess of the carrying value over the fair value of the assets. The Company’s estimate of fair value is based on the best information available. If the estimate of an intangible asset’s remaining useful life is changed, the Company amortizes the remaining carrying value of the intangible asset prospectively over the revised remaining useful life. Based upon management’s annual assessment, the Company believes there were no indicators of impairment of its intangible assets as of September 30, 2011.

Research & Development

Research and development costs are expensed when incurred and are included in operating costs on the accompanying statement of operations. Research and development costs were $51,000 and $250,000 for the nine months ended September 30, 2010 and 2011, and $0 and $250,000 for the three months ended September 30, 2010 and 2011, respectively.

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates.

Recent Accounting Pronouncements

In May 2011, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2011-4, which amends the Fair Value Measurements Topic of the Accounting Standards Codification (ASC) to help achieve common fair value measurement and disclosure requirements in U.S. GAAP and IFRS. ASU No. 2011-4 does not require additional fair value measurements and is not intended to establish valuation standards or affect valuation practices outside of financial reporting. The ASU is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. The ASU will affect the Company’s fair value disclosures, but will not affect the Company’s results of operations, financial condition or liquidity.

In June 2011, the FASB issued ASU No. 2011-5, which amends the Comprehensive Income Topic of the ASC. The ASU eliminates the option to present the components of other comprehensive income as part of the statement of changes in shareholders’ equity, and instead requires consecutive presentation of the statement of net income and other comprehensive income either in a continuous statement of comprehensive income or in two separate but consecutive statements. ASU No. 2011-5 is effective for interim and annual periods beginning after December 15, 2011. The Company will adopt the ASU as required. It will have no affect on the Company’s results of operations, financial condition or liquidity.

Other recent accounting pronouncements issued by the FASB (including its Emerging Issues Task Force) and the SEC did not or are not believed by management to have a material impact on the Company's present or future consolidated financial statements.

UNSECURED CONVERTIBLE PROMISSORY NOTES AND WARRANTS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

UNSECURED CONVERTIBLE PROMISSORY NOTES AND WARRANTS

Effective July 27, 2011 the Company completed an offering of $5,000,000 of its convertible notes and warrants to acquire 4,000,000 shares of the Company’s common stock. Under the terms of the offering, the investors entered into a securities purchase agreement with the Company whereby the investor received notes that mature November 30, 2011 and which are convertible into shares of the Company’s common stock at a conversion price of $1.25 per share and received warrants that have a term of five years and are exercisable at $1.25 per share. Interest on the notes accrues at 7% per annum and is due on the maturity date of the notes. The notes also contain a redemption feature whereby the Company can force conversion in the event its common stock trades at 200% of the conversion price for twenty consecutive trading days with a minimum daily trading volume of 100,000 shares.

As a part of the Offering, the Company also entered into an escrow agreement. Under the terms of the securities purchase agreement, the offering closed in two equal traunches. With the completion of the offering, the Company received gross proceeds of $2,500,000. The escrow agreement provided that the remaining $2,500,000 be placed into escrow. The escrow agreement provided that the remaining proceeds could be released to the Company following the Company signing a worldwide nonexclusive license to certain intellectual property owned by the United States Government related to tumor infiltrating lymphocytes and T-cell technologies and a Cooperative Research and Development Agreement for exclusive access to additional technologies for the conduct of clinical trials prior to November 30, 2011. At September 30, 2011, the remaining proceeds were still held in escrow and are reflected in the accompanying balance sheet as “Restricted cash”. As further described in Note 9 to these condensed financial statements, on October 5, 2011, the Company completed the requirements of the escrow agreement for release of the remaining proceeds from the convertible notes and the Company received $2,320,000, representing the remaining $2,500,000 of the note, less private placement costs of $180,000.

In the event that the Company will be unable to repay the Notes in whole on the November 30, 2011 maturity date, the interest rate on the Notes increases to 15% per annum, and the holders of the Notes have the right to demand that the Company immediately redeem all of the Notes at a price that is the greater than the outstanding balance of the Notes.

As a part of the offering, the Company entered into a registration rights agreement which provides in part that the Company file a registration statement with the Securities and Exchange Commission (Commission) for the shares of common stock underlying the notes and warrants as issued in the offering and have the registration statement declared effective by the Commission within ninety days of the closing date of the Offering if there is no review by the Commission or within 120 days of the closing date in the event the registration statement is reviewed. Failure to have the registration statement declared effective within the time parameters afforded or to keep the registration effective per the terms of the registration rights agreement will result in a penalty imposed on the Company of an amount in cash equal to one percent of the aggregate purchase price of such investor's registrable securities every thirty days until such time as the Company complies with the terms of the registration rights agreement. The Company is currently in the process of filing the registration statement with the Commission.

The notes and warrants contain anti-dilution protection. As such, the conversion price of the notes and the exercise price of the warrants are subject to adjustment based upon the pricing of subsequent financings undertaken by the Company, as more fully described in the securities purchase agreement, notes, and warrants. The Company has determined that this anti-dilution reset provision caused the conversion feature to be bifurcated from the notes, treated as a derivative liability, and accounted for at its fair value. Upon issuance, the Company determined the fair value of the beneficial conversion feature was $1,844,422 and recorded a corresponding discount to the convertible notes. The Company has also determined that the anti-dilution reset provision of the warrants is subject to derivative liability treatment and is required to be accounted for at its fair value. Upon issuance, the Company determined the fair value of the warrants was $3,616,870 and recorded a discount of $3,155,578 to the convertible notes, and recognized the remaining amount of $461,292 as private placement costs in the statement of operations.

The total discount to the notes of $5,000,000 is being amortized over the term of the notes, from July 26, 2011 through the maturity date of November 30, 2011. During the period from the issuance of the notes in July 2011 through September 30, 2011, the Company amortized discount of $2,598,425. The carrying amount of the convertible notes was $2,598,425 at September 30, 2011, representing their unconverted face amount of $5,000,000 less the unamortized discount of $2,401,575.

In connection with this sale of convertible notes and warrants, the Company 1) incurred a placement fee of $350,000 (7% of gross proceeds of the offering), 2) issued five-year warrants to its placement agent to acquire 80,000 shares of common stock, and 3) paid $35,000 for legal and escrow services in connection with the issuance of these convertible notes and warrants. The warrants issued to the placement agent are exercisable at $1.25 per share, may be exercised on a cashless basis, and contain anti-dilution protection. The Company has determined that this anti-dilution reset provision of the warrants is subject to derivative liability treatment and is required to be accounted for at its fair value. Upon issuance, the Company determined the fair value of the warrants was $74,018 and recorded a corresponding charge to private placement costs. Total private placement costs recorded for the issuance of convertible debentures was $920,310.

- Definition

The entire disclosure for information about short-term and long-term debt arrangements, which includes amounts of borrowings under each line of credit, note payable, commercial paper issue, bonds indenture, debenture issue, own-share lending arrangements and any other contractual agreement to repay funds, and about the underlying arrangements, rationale for a classification as long-term, including repayment terms, interest rates, collateral provided, restrictions on use of assets and activities, whether or not in compliance with debt covenants, and other matters important to users of the financial statements, such as the effects of refinancing and noncompliance with debt covenants.

+ References + Details

COMMON STOCK

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

COMMON STOCK

Issuance of common stock for cash

In January 2011, the Company closed a private placement offering pursuant to which it entered into Private Placement Subscription Agreements with two accredited investors providing for the issuance and sale of 45,000 shares of the Company’s common stock for a purchase price of $45,000. The Subscription Agreements granted the investors “piggy-back” registration rights with respect to the shares, pursuant to which the Company agreed, with specified exceptions, to register the shares in the event the Company determines to register its common stock with the Securities and Exchange Commission.

Between April and June 30, 2011, the Company completed its private placement offering and issued an aggregate of 850,000 shares of common stock for $1.00 per share, or net proceeds of $828,000 after closing costs. As an added incentive to the buyers, the Company granted a total of 850,000 warrants to the buyers that are fully vested, will expire in five years and are exercisable at $1.25 per share. Each of the warrant agreements included an anti-dilution provision that allowed for the automatic reset of the number of warrants issued and exercise price of the warrants upon any future sale of common stock or warrants at or below the current exercise price. The Company considered the current Financial Accounting Standards Board guidance of “Determining Whether an Instrument Indexed to an Entity’s Own Stock” which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability or whether or not within the issuers’ control, means the instrument is not indexed to the issuers own stock. Accordingly, the Company determined that as the strike price of these warrants contain exercise prices that may fluctuate based on the occurrence of future offerings or events, and as such is not a fixed amount. As a result, the Company determined that these warrants are not considered indexed to the Company’s own stock and characterized the fair value of these warrants as an offering cost and derivative liabilities upon issuance. The aggregate value of these warrants issued was $642,296 using the probability weighted average Black-Scholes-Merton option valuation model with the following assumptions; average risk-free interest rate of 2.00%; dividend yield of 0%; average volatility of 49%; and an expected life of five years (statutory term). The warrants were accounted for as an offering cost and the entire value was deducted from additional Paid-In Capital.

Issuance of common stock for services

In February 2011, Robert Brook, former CEO and Richard McKilligan, former CFO entered into advisory agreements with the Company. Pursuant to the terms of the advisory agreements, Messrs. Brooke and McKilligan were each required to submit for cancellation 1,500,000 shares or a total of 3,000,000 of the Company’s common stock that they owned.

On May 23, 2011, Messrs. Brooke and McKilligan transferred 1,500,000 common shares each owned by them to Ines Garcia, who subsequently became the wife of Mr. Anthony Cataldo, CEO of the Company. The transfer was accounted for as additional compensation to Mr. Cataldo and the shares were valued at $1.40 per share, or $4,200,000, based upon the market price of the common stock on the date of the transfer.

On May 23, 2011, BC Limited, a shareholder of the Company, agreed to transfer 501,455shares it owned to Ines Garcia. The transfer to Ines Garcia was accounted for as compensation to Mr. Cataldo and the 501,455 shares were valued at $1.40 per share, or $702,037, based upon the market price of the common stock on the date of the transfer.

On May 6, 2011, Anthony Cataldo, the Company’s President, Chief Executive Officer and director, was granted 3,000,000 shares of the Company’s common stock as part of his executive compensation package. These shares were valued at $3,810,000 based on the trading price of the Company’s common stock at the date of the agreement.

From April to May 2011, the Company granted 130,000 shares of common stock for consulting services. These shares were valued at $155,000 based on the trading price of the Company’s common stock at the date of the agreement.

On August 22, 2011, Emmes Group Consulting LLC was issued 1,000,000 shares of the Company’s common stock for consulting services. These shares were valued at $1,040,000 based on the trading price of the Company’s common stock at the date of the agreement. Martin Schroeder, a director of the Company, is Executive Vice President and Managing Director of the Emmes Group, Inc., a strategic business consulting firm.

From July through September, 2011, an additional 330,242 shares of the Company’s common stock were issued for consulting services. These shares were valued at $343,452 based on the trading price of the Company’s common stock at the date of the agreements.

Stock Options

On March 16, 2011, the Company granted options to purchase 250,000 shares of the Company’s common stock to a director at an exercise price of $1.25. These options vest one year from the grant date and have a ten-year life. The options were valued at $187,675, using the Black Scholes option pricing model and are being amortized over the vesting period. The following assumptions were utilized in valuing the options: strike price of $1.25; term of ten (10) years; volatility of 50.95%; expected dividends 0%; and discount rate of 2.82%.

On April 15, 2011, the Company granted options to purchase 825,000 shares of the Company’s common stock to members of its scientific advisory board at an exercise price of $1.19 per share. These options vest quarterly over 12 months from the grant date and have a five-year life. The options were valued at $444,675, using the Black Scholes option pricing model and are being amortized over the vesting period. The following assumptions were utilized in valuing the options: strike price of $1.19; term of five (5) years; volatility of 74%; expected dividends 0%; and discount rate of 0.84%.

On April 25, 2011, the Company granted options to purchase 200,000 shares of the Company’s common stock to a member of its corporate development advisory board at an exercise price of $1.17 per share. These options vest quarterly over 12 months from the grant date and have a ten-year life. The options were valued at $149,800, using the Black Scholes option pricing model and are being amortized over the vesting period. The following assumptions were utilized in valuing the options: strike price of $1.17; term of ten (10) years; volatility of 74%; expected dividends 0%; and discount rate of 1.85%.

During the nine months ended September 30, 2011, the Company recorded compensation costs of $444,971 relating to the vesting of the stock options discussed above and from options granted in previous years. As of September 30, 2011, the aggregate value of unvested options was $625,425, which will continue to be amortized as compensation cost as the options vest over terms ranging from 1 to 4 years, as applicable. The options had intrinsic value of $1,114,063 as of September 30, 2011.

At September 30, 2011, options outstanding are as follows:

	Number of Options		Weighted Average Exercise Price
Balance at January 1, 2011		1,150,000	$	0.03125
Granted		1,275,000	$	1.20
Exercised		—		—
Forfeited or Expired		—		—
Balance at September 30, 2011		2,425,000	$	0.645
Options Exercisable at September 30, 2011		884,000	$	0.70

Warrants

At September 30, 2011, warrants outstanding are as follows:

	Number of Warrants		Weighted Average Exercise Price
Balance at January 1, 2011		1,050,022	$	1.00
Granted		8,630,000	$	1.34
Exercised		—		—
Balance at September 30, 2011		9,680,022	$	1.30

The above warrants are fully vested and have a five year contractual life.

On September 17, 2010, the Company issued warrants to purchase 466,674 shares of the Company’s common stock at an exercise price of $1.00 per share and warrants to purchase 466,674 shares of the Company’s common stock at an exercise price of $1.25 per share. Each of the warrant agreements included an anti-dilution provision that allowed for the automatic reset of the exercise price upon any future sale of common stock instruments at or below the current exercise price. The Company considered the current Financial Accounting Standards Board guidance of “Determining Whether an Instrument Indexed to an Entity’s Own Stock” which indicates that any adjustment to the fixed amount (either conversion price or number of shares) of the instrument regardless of the probability or whether or not within the issuer’s control, means the instrument is not indexed to the issuer’s own stock. Accordingly, the Company determined that as the strike price of these warrants contain exercise prices that may fluctuate based on the occurrence of future offerings or events, and as such is not a fixed amount. As a result, the Company determined that these warrants are not considered indexed to the Company’s own stock and characterized the fair value of these warrants as derivative liabilities upon issuance (see Note 6).

On October 22, 2010, the Company closed a private placement offering pursuant to which it entered into a Private Placement Subscription Agreement with an accredited investor providing for the issuance and sale of 250,000 shares of the Company’s common stock for a purchase price of $250,000. This offering triggered anti-dilution provisions contained in certain warrants previously issued because the $1.00 purchase price per share in the offering is lower than the $1.25 exercise price of those warrants. As a result, effective October 22, 2010, the exercise price of 466,667 warrants issued on September 17, 2010 was reduced to $1.00 per share and the holders of those warrants have become entitled to purchase an aggregate of 116,674 additional shares of the Company’s common stock upon exercise of those warrants, bringing the total number of shares of common stock underlying those warrants to 583,348.

On February 15, 2011, pursuant to a consulting agreement, the Company granted 100,000 fully vested, ten year warrants to acquire shares of its common stock at $1.26. The warrants were valued at $87,540, using the Black Scholes option pricing model with the following assumptions: strike price of $1.26; term of ten (10) years; volatility of 57%; expected dividends 0%; and discount rate of 3.61%. As the warrants were fully vested, the entire $87,540 was expensed at grant date.

During the second quarter 2011, the Company completed a private placement offering of 850,000 shares of common stock. In connection, the Company entered into a Securities Purchase Agreement with a accredited investors which provided for the issuance and sale of 850,000 shares of the Company’s common stock, par value $0.000041666 (the “Shares”) at a per Share purchase price of $1.00 (the “Per Share Purchase Price”) and 850,000 five (5) year Class “C” Warrants exercisable at $1.25 per warrant share (the “Per Warrant Exercise Price”) (the “Warrants”) for a purchase price of $850,000 (the “Offering”).

Each of the Warrants issued from April to June 2011 contain certain purchase price reset protections in the event the Company issues or sells any Shares or any Share equivalents at less than the Per Warrant Exercise Price. The Per Warrant Exercise Price will be adjusted in the event the Company issues or sells any Shares or equivalents pursuant to which Shares may be acquired at less than the Per Warrant Exercise Price (which is subject to adjustment). In addition, in the event of a reduction in the Per Warrant Exercise Price, the number of Shares that a holder of a Warrant shall be entitled to receive upon exercise shall be adjusted by multiplying the number of Shares that would otherwise be issuable on such exercise by a fraction of which (a) the numerator is the Per Warrant Exercise Price that would otherwise be in effect, and (b) the denominator is the Per Warrant Exercise Price in effect on the date of such exercise. The Warrants also contain a cashless exercise provision and the Offering also provides the purchaser the right of first refusal in connection with any future offerings undertaken by the Company for a term of eighteen (18) months.

As more fully described in Note 4 to these condensed financial statements, effective July 27, 2011, the Company completed an offering of $5 million of its seven percent senior convertible notes and five year warrants exercisable at $1.25 to accredited investors. According to the terms of the agreement, the Company issued warrants exercisable for 4,080,000 shares of Common Stock which were accounted for as a derivative liability due to the anti-dilution reset provision of the warrants.

In July 2011, pursuant to consulting agreements, the Company issued warrants to two consultants to purchase an aggregate of 3,000,000 fully vested, five-year warrants to acquire shares of its common stock at $1.50 per share. The warrants contain anti-dilution protection. As such, the exercise price of the warrants is subject to adjustment based upon the pricing of subsequent financings undertaken by the Company. As a result, effective July 26, 2011, the exercise price was reduced to $1.25 per share and the holders of those warrants have become entitled to purchase an aggregate of 600,000 additional shares of the Company’s common stock upon exercise of those warrants, bringing the total number of shares of common stock underlying those warrants to 3,600,000.

The Company has determined that the anti-dilution reset provision of the warrants is subject to derivative liability treatment and is required to be accounted for at its fair value. Upon issuance, the Company determined the fair value of the derivative liability recorded upon issuance of the warrants was $2,563,647 and recorded this amount as share-based compensation at the date of issuance since the warrants were fully vested.

The warrants had intrinsic value of $2,158,500 as of September 30, 2011.

- Definition

The entire disclosure for shareholders' equity, comprised of portions attributable to the parent entity and noncontrolling interest, if any, including other comprehensive income (as applicable). Including, but not limited to: (1) balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings; (2) accumulated balance for each classification of other comprehensive income and total amount of comprehensive income; (3) amount and nature of changes in separate accounts, including the number of shares authorized and outstanding, number of shares issued upon exercise and conversion, and for other comprehensive income, the adjustments for reclassifications to net income; (4) rights and privileges of each class of stock authorized; (5) basis of treasury stock, if other than cost, and amounts paid and accounting treatment for treasury stock purchased significantly in excess of market; (6) dividends paid or payable per share and in the aggregate for each class of stock for each period presented; (7) dividend restrictions and accumulated preferred dividends in arrears (in aggregate and per share amount); (8) retained earnings appropriations or restrictions, such as dividend restrictions; (9) impact of change in accounting principle, initial adoption of new accounting principle and correction of an error in previously issued financial statements; (10) shares held in trust for Employee Stock Ownership Plan (ESOP); (11) deferred compensation related to issuance of capital stock; (12) note received for issuance of stock; (13) unamortized discount on shares; (14) description, terms, and number of warrants or rights outstanding; (15) shares under subscription and subscription receivables, effective date of new retained earnings after quasi-reorganization and deficit eliminated by quasi-reorganization and, for a period of at least ten years after the effective date, the point in time from which the new retained dates; and (16) retroactive effective of subsequent change in capital structure.

+ References

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-Publisher SEC
-Name Regulation S-X (SX)
-Number 210
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+ Details

DERIVATIVE LIABILITIES

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

DERIVATIVE LIABILITIES

In June 2008, the FASB issued authoritative guidance on determining whether an instrument (or embedded feature) is indexed to an entity’s own stock. Under the authoritative guidance, effective January 1, 2009, instruments which do not have fixed settlement provisions are deemed to be derivative instruments. The 8,980,022 warrants issued related to the private placements and consulting agreements in 2010 and 2011 described in Note 5 do not have fixed settlement provisions because their exercise prices may be lowered if the Company issues securities at lower prices in the future. The warrants have been characterized as derivative liabilities to be re-measured at the end of every reporting period with the change in value reported in the statement of operations.

The derivative liabilities were valued using probability weighted average Black-Scholes-Merton valuation techniques with the following average assumptions:

	September 30, 2011			Upon Issuance			December 31, 2010

Warrants:
Risk-free interest rate		1.38	%		0.80	%		1.90	%
Expected volatility		66.58	%		52.45	%		52.45	%
Expected life (in years)		4.7			5.0			5
Expected dividend yield		0	%		0	%		0	%

Fair Value of Conversion Feature	$	514,413		$	1,844,422		$	—
Fair Value of Warrants	$	5,777,975		$	896,831		$	792,575
Total	$	6,292,388		$	8,741,253		$	792,575

The risk-free interest rate was based on rates established by the Federal Reserve Bank, the Company uses the historical volatility of its common stock, and the expected life of the instruments is determined by the expiration date of the instrument. The expected dividend yield was based on the fact that the Company has not paid dividends to common shareholders in the past and does not expect to pay dividends to common shareholders in the future. In the prior year, the Company used an average volatility rate of similar publicly traded companies as an input to its fair value calculations. During the current period, the Company determined that its stock price has matured and there is a consistent level of trading activity, as such, the Company used the volatility percentage of its common stock.

As of September 30, 2011, the aggregate derivative liability was $6,292,388. For the nine months ended September 30, 2011 and 2010, the Company recorded a gain from the decrease in fair value of the derivative liabilities of $3,241,440 and $16,618, respectively.

- Definition

The entire disclosure for the entity's entire derivative instruments and hedging activities. Describes an entity's risk management strategies, derivatives in hedging activities and non-hedging derivative instruments, the assets, obligations, liabilities, revenues and expenses arising therefrom, and the amounts of and methodologies and assumptions used in determining the amounts of such items.

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-Section S99
-Paragraph 1
-Subparagraph (SX 210.4-08.(n))
-URI http://asc.fasb.org/extlink&oid=6881521&loc=d3e23780-122690

Reference 21: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 10
-Section 50
-Paragraph 4J
-URI http://asc.fasb.org/extlink&oid=6935481&loc=SL5708773-113959

Reference 22: http://www.xbrl.org/2003/role/presentationRef
-Publisher FASB
-Name Accounting Standards Codification
-Topic 815
-SubTopic 30
-Section 45
-Paragraph 1
-URI http://asc.fasb.org/extlink&oid=6441202&loc=d3e80720-113993

+ Details

LICENSE AND COMMITMENTS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

LICENSE AND COMMITMENTS

Cancer Research Technology Limited

On March 15, 2010, we entered into a Patent and Know How Licence (the “License Agreement”) with Cancer Research Technology Limited, a company registered in England and Wales (“CRT”). Pursuant to the License Agreement, CRT granted to the Company an exclusive, worldwide right and license in certain intellectual property related to a proprietary, therapeutic use of anti-CD55 antibodies, including rights to patents and patent applications related thereto, to research, develop, use, make, distribute, and sell products utilizing the licensed intellectual property. The license granted to the Company expires on the later to occur of the expiration of the relevant licensed patent in the relevant country or 10 years after the date that the first therapeutic product was placed on the market in such country. In consideration for the license, the Company agreed to pay to CRT $46,872 (£30,000) in royalties upon the effective date of the License Agreement, and an additional $49,104 (£30,000) was paid thereafter upon the milestone achieved during the year ended December 31, 2010. A total of $95,976 was paid during the year ended December 31, 2010. No payments were made during the nine months ended September 30, 2011.

In addition, the Company agreed to pay CRT additional royalties based on the achievement of certain milestones, as follows:

£25,000 (twenty five thousand pounds sterling) on filing of IND or equivalent in each of the US and the European Economic Area;

£75,000 (seventy five thousand pounds sterling) on the commencement of Phase III clinical or Pivotal Registration Studies in each of the US and the European Economic Area;

£200,000 (two hundred thousand pounds sterling) on the filing of a new drug application or equivalent application in each of the US and the European Economic Area;

£250,000 (two hundred and fifty thousand pounds sterling) on the grant of the initial Marketing Approval in each of the US and the European Economic Area; and

£50,000 (fifty thousand pounds sterling) on the grant of Marketing Approval in a Major Market.

As of September 30, 2011, none of the milestones have been achieved and no additional amounts due have been recorded.

University of Nottingham, England

On September 1, 2010, the Company entered into a research agreement with the University of Nottingham, England. The term of the agreement commenced on July 1, 2010 and expires on June 30, 2011. Pursuant to the terms of the agreement, the Company paid to the University of Nottingham approximately $51,000 upon signature of the agreement, which has been included as an expense in the accompanying statement of operations for the year ended December 31, 2010. In addition, the Company agreed to pay the University of Nottingham an additional £32,000 upon completion of the program. The early results of testing conducted by Nottingham University as part of the Anti-CD55+ Antibody Program failed to meet the anticipated clinical development endpoints. Accordingly, we decided to terminate the research agreement. We anticipate that the termination of the exclusive license agreement with CRT will become effective in the near future and that we will not incur any additional costs related to that program in the future.

National Institutes of Health and the National Cancer Institute

Effective August 5, 2011, the Company signed a Cooperative Research and Development Agreement (CRADA) with the National Institutes of Health and the National Cancer Institute (NCI). Under the terms of the five-year cooperative research and development agreement, the Company will work with Steven A. Rosenberg, M.D., Ph.D., chief of NCI’s Surgery Branch, to develop adoptive cell immunotherapies that are designed to destroy metastatic melanoma cells using a patient’s tumor infiltrating lymphocytes.

Specifically, the CRADA will (i) support the in vitro development of improved methods for the generation and selection of tumor infiltrating lymphocytes with anti-tumor reactivity from patients with metastatic melanoma, (ii) help develop approaches for large-scale production of tumor infiltrating lymphocytes that are in accord with Good Manufacturing Practice (GMP) procedures suitable for use in treating patients with metastatic melanoma, and (iii) conduct clinical trials using these improved methods of generating tumor infiltrating lymphocytes as well as improved adoptive cell therapy preparative regimens for the treatment of metastatic melanoma.

Both the Company and the NCI may provide personnel, services, facilities, equipment or other resources under the agreement. Under the terms of the CRADA, the Company will have an exclusive option to negotiate an exclusive license to any new inventions developed jointly or independently by NCI scientists during the course of the research project. A CRADA is the only mechanism the National Institutes of Health has to promise exclusive intellectual property rights in advance to a collaborator.

The Company will provide funds in the amount of $1,000,000 per year of the CRADA for Dr. Rosenberg to use to acquire technical, statistical, and administrative support for the research activities, as well as to pay for supplies and travel expenses. The Company will provide funds in the amount of $250,000 on a quarterly basis. The first quarterly installment of $250,000 was due within thirty (30) days of the Effective Date of the CRADA and was paid during the three months ended September 30, 2011. Each subsequent installment will be due within thirty (30) days of each quarterly anniversary of the Effective Date. The Company also agreed that Dr. Rosenberg can allocate the funding between the various categories in support of the CRADA research as he sees fit.

SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2011

Notes to Financial Statements

SUBSEQUENT EVENTS

National Institutes of Health

Effective October 5, 2011, the Company entered into a Patent License Agreement (the “License Agreement”) with the National Institutes of Health, an agency of the United States Public Health Service within the Department of Health and Human Services (“NIH”). Pursuant to the License Agreement, NIH granted to the Company a non-exclusive worldwide right and license to develop and manufacture certain proprietary autologous tumor infiltrating lymphocyte adoptive cell therapy products for the treatment of metastatic melanoma, ovarian cancer, breast cancer, and colorectal cancer. The intellectual property subject to the License Agreement is covered by 43 patents and patent applications, consisting of nine issued United States patents, 13 pending patent applications in the United States, and 21 foreign patents and patent applications as counterparts of U.S. patents/patent applications. The Company also has limited rights to sublicense the intellectual property subject to the License Agreement. The License Agreement will expire on a product-by-product basis upon the expiration of the subject patent rights. These technologies were also the subject of the Cooperative Research and Development Agreement, effective August 5, 2011, that the Company entered into with the National Cancer Institute, as disclosed previously Note 7 to these condensed financial statements.

The Company has the right to terminate the License Agreement in any country on 60 days notice, and NIH may terminate the agreement if the Company is in material breach, and the breach is not cured within a specified cure period, upon certain bankruptcy and insolvency events, or if the Company fails to comply with or achieve certain benchmarks or development plans as set forth in the License Agreement.

In consideration for the rights granted pursuant to the License Agreement, the Company agreed to pay an estimated $1,200,000 of upfront licensing fees and expense reimbursements within 60 days of the effectiveness of the License Agreement. In addition, the Company will have to pay royalties of six percent (6%) of net sales (subject to certain annual minimum royalty payments), a percentage of revenues from sublicensing arrangements, and lump sum benchmark royalty payments on the achievement of certain clinical and regulatory milestones for each of the various indications. The Company initially intends to focus on the development of licensed products in the metastatic melanoma field of use. If the Company achieves all benchmarks for metastatic melanoma, up to and including the product’s first commercial sale in the United States, the total amount of such benchmark payments will be $6,050,000. The benchmark payments for the other three indications, if all benchmarks are achieved, will be $6,050,000 for ovarian cancer, $12,100,000 for breast cancer, and $12,100,000 for colorectal cancer. Accordingly, if the Company achieves all benchmarks for all four licensed indications, the aggregate amount of benchmark royalty payments that the Company will have to make to NIH will be $36,300,000.

With the Company entering the License Agreement, the escrow provisions of the Company’s previously reported July 27, 2011 $5,000,000 seven (7%) percent senior convertible note and five (5) year warrant offering have been satisfied. Accordingly, the net proceeds of $2,320,000 held in escrow pending the execution of the License Agreement has been released to the Company.

Employment Agreements with Anthony Cataldo and Michael Handelman

On October 3, 2011 the Compensation Committee of the Company approved the employment agreements of Anthony J. Cataldo who serves as the Company’s Executive Chairman and Chief Executive Officer and Michael Handelman who serves as a Director as well as the Company’s Chief Financial Officer, Executive Vice President and Secretary (the “Employment Agreements”).

The respective Employment Agreements were executed on October 3, 2011 and are effective as of May 1, 2011 (the “Effective Date”) for a term of five (5) years from the Effective Date. Mr. Cataldo will receive an annual base salary of $300,000 under his agreement and has agreed to accrue $5,000 of his base salary each month until such time as he and the Company mutually agree regarding the payment of same. Mr. Handelman will receive the annual base salary of $120,000 under his agreement and has agreed to accrue $2,500 of his base salary each month until such time as he and the Company mutually agree regarding the payment of same. Both Messrs Cataldo and Handelman will have the right to receive benefits under the Company’s benefit plans, if such plans exist and will have the opportunity to earn performance bonuses as determined by the Company’s Compensation Committee or any bonus plans then in effect. Additionally, under the terms of the Employment Agreements, Messrs Cataldo and Handelman are each entitled to receive 2,500,000 stock options to purchase shares of the Company’s common stock exercisable at $1.25 a share under the Company’s 2010 Equity Compensation Plan (“2010 Plan”) or any successor to the 2010 Plan. The Options will vest in equal monthly installments over a five (5) year period commencing on the Effective Date, will be exercisable pursuant to the limitations of the 2010 Plan or any successor, and shall be exercisable for a maximum of ten (10) years. The Company has also agreed to grant cost free piggyback registration rights for the shares underlying the options.

2011 Equity Incentive Plan and Grant of Options

As of October 14, 2011, the Company’s Board of Directors, based upon the approval and recommendation of the Compensation Committee, approved by unanimous written consent the Company’s 2011 Equity Incentive Plan (the “2011 Plan”) and form of option agreements for grants under the 2011 Plan (the “Option Agreements”).

Employees, directors, consultants and advisors of the Company are eligible to participate in the 2011 Plan. The 2011 Plan was adopted to encourage selected employees, directors, consultants and advisors to improve operations, increase profitability, accept or continue employment or association with the Company through the participation in the growth in value of the common stock of the Company.

The 2011 Plan will be administered by the Board of Directors or the Company’s Compensation Committee and has 18,000,000 shares of common stock reserved for issuance in the form of incentive stock options (available for issuance to employees, and only upon shareholder approval of the 2011 Plan); non-qualified options; common stock; and grant appreciation rights. No person eligible to participate in the 2011 Plan shall be granted options or other awards during a twelve (12) month period that exceeds 5,000,000 shares. No options or stock appreciation rights may be granted after ten (10) years of the adoption of the 2011 Plan by the Board of Directors, nor may any option have a term of more than 10 years from the date of grant. The exercise price of non qualified options and the base value of a stock appreciation right shall not be less than the fair market value of the common stock on the date of grant. The exercise price of an incentive stock option shall not be less than the fair market value of the stock covered by the option at the time of grant and in instances where a grantee possesses more than ten (10%) percent of the combined voting power of all classes of stock of the Company, the exercise price shall not be less than one hundred and ten (110%) percent of the fair market value of the common stock at the time of grant.

With the approval and adoption of the 2011 Plan and form of Option Agreements the Board of Directors approved on October 14, 2011 the issuance under the 2011 Plan of the options under the Employment Agreements to Messrs Cataldo and Handelman with said options having an exercise price of $1.25 and a term expiring May 1, 2021. Additionally, the Board approved the grant under the 2011 Plan to Merrill McPeak, a director of the Company, options to purchase 500,000 shares of common stock with an exercise price of $1.15 per share with said options vesting in equal monthly installments expiring July 20, 2021. The effective grant date of the grants for Messrs Cataldo, Handelman and McPeak will be the effective date of their respective Option Agreements with the Company. The closing trading price of the Company’s common stock on October 14, 2011 was $1.10.

Letter of Intent with Lonza Walkersville, Inc.

Effective as of November 4, 2011 the Company entered into a Letter of Intent with Lonza Walkersville, Inc. (the “LOI”) whereby Lonza will provide certain process development services as well as to investigate the development and manufacture of Contego™, the Company’s autologous cell therapy using tumorinfiltrating lymphocytes for the treatment of Stage IV metastatic melanoma and to explore the manufacture of Contego™ for clinical trials to be performed by the Company. Pursuant to the terms of the LOI, the Company has agreed to pay a reservation fee to Lonza of $500,000 which is payable in the form of two equal payments with the final payment to be made on or before December 12, 2012. The reservation fee payable to Lonza is non-refundable except in the event that Lonza terminates the LOI. The parties to the LOI have further agreed to enter into good faith negotiations regarding Lonza providing the Company long-term development and manufacturing services under an agreement to be entered into on or prior to January 13, 2012 which date can be extended to February 13, 2012 (the “Outside Date”). If the parties enter into a definitive agreement on or before the Outside Date, the portion of the reservation fee that has not been applied for services provided by Lonza under the LOI will be credited toward costs and expenses to be charged to the Company under any agreement. There can be no assurances that the Company and Lonza will enter into a definitive agreement.”

Balance Sheets (Parenthetical) - USD ($)	Sep. 30, 2011	Dec. 31, 2010
Current assets
Property and equipment, accumulated depreciation	$ 1,513	$ 0
Intellectual property licenses, accumulated amortization	$ 111,723	$ 57,372
Stockholder's equity
Common Stock Par Value	$ 0.000041666	$ 0.000041666
Common Stock Shares Authorized	1,800,000,000	1,800,000,000
Common Stock Shares Issued	78,993,591	78,993,591
Common Stock Shares Outstanding	73,638,349	73,638,349