Commitments and Contingencies | 6 Months Ended |
Apr. 30, 2015 |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | 9. COMMITMENTS AND CONTINGENCIES: |
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Employment Agreements |
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Management voluntarily purchases restricted stock directly from the Company at market price. The respective stock purchases occur on the last trading day of each month. This voluntary election is outlined in each of Daniel J. O’Connor, Chief Executive Officer and President, David J. Mauro, Executive Vice President, Chief Medical Officer, Gregory T. Mayes, Executive Vice President, Chief Operating Officer and Secretary, Robert G. Petit, Executive Vice President, Chief Scientific Officer and Sara M. Bonstein, Senior Vice President, Chief Financial Officer, (each an “Executive”), employment agreements. The table below reflects the purchases of each Executive: |
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| | ANNUALIZED | | | | |
| | Annual Amount | | | For the Six Months Ended April 30, 2015 | |
| | to be Purchased | | | Gross Purchase | | | Net Purchase | |
Executive | | $ | | | $ | | | # of | | | $ | | | # of | |
shares | shares |
Daniel J. O’Connor | | $ | 89,064 | | | $ | 42,590 | | | | 5,391 | | | $ | 42,590 | | | | 5,391 | |
David J. Mauro | | $ | 16,531 | | | $ | 7,991 | | | | 1,023 | | | $ | 5,822 | | | | 794 | |
Gregory T. Mayes | | $ | 23,477 | | | $ | 10,562 | | | | 1,328 | | | $ | 8,772 | | | | 1,118 | |
Robert G. Petit | | $ | 25,225 | | | $ | 12,470 | | | | 1,591 | | | $ | 9,473 | | | | 1,259 | |
Sara M. Bonstein | | $ | 19,734 | | | $ | 8,910 | | | | 1,123 | | | $ | 7,140 | | | | 906 | |
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For the three months ended April 30, 2015, the Company recorded stock compensation expense of $43,925 on the statement of operations representing 3,474 shares of its Common Stock (3,129 shares on a net basis after employee payroll taxes). |
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For the six months ended April 30, 2015, the Company recorded stock compensation expense of $90,088 on the statement of operations representing 11,305 shares of its Common Stock (10,182 shares on a net basis after employee payroll taxes). |
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From 2013 to present, in addition to the purchases of Common Stock set forth in the above table, Mr. O’Connor has also purchased an additional 146,616 shares of Common Stock out of his personal funds at the then market price for an aggregate consideration of approximately $588,294. These purchases consisted of the conversion of amounts due to Mr. O’Connor under a promissory note given by Mr. O’Connor to the Company in 2012 of approximately $66,500 for 21,091 shares, 2013 base salary which he elected to receive in Common Stock of approximately $182,919 for 34,752 shares, 2013 and 2014 cash bonus voluntarily requested to receive in equity of approximately $206,125 for 57,990 shares, Fiscal 2014 voluntary request to purchase stock directly from the Company at market price purchases of $68,750 for 15,950 shares, and purchases of the Company’s Common Stock in the October 2013 and March 2014 public offerings of 13,500 shares for $54,000 and 3,333 shares for $10,000. |
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The Executives’ employment agreements entitle them to a performance-based year-end cash bonus. Mr. O’Connor, Dr. Mauro and Mr. Mayes voluntarily requested to be paid all of their bonus, required to be paid in cash, in the Company’s Common Stock instead of cash. Ms. Bonstein voluntarily requested to be paid 75% of her cash bonus in the Company’s Common Stock instead of cash. Dr. Petit received 100% of his bonus in cash. The total fair value of these equity purchases were $457,125, or 137,275 shares of the Company’s Common Stock (104,461 on a net basis after employee payroll taxes). |
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Stock Awards |
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During the three months ended April 30, 2015, 129,583 shares of Common Stock (83,666 shares on a net basis after employee taxes) were issued to executives and employees related to incentive retention awards, employment inducements and employee excellence awards. Accordingly, $1,138,471 was charged to stock compensation expense. |
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During the six months ended April 30, 2015, 163,378 shares of Common Stock (111,232 shares on a net basis after employee taxes) were issued to executives and employees related to incentive retention awards, employment inducements and employee excellence awards. Accordingly, $1,272,170 was charged to stock compensation expense. |
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Furthermore, non-executive employees were entitled to receive a performance-based year-end cash bonus. Several non-executive employees requested to be paid all or a portion of their cash bonus in the Company’s Common Stock instead of cash. The total fair value of these equity purchases were $67,671, or 20,322 shares of the Company’s Common Stock (14,300 on a net basis after employee payroll taxes). |
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On March 30, 2015, the Company granted to executives 64,652 restricted stock units (RSUs”) with a fair value of $868,923 and 1,048,197 stock options with a fair value of $12,814,963. The RSU’s and stock options vest annually in equal installments such that 100% of the RSU’s have vested by the third anniversary of the grant date. The RSU’s and stock options are contingent upon the approval of the 2015 Incentive Plan. |
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The Company recognizes the fair value of those vested shares in the statement of operations in the period earned. |
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Director Compensation |
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During the three months ended April 30, 2015, 23,955 shares of Common Stock were issued to the Directors for compensation related to board and committee membership. Accordingly, $96,540 was charged to stock compensation expense. |
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During the six months ended April 30, 2015, 215,895 shares of Common Stock (202,468 shares on a net basis after taxes) were issued to the Directors for compensation related to board and committee membership. Accordingly, $703,079 was charged to stock compensation expense. |
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On March 30, 2015, the Company granted to the Directors 90,000 restricted stock units (RSUs”) with a fair value of $1,209,600 and 170,000 stock options with a fair value of $2,078,372 for compensation related to board and committee membership. The RSU’s vest annually in equal installments such that 100% of the RSU’s have vested by the third anniversary of the grant date. The stock options vest annually as follows: 90,000 after the one year anniversary, 40,000 after the two year anniversary and 40,000 after the three year anniversary. The RSU’s and stock options are contingent upon the approval of the 2015 Incentive Plan. |
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Legal Proceedings |
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Iliad Research and Trading |
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On March 24, 2014, Iliad Research and Trading, L.P. (“Iliad”) filed a complaint (the “Complaint”) against the Company in the Third Judicial District Court of Salt Lake County, Utah, purporting to assert claims for breach of express and implied contract. Specifically, Iliad alleged that the Company granted a participation right to Tonaquint, Inc. (“Tonaquint”) in a securities purchase agreement between Tonaquint and the Company, dated as of December 13, 2012 (the “Purchase Agreement”), pursuant to which Tonaquint was entitled to participate in any transaction that the Company structured in accordance with Section 3(a)(9) or Section 3(a)(10) of the Securities Act of 1933, as amended. Iliad further alleged that the settlement that the Company entered into with Ironridge Global IV, Ltd. (“Ironridge”), pursuant to which the Company issued certain shares of its Common Stock to Ironridge in reliance on the Section 3(a)(10) exemption, occurred without adequate notice for Tonaquint to exercise its participation right. In addition, Iliad alleged that it acquired all of Tonaquint’s rights under the Purchase Agreement in April 2013. |
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On June 2, 2014, Iliad filed an amended complaint (the “Amended Complaint”), which purported to add claims against the Company under the federal and Utah securities laws and for common law fraud. On June 30, 2014, the Company removed the action to the United States District Court for the District of Utah. On August 1, 2014, after the Court issued its Order Granting Stipulated Motion for Leave to File Second Amended Complaint, Iliad filed a Second Amended Complaint (the “SAC”), which purported to add a sixth claim for conversion. On August 22, 2014, the Company filed papers in support of its motion to dismiss the SAC in its entirety. On November 24, 2014, the Court filed an order dismissing the conversion claim but denying the remainder of the motion to dismiss. |
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Meanwhile, on September 22, 2014, Iliad filed papers in support of its motion for partial summary judgment of liability on the express contact claim. On December 5, 2014, Advaxis filed papers in opposition to the motion for partial summary judgment and in support of its separate motion under Rule 56(d) to deny partial summary judgment and for allowance of discovery. On December 8, 2014, Advaxis filed its answer to the SAC and a counterclaim (the “Counterclaim”), alleging that Iliad – by purporting to have surreptitiously preserved its claim for breach of Tonaquint’s alleged right to participate in the Ironridge transaction – had fraudulently induced Advaxis to enter into the parties’ post-assignment Exchange and Settlement Agreement and, in the alternative, had breached the covenant of good faith and fair dealing implied therein. On January 23, 2015, Iliad filed its Reply to Counterclaim (rather than attempting to move to dismiss Advaxis’s Counterclaim). On May 4, 2015, the Court filed its Memorandum Decision and Order, which grants the partial motion for summary judgement and denies the Rule 56(d) motion, finding that Advaxis materially breached the Purchase Agreement. |
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On May 28, 2015, following a Scheduling Conference, the Court set the following case deadlines: end of discovery (January 15, 2016); dispositive and expert motions (February 12, 2016); Proposed Pretrial Order (March 23, 2016); and Final Pretrial Conference (March 25, 2016). |
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Iliad seeks “damages in an amount to be determined at trial” (though the common law fraud damages alone are alleged to be “greater than $300,000”) plus interest, attorneys’ fees and costs. Iliad has also asked for punitive damages in connection with its claims under the Utah Securities Act (equal to three times its actual damages), and common law fraud. The Company intends to continue to defend itself vigorously. |
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Numoda |
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On June 19, 2009, the Company entered into a master agreement and on July 8, 2009, the Company entered into a Project Agreement with Numoda Corporation (“Numoda”), to oversee Phase 2 clinical activity with ADXS-HPV for the treatment of invasive cervical cancer and CIN. |
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On October 1, 2014, the Company filed a Complaint against Numoda seeking a declaratory judgment that, with its tender to Numoda of a check for $68,884.00, the Company had fully performed the parties’ Project Agreement and that Numoda was not entitled to interest, costs or attorneys’ fees thereunder or otherwise. On January 9, 2015, Numoda filed papers in support of its motion to dismiss the Complaint. On January 23, 2015, the Company filed an Amended Complaint against Numoda seeking an order directing Numoda to specifically perform its obligation to deliver to Advaxis all materials, information and other data generated under the parties’ Project Agreement. On February 25, 2015, the Court endorsed a letter from Numoda’s counsel withdrawing its motion to dismiss the Complaint in light of the Amended Complaint. On February 20, 2015, Numoda filed an Answer denying liability and asserting a number of affirmative defenses. With Court approval of a stipulation of the parties, the Preliminary Conference was adjourned from May 28, 2015 until August 13, 2015. |
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The Company is from time to time involved in legal proceedings in the ordinary course of its business. The Company does not believe that any of these claims and proceedings against us is likely to have, individually or in the aggregate, a material adverse effect on its financial condition or results of operations. |
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Description of Property |
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The Company’s corporate offices are currently located at 305 College Road East, Princeton, New Jersey 08540. On April 1, 2011, the Company entered into a sublease agreement for such office, which agreement has a termination date of November 29, 2015. In May 2015, the Company entered into a direct lease for an expansion area, as well as a direct lease for the existing office, lab and vivarium space upon the expiration of the sublease agreement, which is approximately 20,000 square foot of space in Princeton, NJ. The Company plans to continue to rent necessary offices and laboratories to support its business. |