9. Related Party Transactions

Cognate BioServices, Inc.

Cognate Expenses and Accounts Payable

At September 30, 2017 and December 31, 2016, the Company owed Cognate $27.8 million (after waiver of $3.75 million by Cognate as described below) and $23.4 million, respectively, for unpaid invoices for manufacturing and related services, based on Cognate invoicing to date. The Company and Cognate have been negotiating an overall settlement for amounts owed to Cognate for 2016 and 2017, to reduce the amounts otherwise due under the contracts, and subsequent to September 30, 2017 reached an agreement in principle. The parties are now in the process of drafting and executing the agreement.

During the nine months ended September 30, 2017, Cognate waived its right to receive payment of $3.75 million in connection with certain payables, which was owed to Cognate by the Company as of December 31, 2016 and March 31, 2017. Following this waiver, the Company owed Cognate $27.8 million for unpaid invoices as of September 30, 2017.

Overall, for the three months ended September 30, 2017 and 2016, the Company incurred research and development costs related to Cognate BioServices of $7.8 million and $18.2 million, respectively, relating to the DCVax-L and DCVax-Direct programs, product and process development work and preparations for upcoming Phase II trials.

Overall, for the nine months ended September 30, 2017 and 2016, the Company incurred research and development costs related to Cognate BioServices of approximately $13.0 million and $34.8 million, respectively, relating to the DCVax-L and DCVax-Direct programs, product and process development work and preparations for upcoming Phase II trials, based on Cognate invoicing to date. The substantial reduction in costs related to Cognate BioServices relates in part to reduction in clinical trial related activity, in part to an arrangement being tested under which the Company would no longer have capacity dedicated to its programs and instead would have to arrange for advance scheduling in regard to each patient individually, and in part to negotiations that were under way between the Company and Cognate for an overall settlement for amounts owed to Cognate for 2016 and 2017. While the negotiations were under way and pending a final determination of amounts, for the first two quarters of this year only, Cognate invoiced a reduced portion of the contract amounts. Subsequent to September 30, 2017, the parties reached an agreement in principle for settlement of the overall amounts due from the Company to Cognate for 2017. The parties are now in the process of drafting and executing the agreement.

Cognate Organization

Pursuant to an institutional financing of Cognate in October 2016, Cognate’s operations outside the US were separated from its operations in the US. The operations outside the US include Cognate BioServices GmbH in Germany, Advent BioServices, Ltd (formerly called Cognate BioServices Ltd.) in the UK, and Cognate Israel in Israel. As a result of the separation, the Cognate affiliates outside the US are now owned by Toucan Capital Fund III, as is Cognate US. The Cognate affiliates in Germany and Israel are in the process of being wound down, and manufacturing and related activities are being expanded and consolidated in the U.K. The Company is in the process of establishing contract arrangements for the U.K. operations. Approximately $1.3 and $3.7 million of the total research and development cost related to Cognate entities outside the US are included in the overall amounts reported with respect to Cognate for the three and nine months ended September 30, 2017, respectively.

Other Related Parties

Leslie J. Goldman - Demand Loans

During the nine months ended September 30, 2017, Leslie J. Goldman, an officer of the Company, loaned the Company an aggregate amount of $1,334,000 pursuant to certain Demand Promissory Note Agreements (the “Goldman Notes”). $470,000 of the Goldman Notes bore interest at the rate of 12% per annum, and $864,000 of the Goldman Notes bore interest at the rate of 10% per annum.

During the nine months ended September 30, 2017, the Company made an aggregate principal payment of $955,000 to settle some of Mr. Goldman’s outstanding demand notes, and an aggregate of $47,000 interest payment associated with these demand notes. Such payment included repayment of $350,000 outstanding debt incurred from the year ending December 31, 2016.

The outstanding principal amount for Goldman Notes was $689,000 as of September 30, 2017.

Toucan Capital III Fund - Demand Loans

During the nine months ended September 30, 2017, Toucan Capital Fund III loaned the Company an aggregate amount of $1,170,000 pursuant to multiple Demand Promissory Notes (the “Toucan Notes”). The Toucan Notes bear interest at 10% per annum, and are payable upon demand, with 7 days’ prior written notice to the Company.

During the nine months ended September 30, 2017, the Company repaid approximately $688,000 of the Toucan Notes.

The outstanding principal amount for Toucan Notes was $482,000 as of September 30, 2017.

Various Related Parties - Demand Loans

During the nine months ended September 30, 2017, Jerry Jasinowski, Robert Farmer and Cofer Black, members of the Company’s Board of Directors, loaned the Company an aggregate amount of $300,000 pursuant to multiple Demand Promissory Notes (the “Notes”). The Notes bear interest at 10% per annum, and are payable upon demand, with 7 days’ prior written notice to the Company.