SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): August 4, 2006
CEL-SCI CORPORATION
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(Exact name of Registrant as specified in its charter)
Colorado 0-11503 84-0916344
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
8229 Boone Blvd. #802
Vienna, VA 22182
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (703) 506-9460
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N/A
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(Former name or former address if changed since last report)
Item 1.01. Entry into Material Definitive Agreement
On August 4, 2006, CEL-SCI sold Series K convertible notes, plus Series K
warrants, to independent private investors for $8,300,000. The notes bear
interest annually at the greater of 8% or 6 month LIBOR plus 3% per year. The
Notes are due and payable on August 4, 2011 and are secured by substantially all
of CEL-SCI's assets.
Interest is payable quarterly with the first interest payment due on
September 30, 2006. Beginning March 4, 2007 CEL-SCI is required to make monthly
payments of $207,500 toward the principal amount of the Notes. If CEL-SCI fails
to make any interest or principal payment when due, the notes will become
immediately due and payable.
At CEL-SCI's election, and under certain conditions, CEL-SCI may use
shares of its common stock to make interest and principal payments.
At the holder's option the Series K notes are convertible into shares of
the Company's common stock at a conversion price of $0.86.
If CEL-SCI sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable Conversion
Price, the Conversion Price will be lowered to the price at which the shares
were sold or the lowest price at which the securities are convertible, as the
case may be. If CEL-SCI sells any additional shares of common stock, or any
securities convertible into common stock at a price above the Conversion Price,
but below the average closing price of CEL-SCI's common stock over the five
trading days prior to the sale of the shares, the Conversion Price will be
lowered to a price determined by a formula contained in the Notes. The
Conversion Price will also be proportionately adjusted in the event of any stock
splits.
CEL-SCI has agreed to file a registration statement with the Securities
and Exchange Commission in order that the shares of common stock issuable upon
the conversion of the Series K notes or the exercise of the Series K warrants
may be resold in the public market.
CEL-SCI is required to file the registration statement no later than
September 13, 2006, to cause the registration statement to become effective by
December 4, 2006, and to keep the registration statement continuously effective
until the shares covered by the registration statement have been sold or can be
sold pursuant to Rule 144(k). If CEL-SCI fails to comply with these provisions,
CEL-SCI will be required to pay damages to the holders of the Notes.
At any time after August 4, 2009 any note holder will have the right to
require CEL-SCI to redeem all or any portion of the outstanding principal amount
of the Notes, plus all accrued but unpaid interest.
The Series K warrants allow the holders to purchase up to 4,825,581 shares
of CEL-SCI's common stock at a price of $0.95 per share at any time between
February 4, 2007 and February 4, 2012.
2
The exercise price of the Series K warrants, as well as the shares
issuable upon the exercise of the warrants, will be proportionately adjusted in
the event of any stock splits.
If CEL-SCI sells any additional shares of common stock, or any securities
convertible into common stock at a price below the then applicable exercise
price of the Series K warrants, the warrant exercise price will be lowered to
the price at which the shares were sold or the lowest price at which the
securities are convertible, as the case may be.
If CEL-SCI sells any additional shares of common stock, or any securities
convertible into common stock at a price above the exercise price but below the
market price of CEL-SCI's common stock, the exercise price of the Series K
warrants will be lowered to a price determined by a formula contained in the
warrants.
See the exhibits attached to this report for the complete terms of the
convertible notes and warrants.
Item 9.01 Financial Statements and Exhibits
Exhibit Number Description
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10 Securities Purchase Agreement (together with
schedule required by Instruction 2 to Item 601 of
Regulation S-K) pertaining to Series K notes and
warrants, together with the following exhibits to
the Securities Purchase Agreement:
A. Form of Note
B. Form of Warrant
C. Transfer Agent Instructions
D. Form of Legal Opinion
E. Form of Security Agreement F. Plan of
Distribution
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: August 7, 2006
CEL-SCI CORPORATION
By: /s/ Geert R. Kersten
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Geert R. Kersten, Chief Executive
Officer