As filed with the Securities and Exchange Commission on October __,
2009.
Registration No 333-161504
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3/A
AMENDMENT NO. 2
Registration Statement Under
THE SECURITIES ACT OF 1933
CEL-SCI CORPORATION
----------------------------------
(Exact name of registrant as specified in charter)
Colorado
(State or other jurisdiction of incorporation)
8229 Boone Blvd. #802
Vienna, Virginia 22182
84-09l6344 (703) 506-9460
--------------------- ---------------------------------------
IRS Employer I.D. (Address, including zip code, and telephone
Number) number including area of principal executive
offices)
Geert Kersten
8229 Boone Blvd. #802
Vienna, Virginia 22182
(703) 506-9460
-------------------------------------------------
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement
becomes effective as determined by market conditions
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction I.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [ ]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", and "smaller reporting company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
CALCULATION OF REGISTRATION FEE
------------------------------------------------------------------------------
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Share (1) Price Fee (1)
------------- ---------- --------- --------- ------------
Common stock (2) 28,162,884 $0.43 $12,110,040 $703
Common stock (3) 11,627,906 $0.43 $ 5,000,000 $290
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(1) Offering price computed in accordance with Rule 457(c).
(2) Shares of common stock to be sold by the selling shareholders.
(3) Shares issuable pursuant to Equity Line of Credit.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the exercise of the warrants as a result of any adjustment in the number of
securities issuable by reason of the anti-dilution provisions of the Series I
Warrants.
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant shall
file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
2
PROSPECTUS
CEL-SCI CORPORATION
39,790,790 shares of Common Stock
By means of this prospectus fourteen shareholders of CEL-SCI Corporation
are offering to sell up to 250,000 shares of CEL-SCI's common stock, plus
27,912,884 shares of common stock issuable upon the conversion of a loan or upon
the exercise of CEL-SCI's warrants, plus up to 11,627,906 shares which may be
acquired pursuant to an equity line of credit agreement with Ascendiant Capital
Group, Inc. Ascendiant will be an underwriter to the extent it purchases any
shares under the equity line of credit and sells those shares by means of this
prospectus.
The securities offered by this prospectus are speculative and involve a high
degree of risk and should be purchased only by persons who can afford to lose
their entire investment. Prospective investors should consider certain important
factors described under "Risk Factors" beginning on page 10 of this prospectus.
These Securities Have Not Been Approved or Disapproved by the Securities and
Exchange Commission Nor Has the Commission Passed Upon the Accuracy or Adequacy
of this Prospectus. Any Representation to the Contrary is a Criminal Offense.
CEL-SCI's common stock is traded on the NYSE Amex. On October 15, 2009 the
closing price of CEL-SCI's common stock on the NYSE Amex was $1.60.
The date of this prospectus is October __, 2009
3
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED BY THE OTHER INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS.
CEL-SCI
-------
CEL-SCI Corporation (CEL-SCI) was formed as a Colorado corporation in
1983. CEL-SCI's principal office is located at 8229 Boone Boulevard, Suite 802,
Vienna, VA 22182. CEL-SCI's telephone number is 703-506-9460 and its web site is
www.cel-sci.com. CEL-SCI makes its electronic filings with the Securities and
Exchange Commission (SEC), including its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to these
reports available on its website free of charge as soon as practicable after
they are filed or furnished to the SEC.
CEL-SCI'S PRODUCTS AND "COLD FILL" MANUFACTURING SERVICE
CEL-SCI's business consists of the following:
---------------------------------------------
1) Multikine cancer therapy;
2) New "cold fill" manufacturing service to the pharmaceutical industry;
and
3) LEAPS technology, with two products, H1N1 treatment for H1N1
hospitalized patients and CEL-2000, a rheumatoid arthritis treatment
vaccine.
MULTIKINE
---------
CEL-SCI's lead product, Multikine(R), is being developed for the treatment
of cancer. It is the first of a new class of cancer immunotherapy drugs called
Immune SIMULATORs. It simulates the activities of a healthy person's immune
system, which battles cancer every day. Multikine is multi-targeted; it is the
only cancer immunotherapy that both kills cancer cells in a targeted fashion and
activates the general immune system to destroy the cancer. We believe Multikine
is the first immunotherapeutic agent being developed as a first-line standard of
care treatment for cancer and it is cleared for a global Phase III clinical
trial in advanced primary (previously untreated) head and neck cancer patients.
Multikine is a new type of immunotherapy in that it is a comprehensive
immunotherapy, incorporating both active and passive immune activity. A
comprehensive immunotherapy most closely resembles the workings of the natural
immune system in the sense that it works on multiple fronts in the battle
against cancer. A comprehensive immunotherapy causes a direct and targeted
killing of the tumor cells and activates the immune system to produce a more
robust and sustainable anti-tumor response.
Multikine is designed to target the tumor micro-metastases that are mostly
responsible for treatment failure. The basic concept is to add Multikine to the
current cancer treatments with the goal of making the overall cancer treatment
4
more successful. Phase II data indicated that Multikine treatment resulted in a
substantial increase in the survival of patients. The lead indication is
advanced primary (previously untreated) head & neck cancer (about 600,000 new
cases per annum). Since Multikine is not tumor specific, it may also be
applicable in many other solid tumors.
The following results were seen in CEL-SCI's last Phase II study
conducted with Multikine. This study used the same treatment protocol as will be
used in CEL-SCI's Phase III study:
o 33% improvement in median overall survival: In the last Phase II study
a 33% improvement in median overall survival, at a median of 3.5 years
post surgery, was seen in patients with locally advanced disease
treated with Multikine as first-line therapy (absolute survival rate
63%) as compared to the 3.5 year median overall survival rates of the
same cancer patient population determined from a review of 55 clinical
trials reported in the scientific literature that were conducted
between 1987 and 2007. CEL-SCI's Phase III clinical trial will need to
demonstrate a 10% improvement in overall survival for Multikine to be
successful.
o Average of 50% reduction in tumor cells: The three week Multikine
treatment regimen used in the last Phase II study killed, on average,
approximately half of the cancer cells before the start of standard
therapy such as surgery, radiation and chemotherapy (as determined by
histopathology).
o 12% complete response: In 12% of patients the tumor was completely
eliminated after only a three week treatment with Multikine (as
determined by histopathology).
In January 2007, the US Food and Drug Administration (FDA) concurred with
the initiation of a global Phase III clinical trial in head and neck cancer
patients using Multikine. The Canadian regulatory agency, the Biologics and
Genetic Therapies Directorate, had previously concurred with the initiation of a
global Phase III clinical trial in head and neck cancer patients using
Multikine.
The protocol is designed to develop conclusive evidence of the efficacy of
Multikine in the treatment of advanced primary (previously untreated) squamous
cell carcinoma of the oral cavity (head and neck cancer). A successful outcome
from this trial should enable CEL-SCI to apply for a Biologics License to market
Multikine for the treatment of this patient population.
The trial will test the hypothesis that Multikine treatment administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by
radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.
CEL-SCI has an agreement with Orient Europharma of Taiwan which provides
Orient Europharma with the exclusive marketing rights to Multikine for all
cancer indications in Taiwan, Singapore, Hong Kong, Malaysia, South Korea, the
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Philippines, Australia and New Zealand. The agreement requires Orient Europharma
to fund the clinical trials needed to obtain marketing approvals in these
countries for head and neck cancer, naso-pharyngeal cancer and potentially
cervical cancer.
CEL-SCI has an agreement with Teva Pharmaceutical Industries, Ltd., which
provides Teva with the exclusive license to market and distribute CEL-SCI's
cancer drug Multikine in Israel and Turkey. Pursuant to the agreement, Teva will
participate in CEL-SCI's upcoming Phase III clinical trial and will fund a
portion of the Phase III trial in Israel.
CEL-SCI has an agreement with Byron Biopharma LLC which provides Byron
with an exclusive license to market and distribute CEL-SCI's cancer drug
Multikine in the Republic of South Africa. Once Multikine has been approved for
sale, CEL-SCI will be responsible for manufacturing the product, while Byron
will be responsible for sales in South Africa.
However, before starting the Phase III trial, CEL-SCI needed to build a
dedicated manufacturing facility to produce Multikine. CEL-SCI has not priced
the Phase III trial in detail, but estimated the parts that will not be paid by
its licensees, Teva Pharmaceuticals and Orient Europharma, will be approximately
$20,000,000. Since CEL-SCI recently obtained substantial financing, CEL-SCI is
moving forward rapidly to launch its global Phase III clinical trial.
UNIQUE COLD FILL CONTRACT MANUFACTURING SERVICE TO BE OFFERED AT CEL-SCI'S NEW
MANUFACTURING FACILITY
In October 2008, CEL-SCI took over its new, state-of-the-art manufacturing
facility. This facility, leased from a third party, will be used to manufacture
Multikine for CEL-SCI's Phase III clinical trial. Located near Baltimore, MD, it
was designed over several years, and was built out to CEL-SCI's specifications
during the past 18 months. CEL-SCI leased this specially designed and built out
facility, rather than having Multikine produced by a third party on a contract
basis, since regulatory agencies prefer that the same facility be used to
manufacture Multikine for both the Phase III trials and commercial sales,
assuming the Phase III trial is successful. As is customary with large, complex
construction projects, the manufacturing facility required a number of
construction, utility and equipment adjustments as well as "punch list" items
that required additional time to complete. This resulted in a gap between the
time when CEL-SCI took over the facility and the time when validations and other
CEL-SCI specific activities could commence. In addition to using this facility
to manufacture Multikine, CEL-SCI will offer the use of the facility as a
service to pharmaceutical companies and others, particularly those that need to
"fill and finish" their drugs in a cold environment (4 degrees Celsius, or
approximately 39 degrees Fahrenheit). Fill and finish is the process of filling
injectable drugs in a sterile manner and is a key part of the manufacturing
process for many medicines.
The fastest area of growth in the biopharmaceutical and pharmaceutical
markets is biologics, and most recently stem cell products. These compounds and
therapies are derived from or mimic human cells or proteins and other molecules
(e.g., hormones, etc.). Nearly all of the major drugs developed for unmet
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medical needs (e.g., Avastin(R), Erbitux(R), Rituxan(R), Herceptin(R),
Copaxon(R), etc.) are biologics. Biologics are usually very sensitive to heat
and quickly lose their biological activity if exposed to room or elevated
temperature. Room or elevated temperatures may also affect the shelf-life of a
biologic with the result that the product cannot be stored for as long as
desired. However, these products do not generally lose activity when kept at 4
degrees Celsius.
The FDA and other regulatory agencies require a drug developer to
demonstrate the safety, purity and potency of a drug being produced for use in
humans. When filling a product at 4 degrees Celsius, minimal to no biological
losses occur and therefore the potency of the drug is maintained throughout the
final critical step of the drug's manufacturing process. If the same temperature
sensitive drug is instead aseptically filled at room temperature, expensive and
time consuming validation studies must be conducted, first, to be able to obtain
a complete understanding of the product's potency loss during the room
temperature fill process, and second, to create solutions to the drug's potency
losses, which require further testing and validation.
CEL-SCI's unique, cold aseptic filling suite can be operated at
temperatures between 2 degrees Celsius and room temperatures, and at various
humidity levels. CEL-SCI's aseptic filling suites are maintained at FDA and EU
ISO classifications of 5/6. CEL-SCI also has the capability to formulate,
inspect, label and package biologic products at cold temperatures.
Since a 4 degrees Celsius fill and finish process can save drug
manufacturers time and money, CEL-SCI believes it will be able to charge
approximately $150,000 for an eight hour fill and finish "run".
CEL-SCI's lease on the manufacturing facility expires on October 31, 2028.
Since October 2008 CEL-SCI has been required to make monthly base rent payments
of $131,250. Beginning October 31, 2009 the annual base rent escalates each year
at 3%. CEL-SCI is also required to pay all real and personal property taxes,
insurance premiums, maintenance expenses, repair costs and utilities associated
with the building, which were approximately $33,000 per month as of the date of
this prospectus.
The landlord has the right to declare CEL-SCI in default if CEL-SCI fails
to pay any installment of the rent if such failure continues for a period of
five business days after CEL-SCI's receipt of written notice from the landlord,
provided that if CEL-SCI fails to pay monthly rent more than two times in any
twelve month period, the landlord will not be required to provide CEL-SCI with
any further notice and CEL-SCI will be in default. In December 2008, CEL-SCI was
not in compliance with certain lease requirements (i.e., failure to pay an
installment of base rent). This resulted in a lease amendment pursuant to which
the landlord agreed to defer three months (December - February) of rent which
would be paid back incrementally from future financings. In return, CEL-SCI
extended 3,000,000 warrants by one year and repriced the exercise price of these
warrants from $1.25 to $0.75. The landlord was also issued an additional 787,000
warrants with an exercise price of $0.75. Both warrants expire on January 26,
2014. On July 1, 2009, CEL-SCI made all lease payments due and has continued to
be current on its lease payments.
7
Before the manufacturing facility can be used to produce drugs on a
contract basis for others, the manufacturing facility must be tested to insure
that the facility is operating properly. CEL-SCI started this process in July
2009.
CEL-SCI does not know of any other facility in the United States which is
able to provide cold 4 degrees Celsius finish and fill services on a contract
basis.
LEAPS
-----
CEL-SCI's patented T-cell Modulation Process uses "heteroconjugates" to
direct the body to choose a specific immune response. The heteroconjugate
technology, referred to as L.E.A.P.S. (Ligand Epitope Antigen Presentation
System), is intended to selectively stimulate the human immune system to more
effectively fight bacterial, viral and parasitic infections as well as
autoimmune, allergies, transplantation rejection and cancer, when it cannot do
so on its own. Administered like vaccines, LEAPS combines T-cell binding ligands
with small, disease associated, peptide antigens and may provide a new method to
treat and prevent certain diseases.
The ability to generate a specific immune response is important because
many diseases are often not combated effectively due to the body's selection of
the "inappropriate" immune response. The capability to specifically reprogram an
immune response may offer a more effective approach than existing vaccines and
drugs in attacking an underlying disease.
Using the LEAPS technology, CEL-SCI has created a potential peptide
treatment for H1N1 (swine flu) hospitalized patients. The Company has begun
pre-clinical formulation, evaluation and testing of a new application of its
H1N1 vaccine, which will allow the targeting of "mutated" versions of H1N1 swine
and other influenza viruses. It is believed that the influenza virus may mutate
and evolve between now and the winter flu season. In conjunction with the
testing, CEL-SCI has produced several L.E.A.P.S. flu treatments/vaccines that
focus on the conserved, non changing epitopes of the different strains of Type A
Influenza viruses (H1N1, H5N1, H3N1, etc.), including "swine", "avian or bird",
and "Spanish Influenza", in order to minimize the change of viral "escape by
mutations" from immune recognition. CEL-SCI's L.E.A.P.S. flu treatment contains
epitopes known to be associated with immune protection against influenza in
animal models. In September 2009 FDA advised CEL-SCI that it could proceed with
the initial clinic trial of its proposed H1N1 treatment for hospitalized H1N1
patients. Preparations to start this trial are currently underway.
With its LEAPS technology CEL-SCI also discovered a second peptide named
CEL-2000, a potential rheumatoid arthritis vaccine. The data from animal studies
of rheumatoid arthritis using the CEL-2000 treatment vaccine demonstrated that
CEL-2000 is an effective treatment against arthritis with fewer administrations
than those required by other anti-rheumatoid arthritis treatments, including
Enbrel(R). CEL-2000 is also potentially a more disease type specific therapy, is
calculated to be significantly less expensive and may be useful in patients
unable to tolerate or who may not be responsive to existing anti-arthritis
therapies.
8
GENERAL
All of CEL-SCI's products are in the development stage. As of September
30, 2009, CEL-SCI was not receiving any revenues from the sale of Multikine or
any other products which CEL-SCI was developing.
CEL-SCI does not expect to develop commercial products for several years,
if at all. CEL-SCI has had operating losses since its inception, had an
accumulated deficit of approximately $(135,000,000) at June 30, 2009 and expects
to incur substantial losses for the foreseeable future.
CEL-SCI's executive offices are located at 8229 Boone Blvd., #802, Vienna,
Virginia 22182, and its telephone number is (703) 506-9460.
THE OFFERING
Securities Offered:
By means of this prospectus, fourteen shareholders of CEL-SCI are offering
to sell 250,000 shares of common stock which they acquired in a private
placement, plus 39,540,790 additional shares issuable upon the conversion of a
loan, the exercise of warrants, or the sale of shares under an equity line of
credit. CEL-SCI refers to the owner of these shares as the selling shareholders
in this prospectus.
Common Stock Outstanding: As of September 30, 2009 CEL-SCI
had 191,785,521 outstanding shares of common stock.
The number of outstanding shares does not give
effect to shares which may be issued upon the
exercise and/or conversion of options, warrants or
other convertible securities. See "Comparative Share
Data" for more information.
Risk Factors: The purchase of the securities offered by
this prospectus involves a high degree of risk. Risk
factors include the lack of revenues and history of
loss, need for additional capital and need for FDA
approval. See the "Risk Factors" section of this
prospectus for additional Risk Factors.
NYSE AMEX Symbol: CVM
This prospectus contains various forward-looking statements that are based
on CEL-SCI's beliefs as well as assumptions made by and information currently
available to CEL-SCI. When used in this prospectus, the words "believe",
"expect", "anticipate", "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding seeking business opportunities, payment of operating expenses, and the
like, and are subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from projections or estimates.
Factors which could cause actual results to differ materially are discussed at
9
length under the heading "Risk Factors". Should one or more of the enumerated
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
RISK FACTORS
Investors should be aware that this offering involves the risks described
below, which could adversely affect the price of CEL-SCI's common stock. In
addition to the other information contained in this prospectus, the following
factors should be considered carefully in evaluating an investment in the
securities offered by this prospectus.
Risks Related to CEL-SCI
------------------------
Since CEL-SCI has earned only limited revenues and has a history of losses,
CEL-SCI will require additional capital to remain in operation.
CEL-SCI has had only limited revenues since it was formed in 1983. Since the
date of its formation and through June 30, 2009 CEL-SCI incurred net losses of
approximately $(135,000,000). CEL-SCI has relied principally upon the proceeds
of public and private sales of its securities to finance its activities to date.
All of CEL-SCI's potential products, with the exception of Multikine, are in the
early stages of development, and any commercial sale of these products will be
many years away. Even potential product sales from Multikine are many years away
as cancer trials can be lengthy. Accordingly, CEL-SCI expects to incur
substantial losses for the foreseeable future.
Since CEL-SCI does not intend to pay dividends on its common stock, any return
to investors will come only from potential increases in the price of CEL-SCI's
common stock.
At the present time, CEL-SCI intends to use available funds to finance
CEL-SCI's operations. Accordingly, while payment of dividends rests within the
discretion of the Board of Directors, no common stock dividends have been
declared or paid by CEL-SCI and CEL-SCI has no intention of paying any common
stock dividends.
If CEL-SCI cannot obtain additional capital, CEL-SCI may have to postpone
development and research expenditures which will delay CEL-SCI's ability to
produce a competitive product. Delays of this nature may depress the price of
CEL-SCI's common stock.
Clinical and other studies necessary to obtain approval of a new drug can
be time consuming and costly, especially in the United States, but also in
foreign countries. CEL-SCI's estimates of the costs associated with future
clinical trials and research may be substantially lower than the actual costs of
these activities. The different steps necessary to obtain regulatory approval,
especially that of the Food and Drug Administration, involve significant costs
and may require several years to complete. CEL-SCI expects that it will need
substantial additional financing over an extended period of time in order to
fund the costs of future clinical trials, related research, and general and
10
administrative expenses.
The extent of CEL-SCI's clinical trials and research programs are
primarily based upon the amount of capital available to CEL-SCI and the extent
to which CEL-SCI has received regulatory approvals for clinical trials. CEL-SCI
is currently in the process of establishing estimates of the future costs of the
Phase III clinical trial.
In December 2008, CEL-SCI entered into an equity line of credit agreement
with Ascendiant Capital Group, LLC in order to establish a possible source of
funding for CEL-SCI. The equity line of credit agreement establishes what is
sometimes referred to as an equity drawdown facility. Although Ascendiant, under
the equity line of credit agreement, has agreed to provide CEL-SCI with up to
$5,000,000 of funding prior to January 6, 2011, there is no guarantee that
Ascendiant will be able to provide the full $5,000,000 of funding if required by
CEL-SCI.
In accordance with the terms of the manufacturing facility's lease,
CEL-SCI must maintain a certain amount of cash. Should CEL-SCI's cash position
fall below the amount stipulated in the lease CEL-SCI would be required to
deposit with the landlord the equivalent of one year's base rent. CEL-SCI paid
this additional amount of $1,575,000 in 2008 and has the opportunity to recoup
this deposit once its cash balance reaches a certain level. The landlord has the
right to declare CEL-SCI in default if CEL-SCI fails to pay any installment of
the base rent when such failure continues for a period of 5 business days after
CEL-SCI's receipt of written notice from the landlord, provided that if CEL-SCI
fails to pay any of the foregoing within five business days more than two times
in any twelve-month period during the lease, the landlord will not be required
to provide CEL-SCI with any further notice and CEL-SCI will be deemed to be in
default. As of the date of this prospectus, CEL-SCI was not in default on the
lease.
The inability of CEL-SCI to conduct clinical trials or research, whether
due to a lack of capital or regulatory approval, will prevent CEL-SCI from
completing the studies and research required to obtain regulatory approval for
any products which CEL-SCI is developing.
No definite plan for marketing of Multikine has been established.
CEL-SCI has not established a definitive plan for marketing nor has it
established a price structure for CEL-SCI's saleable products. However, CEL-SCI
intends, if CEL-SCI is in a position to begin commercialization of its products,
to sell Multikine itself in certain markets and to enter into written marketing
agreements with various major pharmaceutical firms with established sales
forces. The sales forces in turn would probably target CEL-SCI's products to
cancer centers, physicians and clinics involved in head and neck cancer.
CEL-SCI may encounter problems, delays and additional expenses in
developing marketing plans with outside firms. In addition, even though
Multikine should be very cost effective to use if proven to increase overall
survival, CEL-SCI may experience other limitations involving the proposed sale
of its products, such as uncertainty of third-party reimbursement. There is no
assurance that CEL-SCI can successfully market any products which they may
develop or market them at competitive prices.
11
Potential Future Dilution
To raise additional capital CEL-SCI may have to sell shares of its common
stock or securities convertible into common stock at prices that may be below
the prevailing market price of CEL-SCI's common stock at the time of sale. The
issuance of additional shares will have a dilutive impact on other stockholders
and could have a negative effect on the market price of CEL-SCI's common stock.
Multikine is made from components of human blood which involves inherent risks
that may lead to product destruction or patient injury which could materially
harm CEL-SCI's financial results, reputation and stock price.
Multikine is made, in part, from components of human blood. There are
inherent risks associated with products that involve human blood such as
possible contamination with viruses, including Hepatitis or HIV. Any possible
contamination could require CEL-SCI to destroy batches of Multikine or cause
injuries to patients who receive the product thereby subjecting CEL-SCI to
possible financial losses and harm to its business.
Although CEL-SCI has product liability insurance for Multikine, the successful
prosecution of a product liability case against CEL-SCI could have a materially
adverse effect upon its business if the amount of any judgment exceeds CEL-SCI's
insurance coverage.
Although no claims have been brought to date, participants in CEL-SCI's
clinical trials could bring civil actions against CEL-SCI for any unanticipated
harmful effects arising from the use of Multikine or any drug or product that
CEL-SCI may try to develop. Although CEL-SCI believes its insurance coverage of
$1,000,000 per claim is adequate, the defense or settlement of any product
liability claim could adversely affect CEL-SCI even if the defense and
settlement costs did not exceed CEL-SCI's insurance coverage.
CEL-SCI's directors are allowed to issue shares of preferred stock with
provisions that could be detrimental to the interests of the holders of
CEL-SCI's common stock.
The provisions in CEL-SCI's Articles of Incorporation relating to
CEL-SCI's preferred stock would allow CEL-SCI's directors to issue preferred
stock with rights to multiple votes per share and dividend rights which would
have priority over any dividends paid with respect to CEL-SCI's common stock.
The issuance of preferred stock with such rights may make more difficult the
removal of management even if such removal would be considered beneficial to
shareholders generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers if such
transactions are not favored by incumbent management.
CEL-SCI's auditor's report contained an explanatory paragraph expressing
substantial doubt about the Company's ability to continue in business.
As a result of CEL-SCI's continuing losses, negative cash flows, and
negative working capital, CEL-SCI's independent registered public accounting
firm, BDO Seidman, LLP, issued a report in connection with the audit of
12
CEL-SCI's consolidated financial statement for the year ended September 30, 2008
that contained an explanatory paragraph expressing substantial doubt about
CEL-SCI's ability to continue in business. The substantial doubt about CEL-SCI's
ability to continue in business could have an adverse impact on CEL-SCI's
ability to execute its business plan, result in the reluctance on the part of
certain suppliers to do business with CEL-SCI, or adversely affect CEL-SCI's
ability to raise additional capital. However, it should be noted that CEL-SCI
has raised over $40 million in new equity since June 24, 2009.
Risks Related to Government Approvals
-------------------------------------
CEL-SCI's product candidates must undergo rigorous preclinical and clinical
testing and regulatory approvals, which could be costly and time-consuming and
subject CEL-SCI to unanticipated delays or prevent CEL-SCI from marketing any
products.
Therapeutic agents, drugs and diagnostic products are subject to approval,
prior to general marketing, by the FDA in the United States and by comparable
agencies in most foreign countries. Before obtaining marketing approval,
CEL-SCI's product candidates must undergo rigorous preclinical and clinical
testing which is costly and time consuming and subject to unanticipated delays.
There can be no assurance that such approvals will be granted.
CEL-SCI cannot be certain when or under what conditions it will undertake
further clinical trials, including the Phase III clinical trial for Multikine.
The clinical trials of CEL-SCI's product candidates may not be completed on
schedule, the FDA or foreign regulatory agencies may order CEL-SCI to stop or
modify its research or these agencies may not ultimately approve any of
CEL-SCI's product candidates for commercial sale. Varying interpretations of the
data obtained from pre-clinical and clinical testing could delay, limit or
prevent regulatory approval of CEL-SCI's product candidates. The data collected
from CEL-SCI's clinical trials may not be sufficient to support regulatory
approval of its various product candidates, including Multikine. CEL-SCI's
failure to adequately demonstrate the safety and efficacy of any of its product
candidates would delay or prevent regulatory approval of its product candidates
in the United States, which could prevent CEL-SCI from achieving profitability.
The requirements governing the conduct of clinical trials, manufacturing,
and marketing of CEL-SCI's product candidates, including Multikine, outside the
United States can vary from country to country. Foreign approvals may take
longer to obtain than FDA approvals and can require, among other things,
additional testing and different trial designs. Foreign regulatory approval
processes include all of the risks associated with the FDA approval processes.
Some of those agencies also must approve prices for products approved for
marketing. Approval of a product by the FDA does not ensure approval of the same
product by the health authorities of other countries. In addition, changes in
regulatory policy in the US or in foreign countries for product approval during
the period of product development and regulatory agency review of each submitted
new application may cause delays or rejections.
CEL-SCI has only limited experience in filing and pursuing applications
necessary to gain regulatory approvals, which may impede its ability to obtain
timely approvals from the FDA or foreign regulatory agencies, if at all. CEL-SCI
will not be able to commercialize Multikine and other product candidates until
13
it has obtained regulatory approval, and any delay in obtaining, or inability to
obtain, regulatory approval could harm its business. In addition, regulatory
authorities may also limit the types of patients to which CEL-SCI or others may
market Multikine or CEL-SCI's other products.
Any failure to obtain or any delay in obtaining required regulatory
approvals may adversely affect the ability of CEL-SCI or potential licensees to
successfully market any products they may develop.
Even if CEL-SCI obtains regulatory approval for its product candidates, CEL-SCI
will be subject to stringent, ongoing government regulation.
If CEL-SCI's products receive regulatory approval, either in the United
States or internationally, CEL-SCI will be subject to extensive regulatory
requirements. These regulations are wide-ranging and govern, among other things:
o product design, development and manufacture;
o adverse drug experience;
o product advertising and promotion;
o product manufacturing, including good manufacturing practice
requirements;
o record keeping requirements;
o registration and listing of CEL-SCI's establishments and products with
the FDA and certain state agencies;
o product storage and shipping;
o drug sampling and distribution requirements;
o electronic record and signature requirements; and
o labeling changes or modifications.
CEL-SCI and any third-party manufacturers or suppliers must continually
adhere to federal regulations setting forth requirements, known as current Good
Manufacturing Practices, or cGMPs, and their foreign equivalents, which are
enforced by the FDA and other national regulatory bodies through their
facilities inspection programs. If CEL-SCI's facilities, or the facilities of
its contract manufacturers or suppliers, cannot pass a pre-approval plant
inspection, the FDA will not approve the marketing applications of CEL-SCI's
product candidates. In complying with cGMP and foreign regulatory requirements,
CEL-SCI and any of its potential third-party manufacturers or suppliers will be
obligated to expend time, money and effort in production, record-keeping and
quality control to ensure that its products meet applicable specifications and
other requirements. State regulatory agencies and the regulatory agencies of
other countries have similar requirements.
14
If CEL-SCI does not comply with regulatory requirements at any stage,
whether before or after marketing approval is obtained, it may be subject to
license suspension or revocation, criminal prosecution, seizure, injunction,
fines, or be forced to remove a product from the market or experience other
adverse consequences, including restrictions or delays in obtaining regulatory
marketing approval, which could materially harm CEL-SCI's financial results,
reputation and stock price. Additionally, CEL-SCI may not be able to obtain the
labeling claims necessary or desirable for product promotion. CEL-SCI may also
be required to undertake post-marketing trials. In addition, if CEL-SCI or other
parties identify adverse effects after any of CEL-SCI's products are on the
market, or if manufacturing problems occur, regulatory approval may be
withdrawn. CEL-SCI may be required to reformulate its products, conduct
additional clinical trials, make changes in its product's labeling or
indications of use, or submit additional marketing applications to support these
changes. If CEL-SCI encounters any of the foregoing problems, its business and
results of operations will be harmed and the market price of our common stock
may decline.
Also, the extent of adverse government regulations which might arise from
future legislative or administrative action cannot be predicted. Without
government approval, CEL-SCI will be unable to sell any of its products.
Risks Related to Intellectual Property
--------------------------------------
CEL-SCI may not be able to achieve or maintain a competitive position and other
technological developments may result in CEL-SCI's proprietary technologies
becoming uneconomical or obsolete.
The biomedical field in which CEL-SCI is involved is undergoing rapid and
significant technological change. The successful development of trapeutic
agents from CEL-SCI's compounds, compositions and processes through
CEL-SCI-financed research, or as a result of possible licensing arrangements
with pharmaceutical or other companies, will depend on its ability to be in the
technological forefront of this field.
Many companies are working on drugs designed to cure or treat cancer and
have substantial financial, research and development, and marketing resources
and are capable of providing significant long-term competition either by
establishing in-house research groups or by forming collaborative ventures with
other entities. In addition, smaller companies and non-profit institutions are
active in research relating to cancer and infectious diseases.
CEL-SCI's patents might not protect CEL-SCI's technology from competitors, in
which case CEL-SCI may not have any advantage over competitors in selling any
products which it may develop.
Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign
patents. In addition, CEL-SCI has a number of new patent applications pending.
There is no assurance that the applications still pending or which may be filed
in the future will result in the issuance of any patents. Furthermore, there is
no assurance as to the breadth and degree of protection any issued patents might
afford CEL-SCI. Disputes may arise between CEL-SCI and others as to the scope
15
and validity of these or other patents. Any defense of the patents could prove
costly and time consuming and there can be no assurance that CEL-SCI will be in
a position, or will deem it advisable, to carry on such a defense. Other private
and public concerns, including universities, may have filed applications for, or
may have been issued, patents and are expected to obtain additional patents and
other proprietary rights to technology potentially useful or necessary to
CEL-SCI. The scope and validity of such patents, if any, the extent to which
CEL-SCI may wish or need to acquire the rights to such patents, and the cost and
availability of such rights are presently unknown. Also, as far as CEL-SCI
relies upon unpatented proprietary technology, there is no assurance that others
may not acquire or independently develop the same or similar technology.
Risks Related to CEL-SCI's Common Stock
---------------------------------------
Since the market price for CEL-SCI's common stock is volatile, investors may not
be able to sell any of CEL-SCI's shares at a profit.
The market price of CEL-SCI's common stock, as well as the securities of
other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. During the twelve months ended September 30, 2009,
CEL-SCI's stock price has ranged from a low of $0.14 per share to a high of
$2.10 per share. Factors such as fluctuations in CEL-SCI's operating results,
announcements of technological innovations or new therapeutic products by
CEL-SCI or its competitors, governmental regulation, developments in patent or
other proprietary rights, public concern as to the safety of products developed
by CEL-SCI or other biotechnology and pharmaceutical companies, and general
market conditions may have a significant effect on the future market price of
CEL-SCI's common stock.
Shares issuable upon the conversion of notes, the exercise of outstanding
warrants and options, or as a result of sales made in connection with the equity
line of credit may substantially increase the number of shares available for
sale in the public market and may depress the price of CEL-SCI's common stock.
CEL-SCI had outstanding convertible notes, options and warrants which as
of September 30, 2009 could potentially allow the holders to acquire up to
approximately 96,500,000 additional shares of its common stock. Until the
options and warrants expire, or the convertible notes are paid, the holders will
have an opportunity to profit from any increase in the market price of CEL-SCI's
common stock without assuming the risks of ownership. Holders of convertible
notes, options and warrants may convert or exercise these securities at a time
when CEL-SCI could obtain additional capital on terms more favorable than those
provided by the options. The conversion of the notes or the exercise of the
options and warrants will dilute the voting interest of the owners of presently
outstanding shares by adding a substantial number of additional shares of
CEL-SCI's common stock.
CEL-SCI has filed, or plans to file, registration statements with the
Securities and Exchange Commission so that substantially all of the shares of
common stock which are issuable upon the exercise of outstanding options and
16
warrants may be sold in the public market. The sale of common stock issued or
issuable upon the exercise of the warrants described above, or the perception
that such sales could occur, may adversely affect the market price of CEL-SCI's
common stock.
An unknown number of shares of common stock, which may be sold by means of
this prospectus, are issuable under an equity line of credit arrangement with
Ascendiant Capital Group, Inc. As CEL-SCI sells shares of its common stock to
Ascendiant under the equity line of credit, and Ascendiant sells the common
stock to third parties, the price of CEL-SCI's common stock may decrease due to
the additional shares in the market. Since shares sold pursuant to the equity
line will be sold at a 9% discount to the market price of CEL-SCI's common stock
at the time of any draw down, the discount may result in a further decrease in
the market price of CEL-SCI's common stock. If CEL-SCI decides to draw down on
the equity line of credit as the price of its common stock decreases, CEL-SCI
will be required to issue more shares of its common stock for any given dollar
amount invested by Ascendiant, subject to the minimum selling price specified by
CEL-SCI. The more shares that are issued under the equity line of credit, the
more CEL-SCI's then outstanding shares will be diluted and the more CEL-SCI's
stock price may decrease. Any decline in the price of CEL-SCI's common stock may
encourage short sales, which could place further downward pressure on the price
of CEL-SCI's common stock. Short selling is a practice of selling shares which
are not owned by a seller with the expectation that the market price of the
shares will decline in value after the sale.
Claims by the former holders of CEL-SCI's Series K notes may potentially
result in the issuance of additional shares of CEL-SCI's common stock and the
payment of damages.
In August 2006, CEL-SCI sold Series K notes, plus Series K warrants, to a
group of private investors. The notes were convertible into shares of CEL-SCI's
common stock. In connection with the sale of the Series K notes, the Series K
note holders were granted a security interest in substantially all of CEL-SCI's
assets. One of the Series K note holders, Iroquois Master Fund Ltd., has
indicated that it believes the conversion price of the Series K notes, as well
as the exercise price of the Series K warrants, should be $0.20 as opposed to
$0.40. It is CEL-SCI's position that the correct conversion price was $0.40 and
the correct exercise price of the warrants is $0.40.
Although CEL-SCI does not agree with Iroquois, if Iroquois is correct in
its position, CEL-SCI would be required to:
o issue Iroquois approximately 1,850,000 additional shares of its common
stock;
o adjust the exercise price of the Series K warrants held by Iroquois to
$0.20 and increase the number of shares issuable upon the exercise of
the Series K warrants to approximately 2,861,000 shares;
o potentially pay Iroquois penalties, as specified in the loan documents
pertaining to the Series K notes, for failure to deliver the correct
number of shares to Iroquois upon the conversion of its Series K notes
or the exercise of its Series K warrants; and
17
o potentially provide the same relief specified above to the other
holders of the Series K notes and warrants, which would result in the
issuance of approximately 10,782,000 additional shares of common stock
to these holders and an adjustment to the exercise price of the Series
K warrants.
Any penalties for the failure to deliver shares upon the conversion of the
notes or the exercise of the warrants will depend upon the number of shares
requested and the market price of CEL-SCI's common stock at the time the shares
are requested. By way of example, if CEL-SCI failed to deliver 10,000 shares to
Iroquois at a time when the market price of CEL-SCI's common stock was $1.60,
CEL-SCI may be required to pay Iroquois $16,000 in lieu of delivering the 10,000
shares to Iroquois.
COMPARATIVE SHARE DATA
Number Note
of Shares Reference
--------- ---------
Shares outstanding as of September 30, 2009 191,785,521
Shares to be sold in this offering:
o Shares purchased in a private offering 250,000
o shares issuable upon conversion of loan payable
to officer and director 2,760,142 A
o shares issuable upon exercise of warrants issued
to officer and director 3,497,539 A
o shares issuable upon exercise of warrants held by
private investors 21,655,203 B
o shares which may be sold under equity line of credit Unknown C
The number of shares outstanding as of September 30, 2009 excludes shares
which may be issued upon the exercise of the options or warrants described
below.
Other Shares Which May Be Issued:
Number of Note
Shares Reference
--------- ---------
Shares issuable upon exercise of Series L and
M warrants 13,168,335 D
Shares issuable upon the exercise of the
Series K warrants 4,504,199 E
Shares issuable upon exercise of options granted
to CEL-SCI's officers, directors, employees,
consultants, and third parties 30,412,965 F
18
Shares issuable upon exercise of Series A warrants 10,116,560 G
Shares issuable upon exercise of Series C warrants 5,392,217 H
Shares issuable upon exercise of Series D warrants 4,714,284 I
Shares issuable upon exercise of Series E warrants 714,286 I
A. Between December 2008 and June 2009, Maximilian de Clara, CEL-SCI's President
and a director, loaned CEL-SCI $1,104,057. The loan was initially payable at the
end of March, 2009, but was extended to the end of June, 2009. At the time the
loan was due, and in accordance with the loan agreement, CEL-SCI issued Mr. de
Clara a warrant which entitles Mr. de Clara to purchase 1,648,244 shares of
CEL-SCI's common stock at a price of $0.40 per share. The warrant is exercisable
at any time prior to December 24, 2014. Although the loan was to be repaid from
the proceeds of CEL-SCI's recent financing, CEL-SCI's Directors deemed it
beneficial not to repay the loan and negotiated a second extension of the loan
with Mr. de Clara on terms similar to the June 2009 financing. Pursuant to the
terms of the second extension the note is now due on July 6, 2014, but, at Mr.
de Clara's option, the loan can be converted into shares of CEL-SCI's common
stock. The number of shares which will be issued upon any conversion will be
determined by dividing the amount to be converted by $0.40. If the entire loan
was converted Mr. de Clara would receive 2,760,142 shares of common stock. As
further consideration for the second extension, Mr. de Clara received warrants
which allow Mr. de Clara to purchase 1,849,295 shares of CEL-SCI's common stock
at a price of $0.50 per share at any time prior to January 6, 2015. The loan
from Mr. de Clara bears interest at 15% per year and is secured by a second lien
on substantially all of CEL-SCI's assets. CEL-SCI does not have the right to
prepay the loan without Mr. de Clara's consent.
B. The names of the warrant holders and the terms of the warrants are shown
below:
Shares Issuable
Issue Upon Exercise Exercise Expiration
Warrant Holder Date of Warrants Price Date
-------------- ----- -------------- -------- -----------
Eastern Biotech 5/30/03 400,000 $ 0.47 5/30/13
Jena Holdings, LLC 10/13/05 271,370 $ 0.55 10/24/10
Cher Ami Holdings 12/01/03 441,176 $ 0.56 12/01/09
Cher Ami Holdings 7/18/05 375,000 $ 0.65 7/18/11
Lucci Financial Group 10/14/05 80,000 $ 1.00 10/14/10
Lucci Financial Group 10/14/05 80,000 $ 2.00 10/14/10
Cher Ami Holdings 2/09/06 150,000 $ 0.56 2/09/11
Eastern Biotech 4/17/06 800,000 $ 1.25 6/30/13
Cher Ami Holdings 5/18/06 800,000 $ 0.82 5/17/11
Eastern Biotech 8/18/08 2,000,000 (1) $ 0.40 8/18/14
Rockmore Investment
Master Fund Ltd. 8/18/08 75,084 (1) $ 0.40 8/18/14
19
VIF II CEL-SCI Partners,
LLC 1/26/09 6,084,375 $ 0.75 1/26/14
Byron Biopharma 3/27/09 7,500,000 $ 0.25 3/06/16
Crystal Research, Inc. 5/29/07 100,000 $ 0.84 5/28/11
Karen Carson 2/15/05 15,000 $ 0.73 2/15/15
Eastern Biotech 6/30/09 1,750,000 (1) $ 0.40 8/18/14
Rockmore Investment Master
Fund Ltd. 6/30/09 65,698 (1) $ 0.40 8/18/14
Christian Schleuning 7/08/09 167,500 $ 0.50 12/24/14
Platinum Partners Liquid/
Opportunity Master
Fund, L.P. 7/31/09 475,000 (2) $ 0.68 3/3/15
Cornix Management, LLC 7/31/09 25,000 (2) $ 0.68 3/3/15
(1) CEL-SCI sometimes refers to these securities as the Series N Warrants.
(2) CEL-SCI sometimes refers to these securities as the Series B warrants.
C. An unknown number of shares of common stock are issuable under the equity
line of credit agreement between CEL-SCI and Ascendiant Capital Group, LLC. See
the section this prospectus entitled "Equity Line of Credit Agreement" for more
information concerning the equity line.
D. In April 2007, CEL-SCI sold 20,000,000 Units to Korral Partners, an
institutional investor, for $15,000,000. Each Unit was priced at $0.75 and
consisted of one share of CEL-SCI's common stock, one-half of a Series L warrant
and one-half of a Series M warrant. Immediately after this sale Korral Partners
sold the 20,000,000 shares of CEL-SCI's common stock and the 10,000,000 Series M
warrants to 19 foreign investors. Korral Partners retained the 10,000,000 Series
L warrants.
Pursuant to a previously granted right of participation two investors in
CEL-SCI's August 2006 financing purchased 43,333 Units, which were identical to
the Units sold to Korral Partners, at a price of $0.75 per Unit.
Each Series L warrant allows the holder to purchase one share of CEL-SCI's
common stock for $0.75. Each Series M warrant allows the holder to purchase one
share of CEL-SCI's common stock for $2.00. The Series L and M warrants expire on
April 17, 2012.
In September 2008, 2,250,000 of the Series L warrants were repriced to
$0.56 and their expiration date was extended one year to April 17, 2013.
E. In August 2006, CEL-SCI sold Series K convertible notes, plus Series K
warrants, to independent private investors for $8,300,000. The notes were
convertible into shares of CEL-SCI's common stock. As of September 30, 2009 all
of the Series K notes had either been repaid or had been converted into shares
of CEL-SCI's common stock.
The Series K warrants allow the holders to purchase shares of CEL-SCI's
common stock at a price of $0.40 per share at any time prior to February 4,
2012. If CEL-SCI sells any additional shares of common stock, or any securities
20
convertible into common stock at a price below the $0.40, 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.
F. The options are exercisable at prices ranging from $0.16 to $4.50 per share.
CEL-SCI may also grant options to purchase additional shares under its Incentive
Stock Option and Non-Qualified Stock Option Plans.
G. Between June 29 and July 1, 2009, CEL-SCI sold 15,099,346 shares of its
common stock at a price of $0.40 per share. The investors in this offering also
received 10,116,560 Series A warrants. Each Series A warrant entitles the holder
to purchase one share of CEL-SCI's common stock. The Series A warrants may be
exercised at any time on or after December 24, 2009 and on or prior to December
24, 2014 at a price of $0.50 per share. The shares issuable upon the exercise of
the Series A warrants have been registered by means of a separate registration
statement.
H. On August 20, 2009, CEL-SCI sold 10,784,435 shares of its common stock to a
group of private investors for $4,852,995 or $0.45 per share. The investors also
received Series C warrants which entitle the investors to purchase 5,392,217
shares of CEL-SCI's common stock. The Series C warrants may be exercised at any
time on or after February 20, 2010 and on or prior to February 20, 2015 at a
price of $0.55 per share.
I. On September 21, 2009, CEL-SCI sold 14,285,715 shares of its common stock to
a group of private investors for $20,000,000 or $1.40 per share. The investors
also received Series D warrants which entitle the investors to purchase up to
4,714,284 shares of CEL-SCI's common stock. The Series D warrants may be
exercised at any time prior to September 21, 2011 at a price of $1.50 per share.
CEL-SCI paid Rodman & Renshaw, LLC, the placement agent for the offering,
a cash commission of $1,000,000, as well as an expense reimbursement of $37,500.
CEL-SCI also issued Rodman & Renshaw 714,286 Series E warrants. Each Series E
warrant will entitle the holder to purchase one share of CEL-SCI's common stock.
The Series E warrants may be exercised at any time prior to August 12, 2014 at a
price of $1.75 per share.
MARKET FOR CEL-SCI'S COMMON STOCK
As of September 30, 2009 there were approximately 1,100 record holders of
CEL-SCI's common stock. CEL-SCI's common stock is traded on the NYSE Amex under
the symbol "CVM". Set forth below are the range of high and low quotations for
CEL-SCI's common stock for the periods indicated as reported on the NYSE Amex.
The market quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not necessarily represent actual transactions.
Quarter Ending High Low
-------------- ---- ---
12/31/06 $0.81 $0.55
3/31/07 $0.90 $0.56
21
6/30/07 $1.08 $0.71
9/30/07 $0.76 $0.57
12/31/07 $0.64 $0.48
3/31/08 $0.74 $0.37
6/30/08 $0.71 $0.60
9/30/08 $0.78 $0.40
12/31/08 $0.43 $0.18
3/31/09 $0.40 $0.14
6/30/09 $0.80 $0.20
9/30/09 $2.10 $0.38
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors out of legally available funds and, in the
event of liquidation, to share pro rata in any distribution of CEL-SCI's assets
after payment of liabilities. The Board of Directors is not obligated to declare
a dividend. CEL-SCI has not paid any dividends on its common stock and CEL-SCI
does not have any current plans to pay any common stock dividends.
The provisions in CEL-SCI's Articles of Incorporation relating to
CEL-SCI's preferred stock would allow CEL-SCI's directors to issue preferred
stock with rights to multiple votes per share and dividend rights which would
have priority over any dividends paid with respect to CEL-SCI's Common Stock.
The issuance of preferred stock with such rights may make more difficult the
removal of management even if such removal would be considered beneficial to
shareholders generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers if such
transactions are not favored by incumbent management.
The market price of CEL-SCI's common stock, as well as the securities of
other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in CEL-SCI's operating
results, announcements of technological innovations or new therapeutic products
by CEL-SCI or its competitors, governmental regulation, developments in patent
or other proprietary rights, public concern as to the safety of products
developed by CEL-SCI or other biotechnology and pharmaceutical companies, and
general market conditions may have a significant effect on the market price of
CEL-SCI's common stock.
EQUITY LINE OF CREDIT AGREEMENT
On December 30, 2008, CEL-SCI entered into an equity line of credit
agreement with Ascendiant Capital Group, LLC in order to establish a possible
source of funding for CEL-SCI. The equity line of credit agreement establishes
what is sometimes also referred to as an equity drawdown facility.
22
Under the equity line of credit agreement, Ascendiant has agreed to
provide CEL-SCI with up to $5,000,000 of funding prior to January 6, 2011.
During this period, CEL-SCI may request a drawdown under the equity line of
credit by selling shares of its common stock to Ascendiant and Ascendiant will
be obligated to purchase the shares. CEL-SCI may request a drawdown once every
ten trading days, although CEL-SCI is under no obligation to request any
drawdowns under the equity line of credit. There must be a minimum of two
trading days between each drawdown request.
During the ten trading days following a drawdown request, CEL-SCI will
calculate the amount of shares it will sell to Ascendiant and the purchase price
per share. The purchase price per share of common stock will be based on the
daily volume weighted average price of CEL-SCI's common stock during each of the
ten trading days immediately following the drawdown date, less a discount of 9%.
CEL-SCI may request a drawdown by faxing a drawdown notice to Ascendiant,
stating the amount of the drawdown and the lowest price, if any, at which
CEL-SCI is willing to sell the shares. The lowest price will be set by CEL-SCI's
Chief Executive Officer in his sole and absolute discretion.
Calculation of Drawdown Amount, Purchase Price and Number of Shares Sold
------------------------------------------------------------------------
There is no minimum amount CEL-SCI can draw down at any one time. The
maximum amount CEL-SCI can draw down at any one time is an amount equal to:
o 10% of the total trading volume of CEL-SCI's common stock for the ten
trading days prior to the date of the drawdown request, multiplied by
o the weighted average price of CEL-SCI's common stock for the same ten
trading days,
or any other amount mutually agreed upon by CEL-SCI and Ascendiant.
On the day following the delivery of the drawdown notice, a valuation
period of ten trading days will start:
o On each of the ten trading days during the valuation period, the
number of shares to be sold to Ascendiant will be determined by
dividing 1/10 of the drawdown amount by the purchase price on each
trading day. The purchase price will be 91% of the volume weighted
average price of CEL-SCI's common stock on that day.
o If the purchase price on any trading day during the ten trading day
calculation period is below the minimum price specified by CEL-SCI,
then Ascendiant will not purchase any shares on that day, and the
drawdown amount will be reduced by 1/10.
Using the formula described above, if CEL-SCI had requested a drawdown on
December 12, 2008, the maximum amount CEL-SCI could draw down during the
subsequent ten trading days would have been approximately $72,125. Based upon
the volume weighted average of CEL-SCI's common stock during the ten trading
days subsequent to December 12, 2008, CEL-SCI would have sold 258,000 shares of
23
its common stock to Ascendiant and would have received proceeds from the sale of
these shares of approximately $72,125.
If CEL-SCI sets a minimum price which is too high and CEL-SCI's stock
price does not consistently meet that level during the ten trading days after
its drawdown request, the amount CEL-SCI can draw and the number of shares
CEL-SCI will sell to Ascendiant will be reduced. On the other hand, if CEL-SCI
sets a minimum price which is too low and its stock price falls significantly
but stays above the minimum price, CEL-SCI will have to issue a greater number
of shares to Ascendiant based on the reduced market price.
Payment for Shares
------------------
The shares purchased on the ten trading days following a drawdown request
will be issued and paid for on the 13th trading day following the drawdown
request.
Termination of the Equity Line of Credit Agreement
--------------------------------------------------
The equity line of credit agreement will be terminated if:
o CEL-SCI's common stock is de-listed from the NYSE Amex unless the
de-listing is in connection with CEL-SCI's subsequent listing of its
common stock on the NASDAQ National Market, the NASDAQ SmallCap
Market, the New York Stock Exchange, the OTC Bulletin Board,
o CEL-SCI files for protection from its creditors under the Federal
Bankruptcy laws,
o The shares which are to be sold to Ascendiant are not covered by an
effective registration statement,
o Ascendiant fails to honor a drawdown notice, or
o the equity line of credit agreement violates any other agreement to
which CEL-SCI is a party.
General
-------
On the trading day immediately prior to the date CEL-SCI sends its first
drawdown notice to Ascendiant, and in consideration for providing the equity
drawdown facility, CEL-SCI will deliver to Ascendiant shares of its common stock
equal in number to the amount determined by:
o dividing $250,000 by
o the greater of the weighted average price of CEL-SCI's common stock or
the closing bid price of CEL-SCI's common stock on the second trading
day immediately preceding the drawdown notice.
Ascendiant is entitled to customary indemnification from CEL-SCI for any
losses or liabilities it suffers as a result of any breach by CEL-SCI of any
provisions of the equity line of credit agreement, or as a result of any lawsuit
24
brought by any shareholder of CEL-SCI, provided the shareholder instituting the
lawsuit is not an officer, director or principal shareholder of CEL-SCI.
Ascendiant will be an underwriter to the extent it purchases any shares
under the equity line of credit and sells those shares by means of this
prospectus.
If Ascendiant merges with another company, and Ascendiant is not the
survivor to the merger, then Ascendiant may not use this prospectus to sell any
shares it acquires from CEL-SCI under the Equity Line.
SELLING SHAREHOLDERS
See "Comparative Share Data" for information concerning the terms of the
convertible loan and warrants.
CEL-SCI refers to the owners of these shares as the selling shareholders
in this prospectus. CEL-SCI will not receive any proceeds from the sale of the
shares by the selling shareholders. The name of, and the shares to be sold by,
the selling shareholders are:
Shares Shares Which
Issuable May Be Shares to Owner-
Upon Acquired be Sold ship
Shares Conversion Upon Exercise in this After
Name Owned of Loan of Warrants Offering Offering
----------------- ------ ---------- ------------- -------- --------
Maximilian de Clara 438,077 2,760,142 3,497,539 6,257,681 438,077*
Byron Biopharma 7,500,000 7,500,000 --
Cher Ami Holdings 1,766,176 1,766,176 --
Cornix Management, LLC 25,000 25,000 --
Crystal Research, Inc. 100,000 100,000 --
Eastern Biotech 4,950,000 4,950,000 --
Jena Holdings, LLC 271,370 271,370 --
Lucci Financial Group 160,000 160,000 --
Platinum Partners Liquid/
Opportunity Master
Fund, L.P. 475,000 475,000 --
Rockmore Investment
Master Fund Ltd. 140,782 140,782 --
VIF II CEL-SCI --
Partners, LLC 6,084,375 6,084,375 --
Karen Carson 15,000 15,000 --
Christian Schleuning 250,000 167,500 417,500 --
* Represents less than 1% of CEL-SCI's outstanding shares.
For purposes of the foregoing table, it is assumed that all shares owned,
or which may be acquired, by the selling shareholders are sold to the public by
means of this prospectus.
25
If all warrants listed in the above table were exercised, CEL-SCI would
receive approximately $12,800,000.
Ascendiant Capital Group, Inc. has entered into an equity line of credit
agreement with CEL-SCI and is a selling shareholder. As explained in the section
of this prospectus captioned "Equity Line of Credit Agreement", the number of
shares which Ascendiant may acquire pursuant to the equity line of credit is not
known. As of the date of this prospectus Ascendiant does own any shares of
CEL-SCI's common stock and CEL-SCI had not sold any shares in connection with
the equity line of credit. If Ascendiant sells all of the shares it acquires
under the equity line of credit, Ascendiant will not own any shares of CEL-SCI.
The controlling person of each selling shareholder, which is not an
individual, is shown below:
Selling Shareholder Controlling Person
------------------- ------------------
Lucci Financial Group Michael Lucci
Byron Biopharma Ed Smith
Cher Ami Holdings Dr. Fischer-Zenin
Cornix Management, LLC Kerry Propper, Steve Urbach and Jonas Grossman
Crystal Research, Inc. Jeffrey Kraws
Eastern Biotech Marta de Saavedra and Leslie Barker de Giron
Jena Holdings, LLC Roger Smythe
Platinum Partners
Liquid/Opportunity
Master Fund, L.P. David Levy
Rockmore Investment Master
Fund Ltd. Bruce Bernstein
VIF II CEL-SCI Partners, LLC Stan Wendzel
Ascendiant Capital Group, Inc. Mark Bergendahl
Plan of Distribution
--------------------
The selling shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling shareholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the
broker-dealer solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the
shares as agent but may position and resell a portion of the block as
principal to facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the
broker-dealer for its account;
o an exchange distribution in accordance with the rules of the
applicable exchange;
26
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the selling shareholders to sell a
specified number of such shares at a stipulated price per share;
o a combination of any such methods of sale; and
o any other method permitted pursuant to applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in securities of CEL-SCI or derivatives of
CEL-SCI securities and may sell or deliver shares in connection with these
trades. The selling shareholders may pledge its shares to their brokers under
the margin provisions of customer agreements. If a selling shareholder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholder (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling shareholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
CEL-SCI is required to pay all fees and expenses incident to the
registration of the shares.
CEL-SCI has advised the selling shareholders that in the event of a
"distribution" of the shares owned by the selling shareholders, the selling
shareholders, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. A "distribution" is defined in Rule 102 as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods". CEL-SCI has also advised the selling shareholders that Rule
102 under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase"
for the purpose of pegging, fixing or stabilizing the price of the common stock
in connection with this offering. Rule 101 makes it unlawful for any person who
is participating in a distribution to bid for or purchase stock of the same
class as is the subject of the distribution.
27
DESCRIPTION OF SECURITIES
Common Stock
------------
CEL-SCI is authorized to issue 450,000,000 shares of common stock, (the
"common stock"). Holders of common stock are each entitled to cast one vote for
each share held of record on all matters presented to shareholders. Cumulative
voting is not allowed; hence, the holders of a majority of the outstanding
common stock can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of CEL-SCI's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by CEL-SCI. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All of the
outstanding shares of common stock are fully paid and non-assessable and all of
the shares of common stock offered as a component of the Units will be, upon
issuance, fully paid and non-assessable.
Preferred Stock
---------------
CEL-SCI is authorized to issue up to 200,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Colorado statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of CEL-SCI. As of
September 21, 2009 no shares of preferred stock were outstanding.
Options, Warrants and Convertible Securities
--------------------------------------------
See "Comparative Share Data" for information concerning CEL-SCI's
outstanding options, warrants and convertible securities.
Transfer Agent
--------------
Computershare Trust Company, Inc., of Denver, Colorado, is the transfer
agent for CEL-SCI's common stock.
28
EXPERTS
The financial statements as of September 30, 2008 and 2007 and for each of
the three years in the period ended September 30, 2008 incorporated by reference
in this Prospectus have been so incorporated in reliance on the report of BDO
Seidman, LLP, an independent registered public accounting firm, incorporated
herein by reference, given on the authority of said firm as experts in auditing
and accounting.
INDEMNIFICATION
CEL-SCI's bylaws authorize indemnification of a director, officer,
employee or agent of CEL-SCI against expenses incurred by him in connection with
any action, suit, or proceeding to which he is named a party by reason of his
having acted or served in such capacity, except for liabilities arising from his
own misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of CEL-SCI who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling CEL-SCI pursuant to the foregoing provisions, CEL-SCI has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ADDITIONAL INFORMATION
CEL-SCI is subject to the requirements of the Securities Exchange Act of
l934 and is required to file reports, proxy statements and other information
with the Securities and Exchange Commission. Copies of any such reports, proxy
statements and other information filed by CEL-SCI can be read and copied at the
Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C.,
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding CEL-SCI. The address of that site is
http://www.sec.gov.
CEL-SCI will provide, without charge, to each person to whom a copy of
this prospectus is delivered, including any beneficial owner, upon the written
or oral request of such person, a copy of any or all of the documents
incorporated by reference below (other than exhibits to these documents, unless
the exhibits are specifically incorporated by reference into this prospectus).
Requests should be directed to:
CEL-SCI Corporation
8229 Boone Blvd., #802
Vienna, Virginia 22182
(703) 506-9460
29
The following documents filed with the Commission by CEL-SCI (Commission
File No. 0-11503) are incorporated by reference into this prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended September 30,
2008.
(2) Proxy Statement relating to its March 3, 2008 shareholders' meeting.
(3) Report on Form 8-K filed on December 9, 2008.
(4) Report on Form 10-Q for the three months ended December 31, 2008.
(5) Report on Form 8-K filed January 6, 2009.
(6) Report on Form 8-K filed March 12, 2009.
(7) Report on Form 8-K filed April 1, 2009.
(8) Report on form 10-Q for the three months ended March 31, 2009.
(9) Report on Form 8-K filed June 25, 2009.
(10) Report on Form 8-K filed June 29, 2009.
(11) Report on Form 8-K filed July 2, 2009.
(12) Report on Form 8-K filed on August 5, 2009.
(13) Report on Form 10-Q for the three months ended June 30, 2009.
(14) Report on Form 8-K filed on August 21, 2009.
(15) Report on Form 8-K/A filed on August 28, 2009.
(16) Report on Form 8-K filed on September 17, 2009.
(17) Report on Form 8-K filed on September 21, 2009.
All documents filed with the Commission by CEL-SCI pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this prospectus and to be a part of this
prospectus from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
shall be deemed to be modified or superseded for the purposes of this prospectus
to the extent that a statement contained in this prospectus or in any
subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes such statement. Such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Investors are entitled to rely upon information in this prospectus or
incorporated by reference at the time it is used by CEL-SCI to offer and sell
securities, even though that information may be superseded or modified by
information subsequently incorporated by reference into this prospectus.
CEL-SCI has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of l933, as amended, with
respect to the securities offered by this prospectus. This prospectus does not
contain all of the information set forth in the Registration Statement. For
further information with respect to CEL-SCI and such securities, reference is
made to the Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as to the
contents of any contract or other documents are summaries which are not
30
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Registration Statement and related exhibits may also be examined at the
Commission's internet site.
31
TABLE OF CONTENTS
Page
Prospectus Summary..........................................
Risk Factors................................................
Comparative Share Data......................................
Market for Cel-Sci's Common Stock ..........................
Equity Line of Credit Agreement ............................
Selling Shareholders........................................
Description of Securities...................................
Experts.....................................................
Indemnification.............................................
Additional Information......................................
Common stock
CEL-SCI CORPORATION
PROSPECTUS
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
SEC Filing Fee $ 993
Blue Sky Fees and Expenses 100
Printing and Engraving Expenses 2,000
Legal Fees and Expenses 20,000
Accounting Fees and Expenses 10,000
Miscellaneous Expenses 1,907
---------
TOTAL $35,000
=========
All expenses other than the SEC filing fees are estimated.
Item 15. Indemnification of Officers and Directors.
-----------------------------------------
It is provided by Section 7-109-102 of the Colorado Revised Statutes and
CEL-SCI's Bylaws that CEL-SCI may indemnify any and all of its officers,
directors, employees or agents or former officers, directors, employees or
agents, against expenses actually and necessarily incurred by them, in
connection with the defense of any legal proceeding or threatened legal
proceeding, except as to matters in which such persons shall be determined to
not have acted in good faith and in the best interest of CEL-SCI.
Item 16. Exhibits
3(a) Articles of Incorporation Incorporated by reference to Exhibit
3(a) of CEL-SCI's combined Registration
Statement on Form S-1 and Post-Effective
Amendment ("Registration Statement"),
Registration Nos. 2-85547-D and 33-7531.
(b) Amended Articles Incorporated by reference to Exhibit
3(a) of CEL-SCI's Registration Statement
on Form S-1, Registration Nos. 2-85547-D
and 33-7531.
(c) Amended Articles Filed as Exhibit 3(c) to CEL-SCI's
(Name change only) Registration Statement on Form S-1
Registration Statement (No. 33-34878).
(d) Bylaws Incorporated by reference to Exhibit
3(b) of CEL-SCI's Registration Statement
on Form S-1, Registration Nos. 2-85547-D
and 33-7531.
II-1
4. Shareholders Rights Agreement Incorporated by reference to Exhibit 4
of CEL-SCI's report on Form 8-K dated
November 7, 2007.
5. Opinion of Counsel
10(d) Employment Agreement with Incorporated by reference to Exhibit
Maximilian de Clara 10(d) of CEL-SCI's report on Form 8-K
(dated April 21, 2005) and Exhibit 10(d)
to CEL-SCI's report on Form 8-K dated
September 8, 2006.
10(e) Employment Agreement with Incorporated by reference to Exhibit
Geert Kersten 10(e) of CEL-SCI's Registration
Statement on Form S-3 (Commission File
#106879) and Exhibit 10(c) to CEL-SCI's
report on Form 8-K dated September 8,
2006.
10(g) Securities Purchase Agreement Incorporated by reference to Exhibit 10
(together with schedule required to CEL-SCI's Report on Form 8-K dated by
Instruction 2 to Item 601 of August 4, 2006.
Regulation S-K) pertaining to
Series K notes and warrants,
together with the exhibits to
the Securities Purchase Agreement.
10(h) Subscription Agreement Incorporated by reference to Exhibit 10
(together with schedule to CEL-SCI's Report on Form 8-K filed
required by Instruction 2 to on April 26, 2007.
Item 601 of Regulation S-K).
10(i) Form of Series L Warrant. Incorporated by reference to Exhibit
10.2 to CEL-SCI's Report on Form 8-K
filed on April 26, 2007.
10(j) Form of Series M Warrant. Incorporated by reference to Exhibit
10.3 to CEL-SCI's Report on Form 8-K
filed on April 26, 2007.
10(k) Equity Line of Credit Agreement Incorporated by reference to Exhibit
10(j) to CEL-SCI's report on Form 8-K
filed on January 6, 2009.
10(l) Securities Purchase Agreement Incorporated by reference to Exhibit 10
pertaining to common stock and to CEL-SCI's Report on Form 8-K filed on
Series A warrants, together with June 24, 2009. exhibits to the
the Securities Purchase Agreement.
II-2
10(m) Securities Purchase Agreement Incorporated by reference to Exhibit 10
pertaining to common stock and to CEL-SCI's Report on Form 8-K filed on
Series A warrants, together with June 29, 2009. exhibits to the
the Securities Purchase Agreement.
10(n) Securities Purchase Agreement Incorporated by reference to Exhibit 10
pertaining to common stock and to CEL-SCI's Report on Form 8-K filed on
Series C warrants, together with August 21, 2009. exhibits to the
the Securities Purchase Agreement.
10(o) Securities Purchase Agreement Incorporated by reference to Exhibit 10
pertaining to common stock and to CEL-SCI's Report on Form 8-K filed on
Series D and E warrants, September 17, 2009.
together with the exhibits to
the Securities Purchase Agreement.
23 Consent of Hart & Trinen
Consent of BDO Seidman, LLP
Item 17. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.
(i) To include any prospectus required by Section l0(a)(3) of the
Securities Act of l933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the Registration
Statement;
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement, including
(but not limited to) any addition or deletion of a managing underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of l933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act of
l933 may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3/A and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vienna, Commonwealth of Virginia, on the 16th day of
October, 2009.
CEL-SCI CORPORATION
By: /s/ Maximilian de Clara
-----------------------------
Maximilian de Clara, President
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
/s/ Maximilian de Clara Director and Principal October 16, 2009
------------------------ Executive Officer
Maximilian de Clara
/s/ Geert R. Kersten Director, Principal October 16, 2009
------------------------ Financial and Accounting
Geert R. Kersten Officer and Chief Executive
Officer
Alexander G. Esterhazy Director
/s/ C. Ricard Kinsolving
------------------------ Director October 19, 2009
C. Richard Kinsolving, Ph.D.
/s/ Peter R. Young Director October 16, 2009
------------------------
Peter R. Young, Ph.D.
CEL-SCI CORPORATION
REGISTRATION STATEMENT ON
FORM S-3
EXHIBITS