The information in this preliminary prospectus supplement and the accompanying
prospectus is not complete and may be changed. This prospectus supplement and
the accompanying prospectus are part of a registration statement that has been
declared effective by the Securities and Exchange Commission. This prospectus
supplement and the accompanying prospectus are not an offer to sell these
securities, and we are not soliciting an offer to buy these securities in any
jurisdiction where the offer or sale is not permitted.
Filed pursuant to Rule 424(b)3(5)
Registration No. 333-184094
Subject to completion, October 7, 2013
PRELIMINARY PROSPECTUS SUPPLEMENT
To Prospectus dated October 4, 2013
CEL-SCI Corporation
__________ Shares of Common Stock
Warrants to Purchase ____ Shares of Common Stock
We are offering an aggregate of ________ shares of common stock, $0.01 par
value per share, and warrants to purchase up to ______ shares of common stock.
Each share of common stock is being sold together with a warrant to purchase
____ share of our common stock for the combined purchase price of $_____. Each
warrant can be exercised at any time on or before ____, 2018 at a price of $____
per share. The shares of common stock and warrants will be issued separately.
Our common stock is currently traded on the NYSE MKT (formerly known as
the NYSE Amex) under the symbol "CVM." On October __, 2013, the closing price of
our common stock on the NYSE MKT was $____ per share. Currently, no public
market exists for our warrants and we expect no public market to develop. We
will not apply to list the warrants sold hereunder on NYSE MKT. For a more
detailed description of our common stock and warrants, see the section entitled
"Description of Securities" beginning on page 14 herein
Investing in our common stock involves a high degree of risk. See "Risk
Factors" beginning on page 10 of this prospectus supplement and page 11 of the
accompanying prospectus.
Price to Public Underwriting Proceeds,
Discounts and Before Expenses,
Commissions to Us
----------------- --------------- -----------------
Per Share $ - $ - $ -
Per Warrant
Total $ - $ - $ -
The underwriters may also purchase up to an additional ______ shares of
common stock and/or warrants to purchase up to _____ shares of common stock from
us at the public offering prices set forth above, less underwriting discounts
and commissions, within 45 days of the date of this prospectus supplement to
cover any over-allotments.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or determined if this
prospectus supplement or the accompanying prospectus is truthful or complete.
Any representation to the contrary is a criminal offense.
The underwriters expect to deliver the shares of common stock against
payment on or before October __, 2013.
Chardan Capital Markets, LLC Laidlaw & Company (UK) Ltd.
The date of this prospectus supplement is October 7, 2013.
TABLE OF CONTENTS
Prospectus Supplement
Page
About this Prospectus Supplement 3
Forward-Looking Statements 4
Prospectus Supplement Summary 5
The Offering 7
Risk Factors 8
Determination of Offering Price 9
Use of Proceeds 9
Dilution 10
Description of Securities 11
Underwriting 13
Additional Information 13
2
ABOUT THIS PROSPECTUS SUPPLEMENT
This document is in two parts. The first part is the prospectus supplement,
including the documents incorporated by reference, which describes the specific
terms of this offering. The second part, the accompanying prospectus, including
the documents incorporated by reference, provides more general information.
Generally, when we refer to this prospectus, we are referring to both parts of
this document combined. We urge you to carefully read this prospectus supplement
and the accompanying prospectus, and the documents incorporated herein and
therein, before buying any of the securities being offered by this prospectus
supplement. This prospectus supplement may add, update or change information
contained in the accompanying prospectus. To the extent that any statement that
we make in this prospectus supplement is inconsistent with statements made in
the accompanying prospectus or any documents incorporated by reference therein,
the statements made in this prospectus supplement will be deemed to modify or
supersede those made in the accompanying prospectus and such documents
incorporated by reference therein.
You should rely only on the information contained or incorporated herein by
reference in this prospectus supplement and contained or incorporated therein by
reference in the accompanying prospectus. We have not, and the underwriters have
not, authorized anyone to provide you with different or additional information.
Dealers are not authorized to give any information othe rhtan contained in the
prospectus, this prospectus supplement, and any free writing prospectus prepared
by us or on our behalf. If anyone provides you with different, additional or
inconsistent information, you should not rely on it. We and the underwriters are
not making an offer to sell these securities in any jurisdiction where the offer
or sale is not permitted. Persons outside the United States who come into
possession of this prospectus must inform themselves about, and observe any
restrictions relating to, the offering of of our securities and the distribution
of this prospectus outside the United States. You should assume that the
information in this prospectus supplement and the accompanying prospectus is
accurate only as of the date on the front of the applicable document and that
any information we have incorporated by reference is accurate only as of the
date of the document incorporated by reference, regardless of the time of
delivery of this prospectus supplement or the accompanying prospectus, or any
sale of a security. Our business, financial condition, results of operations and
prospects may have changed since those dates. You should read this prospectus
supplement, the accompanying prospectus and the documents incorporated by
reference in this prospectus supplement and the accompanying prospectus when
making your investment decision. You should also read and consider the
information in the documents we have referred you to in the section of this
prospectus entitled "Additional Information."
This prospectus supplement, the accompanying prospectus, and the
information incorporated herein and therein by reference may include trademarks,
service marks and trade names owned by us or other companies. All trademarks,
service marks and trade names included or incorporated by reference into this
prospectus supplement or the accompanying prospectus are the property of their
respective owners.
In this prospectus, unless otherwise specified or the context requires
otherwise, we use the terms "CEL-SCI," the "Company," "we," "us" and "our" to
refer to CEL-SCI Corporation. Our fiscal year ends on September 30.
3
FORWARD-LOOKING STATEMENTS
This prospectus supplement, the accompanying prospectus and the documents
incorporated by reference herein and therein contain forward-looking statements.
These statements relate to future events and involve known and unknown risks,
uncertainties and other factors which may cause our actual results, performance
or achievements to be materially different from any future results, performances
or achievements expressed or implied by the forward-looking statements.
Factors that might affect our forward-looking statements include those
disclosed in this prospectus and the accompanying prospectus.
In some cases, you can identify forward-looking statements by terms such
as "may," "will," "should," "could," "would," "expects," "plans," "anticipates,"
"believes," "estimates," "projects," "predicts," "potential" and similar
expressions intended to identify forward-looking statements. These statements
reflect our current views with respect to future events and are based on
assumptions and subject to risks and uncertainties. Given these uncertainties,
you should not place undue reliance on these forward-looking statements. We
discuss many of these risks in greater detail under the heading "Risk Factors"
herein and in the documents incorporated by reference herein. Also, these
forward-looking statements represent our estimates and assumptions only as of
the date of the document containing the applicable statement.
Unless required by law, we undertake no obligation to update or revise any
forward-looking statements to reflect new information or future events or
developments. Thus, you should not assume that our silence over time means that
actual events are bearing out as expressed or implied in such forward-looking
statements. Before deciding to purchase our securities, you should carefully
consider the risk factors incorporated by reference and set forth herein, in
addition to the other information set forth in this prospectus supplement, the
accompanying prospectus and in the documents incorporated by reference herein
and therein.
4
PROSPECTUS SUPPLEMENT SUMMARY
This summary highlights certain information about us, this offering and
information appearing elsewhere in this prospectus supplement, in the
accompanying prospectus and in the documents we incorporate by reference. This
summary is not complete and does not contain all of the information that you
should consider before investing in our securities. To fully understand this
offering and its consequences to you, you should read this entire prospectus
supplement and the accompanying prospectus carefully, including the information
referred to under the heading "Risk Factors" in the accompanying prospectus and
set forth herein, the financial statements and other information incorporated by
reference in this prospectus supplement and the accompanying prospectus when
making an investment decision.
About Cel-Sci Corporation
We were formed as a Colorado corporation in 1983. Our principal office is
located at 8229 Boone Boulevard, Suite 802, Vienna, VA 22182. Our telephone
number is 703-506-9460 and our web site is www.cel-sci.com.
Our business consists of the following:
1) Multikine(R) (Leukocyte Interleukin, Injection) investigational cancer
therapy;
2) LEAPS technology, with two investigational therapies, pandemic flu
treatment for hospitalized patients and CEL-2000, a rheumatoid
arthritis treatment vaccine.
MULTIKINE
Our lead investigational therapy, Multikine, is currently being developed
as a potential therapeutic agent directed at using the immune system to produce
an anti-tumor immune response. Data from Phase I and Phase II clinical trials
suggest that Multikine simulates the activities of a healthy person's immune
system, enabling it to use the body's own anti-tumor immune response. Multikine
(Leukocyte Interleukin, Injection) is the full name of this investigational
therapy, which, for simplicity, is referred to in the remainder of this document
as Multikine. Multikine is the trademark that we have registered for this
investigational therapy, and this proprietary name is subject to FDA review in
connection with our future anticipated regulatory submission for approval.
Multikine has not been licensed or approved for sale, barter or exchange by the
FDA or any other regulatory agency. Neither has its safety or efficacy been
established for any use.
Multikine has been cleared by the regulators in nine countries around the
world, including the U.S. FDA, for a global Phase III clinical trial in advanced
primary (not yet treated) head and neck cancer patients. This trial is expected
to be the largest head and neck cancer clinical study ever conducted.
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
5
verall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.
The primary clinical endpoint in CEL-SCI's ongoing Phase III clinical
trial is that a 10% improvement in overall survival in the Multikine treatment
arm, plus the current standard of care (SOC - consisting of surgery +
radiotherapy or surgery + radiochemotherapy), over that which can be achieved in
the SOC arm alone (in the well-controlled Phase III clinical trial currently
ongoing) must be achieved. Based on what is presently known about the current
survival statistics for this population, CEL-SCI believes that achievement of
this endpoint should enable CEL-SCI, subject to further consultations with FDA,
to move forward, prepare and submit a Biologic License Application to FDA for
Multikine.
The clinical trial is giving immunotherapy to cancer patients, i.e., prior
to their receiving any conventional treatment for cancer, including surgery,
radiation and/or chemotherapy. This could be shown to be important because
conventional therapy may weaken the immune system, and may compromise the
potential effect of immunotherapy. Because Multikine is given before
conventional cancer therapy, when the immune system may be more intact, we
believe the possibility exists for it to have a greater likelihood of activating
an anti-tumor immune response under these conditions. This likelihood is one of
the clinical aspects being evaluated in the ongoing global Phase III clinical
trial.
Multikine is a different kind of investigational therapy in the fight
against cancer. Multikine is a defined mixture of cytokines. It is a combination
immunotherapy, possessing both active and passive properties.
In the recent interim review of the safety data from the Phase III study,
an Independent Data Monitoring Committee (IDMC) raised no safety concerns. The
IDMC also indicated that no safety signals were found that would call into
question the benefit/risk of continuing the study. CEL-SCI considers the results
of the IDMC review to be important since studies have shown that up to 30% of
Phase III trials fail due to safety considerations and the IDMC's safety
findings from this interim review were similar to those reported by
investigators during CEL-SCI's Phase I-II trials. Ultimately, the decision as to
whether a drug is safe is made by the FDA based on an assessment of all of the
data from a trial.
On October 7, 2013, CEL-SCI announced a Cooperative Research and
Development Agreement with the U.S. Naval Medical Center, San Diego. Pursuant to
this agreement, the Naval Medical Center will conduct Human Subjects
Institutional Review Board approved Phase I study of CEL-SCI's investigational
immunotherapy, Multikine, in HIV/HPV co-infected men and women with peri-anal
warts. Anal and genital warts are commonly associated with the Human Papilloma
Virus, the most common sexually transmitted disease. Men and women with a
history of anogenital warts have a 30 fold increased risk of anal cancer.
Persistent HPV infection in the anal region is thought to be responsible for up
to 80% of anal cancers. HPV is a significant health problem in the HIV infected
population as individuals are living longer as a result of greatly improved HIV
medications.
6
The purpose of this study is to evaluate the safety and clinical impact of
Multikine as a treatment of peri-anal warts and assess its effect on anal
intraepithelial dysplasia (AIN) in HIV/HPV co-infected men and women.
CEL-SCI will contribute the investigational study drug Multikine, will
retain all rights to any currently owned technology, and will have the right to
exclusively license any new technology developed from the collaboration.
Multikine is being given to the HIV/HPV co-infected patients with
peri-anal warts since promising early results were seen in another Institutional
Review Board approved Multikine Phase I study conducted at the University of
Maryland. In this study, investigational therapy Multikine was given to HIV/HPV
co-infected women with cervical dysplasia resulting in visual and histological
evidence of clearance of lesions. Furthermore, elimination of a number of HPV
strains was determined by in situ polymerase chain reaction (PCR) performed on
tissue biopsy collected before and after Multikine treatment. As reported by the
investigators in the earlier study, the study volunteers all appeared to
tolerate the treatment with no reported serious adverse events.
The treatment regimen for the study of up to 15 HIV/HPV co-infected
patient volunteers with peri-anal warts to be conducted by the Naval Medical
Center will be identical to the regimen that was used in the earlier Multikine
cervical study in HIV/HPV co-infected patients.
LEAPS
CEL-SCI's patented T-cell Modulation Process, referred to as LEAPS (Ligand
Epitope Antigen Presentation System), uses "heteroconjugates" to direct the body
to choose a specific immune response. LEAPS is designed to 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 a vaccine, 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, we have created a potential peptide treatment
for H1N1 (swine flu) hospitalized patients. This LEAPS flu treatment is designed
to 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 chance of viral "escape
by mutations" from immune recognition. Therefore one should think of this
treatment not really as an H1N1 treatment, but as a pandemic flu treatment. our
LEAPS flu treatment contains epitopes known to be associated with immune
protection against influenza in animal models.
7
Additional work on this treatment for the pandemic flu work is being
pursued in collaboration with the National Institute of Allergy and Infectious
Diseases (NIAID), part of the National Institutes of Health, USA. In May 2011
NIAID scientists presented data at the Keystone Conference on "Pathogenesis of
Influenza: Virus-Host Interactions" in Hong Kong, China, showing the positive
results of efficacy studies in mice of L.E.A.P.S. H1N1 activated dendritic cells
(DCs) to treat the H1N1 virus. Scientists at the NIAID found that H1N1-infected
mice treated with LEAPS-H1N1 DCs showed a survival advantage over mice treated
with control DCs. The work was performed in collaboration with scientists led by
Kanta Subbarao, M.D., Chief of the Emerging Respiratory Diseases Section in
NIAID's Division of Intramural Research, part of the National Institutes of
Health, USA.
In July 2013, CEL-SCI announced the publication of the results of
additional influenza studies by researchers from the NIAID in the Journal of
Clinical Investigation (www.jci.org/articles/view/67550). The studies described
in the publication show that when CEL-SCI's investigational J-LEAPS Influenza
Virus treatments were used "in vitro" to activate immune cells called dendritic
cells (DCs), these activated dendritic cells, when injected into influenza
infected mice, arrested the progression of lethal influenza virus infection in
these mice. The work was performed in the laboratory of Dr. Subbarao.
With our LEAPS technology, we have also developed 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
CEL-SCI Corporation
THE OFFERING
Common stock offered by us _______ shares
Common stock to be outstanding _______ shares
immediately after this offering
Warrants we are offering We are offering warrants to purchase
up to ____ shares of common stock that
will be exercisable during the period
commencing on the date of original
issuance and ending 5 years from such
date at an exercise price of $____ per
share of common stock, subject to
adjustment. This prospectus
supplement also relates to the
offering of the shares of common stock
issuable upon exercise of the
warrants. There is no established
public trading market for the
warrants, and we do not expect a
market to develop. In addition, we do
not intend to apply for listing of the
warrants on any national securities
exchange or other nationally
recognized trading system.
Over-allotment option We have granted the underwriters a
45-day option to purchase up to ______
additional shares of our common stock
and/or warrants to purchase up to ____
shares of common stock to cover any
over-allotments.
Use of proceeds We estimate that our net proceeds from
this offering will be approximately
$___ million after deducting
underwriting discounts and commissions
and estimated offering expenses, or
approximately $___ million if the
underwriters exercise the
over-allotment option in full.
We intend to use the net proceeds from
this offering primarily for our Phase
III clinical trial, other research and
development, and general and
administrative expenses.
Dividend policy We have not declared or paid any
cash or other dividends on our common
stock, and do not expect to declare or
pay any cash or other dividends in the
foreseeable future.
9
Risk factors You should carefully read and consider
the information beginning on page
_____ of this prospectus supplement
and page ____ of the accompanying
prospectus set forth under the
headings "Risk Factors" and all other
information set forth in this
prospectus supplement, the
accompanying prospectus, and the
documents incorporated herein and
therein by reference before deciding
to invest in our common stock.
NYSE MKT symbol CVM
The number of shares to be outstanding after this offering is based on
31,023,860 shares of our common stock outstanding as of September 30, 2013 and
excludes ______ shares which may be issued upon the exercise to outstanding
options and warrants or the conversion of a note. Unless otherwise indicated,
the information in this prospectus supplement assumes that the underwriters will
not exercise their over-allotment option.
RISK FACTORS
Investing in our common stock involves significant risks. You should
carefully consider the "Risk Factors" included and incorporated by reference in
the accompanying prospectus, this prospectus supplement and any other applicable
prospectus supplement, including the risk factors incorporated by reference from
our most recent Annual Report on Form 10-K for the fiscal year ended September
30, 2012, filed with the SEC on December 14, 2012, as updated by our Quarterly
Reports on Form 10-Q and our other filings with the SEC, filed after the Annual
Report. The risks and uncertainties we described are not the only ones facing
us. Additional risks not presently known to us, or that we currently deem
immaterial, may also impair our business operations. If any of these risks were
to occur, our business, financial condition, or result of operations would
likely suffer. In that event, the trading price of our common stock would
decline, and you could lose all or part of your investment.
Risks related to this Offering
Management will have broad discretion as to the use of the proceeds of this
offering.
We have not designated the amount of net proceeds we will receive from this
offering for any particular purpose. Accordingly, our management will have broad
discretion as to the application of these net proceeds and could use them for
purposes other than those contemplated at the time of this offering. Our
stockholders may not agree with the manner in which our management chooses to
allocate and spend the net proceeds.
You will experience immediate and substantial dilution.
Since the offering price of the securities offered pursuant to this prospectus
supplement and the accompanying prospectus is higher than the net tangible book
10
value per share of our common stock, you will suffer substantial dilution in the
net tangible book value of the common stock you purchase in this offering. See
"Dilution" in this prospectus supplement for a more detailed discussion of the
dilution you will incur if you purchase securities in this offering.
You may experience future dilution as a result of future equity offerings or
other equity issuances.
To raise additional capital, we may in the future offer additional shares of our
common stock or other securities convertible into or exchangeable for our common
stock. We cannot assure you that we will be able to sell shares or other
securities in any other offering at a price per share that is equal to or
greater than the price per share paid by investors in this offering. The price
per share at which we sell additional shares of our common stock or other
securities convertible into or exchangeable for our common stock in future
transactions may be higher or lower than the price per share in this offering.
Our outstanding options and warrants may adversely affect the trading price of
our common stock.
As of September 30, 2013, after the 1-for-10 reverse stock split, there
were outstanding options which allows the holders to purchase approximately
5,200,000 shares of our common stock, at prices ranging between $1.60 and $20.00
per share, outstanding warrants which allow the holders to purchase
approximately 9,918,000 shares of our common stock, at prices ranging between
$2.50 and $17.50 per share, and a convertible note which allows the holder to
acquire approximately 276,000 shares of our common stock at a conversion price
of $4.00. The outstanding options and warrants could adversely affect our
ability to obtain future financing or engage in certain mergers or other
transactions, since the holders of options and warrants can be expected to
exercise them at a time when we may be able to obtain additional capital through
a new offering of securities on terms more favorable to us than the terms of the
outstanding options and warrants. For the life of the options, warrants and the
convertible note, the holders have the opportunity to profit from a rise in the
market price of our common stock without assuming the risk of ownership. The
issuance of shares upon the exercise of outstanding options and warrants, or the
conversion of the note, will also dilute the ownership interests of our existing
stockholders.
There is no public market for the warrants to purchase common stock being
offered in this offering.
There is no established public trading market for the warrants being offered in
this offering, and we do not expect a market to develop. In addition, we do not
intend to apply for listing on any securities exchange or other nationally
recognized trading system. Without an active trading market, the liquidity of
the warrants will be limited.
11
The warrants may not have any value.
The warrants have an exercise price of $___ per share and expire on the 5 year
anniversary of the date of issuance. In the event that our common stock does not
exceed the exercise price of the warrants during the period when the warrants
are exercisable, the warrants may not have any value.
DETERMINATION OF OFFERING PRICE
Our common stock is currently quoted on the NYSE MKT.
The public offering price of the shares of common stock and warrants
offered by this prospectus supplement has been determined by negotiation between
us and the representative of the underwriters. Among the factors considered in
determining the offering price of the shares and warrants have been:
o our history and our prospects;
o the industry in which we operate;
o our past and present operating results; and
o the general condition of the securities markets at the time of this
offering.
USE OF PROCEEDS
We estimate that the net proceeds from the sale of the shares of common
stock and warratns that we are offering will be approximately $____________, or
approximately $_____________ if the underwriter exercise in full its
over-allotment option to purchase additional shares of common stock and warrants
from us, after deducting the underwriters' commissions and the offering expenses
payable by us.
We intend to use the net proceeds from this offering primarily for our
Phase III clinical trial, other research and development, and general and
administrative expenses. As of the date of this prospectus supplement, we cannot
specify with certainty all of the particular uses of the proceeds from this
offering.
Our management will have broad discretion in the application of the net
proceeds from this offering, and investors will be relying on the judgment of
our management with regard to the use of these net proceeds. Pending the use of
the net proceeds from this offering as described above, we intend to invest the
net proceeds in short-term, investment-grade, interest-bearing instruments.
12
DILUTION
The net tangible book value of our common stock on September 30, 2013 was
approximately $0.09 per share, based on 31,023,860 shares of our common stock
outstanding as of September 30, 2013. Net tangible book value per share
represents the amount of our total tangible assets, less our total liabilities,
divided by the total number of shares of our common stock outstanding. Dilution
in net tangible book value per share to new investors represents the difference
between the amount per share paid by purchasers for shares and warrants in this
offering and the net tangible book value per share of our common stock
immediately afterwards.
The calculations below do not give any effect to the public offering price
of the warrants or the shares of common stock issuable upon the exercise of the
warrants.
After giving effect to the sale of _______ shares of our common stock in
this offering, and after deducting the underwriters' commission and estimated
offering expenses payable by us, our as-adjusted net tangible book value as of
September 30, 2013 would have been approximately ________, (unaudited) or _____
per share. This represents an immediate increase in the net tangible book value
of ______ per share to existing stockholders and the immediate dilution in the
net tangible book value of ____ per share to new investors purchasing our shares
in this offering.
The following table illustrates this per share dilution. All amounts in
the table are unaudited.
Offering price per share $____
Net tangible book value per share as of September 30, 2013 $0.09
Pro forma net tangible book value per share as of September 30, 2013,
after giving effect to this offering $____
Increase in net tangible book value per share attributable to
this offering $____
Dilution per share to new investors in this offering $____
If the underwriter exercise in full its over-allotment option to purchase
_________ additional shares of common stock at the public offering price of
$_____ per share, the as adjusted net tangible book value after this offering
would be $____ per share, representing an increase in net tangible book value of
$____ per share to existing stockholders and immediate dilution in net tangible
book value of $_______ per share to investors purchasing our shares in this
offering at the public offering price.
13
The above discussion and table are based on 31,023,860 shares of our common
stock outstanding as of September 30, 2013 and excludes:
____ shares of common stock issuable upon full exercise of outstanding
warrants; and
____ shares of common stock issuable upon full exercise of outstanding options.
DESCRIPTION OF SECURITIES
In this offering, we are offering ________ shares of common stock and
warrants to purchase up to ______ shares of common stock. The shares of common
stock and warrants will be issued separately. This prospectus also relates to
the offering of shares of our common stock upon the exercise, if any, of the
warrants.
Common stock
The material terms and provisions of our common stock are described under
the caption "Description of Securities" in the accompanying prospectus.
Warrants
The following summary of certain terms and provisions of the warrants that
are being offered hereby is not complete and is subject to, and is qualified in
its entirety by the provisions of the warrants, the form of which will be filed
as an exhibit to a Current Report on Form 8-K that we will file in connection
with this offering. Prospective investors should carefully review the terms and
provisions of the form of warrant for a complete description of the terms and
conditions of the warrants.
Duration and Exercise Price: The warrants offered hereby will entitle the
holders thereof to purchase up to an aggregate of ____ shares of our common
stock at an initial exercise price of $___ per share, commencing immediately on
the date of issuance and will expire on the ____ anniversary of the date of
issuance.
Cashless Exercise: If, at any time during the term of the warrants, the issuance
of shares of our common stock upon exercise of the warrants is not covered by an
effective registration statement, the holder is permitted to effect a cashless
exercise of the warrants (in whole or in part) by having the holder deliver to
us a duly executed exercise notice, canceling a portion of the warrant in
payment of the purchase price payable in respect of the number of shares of our
common stock purchased upon such exercise.
Transferability: The warrants may be transferred at the option of the warrant
holder upon surrender of the warrant with the appropriate instruments of
transfer.
Exchange Listing: We do not plan on making an application to list the warrants
on the NYSE MKT, any national securities exchange or other nationally recognized
trading system.
14
Rights as a stockholder: Except as set forth in the warrants, the holders of the
warrants do not have the rights or privileges of holders of our common stock,
including any voting rights, until they exercise the warrants
Fundamental Transactions: In the event of a fundamental transaction, as
described in the warrants and generally including any merger with another
entity, the sale, transfer or other disposition of all or substantially all of
our assets to another entity, or the acquisition by a person of more than 50% of
our common stock, then the holders of the warrants will thereafter have the
right to receive upon exercise of the warrants such shares of stock, securities
or assets as would have been issuable or payable with respect to or in exchange
for a number of shares of our common stock equal to the number of shares of our
common stock issuable upon exercise of the warrants immediately prior to the
fundamental transaction, had the fundamental transaction not taken place, and
appropriate provision will be made so that the provisions of the warrants
(including, for example, provisions relating to the adjustment of the exercise
price) will thereafter be applicable, as nearly equivalent as may be practicable
in relation to any share of stock, securities or assets deliverable upon the
exercise of the warrants after the fundamental transaction. In lieu of the right
to receive upon exercise the shares of stock, securities, or assets as would
have been issuable or payable with respect to or in exchange for a number of
shares of our common stock, the holders of the warrants may require us under
certain circumstances to redeem the warrants for a purchase price payable in
cash of the Black-Scholes value of the warrants, as calculated pursuant to the
terms of the warrants.
Limits on Exercise of Warrants: Except upon at least 61 days' prior notice from
the holder to us, the holder will not have the right to exercise any portion of
the warrant if the holder, together with its affiliates, would beneficially own
in excess of 4.99% of the number of shares of common stock (including securities
convertible into common stock) outstanding immediately after the exercise.
Rights Agreement
In November 2007 we declared a dividend of one Series A Right and one
Series B Right for each share of our common stock which was outstanding on
November 9, 2007. When the Rights become exercisable, each Series A Right will
entitle the registered holder, subject to the terms of a Rights Agreement, to
purchase from us one share of our common stock at a price equal to 20% of the
market price of our common stock on the exercise date, although the price may be
adjusted pursuant to the terms of the Rights Agreement. If after a person or
group of affiliated persons has acquired 15% or more of our common stock or
following the commencement of, a tender offer for 15% or more of our outstanding
common stock (i) we are acquired in a merger or other business combination and
we are not the surviving corporation, (ii) any person consolidates or merges
with us and all or part of our common shares are converted or exchanged for
securities, cash or property of any other person, or (iii) 50% or more of our
consolidated assets or earning power are sold, proper provision will be made so
that each holder of a Series B Right will thereafter have the right to receive,
upon payment of the exercise price of $100 (subject to adjustment), that number
of shares of common stock of the acquiring company which at the time of such
transaction has a market value that is twice the exercise price of the Series B
Right.
15
UNDERWRITING
We are offering the shares of common stock and warrants described in this
prospectus supplement through the underwriters named below pursuant to an
underwriting agreement between us and the representative. Chardan Capital
Markets, LLC is acting as the representative of the underwriters named below.
Subject to the terms and conditions of the underwriting agreement, we have
agreed to sell to the underwriters, and each underwriter has severally agreed to
purchase, at the public offering price less the underwriting discounts and
commissions set forth on the cover page of this prospectus supplement, the
number of shares of common stock and warrants listed next to its name in the
following table:
Number Number
Name of Underwriter of Shares of Warrants
Chardan Capital Markets, LLC
Laidlaw & Company (UK) Ltd.
Total
The underwriting agreement provides that the underwriters' obligation to
purchase our common stock and warrants is subject to approval of legal matters
by counsel and the satisfaction of the conditions contained in the underwriting
agreement. The conditions contained in the underwriting agreement include the
conditions that the representations and warranties made by us to the
underwriters are true, that there has been no material adverse change to our
condition or in the financial markets, and that we deliver to the underwriters
customary closing documents. The underwriters are obligated to purchase all of
the shares of common stock and warrants (other than those covered by the
over-allotment option described below) if they purchase any of the shares of
common stock and warrants.
We have agreed to indemnify the underwriters against specified
liabilities, including liabilities under the Securities Act of 1933, as amended,
and to contribute to payments the underwriters may be required to be make in
respect thereof.
Option to Purchase Additional Common Shares
We have granted to the underwriters an option, exercisable for 45 days
from the date of this prospectus supplement, to purchase up to ________
additional shares of common stock and/or warrants to purchase up to ____ shares
of common stock at the public offering prices, less the underwriting discount
and commissions. shown on the cover page of this prospectus supplement. The
underwriters may exercise this option, in whole or in part, solely to cover
over-allotments, if any, made in connection with this offering. The underwriter
is not required to exercise the over-allotment option.
16
Underwriting Discount and Commissions and Offering Expenses
The underwriters propose to offer the common stock and warrants to the
public at the public offering price set forth on the cover of this prospectus
supplement. The underwriters may offer the common stock and warrants to
securities dealers at the price to the public less a concession not in excess of
$___ per share of common stock and related warrant. After the common stock and
warrants are delivered for sale to the public, the underwriters may vary the
offering price and other selling terms from time to time.
The following table summarizes the compensation to be paid to the
underwriters by us:
Total
-------------------------------
Per Share of
Common Stock No Option Full Option
and Per Exercise Exercise
Warrant
------------- ---------- -------------
Public offering price $ $ $
Underwriting discounts and
commissions to be paid
by us $ $ $
Proceeds, before expenses,
to us $ $ $
We estimate our total expenses associated with the offering, excluding
underwriting discounts and commissions, will be approximately $________.
Indemnification
We have agreed to indemnify the underwriters against certain liabilities,
including liabilities under the U.S. federal securities laws, or to contribute
to payments that may be required to be made in respect of these liabilities.
Lock-Up Agreements
Pursuant to certain "lock up" agreements, for a period of 60 days from the
date of this prospectus supplement, other than with the prior written consent of
the representative of the underwriters (which consent may be withheld at the
sole discretion of the representative), we and our officers and directors have
agreed that we and they will not, directly or indirectly, sell, offer, contract,
or grant any option to sell, pledge, transfer, or establish an open "put
equivalent position" within the meaning of the Exchange Act or otherwise dispose
of or transfer, or announce the offering of, or file any registration statement
under the Securities Act in respect of, any shares of our common stock, options,
or warrants to acquire shares of our common stock or securities exchangeable or
exercisable for or convertible into shares of our common stock. In addition, our
officers and directors may not enter into a swap or other derivatives
transaction that transfers to another, in whole or in part, the economic
benefits or risk of ownership in our common stock, or otherwise dispose of any
shares of our common stock, options or warrants or securities exchangeable or
exercisable for or convertible into shares of our common stock currently or
later owned either of record or beneficially, or publicly announce an intention
to do any of the foregoing.
17
The restrictions above do not apply to (i) our issuance of shares of our
common stock or options to purchase shares of our common stock, or shares of our
common stock upon exercise of options, pursuant to any stock option, stock
bonus, or other stock plan or arrangement described in this prospectus
supplement or the accompanying prospectus, or any amendment to or replacement of
such plan and (ii) our filing of one or more registration statements on Form S-8
or amendments thereto relating to the issuance of shares of our common stock or
the issuance and exercise of options to purchase shares of our common stock
granted under our employee benefit plans existing on the date of this prospectus
supplement or any amendment to or replacement of such plan. Our officers and
directors may transfer shares of our common stock or such other convertible,
exercisable or exchangeable securities without the prior written consent of the
representative if: (a) the representative receives a signed lock-up agreement
for the balance of the 60-day restricted period from each donee, trustee,
distributee, or transferee, as the case may be; (b) any such transfer does not
involve a disposition for value; (c) such transfers are not publicly reportable
under the Securities Act, the Exchange Act, and their related rules and
regulations; (d) the transferor does not otherwise voluntarily effect any public
filing or report regarding such transfers; and (e) such transfer is (i) a bona
fide gift or gifts; (ii) to any trust for the direct or indirect benefit of the
transferor or the immediate family of the transferor; or (iii) to the
transferor's affiliates or to any investment fund or other entity controlled or
managed by the transferor.
If (A) during the last 17 days of the 60-day period, we issue an earnings
release or material news or a material event relating to us occurs or (B) prior
to the expiration of the 60-day period, we announce that we will release
earnings results during the 16-day period beginning on the last day of the
60-day period, then in each case the 60-day period will be extended until the
expiration of the 18-day period beginning on the date of the issuance of the
earnings release or the occurrence of the material news or material event, as
applicable, unless the representative waives such restriction.
Price Stabilization, Short Positions and Penalty Bids; Passive Market Making
The underwriters may engage in over-allotment, syndicate covering
transactions, stabilizing transactions, penalty bids, and passive market making
in accordance with Regulation M under the Exchange Act. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Covered short sales are sales made in an amount not greater than the
number of shares available for purchase by the underwriters under their
over-allotment option. The underwriters may close out a covered short sale by
exercising their over-allotment option or purchasing shares in the open market.
Naked short sales are sales made in an amount in excess of the number of shares
available under the over-allotment option. The underwriters must close out any
naked short sale by purchasing shares in the open market. Syndicate covering
transactions involve purchases of shares of common stock in the open market
after the distribution has been completed in order to cover syndicate short
positions. In determining the source of shares to close out the short position,
the underwriter will consider, among other things, the price of shares available
for purchase in the open market as compared with the price at which they may
purchase shares through exercise of the overallotment option. Stabilizing
transactions permit bids to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum and are engaged in for the
purpose of preventing or retarding a decline in the market price of the common
18
stock while the offering is in progress. Penalty bids permit the underwriters to
reclaim a selling concession from a syndicate member when the shares of common
stock originally sold by such syndicate member is purchased in a syndicate
covering transaction to cover syndicate short positions. Penalty bids may have
the effect of deterring syndicate members from selling to people who have a
history of quickly selling their shares. In passive market making, market makers
in our common stock who are underwriters or prospective underwriters may,
subject to certain limitations, make bids for or purchases of the common stock
until the time, if any, at which a stabilizing bid is made. In connection with
this offering, the underwriters may engage in passive market making transactions
in the shares of common stock in accordance with Rule 103 of Regulation M under
the Exchange Act during the period before the commencement of offers or sales of
common stock and extending through the completion of distribution. A passive
market maker must display its bids at a price not in excess of the highest
independent bid of the security. However, if all independent bids are lowered
below the passive market maker's bid that bid must be lowered when specified
purchase limits are exceeded. These stabilizing transactions, syndicate covering
transactions and penalty bids may cause the price of our common stock to be
higher than it would otherwise be in the absence of these transactions.
The underwriters are not required to engage in these activities and may
end any of these activities at any time.
Electronic Distribution
This prospectus supplement, the accompanying prospectus and the documents
incorporated herein and therein by reference in electronic format may be made
available on the websites maintained by one or more of the underwriters. The
underwriters may distribute prospectuses electronically. The underwriters may
agree to allocate a number of shares of common stock for sale to their online
brokerage account holders. The common stock will be allocated to underwriters
that may make Internet distributions on the same basis as other allocations. In
addition, common stock may be sold by the underwriters to securities dealers who
resell common stock to online brokerage account holders.
Other than this prospectus supplement, the accompanying prospectus and the
documents incorporated herein and therein by reference in electronic format,
information contained in any website maintained by an underwriter is not part of
this prospectus supplement, the accompanying prospectus, the documents
incorporated herein and therein by reference or registration statement of which
the prospectus supplement forms a part, has not been endorsed by us and should
not be relied on by investors in deciding whether to purchase common stock. The
underwriters are not responsible for information contained in websites that they
do not maintain.
19
Relationship with the Underwriters
From time to time, certain of the underwriters and their respective
affiliates have provided, and may continue to provide, investment banking
services to us in the ordinary course of their businesses, and have received,
and may continue to receive, compensation for such services.
Stock Exchange Listing
Our common stock is listed on the NYSE MKT under the symbol "CVM". There
is no established trading market for the warrants offered hereby, and we do not
expect a market to develop. In addition, we do not intend to apply for listing
of the warrants on any national securities exchange or other nationally
registered trading system.
ADDITIONAL INFORMATION
We are subject to the requirements of the Securities Exchange Act of l934
and are 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 us 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 us. The address of that site is
http://www.sec.gov.
We 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
The following documents filed with the Commission by us (Commission File
No. 001-11889) are incorporated by reference into this prospectus:
o Annual Report on Form 10-K for the fiscal year ended September 30,
2012.
o Report on Form10-Q for the three months ended December 31, 2012.
o Report on Form 10-Q for the three and six months ended March 31, 2013.
o Report on Form 10-Q for the three and nine months ended June 30, 2013.
o Current Reports on Form 8-K, which were filed with the SEC on December
26, 2012, June 26, 2013, July 19, 2013, July 26, 2013, August 30, 2013
and September 3, 2013.
20
All documents filed with the Commission by us 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.
We have 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 us 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 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.
No dealer salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus. Any information or representation not contained in this prospectus
must not be relied upon as having been authorized by us. This prospectus does
not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in our affairs since the
date of this prospectus.