-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, DCyw/i4uDaBTtY07sSWX7I4IYjFBCoAhbibyFnr3b/KKHIVuNhxbINROPKHkbnqd fLyunF9HZSQX5Za4b/cE3A== 0001004878-99-000010.txt : 19990217 0001004878-99-000010.hdr.sgml : 19990217 ACCESSION NUMBER: 0001004878-99-000010 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980331 FILED AS OF DATE: 19990216 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CEL SCI CORP CENTRAL INDEX KEY: 0000725363 STANDARD INDUSTRIAL CLASSIFICATION: BIOLOGICAL PRODUCTS (NO DIAGNOSTIC SUBSTANCES) [2836] IRS NUMBER: 840916344 STATE OF INCORPORATION: CO FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-11889 FILM NUMBER: 99539625 BUSINESS ADDRESS: STREET 1: 66 CANAL CENTER PLZ STE 510 CITY: ALEXANDRIA STATE: VA ZIP: 22314 BUSINESS PHONE: 7035495293 MAIL ADDRESS: STREET 1: 66 CANAL CENTER PLAZA SUITE 510 CITY: ALEXANDRIA STATE: VA ZIP: 22314 FORMER COMPANY: FORMER CONFORMED NAME: INTERLEUKIN 2 INC DATE OF NAME CHANGE: 19880317 10-Q/A 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q/A (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1998. OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ______________. Commission File Number 0-11503 CEL-SCI CORPORATION Colorado 84-0916344 ================ ============ State or other jurisdiction (IRS) Employer incorporation Identification Number 8229 Boone Boulevard, Suite 802 Vienna, Virginia 22182 ----------------------------- Address of principal executive offices (703) 506-9460 ----------------------------- Registrant's telephone number, including area code Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days. Yes ____X_____ No __________ Class of Stock No. Shares Outstanding Date - -------------- ---------------------- ---- Common 11,494,815 May 14, 1998 TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Page ---- Balance Sheets 3-4 Statements of Operations 5-6 Statements of Cash Flow 7 Notes to Financial Statements 8 Item 2. Management's Discussion and Analysis 10 PART II Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12 Item 1. FINANCIAL STATEMENTS CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ ASSETS (unaudited) March 31, September 30, 1998 1997 ------------- --------------- CURRENT ASSETS: Cash and cash equivalents $3,508,606 $2,957,409 Investments, net 745,216 12,362,395 Interest receivable 94,578 106,443 Accounts receivable 702 Prepaid expenses 518,875 410,788 Advances to officer/shareholder and employees 100,900 291,781 ------------- --------------- Total Current Assets 5,062,834 16,034,859 RESEARCH AND OFFICE EQUIPMENT- Less accumulated depreciation of $1,250,512 and $1,128,410 673,709 791,964 DEPOSITS 18,178 18,178 PATENT COSTS- less accumulated amortization of $427,798 and $402,025 471,670 461,421 ------------- --------------- $17,198,416 $6,334,397 ============= =============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ (continued) LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) March 31, September 30, 1998 1997 ------------- --------------- CURRENT LIABILITIES: Accounts payable $114,076 $481,587 ------------- --------------- Total current liabilities 114,076 481,587 DEFERRED RENT 27,030 27,030 ------------- --------------- Total liabilities 141,106 508,617 STOCKHOLDERS' EQUITY Preferred stock, Series D, $.01 par value - authorized 10,000 shares; issued and outstanding 100 - 10,000 shares Common stock, $.01 par value; authorized, 100,000,000 shares; issued and outstanding, 11,492,815 and 10,445,691 shares 114,928 104,457 Additional paid-in capital 44,419,244 58,468,290 Net unrealized loss on equity - (3,499) securities Deficit (38,694,422) (41,526,008) ------------- --------------- TOTAL STOCKHOLDERS' EQUITY 17,057,310 5,825,780 ------------- --------------- $17,198,416 $6,334,397 ============= =============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --------------------------------- (unaudited) Six Months Ended March 31, 1998 1997 (as (as restated restated see Note E) see Note E) ------------- --------------- REVENUES: Interest income $281,003 $223,222 Other income 4,752 3,438 ------------- --------------- TOTAL INCOME 285,755 226,660 EXPENSES: Research and development 3,672,943 1,727,661 Depreciation and amortization 147,874 155,319 General and administrative 1,137,970 1,241,805 ------------- --------------- TOTAL OPERATING EXPENSES 3,117,340 4,966,232 ------------- --------------- NET LOSS $2,831,585 $4,739,572 ACCRETION OF PREFERRED STOCK 1,980,000 847,336 DIVIDENDS PREFERRED STOCK DIVIDENDS 108,957 - NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $4,811,585 $5,698,658 ========== ========== LOSS PER COMMON SHARE (basic) $0.43 $0.67 ===== ===== LOSS PER COMMON SHARE (diluted) $0.43 $0.67 ===== ===== ============= =============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 11,242,903 8,497,139 ============= =============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS ---------------------------------- (unaudited) Three Months Ended March 31, 1998 1997 ------------- --------------- REVENUES: Interest Income $183,422 $99,552 Other Income 2,734 2,063 ------------- --------------- TOTAL INCOME 186,156 101,615 EXPENSES: Research and development 704,349 2,988,983 Depreciation and amortization 73,949 81,105 General and administrative 634,018 589,761 ------------- --------------- TOTAL OPERATING EXPENSES 1,412,316 3,659,849 ------------- --------------- NET LOSS $1,226,160 $3,558,234 ============= =============== ACCRETION OF PREFERRED STOCK DIVIDENDS - 251,471 ------------- --------------- NET LOSS ATTRIBUTABLE TO COMMON STOCKHOLDERS $1,266,160 $3,809,705 ========== ========== LOSS PER COMMON SHARE (basic) $0.11 $0.43 ======= ===== LOSS PER COMMON SHARE (diluted) $0.11 $0.43 ======= ===== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 11,341,261 8,848,507 See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW --------------------------------- (unaudited) Six Months Ended March 31, 1998 1997 ------------- --------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS $(2,831,585) $(4,739,572) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 147,874 155,319 Amortization of premium (237,060) (113,192) (discount) on investments Unrealized gain (loss) on sale of 3,499 (11,550) investments Stock issued for services 23,254 - Stock options issued for services 40,419 - Decrease (increase) in interest 11,865 (17,798) receivable Decrease (increase) in accounts (702) (688) receivable Decrease (increase) in prepaid (108,088) (157,781) expenses Decrease (increase) in advances 135,090 136,293 Increase (decrease) in accounts (367,511) (150,885) payable ------------- --------------- NET CASH USED IN OPERATING (3,182,945) (4,899,854) ACTIVITIES ------------- --------------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITY: Sales of investments 6,750,000 3,550,000 Purchase of investments (18,130,119) - Note receivable from - (300,000) employee/shareholder Payment on note receivable from 55,791 employee/shareholder Laboratory construction - (113,837) Purchase of research and office (3,847) (49,299) equipment Patent costs (36,021) (29,191) ------------- --------------- NET CASH USED IN INVESTING ACTIVITY (11,364,196) 3,057,673 ------------- --------------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Repurchase of preferred stock - (2,850,000) Issuance of preferred stock 10,000,000 2,850,000 Dividends paid - (103,963) Issuance of common stock 3,995,944 2,121,401 ------------- --------------- NET CASH PROVIDED BY FINANCING 13,995,944 2,017,438 ACTIVITIES ------------- --------------- NET (DECREASE) INCREASE IN CASH (551,197) 175,257 CASH AND CASH EQUIVALENTS: Beginning of period 3,508,606 3,549,810 ------------- --------------- End of period $2,957,409 $3,725,067 ============= =============== See notes to condensed financial statements. CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED MARCH 31, 1998 AND 1997 (unaudited) INTRODUCTORY NOTE This Amendment on Form 10-Q/A amends the Company's Quarterly Report on Form 10-Q, as filed by the Company on May 15, 1998, and is being filed to reflect the restatement of the Company's condensed consolidated financial statements (the "Restatement"). The Restatement reflects the effect on net loss per share amounts for the accretion of preferred stock beneficial conversion features and warrants, and preferred stock dividends. A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The accompanying financial statements have been prepared in accordance with rules established by the Securities and Exchange Commission for Form 10-Q. Not all financial disclosures required to present the financial position and results of operations in accordance with generally accepted accounting principles are included herein. The reader is referred to the Company's Financial Statements included in the registrant's Annual Report on Form 10-K for the year ended September 30, 1997. In the opinion of management, all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the financial position as of March 31, 1998 and the results of operations for the six-month period then ended have been made. Significant accounting policies have been consistently applied in the interim financial statements and the annual financial statements. Investments Investments that may be sold as part of the liquidity management of the Company or for other factors are classified as available-for-sale and are carried at fair market value. Unrealized gains and losses on such securities are reported as a separate component of stockholders' equity. Realized gains and losses on sales of securities are reported in earnings and computed using the specific identified cost basis. Loss per Share Basic EPS excludes dilution and is computed by dividing net income or loss attributable to common stockholders by the weighted average of common shares outstanding for the period. Diluted EPS reflects the potential dilution that could occur if securities or other CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS SIX MONTHS ENDED MARCH 31, 1998 AND 1997 (unaudited) (continued) contracts to issue common stock (convertible preferred stock, warrants to purchase common stock and common stock options using the treasury stock method) were exercised or converted into common stock. Potential common shares in the diluted EPS computation are excluded in net loss periods as their effect would be antidilutive. The loss attributable to common stockholders includes the accretion of Series B and Series C Preferred Stock beneficial conversion features, the accretion of Series D Preferred Stock warrants and preferred stock dividends. Long-lived Assets Statement of Accounting Standards No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of" is effective for financial statements for fiscal years beginning after December 15, 1995. It is the Company's opinion that the adoption of the statement would have no material effect on its Financial Statements. B. RELATED PARTY TRANSACTIONS In October, 1996, the Company loaned $300,000 to an officer and shareholder. The loan carried an interest rate of 5% and is due September 30, 1998. Payments have been made on the note and the balance on March 31, 1998 is $96,009. C. STOCKHOLDERS' EQUITY On December 23, 1997, the Company sold 10,000 shares of Series D convertible preferred stock to institutional investors for $10,000,000. Prior to September 19, 1998, the stock is convertible, at the option of the holder, into shares of common stock of the Company at $8.28, a premium to the closing bid stock price of $7.25, the day prior to the closing of the financing. The number of shares issuable upon the conversion of each Series D preferred share is to be determined by dividing $1,000 by $8.28. After a nine month holding period, the preferred stock will be convertible at the lower of $8.28 or the average price of the Company's common stock for any two trading days during the ten trading days preceding the conversion date. Investors also received an aggregate of 1,100,000 four-year warrants to purchase additional shares at $8.625 and $9.315. The Company filed a registration statement for the resale of the shares of common stock acquired upon conversion of the Series D preferred stock and warrants. D. SERIES A WARRANT OFFER Between January 9, 1998 and February 6, 1998 the holders of the Company's outstanding warrants were given the opportunity to purchase one share of the Company's Common Stock and one Series A Warrant in exchange for $6.00 and five warrants (the "Exchange Offer"). Each Series A Warrant originally allowed the holder to purchase one additional share of the Company's Common Stock for $18.00 at any time prior to February 7, 2000. The expiration date of the Exchange offer was subsequently extended to February 17, 1998 and the exercise price of the Series A Warrants was lowered to $10.00. During the period of the exchange offer, 582,025 warrants were tendered, the Company received proceeds of approximately $698,000, and a total of 116,405 Series A Warrants were issued to the warrant holders participating in the exchange offer. The expiration date of the Company's old warrants was extended to July 31, 1998. E. RESTATEMENT Subsequent to the issuance of the Company's Report on Form 10-Q for the quarter ended March 31, 1998, the Company determined that the application of a technical accounting treatment required the loss per share calculation to include the impact of $1,980,000 for the accretion of Series D Preferred Stock warrants for the six months ended March 31, 1998 and $847,336 and $108,957 for the accretion of the assumed beneficial conversion features of the Series B and C Preferred Stock and preferred stock dividends, respectively, for the six months ended March 31, 1997. The effect of the accretion is a non-cash charge to additional paid-in capital and does not impact the previously reported net loss for the six months ended March 31, 1998 and 1997, nor does it result in a net change to stockholders' deficit at September 30, 1997 or March 31, 1998. The effect of the restatement was to increase net loss attributable to common stockholders and net loss per share for the six months ended March 31, 1998 and 1997. Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Liquidity and Capital Resources The Company has had only limited revenues from operations since its inception in March 1983. The Company has relied upon proceeds realized from the public and private sale of its Common Stock and short-term borrowings to meet its funding requirements. Funds raised by the Company have been expended primarily in connection with the acquisition of exclusive rights to certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, the funding of VTI's research and development program, patent applications, the repayment of debt, the continuation of Company-sponsored research and development and administrative costs, and the construction of laboratory facilities. Inasmuch as the Company does not anticipate realizing significant revenues until such time as it enters into licensing arrangements regarding its technology and know-how or until such time it receives permission to sell its product (which could take a number of years), the Company is mostly dependent upon short-term borrowings and the proceeds from the sale of its securities to meet all of its liquidity and capital resource requirements. Effective June 1, 1997, the exercise price of the publicly held warrants, was lowered from $15.00 to $6.00. In addition, the Company changed the terms of the conversion such that only 5 warrants are required to purchase one share. Previously ten warrants had been required. These warrants will expire on July 31, 1998. During 1997, the Company issued Preferred Stock. See Footnote C, Stockholders' Equity. Results of Operations Interest income during the six months ending March 31, 1998 reflects interest accrued on investments. Interest income has increased over the same period in 1997 due to the investment of the proceeds of the sale of the Series D Preferred Stock. Research and development expense in 1998 is substantially less than it was in 1997 because the 1997 numbers reflect the acquisition of the license for Multikine. General and administrative expenses have increased due to the additional employees needed for the increased activity level. PART II Item 2. Changes in Securities and Use of Proceeds See Notes C and D to the Company's Notes to Financial Statements. Item 6. (a) Exhibits No exhibits are filed with this report. (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the quarter ended March 31, 1998. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CEL-SCI Corporation Date:February 11, 1999 /s/ Geert Kersten ------------------------------- Geert Kersten Chief Executive Officer* *Also signing in the capacity of the Chief Accounting Officer and Principal Financial Officer. EX-27 2 FDS --
5 1 U.S. Dollars 6-MOS sep-30-1998 mar-31-1998 1.00 2,957,409 12,362,395 714,353 0 0 16,034,859 1,924,224 1,250,512 17,198,416 114,076 0 0 100 114,928 16,942,282 17,198,416 0 285,755 0 3,117,340 0 0 0 (2,831,585) 0 (2,831,585) 0 0 0 (2,831,585) (0.43) (0.43)
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