-----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, Inl+03LwiRJCdxxAjHFBsywxwD2AlX9oJC85gPUxkZyGu096Jr4/C+UuztOZYi80 nOVzlg0zTfqXNp0nRni4PA== 0001004878-00-000022.txt : 20000215 0001004878-00-000022.hdr.sgml : 20000215 ACCESSION NUMBER: 0001004878-00-000022 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000214 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 SEC ACT: SEC FILE NUMBER: 333-72415 FILM NUMBER: 541529 BUSINESS ADDRESS: STREET 1: 8229 BOONE BLVD STE 510 CITY: VIENNA STATE: VA ZIP: 22182 BUSINESS PHONE: 7035495293 MAIL ADDRESS: STREET 1: 8229 BOONE BLVD STE 802 CITY: VIENNA STATE: VA ZIP: 22182 FORMER COMPANY: FORMER CONFORMED NAME: INTERLEUKIN 2 INC DATE OF NAME CHANGE: 19880317 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999. OR ( ) RANSITION 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 of 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 18,037,981 February 9, 2000 TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Page Balance Sheets 3-4 Statements of Operations 5 Statements of Cash Flow 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis 9 PART II Item 6. Exhibits and Reports on Form 8-K 10 Signatures 11 Item 1. FINANCIAL STATEMENTS CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ ASSETS (unaudited) December 31, September 30, 1999 1999 -------------- -------------- CURRENT ASSETS: Cash and cash equivalents $ 4,570,132 $ 2,746,531 Investments, net 2,002,492 3,192,604 Interest and other receivables 55,149 62,825 Prepaid expenses 463,421 514,572 Advances to officer/shareholder and 13,294 69,448 employees -------------- -------------- Total Current Assets 7,104,488 6,585,980 RESEARCH AND OFFICE EQUIPMENT- Less accumulated depreciation of $1,618,930 and $1,563,586 444,812 468,627 DEPOSITS 14,828 14,828 PATENT COSTS- less accumulated amortization of $526,655 and $511,118 517,689 490,337 -------------- -------------- $ 8,081,817 $ 7,559,772 ============== ============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ (continued) LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) December 31, September 30, 1999 1999 -------------- -------------- CURRENT LIABILITIES: Accounts payable $ 263,508 $ 433,265 -------------- -------------- Total current liabilities 263,508 433,265 DEFERRED RENT 28,321 28,321 -------------- -------------- Total liabilities 291,829 461,586 STOCKHOLDERS' EQUITY Common stock, $.01 par value; authorized, 100,000,000 shares; issued and outstanding, 18,037,981 and 17,002,341 shares 180,380 170,023 Additional paid-in capital 62,039,794 59,672,652 Net unrealized loss on equity securities (97,946) (116,659) Deficit (54,332,240) (52,627,830) -------------- -------------- TOTAL STOCKHOLDERS' EQUITY 7,789,988 7,098,186 -------------- -------------- $ 8,081,817 $ 7,559,772 ============== ============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --------------------------------- (unaudited) Three Months Ended December 31, 1999 1998 -------------- -------------- REVENUES: Interest income $ 28,693 $ 156,046 Other income 1,355 39,667 -------------- -------------- TOTAL INCOME 30,048 195,713 EXPENSES: Research and development 995,024 941,948 Depreciation and amortization 70,780 65,932 General and administrative 668,652 706,024 -------------- -------------- TOTAL OPERATING EXPENSES 1,734,456 1,713,904 -------------- -------------- NET LOSS $ 1,704,408 $ 1,518,191 ============== ============== LOSS PER COMMON SHARE (BASIC) $ 0.10 $ 0.13 ============== ============== LOSS PER COMMON SHARE (DILUTED) $ 0.10 $ 0.13 ============== ============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 17,270,008 11,615,914 ============== ============== See notes to condensed financial statements. CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW --------------------------------- (unaudited) Three Months Ended December 31, 1999 1998 -------------- -------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS $ (1,704,408) $(1,518,191) Adjustments to reconcile net loss to net cash used in operating activities: - Depreciation and amortization 70,780 65,932 Net realized loss on sale of securities 51,918 - Stock issued for services - - Stock bonus granted to officer - - Stock issued to 401(k) 22,498 - Decrease (increase) in deposits - - Decrease (increase) in receivables 7,676 1,256 Decrease (increase) in prepaid expenses 51,151 70,013 Decrease (increase) in advances 56,154 (52,395) (Increase) decrease in deferred rent - - Increase (decrease) in accounts payable (169,757) (128,251) ------------ ------------ NET CASH USED IN OPERATING ACTIVITIES (1,613,988) (1,561,636) ------------ ------------ CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITY: Sales of investments 1,156,907 1,294,101 Purchase of investments - - Note receivable from employee/shareholder - - Payment on note receivable from employee/shareholder - - Purchase of research and office equipment (31,430) (31,887) Patent costs (42,888) (23,654) -------------- -------------- NET CASH USED IN INVESTING ACTIVITY 1,082,589 1,238,560 -------------- -------------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Cash proceeds from issuance of preferred and common stock and warrant conversion for cash 2,355,000 21,553 -------------- -------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 2,355,000 21,553 -------------- -------------- NET (DECREASE) INCREASE IN CASH 1,823,601 (301,523) CASH AND CASH EQUIVALENTS: Beginning of period 2,746,531 2,813,225 -------------- -------------- End of period $ 4,570,132 $ 2,511,702 ============== ============== See notes to condensed financial statements. CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (unaudited) 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, 1999. 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 December 31, 1999 and the results of operations for the three-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 Net loss per common share is computed by dividing the net loss, after increasing the loss for the effect of any preferred stock dividends, by the weighted average number of common shares outstanding during the period. Common stock equivalents, including options to purchase common stock, were excluded from the calculation. 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. CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (unaudited) (continued) B. STOCKHOLDERS' EQUITY In December 1999 and January 2000, the Company sold 1,148,592 shares of its common stock, plus Series A and Series B warrants, to a group of private investors for $2,800,000. The Series A warrants allow the holders to purchase up to 402,007 shares of the Company's common stock at a price of $2.925 per share at any time prior to December 8, 2002. The Series B warrants allow the holders, under certain circumstances, to acquire additional shares of the Company's common stock at a nominal price in the event (i) the price of the Company's common stock falls below $2.44 per share prior to certain vesting dates, or (ii) the Company raises in excess of $1,000,000 at a price which is below either the then prevailing market price of the Company's common stock or $2.44 per share. The actual number of shares issuable upon the exercise of the Series B warrants (if any) will vary depending upon a number of factors, including the price of the Company's common stock at certain dates. C. COMPREHENSIVE LOSS In fiscal 1999, the Company adopted Statement of Financial Accounting Standard ("SFAS") No. 130 "Reporting Comprehensive Income" which was effective for fiscal years beginning after December 15, 1997. Comprehensive Income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company's source of other comprehensive loss, other than net losses, is from unrealized gain or loss on investments. The components of comprehensive income (loss) are as follows: Three Months Ended Three Months Ended December 31, 1999 December 31, 1998 Net Loss $1,704,408 $1,518,191 Other Comprehensive Income: Unrealized Loss (Gain) from Investments (18,713) 62,819 ------------- ------------- Comprehensive Loss $1,685,695 $1,581,010 ========== ========== CEL-SCI CORPORATION 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 the proceeds from the sale of its securities to meet all of its liquidity and capital resource requirements. The Company had working capital of $6,840,980 at December 31, 1999. During the three months ended December 31, 1999 the Company's operations used $1,613,988 of cash. Results of Operations Interest income during the three months ending December 31, 1999 reflects interest accrued on investments. Interest income has decreased as the Company continues to use the proceeds from the sale of its Series D Preferred Stock for operations. Research and development expense in 1999 was higher than in 1998 because the Company is running more and larger clinical trials. General and administrative expenses have decreased due to a decline in activities in the Company's subsidiary. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Company's cash flow and earnings are subject to fluctuations due to changes in interest rates in its investment portfolio of debt securities, to the fair value of equity instruments held, and, to an immaterial extent, to foreign currency exchange rates. The Company maintains an investment portfolio of various issuers, types and maturities. These securities are generally classified as available-for-sale and, consequently, are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of stockholders' equity. Other-than-temporary losses are recorded against earnings in the same period the loss was deemed to have occurred. The Company does not currently hedge this exposure and there can be no assurance that other-than-temporary losses will not have a material adverse impact on the Company's results of operations in the future. PART II Item 1. Legal Proceedings See Part I, Item 3 of the Company's report on Form 10-K for the year ending September 30, 1999. Item 2. Changes in Securities and Use of Proceeds See Note B 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 December 31, 1999. 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 14, 2000 /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 0000725363 Cel-Sci Corporation 1 US 3-MOS SEP-30-2000 OCT-1-1999 DEC-31-1999 1 4,570,132 2,002,492 55,149 0 0 7,104,448 2,063,742 1,618,930 7,104,488 263,508 0 0 0 180,380 7,609,608 8,081,817 0 30,048 0 1,734,456 0 0 0 (1,704,408) 0 (1,704,408) 0 0 0 (1,704,408) (0.10) (0.10)
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