-----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, JuMukTQJ/1prcbFLDo1/OP427tjlbXxHPDYOODXHwzBG+UjjVCEITf9/8DYeQa3C Pl/XGIIF1C/dhqKUTQTPCQ== 0001004878-97-000013.txt : 19970120 0001004878-97-000013.hdr.sgml : 19970120 ACCESSION NUMBER: 0001004878-97-000013 CONFORMED SUBMISSION TYPE: S-3 PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19970117 SROS: NASD 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: S-3 SEC ACT: 1933 Act SEC FILE NUMBER: 333-19989 FILM NUMBER: 97507475 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 S-3 1 As filed with the Securities and Exchange Commission on January 15, 1997. Registration No. 333- SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM S-3 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) 66 Canal Center Plaza, Suite 510 Alexandria, Virginia 223l4 84-09l6344 (703) 549-5293 (IRS Employer I.D. (Address, including zip code, and telephone number Number) including area of principal executive offices) Geert Kersten 66 Canal Center Plaza, Suite 510 Alexandria, Virginia 223l4 (703) 549-5293 (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: As soon as practicable after the effective date of this Registration Statement If the only securities being registered on this Form are being offered pursuant to dividend or interest reinvestment plans, please check the following box. [ ] Page 1 of Pages Exhibit Index Begins on Page 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 delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box. [ ] 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 Unit (1) Price Fee Common Stock (2) 800,000 $5.05 $4,040,000 $1,225 Common Stock (3) 759,526 $5.05 3,835,607 1,163 Total 1,389,000 $7,875,607 $2,388 (1) Offering price computed in accordance with Rule 457(c). (2) Shares of Common Stock are offered as a result of the conversion of the Company's Series C Preferred Stock into shares of common stock. (3) Shares of Common Stock issuable upon the exercise of Series A and Series B Warrants. The Series A and Series B Warrants were issued in connection with the sale of the Company's Series C Preferred Stock. Pursuant to Rule 416, this Registration Statement includes such indeterminate number of additional securities as may be required for issuance upon the conversion of the Series C Preferred Stock or 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 C Preferred Stock or the Sales Agent's 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 Registra- tion 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 Sec- tion 8(a), may determine. CEL-SCI CORPORATION CROSS REFERENCE SHEET Item in Form S-3 Location in Prospectus Item 1 Forepart of the Registration Statement and Outside Front Cover Page of Prospectus .............................. Facing Page; Outside Front Cover Page Item 2 Inside Front and Outside Back Cover Pages of Prospectus ..................... Inside Front Cover Page; Outside Back Cover Page Item 3 Summary Information, Risk Factors and Ratio of Earnings to Fixed Changes ...... Prospectus Summary; Risk Factors Item 4 Use of Proceeds ......................... Not Applicable. Item 5 Determination of Offering Price ......... Selling Shareholders Item 6 Dilution ................................ Dilution Item 7 Selling Security Holders ................ Selling Shareholders Item 8 Plan of Distribution .................... Selling Shareholders Item 9 Description of Securities to be Registered .............................. Description of Securities Item l0 Interest of Named Experts and Counsel ... Experts Item 11 Material Changes ........................ Prospectus Summary Item 12 Incorporation of Certain Information by Reference ............................... Documents Incorporated by Reference Item l3. Disclosure of Commission Position on Indemnification for Securities Act Liabilities ............................. Indemnification PROSPECTUS CEL-SCI CORPORATION Common Stock This Prospectus relates to the offer and sale of shares of the Common Stock of Cel-Sci Corporation (the "Company") by the holders of the Company's Series C Preferred Stock (the "Preferred Stock") if and when the holders of the Series C Preferred Stock elect to convert the Preferred Stock into shares of the Company's Common Stock. The Series C Preferred Shares are convertible into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by 85% of the Closing Price of the Company's Common Stock (the "Conversion Price"). The term "Closing Price" is defined as the average closing bid price of the Company's Common Stock over the five day trading period ending on the day prior to the conversion of the Preferred Stock. Notwithstanding the above, the Conversion Price may not be more than $4.00. Beginning 90 days after December 17, 1996 one half of the Series C Preferred Shares are convertible into shares of the Commpany's common stock. All preferred shares are convertible into shares of the Company's common stock beginning 180 days after December 17, 1996 provided however that if the Company's common stock trades for more than $8.00 at any time, then all shares of Preferred Stock will thereafter be immediately convertible into shares of the Company's common stock. The holders of the Preferred Stock may resell the shares they receive upon conversion from time to time in the public market. The holders of the Preferred Stock, to the extent they convert the Preferred Stock into shares of Common Stock, are sometimes referred to in this Prospectus as the "Selling Shareholders". This Prospectus also relates to the sale of up to 759,526 shares of common stock issuable upon the exercise of certain Warrants. The Warrants were issued in connection with the sale of the Company's Series C Preferred Stock. As part of this sale, the Company issued 379,763 Series A Warrants and 379,763 Series B Warrants (collectively, the "Warrants"). Each Series A warrant entitles the holder to purchase one share of the Company's common stock at a price of $4.50 per share at any time prior to March 15, 1998. Each Series B Warrant entitles the holder to purchase one share of the Company's Common Stock at a price of $4.50 per share at any time prior to March 15, 1999. The holders of the Warrants, to the extent they exercise the Warrants and receive shares of Common Stock, are also referred to in this Prospectus as the "Selling Shareholders". The Company will not receive any proceeds from the resale of the shares by the Selling Shareholders. The Selling Shareholders have advised the Company that they will offer the shares through broker/dealers at market prices with customary commissions being paid by the Selling Shareholders. The costs of registering the shares offered by the Selling Shareholders are being paid by the Company. The Selling Shareholders will pay all other costs of the sale of the shares offered by them. See "Selling Shareholders". THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE INVESTMENT. FOR A DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" AND "DILUTION". 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. On January , 1997 the closing prices of the Company's Common Stock and Warrants on the NASDAQ System were $ and $ , respectively. See "Market Information". The Date of this Prospectus is January , 1997 AVAILABLE INFORMATION The Company is subject to the informational requirements of the Securities Exchange Act of l934 and in accordance therewith is required to file reports, proxy statements and other information with the Securities and Exchange Commission (the "Commission"). Copies of any such reports, proxy statements and other information filed by the Company can be inspected and copied at the public reference facility maintained by the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C. and at the Commission's Regional offices in New York (7 World Trade Center, Suite 1300, New York, New York 10048) and Chicago (Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661-2511). Copies of such material can be obtained from the Public Reference Section of the Commission at its office in Washing- ton, D.C. 20549 at prescribed rates. Certain information concerning the Com- pany is also available at the Internet Web Site maintained by the Securities and Exchange Commission at www.sec.gov. The Company has filed with the Commis- sion a Registration Statement on Form S-3 (together with all amendments and exhibits thereto, the "Registration Statement") under the Securities Act of 1933, as amended (the "Act"), with respect to the Units offered hereby. This Prospectus does not contain all of the information set forth in the Registra- tion Statement, certain parts of which are omitted in accordance with the rules and regulations of the Commission. For further information, reference is made to the Registration Statement. DOCUMENTS INCORPORATED BY REFERENCE The Company 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 herein (other than exhibits to such documents, unless such exhibits are specifically incorporated by reference into this Prospectus). Requests should be directed to: CEL-SCI Corporation 66 Canal Center Plaza, Suite 510 Alexandria, VA 22314 (703) 549-5293 Attention: Secretary The following documents filed with the Commission by the Company (Commission File No. 0-11503) are hereby incorporated by reference into this Prospectus: (1) The Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1996; and (2) The Company's Proxy Statement relating to the June 14, 1996 Annual Meeting of Shareholders. All documents filed with the Commission by the Company 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 the offering registered hereby shall be deemed to be incorporated by reference into this Prospectus and to be a part hereof from the date of the filing of such documents. Any statement contained in a document incorporated or deemed to be incorporated by reference herein shall be deemed to be modified or superseded for the purposes of this Prospectus to the extent that a statement contained herein or in any subsequently filed document which also is or is deemed to be incorporated by reference herein modifies or supersedes such statement. Such statement so modified or superseded shall not be deemed, except as so modified or super- seded, to constitute a part of this Prospectus. PROSPECTUS SUMMARY THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS. The Company CEL-SCI Corporation (the "Company") was formed as a Colorado corporation in 1983. The Company is involved in the research and development of certain drugs and vaccines. The Company's first product, MULTIKINETM, manufactured using the Company's proprietary cell culture technologies, is a combination, or "cocktail", of natural human interleukin2 ("IL-2") and certain lymphokines and cytokines. MULTIKINE is being tested to determine if it is effective in improving the immune response of advanced cancer pantients. The Company's second product, HGP- 30, is being tested to determine if it is an effective treatment/ vaccine against the AIDS virus. In addition, the Company recently acquired a new patented T-cell Modulation Process which uses "hetero- conjugates" to direct the body to chose a specific immune response. The Company intends to use this new technology to improve the cellular immune response of persons vaccinated with HGP-30 and to develop a potential tuberculosis ("TB") treatment/vaccine. Before human testing can begin with respect to a drug or biological product, preclinical studies are conducted in laboratory animals to evaluate the potential efficacy and the safety of a product. Human clinical studies generally involve a three-phase process. The initial clinical evaluation, Phase I, consists of administering the product and testing for safe and tolerable dosage levels. Phase II trials continue the evaluation of immunogenicity and determine the appropriate dosage for the product, identify possible side effects and risks in a larger group of subjects, and provide preliminary indi- cations of efficacy. Phase III trials consist of testing for actual clinical efficacy for safety within an expanded group of patients at geographically dispersed test sites. In March 1995, the Canadian Health Protection Branch, Health and Welfare Ministry gave clearance to the Company to start a phase I/II cancer study using Multikine. The study, which will enroll up to 30 head and neck cancer patients who have failed conventional treatments, will be conducted at several sites in the United States and Canada and is designed to evaluate safety, tumor responses and immune responses in patients treated with multiple courses of Multikine. The length of time that each patient will remain on the inves- tigational treatment will depend on the patient's response to treatment. In May l995, the U.S. Food and Drug Administration (FDA) authorized the export of the Company's Multikine drug to Canada for purposes of this study. In February 1996 the FDA authorized the Company to conduct two human clinical studies using MULTIKINE and focusing on prostate and head and neck cancer. The prostate study is being conducted at Jefferson Hospital in Philadelphia, Pennsylvania and will involve up to 15 prostate cancer patients who have failed on hormonal therapy. The head and neck cancer study will involve up to 30 cancer patients who have failed using conventional therapies. The head and neck cancer study in the U.S. is being conducted in conjunction with the Company's Canadian head and neck cancer study. Viral Technologies, Inc. ("VTI"), a wholly-owned subsidiary of the Company, is engaged in the development of a possible treatment/vaccine for AIDS. VTI's technology may also have application in the treatment of AIDS-in fected individuals and the diagnosis of AIDS. VTI's AIDS treatment/ vaccine, HGP-30, has completed certain Phase I human clinical trials. In the Phase I trials, the vaccine was administered to volunteers who were not infected with the HIV virus in an effort to determine safe and tolerable dosage levels. In April 1995 VTI, with the approval of the California Department of Health Services Food and Drug Branch (FDB), began another clinical trial in California using volunteers who received two vaccinations. The volunteers receiving the two lowest dosage levels were asked to donate blood for a SCID mouse HIV challenge study. The SCID mouse is considered to be the best available animal model for HIV because it lacks its own immune system and therefore permits human cell growth. White blood cells from the five (5) vaccinated volunteers and from normal donors were injected into groups of SCID mice. They were then challenged with high levels of a different strain of the HIV virus than the one from which HGP- 30 is derived. Infection by virus was determined and confirmed by two different assays, p24 antigen, a component of the virus core, and reverse transcriptase activity, an enzyme critical to HIV replication. Approximately 78% of the SCID mice given blood from vaccinated volunteers showed no HIV infection after virus challenge as compared to 13% of the mice given blood from unvaccinated donors. All of the Company's products are in the early stages of development. The Company does not expect to develop commercial products for several years, if at all. The Company has had operating losses since its inception, had an accumulated deficit of approximately $30,400,000 at September 30, 1996, and expects to incur substantial losses for the foreseeable future. In August 1996 the Company sold, in a private transaction, 5,000 shares of its Series B Preferred Stock (the "Series B Preferred Shares") for $5,000,000 or $1,000 per share. At the purchasers' option, up to 2,500 Series B Preferred Shares are convertible, on or after ten days from the date the shares have been registered for public sale (the "Effective Date"), into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by 87% of the Closing Price of the Company's Common Stock. All Preferred Shares are convertible, on or after 40 days from the Effective Date, on the basis of one share of Preferred Stock for shares of the Company's Common Stock equal in number to the amount determined by dividing $1,000 by 85% of the Closing Price of the Company's Common Stock. The term "Closing Price" is defined as the average closing bid price of the Company's Common Stock over the five-day trading period ending on the day prior to the conversion of the Preferred Stock. Notwithstanding the above, the conversion price may not be less than $3.60 nor more than $14.75. Each Preferred Share is entitled to a quarterly dividend, if, as, and when declared by the Board of Directors, of $17.50. Any Series B Preferred Shares which are outstanding on the second anniversary of the Effective Date will be automatically converted into shares of the Company's Common Stock. By means of a Registration Statement filed with the Securities and Exchange Commission, the shares issuable upon the conversion of the Series B Preferred Shares have been registered for public sale. Prior to December 20, 1996 1,900 Series B Preferred Shares were converted into 527,774 shares of the Company's common stock. In December 1996 the Company repurchased 2,850 Series B Preferred Shares for $2,850,000 plus warrants which allow the holders to purchase up to 99,750 shares of the Company's common stock for $4.25 per share at any time prior to December 15, 1999. The Company raised funds required for this repurchase from the sale of its Series C Preferred Stock. In December 1996 the Company raised $2,850,000 from the sale of units consisting of 2,850 shares of the Company's Series C Preferred Stock, 379,763 Series A Warrants and 379,763 Series B Warrants. The Series C Preferred Shares are convertible into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by 85% of the Closing Price of the Company's Common Stock (the "Conversion Price"). The term "Closing Price" is defined as the average closing bid price of the Company's Common Stock over the five day trading period ending on the day prior to the conversion of the Preferred Stock. Notwithstanding the above, the Conversion Price may not be more than $4.00. Beginning 90 days after December 17, 1996 one half of the Series C Preferred Shares are convertible into shares of the Commpany's common stock. All preferred shares are convertible into shares of the Company's common stock beginning 180 days after December 17, 1996 provided however that if the Company's common stock trades for more than $8.00 at any time, then all shares of Preferred Stock will thereafter be immediately convertible into shares of the Company's common stock. The Preferred Shares are not entitled to any annual dividends, provided however that if the shares of common stock issuable upon the conversion of the Series C Preferred Stock have not been registered for public sale within 90 days after December 17, 1996, then the Company will pay a dividend (based upon a variable formula) with respect to each outstanding share of the Series C Preferred Stock. Any Series C Preferred Shares which are outstanding on December 15, 1998 will be automatically converted into shares of the Company's Common Stock, provided however the shares of Common Stock issuable upon the conversion of the Series C Preferred Shares have been registered for public sale and the Company's Common Stock is listed on the Nasdaq System. The Preferred Shares have a liquidation preference of $1,000 per share over the Company's Common Stock. Each Series A Warrant entitles the holder to purchase one share of the Company's common stock at a price of $4.50 per share at any time prior to March 15, 1998. Each Series B Warrant entitles the holder to purchase one share of the Company's common stock at a price of $4.50 per share at any time prior to March 15, 1999. The shares issuable upon the conversion of the Series C Preferred Shares and the exercise of the Warrants are are being offered for public sale by means of this Registration Statement. See "Selling Shareholders". The Company's executive offices are located at 66 Canal Center Plaza, Suite 510, Alexandria, Virginia 22314, and its telephone number is (703) 5495293. THE OFFERING Securities Offered: Shares of Common Stock are offered for public sale by the holders of the Company's Series C Preferred Stock if and when the holders of the Preferred Stock elect to convert the Preferred Stock into shares of the Company's Common Stock. Up to 759,526 additional shares of common stock are offered for public sale upon the exercise of Warrants which were issued in connection with the sale of the Series C Preferred Stock. The holders of the Preferred Stock and the Warrants, to the extent they convert the Preferred Stock into Common Stock or exercise the Warrants, may resell the shares they receive upon conversion or exercise from time to time in the public market. The holders of the Preferred Stock and the Warrants are sometimes referred to in this Prospectus as the "Selling Shareholders". The Company will not receive any proceeds from the sale of the shares offered by the Selling Shareholders. See "Selling Shareholders". Common Stock Outstand- ing Prior To and After Offering: As of December 31, 1996, the Company had 8,519,950 shares of Common Stock issued and outstanding. Assuming all shares of the Series C Preferred Stock are converted to 712,500 shares of the Company's Common Stock (assuming a conversion price of $4.00 per share) and all of the Warrants are exercised, there will be 9,991,988 shares of Common Stock issued and outstanding. The number of outstanding shares before and after this Offering does not give effect to shares which may be issued upon the exercise and/or conversionof options, warrants or other convertible securities previously issued by the Company. See "Dilution and Comparative Share Data", "Selling Shareholders" and "Description of Securities". Risk Factors: The purchase of the Securities offered by this Pros- pectus involves a high degree of risk. Risk factors include the following: lack of revenues and history of loss, need for additional capital, government regula- tion, need for FDA approval, and dilution. See "Risk Factors." NASDAQ Symbols: Common Stock: CELI Warrants: CELIW Summary Financial Data For the Years Ended September 30, 1996 1995 1994 1993 1992 Investment Income & Other Revenues $ 322,370 $ 423,765 $624,670 $997,964 $434,180 Expenses: Research and Development 3,471,477 1,824,661 2,896,109 1,307,042 481,697 Depreciation and Amortization 290,829 262,705 138,755 55,372 33,536 General and Administrative 2,882,958 1,713,912 1,621,990 1,696,119 1,309,475 Equity in loss of joint venture 3,772 501,125 394,692 344,423 260,388 Net Loss $(6,326,666) $(3,878,638) $(4,426,876) $(2,404,992) $(1,650,916) Loss per common share $(0.98) $(0.89) $(1.06) $(0.58) $(0.42) Weighted average common shares outstanding 6,425,316 4,342,628 4,185,240 4,155,431 3,953,233 Balance Sheet Data: September 30, 1996 1995 1994 1993 1992 Working Capital $10,266,104 $3,983,699 $5,795,191 $10,296,472 $13,043,012 Total Assets 11,878,370 6,359,011 8,086,670 11,633,090 13,769,504 Total Liabilities 294,048 1,516,978 1,407,602 688,231 467,086 Shareholders' Equity 11,584,322 4,842,033 6,679,068 10,944,859 13,302,4l8 No common stock dividends have been declared by the Company since its inception. RISK FACTORS An investment in the Company's Securities involves a high degree of risk. Prospective investors are advised that they may lose all or part of their investment. Prospective investors should carefully review the following risk factors. Lack of Revenues and History of Loss. The Company has had only limited revenues since it was formed in 1983. Since the date of its formation and through September 30, 1996, the Company has incurred net losses of approximately $30,400,000. During the years ended September 30, 1994, 1995 and 1996 the Company suffered losses of $4,426,876, $3,878,638 and $6,326,666 respectively. The Company has relied principally upon the proceeds of public and private sales of securities to finance its activities to date. All of the Company's potential products are in the early stages of development, and any commercial sale of these products will be many years away. Accordingly, the Company expects to incur substantial losses for the foreseeable future. Need for Additional Capital. 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. The different steps necessary to obtain regulatory approval, especially that of the Food and Drug Administration ("FDA"), involve significant costs. The Company expects that it will need additional financing in order to fund the costs of future clinical trials, related research, and general and administrative expenses. The Company may be forced to delay or postpone development and research expenditures if the Company is unable to secure adequate sources of funds. These delays in development may have an adverse effect on the Company's ability to produce a timely and competitive product. There can be no assurance that the Company will be able to obtain additional funding from other sources. Viral Technologies, Inc. ("VTI"), a wholly-owned subsididary of the Company, is dependent upon funding from the Company for its operations and research programs. Cost Estimates. The Company's estimates of the costs associated with future clinical trials and research may be substantially lower than the actual costs of these activities. If the Company's cost estimates are incorrect, the Company will need additional funding for its research efforts. Government Regulation - FDA Approval. Products which may be developed by the Company or Viral Technologies, Inc. (or which may be developed by affiliates or licensees) will require regulatory approvals prior to sale. In particular, therapeutic agents 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. The process of obtaining FDA and corresponding foreign approvals is costly and time consuming, particularly for pharmaceutical products such as those which might ultimately be developed by the Company, Viral Technologies, Inc. or its licensees, and there can be no assurance that such approvals will be granted. Any failure to obtain or any delay in obtaining such approvals may adversely affect the ability of poten- tial licensees or the Company to successfully market any products developed. Also, the extent of adverse government regulations which might arise from future legislative or administrative action cannot be predicted. The clinical trial which the Company's affiliate, Viral Technologies, Inc., is conducting in California is regulated by government agencies in California and obtaining approvals from states for clinical trials is likewise expensive and time consuming. Dependence on Others to Manufacture Product. The Company has an agreement with an unrelated corporation for the production, until 1997, of MULTIKINE for research and testing purposes. At present, this is the Company's only source of MULTIKINE. If this corporation could not, for any reason, supply the Company with MULTIKINE, the Company estimates that it would take approximately six to ten months to obtain supplies of MULTIKINE under an alternative manufacturing arrangement. The Company does not know what cost it would incur to obtain this alternative source of supply. Licensed Technology. The Company's clinical studies and research with respect to MULTIKINE have focused on compounds, compositions and processes which were licensed to the Company by Sittona Company, B.V. ("Sittona") in 1983. Maximilian de Clara, the Company's president and a director, controlled Sittona between 1985 and 1996. Any commercial products developed by the Com- pany and based upon the technology licensed by Sittona will belong to Sittona, subject to the Company's right to manufacture and sell such products in accordance with the terms of the licensing agreement. The Company's license remains in effect until the expiration or abandonment of all patent rights or until the compounds, compositions and processes subject to the license enter into the public domain, whichever is later. The license may be terminated earlier for other reasons, including the insolvency of the Company. Any future trans actions between the Company and Sittona will be subject to the review and approval by a majority of the Company's disinterested directors. Technological Change. The biomedical field in which the Company is involved is undergoing rapid and significant technological change. The successful development of therapeutic agents and diagnostic products from the compounds, compositions and processes licensed to the Company, through Company financed research or as a result of possible licensing arrangements with pharmaceutical or other companies, will depend on its ability to be in the tech- nological forefront of this field. There can be no assurance that the Company will achieve or maintain such a competitive position or that other technologi- cal developments will not cause the Company's proprietary technologies to become uneconomical or obsolete. Certain of the Company's products, as well as certain technology relating to such products, are covered by U.S. and foreign patents licensed to the Company. There is no assurance that any pending patent applications or any patent applications 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 the owners of the patents and the Company. Disputes may arise between the owners of the patents or the Company and others as to the scope, validity and ownership rights of these or other patents. Any defense of the patents could prove costly and time consuming and there can be no assurance that the Company or the owners of the patents will be in a position, or will deem it advisable, to carry on such a defense. Other private and public concerns, in- cluding universities, may have filed applications for, or may have been is- sued, patents and are expected to obtain additional patents and other proprie- tary rights to technology potentially useful or necessary to the Company. The scope and validity of such patents, if any, the extent to which the Company or the owners of the patents may wish or need to acquire the rights to such pa- tents, and the cost and availability of such rights are presently unknown. Also, as far as the Company relies upon unpatented proprietary technology, there is no assurance that others may not acquire or independently develop the same or similar technology. Options, Warrants and Convertible Securities. The Company has is sued options, warrants and other convertible securities ("Derivative Securi ties") which allow the holders to acquire additional shares of the Company's Common Stock. In some cases the Company has agreed that, at its expense, it will make appropriate filings with the Securities and Exchange Commission so that the securities underlying certain Derivative Securities will be available for public sale. Such filings could result in substantial expense to the Company and could hinder future financings by the Company. For the terms of these Derivative Securities, the holders thereof will have an opportunity to profit from any increase in the market price of the Company's Common Stock without assuming the risks of ownership. Holders of such Derivative Securities may exercise and/or convert them at a time when the Company could obtain additional capital on terms more favorable than those provided by the Derivative Securities. The exercise or conversion of the Derivative Securities will dilute the voting interest of the owners of pre- sently outstanding shares of the Company's Common Stock and may adversely af- fect the ability of the Company to obtain additional capital in the future. The sale of the shares of Common Stock issuable upon the exercise or conver- sion of the Derivative Securities could adversely affect the market price of the Company's stock. See "Dilution and Comparative Share Data". Competition. The competition in the research, development and com mercialization of products which may be used in the prevention or treatment of cancer and AIDS is intense. Major pharmaceutical and chemical companies, as well as specialized genetic engineering firms, are developing products for these diseases. Many of these companies 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, both smaller companies and non- profit institutions are active in research relating to cancer and AIDS and are expected to become more active in the future. The clinical trials sponsored to date by the Company and VTI have not been approved by the FDA, but rather have been conducted pursuant to approvals obtained from regulatory agencies in England, Canada and certain states. Since the results of these clinical trials may not be accepted by the FDA, companies which are conducting clinical trials approved by the FDA may have a competi- tive advantage in that the products of such companies are further advanced in the regulatory process than those of the Company or VTI. Lack of Dividends. There can be no assurance the Company will be profitable. At the present time, the Company intends to use available funds to finance the Company'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 the Company. The Company does not presently intend to pay dividends on its common stock and there can be no assurance that common stock dividends will ever be paid. Dilution. Persons purchasing the securities offered by this Pros pectus will suffer an immediate dilution in the per share net tangible book value of their Common Stock. See "Dilution and Comparative Share Data." Preferred Stock. The Company's Articles of Incorporation authorize the Company's Board of Directors to issue up to 200,000 shares of Preferred Stock. The provisions in the Company's Articles of Incorporation relating to the Preferred Stock allow the Company's directors to issue Preferred Stock with multiple votes per share and dividends rights which would have priority over any dividends paid with respect to the Company's Common Stock. The issuance of Preferred Stock with such rights may make the removal of management difficult 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. DILUTION AND COMPARATIVE SHARE DATA As of December 31, 1996, the present shareholders of the Company owned 8,519,950 shares of Common Stock, which had a net tangible book value of approximately $1.38 per share. The following table illustrates the comparative stock ownership of the other stockholders of the Company, as compared to the investors in this Offering, assuming all shares offered are sold. Shares outstanding (1) 8,519,950 Shares to be issued upon conversion of Series C Preferred Stock, assuming conversion price of $4.00 per share 712,512 Shares to be issued upon exercise of Warrants 759,526 Shares outstanding (pro forma basis) (1) 9,991,988 Net tangible book value per share $1.38 Equity ownership by present shareholders afterthis offering 85% Equity ownership by investors in this Offering 15% (1) Amount excludes shares which may be issued upon the exercise and/or con version of options, warrants and other convertible securities previously issued by the Company. See table below. The purchasers of the securities offered by this Prospectus will suffer an immediate dilution if the price paid for the securities offered is greater than the net tangible book value of the Company's Common Stock. "Net tangible book value" is the amount that results from subtracting the total liabilities and intangible assets of the Company from its total as- sets. "Dilution" is the difference between the offering price and the net tangible book value of shares immediately after the Offering. The following table reflects the additional shares which may be is sued as the result of the exercise of outstanding options and warrants or the conversion of other securities issued by the Company. Number of Note Shares Reference Outstanding as of December 31, 1996 8,519,950 Shares Subject to this Offering: Shares issuable upon conversion of the Series C preferred stock, assuming conversion price of $4.00 per share 712,512 A Shares issuable upon exercise of Series A and Series B Warrants 759,526 A Shares outstanding (pro forma basis) 9,991,988 Other Shares Which May Be Issued: Shares issuable upon conversion of Series B Preferred stock, assuming conversion price of $4.00 per share 62,500 B Shares issuable upon exercise of warrants to be held by former holders of the Company's Series B Preferred Stock. 99,750 B Shares issuable upon exercise of warrants issued to Selling Agent, or its assigns, in connection with the Company's June and September 1995 Private Offerings 49,720 C Shares issuable upon exercise of warrants issued to Selling Agent, or its assigns, in connection with the Company's August 1996 Private Offering 15,355 D Shares issuable upon exercise of warrants sold in Company's 1992 Public Offering 517,500 E Shares issuable upon exercise of warrants sold to Underwriter in connection with Company's 1992 Public Offering 90,000 F Shares issuable upon exercise of options granted to Company's officers, directors, employees and consultants 1,161,750 G 11,988,563 A. In December 1996 the Company raised $2,850,000 from the sale of units consisting of 2,850 shares of the Comany's Series C Preferred Stock, 379,763 Series A Warrants and 379,763 Series B Warrants. The Series C Preferred Shares are convertible into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by the 85% of Closing Price of the Company's Common Stock (the "Conversion Price"). The term "Closing Price" is defined as the average closing bid price of the Company's Common Stock over the five- day trading period ending on the day prior to the conversion of the Preferred Stock. Beginning 90 days after December 17, 1996, one half of the Series C Preferred Shares are convertible into shares of the Company's common stock. All preferred shares are convertible into shares of the Company's common stock beginning 180 days after December 17, 1996, provided however that if the closing bid price of the Company's common stock trades for more than $8.00 at any time, then all shares of Preferred Stock will thereafter be immediately convertible into shares of the Company's common stock. Notwithstanding the above, the Conversion Price may not be more than $4.00. Any Preferred Shares which are outstanding on December 15, 1998 will be automatically converted into shares of the Company's Common Stock, provided that the shares of Common Stock issuable upon the conversion of the Preferred Shares have been registered for public sale and the Company's Common Stock is listed on the Nasdaq system. Each Series A Warrant entitles the holder to purchase one share of the Company's common stock at a price fo $4.50 per share at any time prior to March 15, 1998. Each Series B Warrant entitles the holder to purchase one share of the Company's common stock at a price of $4.50 per share at any time prior to March 15, 1999. The shares issuable upon the conversion of the Series C Preferred Shares and the exercise of the Warrants are being offered for public sale by means of this prospectus. B. In August 1996 the Company sold, in a private transaction, 5,000 shares of its Series B Preferred Stock (the "Preferred Shares") for $5,000,000 or $1,000 per share. At the purchasers' option, up to 2,500 Preferred Shares were convertible, on or after November 7, 1996 (the "Effective Date"), into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by 87% of the Closing Price of the Company's Common Stock. All Preferred Shares are convertible, on or after 40 days from the Effective Date, on the basis of one share of Preferred Stock for shares of the Company's Common Stock equal in number of the amount determined by dividing $1,000 by 85% of the Closing Price of the Company's Common Stock. The term "Closing Price" is defined as the average closing bid price of the Company's Common Stock over the five-day trading period ending on the day prior to the conversion of the Preferred Stock. Notwithstanding the above, the conversion price may not be less than $3.60 nor more than $14.75. The Preferred Shares, if issued, are entitled to a quarterly divi- dend of $17.50 per share. Any Preferred Shares which are outstanding on November 7, 1998 will be automatically converted into shares of the Com- pany's Common Stock. By means of a Registration Statement filed with the Securities and Exchange Commission, the shares issuable upon the conversion of the Series B Preferred Shares have been registered for public sale. Prior to December 20, 1996 1,900 Series B Preferred Shares were converted into 527,774 shares of the Company's common stock. In December 1996 the Company repurchased 2,850 Series B Preferred Shares for $2,850,000 plus warrants which allow the holders to purchase up to 99,750 shares of the Company's common stock for $4.25 per share at any time prior to December 15, 1999. The Company raised the funds required for this repurchase from the sale of its Series C Preferred Stock. C. In connection with the Company's June and September Private Offerings, Neidiger/Tucker/Bruner, Inc., the Sales Agent for these offerings, received a commission, a non-accountable expense allowance and warrants to purchase (i) 57,500 shares of the Company's Common Stock at $2.00 per share, (ii) 57,500 shares at $2.40 per share, and (ii) an additional 115,000 shares at $3.25 per share. Prior to the date of this Prospectus the Sales Agent (and/or its assigns) collectively exercised Warrants pertaining to 180,280 shares of the Company's Common Stock. By means of a separate Registration Statement, the shares of Common Stock issuable upon the exercise of the remaining Warrants issued to the Sales Agent have been registered for public sale. D. In connection with the Company's August l996 Private Offering, Shoreline Pacific Institutional Finance, the Sales Agent for such offering, received a commission plus warrants to purchase 15,355 shares of the Company's Com- mon Stock at $6.51 per share. By means of a separate Registration State- ment, the shares of Common Stock issuable upon the exercise of the Warrants issued to the Sales Agent (or its assigns) have been registered for public sale. E. See "Description of Securities". F. The Underwriter's Warrants provide that the Company, at its expense, will make appropriate filings with the Securities and Exchange Commission so that the securities underlying the Underwriter's Warrants will be available for public sale. G. The options are exercisable at prices ranging from $2.87 to $19.70 per share. The Company may also grant options to purchase 833,707 additional shares under its Incentive Stock Option and Non- Qualified Stock Option Plans. SELLING SHAREHOLDERS In December 1996 the Company raised $2,850,000 from the sale of units consisting of 2,850 shares of the Company's Series C Preferred Stock, 379,763 Series A Warrants and 379,763 Series B Warrants. At the purchasers' option, the Preferred Shares are convertible from time to time, in whole or in part, into shares of the Company's Common Stock upon certain terms. See "Dilution and Comparative Share Data". The shares issuable upon the conversion of the Series C Preferred Shares and/or the exercise of the Series A and Series B Warrants are being offered to the public by means of this Prospectus. The holders of the Preferred Shares and the Warrants, to the event they convert their Preferred Shares into shares of Common Stock or exercise their Warrants, are sometimes referred to in this Prospectus as the "Selling Shareholders". The Company will not receive any proceeds from the sale of the shares by the Selling Shareholders. The names of the Selling Shareholders are: Shares Which May Be Shares Acquired Which Upon Con- May be Share version of Acquired Shares to Owner- Shares Series C Upon Ex- be Sold ship Presently Preferred ercise of in this After Name Owned Shares (1) Warrants (2) Offering (3) Offering Laura Huberfeld/Naomi - 250,000 266,500 516,500 - - Bodner Partnership Saleslink LTD - 125,000 133,250 258,250 - - Newark Sales Corporation - 75,000 79,950 154,950 - - Cong. Ahavas Tzdoka - 125,000 133,250 258,250 - - V'Chesed Rita Folger - 37,500 39,976 77,476 - - Viva Corporation - 100,000 106,600 106,600 - - 712,500 759,526 1,472,000 - - (1) Represents shares issuable upon the conversion of the Series C Preferred Stock assuming conversion price of $4.00 per share. The actual number of shares to be issued upon the conversion of the Preferred Shares will depend upon the price of the Company's Common Stock at the time of conversion. See "Description of Securities." (2) Represents shares issuable upon the exercise of the Series A and Series B Warrants. (3) Assumes all shares owned, or which may be acquired, by the Selling Share holders, are sold to the public by means of this Prospectus. Manner of Sale. The shares of Common Stock owned, or which may be acquired, by the Selling Shareholders may be offered and sold by means of this Prospectus from time to time as market conditions permit in the overthecounter market, or otherwise, at prices and terms then prevailing or at prices related to the then-current market price, or in negotiated transactions. These shares may be sold by one or more of the following methods, without limitation: (a) a block trade in which a broker or dealer so engaged will attempt to sell the shares as agent but may position and resell a portion of the block as principal to facilitate the transaction; (b) purchases by a broker or dealer as principal and resale by such broker or dealer for its account pursuant to this Prospectus; (c) ordinary brokerage transactions and transactions in which the broker solicits purchasers; and (d) face-to-face transactions between sellers and purchasers without a broker/dealer. In effecting sales, brokers or dealers engaged by the Selling Shareholders may arrange for other brokers or dealers to participate. Such brokers or dealers may receive commissions or discounts from Selling Shareholders in amounts to be negotiated. The Selling Shareholders and any broker/dealers who act in connection with the sale of the Shares hereunder may be deemed to be "underwriters" within the meaning of 2(11) of the Securities Acts of 1933, and any commissions re- ceived by them and profit on any resale of the Shares as principal might be deemed to be underwriting discounts and commissions under the Securities Act. The Company has agreed to indemnify the Selling Shareholders and any securities broker/dealers who may be deemed to be underwriters against certain liabili- ties, including liabilities under the Securities Act as underwriters or other- wise. The Company has advised the Selling Shareholders that they and any securities broker/dealers or others who may be deemed to be statutory under writers will be subject to the Prospectus delivery requirements under the Securities Act of 1933. The Company has also advised each Selling Shareholder that in the event of a "distribution" of the shares owned by the Selling Shareholder, such Selling Shareholder, any "affiliated purchasers", and any broker/ dealer or other person who participates in such distribution may be subject to Rule 10b-6 under the Securities Exchange Act of 1934 ("1934 Act") until their participation in that distribution is completed. A "distribution" is defined in Rule 10b-6 as an offering of securities "that is distinguished from ordinary trading transactions by the magnitude of the offering and the presence of spe- cial selling efforts and selling methods". The Company has also advised the Selling Shareholders that Rule 10b-7 under the 1934 Act prohibits any "stabi- lizing bid" or "stabilizing purchase" for the purpose of pegging, fixing or stabilizing the price of the Common Stock in connection with this offering. Rule 10b-6 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. If Rule 10b-6 applies to the offer and sale of any of the Shares, then participating broker/dealers will be obligated to cease market-making activities nine business days prior to their participation in the offer and sale of such Shares and may not recommence market-making activi- ties until their participation in the distribution has been completed. If Rule 10b-6 applies to one or more of the principal marketmakers in the Company's Common Stock, the market price of such stock could be adversely affected. DESCRIPTION OF SECURITIES Common Stock The Company is authorized to issue 100,000,000 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 out- standing 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 the Company'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 the Company. There are no conversion, redemp- tion, sinking fund or similar provisions regarding the Common Stock. All of the outstanding shares of Common Stock are fully paid and nonassessable 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 The Company is authorized to issue up to 200,000 shares of Preferred Stock. The Company'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 take- over of the Company. In May 1996 the Company sold 3,500 shares of its Series A Preferred Stock (the "Preferred Shares") for $3,500,000 or $1,000 per share. At the purchasers' option, up to 1,750 Preferred Shares were convertible, on or after 60 days from the closing date of the purchase of such shares (the "Closing"), into shares of the Company's Common Stock on the basis of one share of Preferred Stock for shares of Common Stock equal in number to the amount determined by dividing $1,000 by 85% of the Closing Price of the Company's Common Stock. All Preferred Shares were convertible, on or after 90 days from the Closing, on the basis of one share of Preferred Stock for shares of the Company's Common Stock equal in number to the amount determined by dividing $1,000 by 83% of the Closing Price of the Company's Common Stock. The term "Closing Price" was defined as the average closing bid price of the Company's Common Stock over the five-day trading period ending on the day prior to the conversion of the Preferred Stock. All outstanding shares of the Series A Preferred Stock have since been converted into 632,041 shares of the Company's Common Stock. The shares issued upon the conversion of the Series A Preferred Stock are being offered for public sale by means of a separate registration statement. See "Dilution and Comparative Share Data" for information concerning the Company's Series B and Series C Preferred Stock. Publicly Traded Warrants In connection with the Company's February, 1992 public offering, the Company issued 5,175,000 Warrants. Every ten Warrants entitle the holder to purchase one share of the Company's Common Stock at a price of $15.00 per share prior to February 7, 1998. The Company, upon 30-days notice, may accelerate the expiration date of the Warrants, provided, however, that at the time the Company gives such notice of acceleration (1) the Company has in effect a cur- rent registration statement covering the shares of Common Stock issuable upon the exercise of the Warrants and (2) at any time during the 30 day period pre- ceding such notice, the average closing bid price of the Company's Common Stock has been at least 20% higher than the warrant exercise price for 15 consecutive trading days. If the expiration date is accelerated, all Warrants not exer- cised within the 30-day period will expire. Other provisions of the Warrants are set forth below. This information is subject to the provisions of the Warrant Certificate representing the Warrants. 1. Holders of the Warrants may sell the Warrants rather than exercise them. However, there can be no assurance that a market will develop or continue as to the Warrants. 2. Unless exercised within the time provided for exercise, the Warrants will automatically expire. 3. The exercise price of the Warrants may not be increased during the term of the Warrants, but the exercise price may be decreased at the dis cretion of the Company's Board of Directors by giving each Warrant holder notice of such decrease. The exercise period for the Warrants may be extended by the Company's Board of Directors giving notice of such extension to each Warrant holder of record. 4. There is no minimum number of shares which must be purchased upon exercise of the Warrants. 5. The holders of the Warrants in certain instances are protected against dilution of their interests represented by the underlying shares of Common Stock upon the occurrence of stock dividends, stock splits, reclassifications, and mergers. 6. The holders of the Warrants have no voting power and are not entitled to dividends. In the event of a liquidation, dissolution, or winding up of the Company, holders of the Warrants will not be entitled to participate in the distribution of the Company's assets. Transfer Agent American Securities Transfer, Inc., of Denver, Colorado, is the transfer agent for the Company's Common Stock. LITIGATION In February 1996 the Company filed a lawsuit against ImmunoRx and Dr. John Hadden for contract breach, tortious interference of contract and patent infringement concerning the Company's MULTIKINE drug. The lawsuit, filed in the U.S. District Court for the Middle District of Florida, seeks damages and the termination of certain research and clinical studies being conducted by ImmunoRx and Dr. Hadden. From 1984 to 1992, Dr. Hadden consulted with the Company, performed research on MULTIKINE and manufactured MULTIKINE for the Com- pany's head and neck cancer study in Florida. In early 1993, Dr. Hadden signed a separation agreement with the Company acknowledging the Company's ownership of both MULTIKINE and the research results. The Company has learned that Dr. Hadden and ImmunoRx are apparently making copies of MULTIKINE, in contravention of the separation agreement and the patents covering MULTIKINE, and have begun clinical studies in a foreign country using a copy of MULTIKINE. See "Business Compounds and Processes Licensed to the Company". EXPERTS The financial statements as of September 30, 1996 and 1995 and for each of the three years in the period ended September 30, 1996 incorporated by reference in this prospectus have been audited by Deloitte & Touche LLP, inde- pendent auditors, as stated in their report appearing herein, and are incorpo- rated by reference upon the report of such firm given upon their authority as experts in accounting and auditing. INDEMNIFICATION The Company's Bylaws authorize indemnification of a director, officer, employee or agent of the Company 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 the Company 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 en- titled to indemnification. Insofar as indemnification for liabilities arising under the Securities Act of 1933 may be permitted to directors, officers, or persons controlling the Company pursuant to the foregoing provisions, the Com- pany has been informed that in the opinion of the Securities and Exchange Com- mission, such indemnification is against public policy as expressed in the Act and is therefore unenforceable. ADDITIONAL INFORMATION The Company has filed with the Securities and Exchange Commission, 450 5th Street, N.W., Washington, D.C. 20001, a Registration Statement under the Securities Act of l933, as amended, with respect to the securities offered hereby. This Prospectus does not contain all of the information set forth in the Registration Statement. For further information with respect to the Company and such securities, reference is made to the Registration Statement and to the Exhibits filed therewith. 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 State- ment, each such statement being qualified in all respects by such reference. Copies of each document may be inspected at the Commission's offices at 450 Fifth Street, N.W., Washington, D.C., 20549, and at the Northeast Regional Office, 7 World Trade Center, 13th Floor, New York, New York 10048 and the Midwest Regional Office, Suite 1400, 500 West Madison Street, Chicago, Illi- nois 606812511. This Registration Statement and the related exhibits may also be inspected at the Internet Web Site maintained by the Securities and Exchange Commission at www.sec.gov. Copies may be obtained at the Washington, D.C. office upon payment of the charges prescribed by the Commission. 2512D 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 Prospec- tus must not be relied upon as having been authorized by the Company. 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 the affairs of the Company since the date hereof. TABLE OF CONTENTS Page Prospectus Summary ........................................... Risk Factors ................................................. Dilution and Comparative Share Data .......................... Selling Shareholders ......................................... Description of Securities .................................... Litigation ................................................... 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 $ 2,388 NASD Filing Fee 1,287 Blue Sky Fees and Expenses 2,000 Printing and Engraving Expenses 1,000 Legal Fees and Expenses 20,000 Accounting Fees and Expenses 3,000 Transfer Agent Fees 100 Miscellaneous Expenses 5,225 TOTAL $35,000 All expenses other than the S.E.C. and NASD filing fees are estimated. Item 25. Indemnification of Officers and Directors. It is provided by Section 7-109-102 of the Colorado Revised Statutes and the Company's Bylaws that the Company 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 con- nection with the defense of any legal proceeding or threatened legal proceed- ing, except as to matters in which such persons shall be determined to not have acted in good faith and in the best interest of the Company. Item 16. Exhibits 3(a) Articles of Incorporation Incorporated by reference to Exhibit 3(a) of the Company's combined Regis tration Statement on Form S- 1 and PostEffective Amendment ("Registration Statement"), Registration Nos. 2-85547D and 33 7531. (b) Amended Articles Incorporated by reference to Exhibit 3(a) of the Company's Registration Statement on Form S-1, Registration Nos. 2-85547-D and 33 7531. (c) Amended Articles Filed as Exhibit 3(c) to the Company'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 the Company's Registration Statement on Form S- 1, Registration Nos. 2-85547-D and 337531. II-1 4(a) Specimen copy of Incorporated by reference to Exhibit Stock Certificate 4(a) of the Company's Registration Statement on Form S-1, Registration Nos. 2-85547-D and 337531. (c) Form of Common Stock Incorporated by reference to Exhibit Purchase Warrant 4(c) filed as an exhibit to the Com- pany's Registration Statement on Form S-1 (Registration No. 33 43281). 5. Opinion of Counsel Filed with initial Registration State- ment. 10(a) Purchase Agreement Incorporated by reference to Exhibit dated April 21, 1986 10(a) of the Company's Registration with Alpha I Biomedical Statement on Form S-1, Registration Nos. 2-85547-D and 33-7531. (b) Agreement with Sittona Incorporated by reference to Exhibit Company B.V. dated 10(c) of the Company's Registration May 3, 1983 Statement on Form S-1, Registration Nos. 2-85547-D and 33-7531. (c) Addendum effective May 3, Incorporated by reference to Exhibit 1983 to Licensing Agree- 10(e) of the Company's Registration ment with Sittona Company, Statement on Form S-1, Registration B.V. Nos. 2-85547-D and 33-7531. (d) Addendum effective October Incorporated by reference to Exhibit 13, 1989 to Licensing Agree- 10(d) of Company's Annual Report on ment with Sittona Company, Form 10-K for the year ended September B.V. 30, 1989. 10(e) Employment Agreement with Filed with Amendment Number 1 to the Geert Kersten Company's Registration Statement on Form S-1 (Commission File Number 33 43281). 10(g) Agreement between Viral Filed with Amendment Number 2 to the Technologies, Inc. and Company's Registration Statement on Nippon Zeon Co., Ltd. Form S-1 (Commission File Number 33- 90230). 23(a) Consent of Hart & Trinen Filed with initial Registration State- ment. II-2 (b) Consent of Deloitte & Filed with initial Registration State- Touche LLP ment. 24. Power of Attorney Included as part of signature page. 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 Registra tion Statement or any material change to such information in the Registration Statement, including (but not limited to) any addi- tion 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. (3) To remove from registration by means of a post-effective amend ment any of the securities being registered which remain unsold at the termi nation of the offering. Insofar as indemnification for liabilities arising under the Securi ties Act of l933 may be permitted to directors, officers and controlling per sons 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 pay- ment 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 per- son in connection with the securities being registered, the Registrant will, unless in the opinion of its counsel the matter has been settled by controll- ing 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-3 2512D:dm 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 posteffective 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 Reg istrant certifies that it has reasonable grounds to believe that it meets all the requirements for filing on Form S-3 and has duly caused this Registration Statement to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Alexandria, State of Virginia, on the 14th day of January, 1997. 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 January 14, 1997 MAXIMILIAN DE CLARA Executive Officer /s/ Geert R. Kersten Director, Principal January 14, 1997 GEERT R. KERSTEN Financial Officer and Chief Executive Officer /s/ Mark V. Soresi Director January 14, 1997 MARK V. SORESI /s/ F. Donald Hudson Director January 14, 1997 F. DONALD HUDSON 2512D:dm EX-5 2 January 14, 1997 CEL-SCI Corporation 66 Canal Center Plaza Suite 510 Alexandria, Virginia 22314 Gentlemen: This letter will constitute an opinion upon the legality of the sale by CEL-SCI Corporation, a Colorado corporation ("the Company"), of up to 1,389,000 shares of Common Stock, all as referred to in the Registration Statement on Form S-1 filed by the Company with the Securities and Exchange Commission. We have examined the Articles of Incorporation, the Bylaws and the minutes of the Board of Directors of the Company and the applicable laws of the State of Colorado, and a copy of the Registration Statement. In our opinion, the Company is authorized to issue the shares of stock mentioned above and such shares, when issued, will represent fully paid and non-assessable shares of the Company's Common Stock. Very truly yours, HART & TRINEN William T. Hart EX-23.A 3 CONSENT OF ATTORNEYS Reference is made to the Registration Statement of CEL-SCI Corporation, whereby the Company proposes to sell up to 1,389,000 shares of the Company's Common Stock. Reference is also made to Exhibit 5 included in the Registration Statement relating to the validity of the securities proposed to be sold. We hereby consent to the use of our opinion concerning the validity of the securities proposed to be issued and sold. Very truly yours, HART & TRINEN William T. Hart Denver, Colorado January 14, 1997 EX-23.B 4 INDEPENDANT AUDITORS'CONSENT We consent to the incorporation by reference in this Registration Statement of CEL SCI Corporation on Form S-3 of our report dated November 27, 1996, appearing in the Annual Report on Form 10-K of CEL-SCI Corporation for the year ended September 30, 1996 and to the reference to us under the heading "Experts" in the Prospectus, which is part of this Registration Statement. DELOITTE & TOUCHE LLP Washington, DC January 10, 1997 2512D -----END PRIVACY-ENHANCED MESSAGE-----