-----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, FXmlky1ttKdrJJfV5kjwITqRiW9u86NFYCebspLLAqoGOPU9rqJc0Oe7+w3rcF2Q CpjhiwKusGh3kTP9u7JXfQ== 0001004878-97-000073.txt : 19970918 0001004878-97-000073.hdr.sgml : 19970918 ACCESSION NUMBER: 0001004878-97-000073 CONFORMED SUBMISSION TYPE: 10-Q/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970630 FILED AS OF DATE: 19970911 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: 10-Q/A SEC ACT: SEC FILE NUMBER: 001-11889 FILM NUMBER: 97679123 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 June 30, 1997. 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 66 Canal Center Plaza, Suite 510 Alexandria, Virginia 22314 ----------------------------- Address of principal executive offices (703) 549-5293 ----------------------------- 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 10,389,194 August 14,1997 Page 1 of 14 pages TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Page Balance Sheets 3-4 Statement of Operations 5-6 Statements of Cash Flow 7-8 Notes to Financial Statements 9 Item 2. Management's Discussion and Analysis 12 PART II Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 Item 1. FINANCIAL STATEMENTS CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ ASSETS (unaudited) June 30, September 30, 1997 1996 ----------------- ----------------- CURRENT ASSETS: Cash and cash equivalents $3,401,150 $3,549,810 Investments, net 1,994,914 6,498,812 Accounts receivable - Interest receivable 72,376 76,515 Prepaid expenses 576,510 272,404 Short-term loan to officer/shareholder 281,900 - Advances to officer/shareholder and employees 8,172 142,973 ----------------- ----------------- Total Current Assets 6,335,022 10,540,514 RESEARCH AND OFFICE EQUIPMENT- Less accumulated depreciation of $1,064,297 and $863,899 853,042 871,983 DEPOSITS 18,178 18,178 PATENT COSTS- less accumulated amortization of $389,132 and $352,990 457,404 447,695 ----------------- ----------------- $7,663,646 $11,878,370 ================= =================
See notes to condensed financial statements. 3 CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED BALANCE SHEETS ------------------------ (continued) LIABILITIES AND STOCKHOLDERS' EQUITY (unaudited) June 30, September 30, 1997 1996 ----------------- ----------------- CURRENT LIABILITIES: Accounts payable $281,254 $274,410 Other current liabilities 25,498 - ----------------- ----------------- Total current liabilities 306,752 274,410 DEFERRED RENT 19,638 19,638 ----------------- ----------------- Total liabilities 326,390 294,048 STOCKHOLDERS' EQUITY Preferred stock, Series A, $.01 par value - authorized 3,500 shares; issued and outstanding, 0 and 600 shares - 6 Preferred stock, Series B, $.01 par value - authorized 5,000 shares; issued and outstanding, 0 and 5,000 shares - 50 Preferred stock, Series C, $.01 par value - authorized 3,600 shares; issued and outstanding, 0 and 0 shares - - Common stock, $.01 par value; authorized, 100,000,000 shares; issued and outstanding, 10,389,191 and 7,831,481 shares 103,892 78,315 Additional paid-in capital 44,194,118 41,918,036 Net unrealized loss on equity securities (2,555) (16,078) Dividends (108,957) Deficit (36,849,242) (30,396,007) ----------------- ----------------- TOTAL STOCKHOLDERS' EQUITY 7,337,256 11,584,322 ----------------- ----------------- $7,663,646 $11,878,370 ================= =================
See notes to condensed financial statements. 4 CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --------------------------------- (unaudited) Nine Months Ended June 30, 1997 1996 ----------------- ----------------- REVENUES: Interest income $316,159 $136,651 Other income 62,105 51,605 ----------------- ----------------- TOTAL INCOME 378,264 188,256 EXPENSES: Research and development 4,795,504 2,350,600 Depreciation and amortization 236,541 208,912 General and administrative 1,799,454 2,113,884 ----------------- ----------------- TOTAL OPERATING EXPENSES 6,831,499 4,673,396 ----------------- ----------------- EQUITY IN LOSS OF JOINT VENTURE - (3,772) ----------------- ----------------- 6,831,499 4,677,168 ----------------- ----------------- NET LOSS $6,453,235 $4,488,912 ================= ================= LOSS PER COMMON SHARE $0.72 $0.74 ================= ================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,970,583 6,086,492 ================= =================
See notes to condensed financial statements. 5 CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS ---------------------------------- (unaudited) Three Months Ended June 30, 1997 1996 ----------------- ----------------- REVENUES: Interest Income $92,937 $51,737 Other Income 58,667 44,280 ----------------- ----------------- TOTAL INCOME 151,604 96,017 EXPENSES: Research and development 1,122,561 617,987 Depreciation and amortization 81,222 68,950 General and administrative 661,484 894,165 ----------------- ----------------- TOTAL OPERATING EXPENSES 1,865,267 1,581,102 EQUITY IN LOSS OF JOINT VENTURE - - ----------------- ----------------- 1,865,267 1,581,102 ----------------- ----------------- ================= ================= LOSS PER COMMON SHARE $0.17 $0.22 ================= ================= WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 9,917,471 6,612,293 ================= =================
See notes to condensed financial statements. 6 CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW --------------------------------- (unaudited) Nine Months Ended June 30, 1997 1996 ----------------- ----------------- CASH FLOWS FROM OPERATING ACTIVITIES: NET LOSS $(6,453,235) $(4,488,912) Adjustments to reconcile net loss to net cash used in operating activities: Research and development expenses related to stock portion of purchase of Cell-Med 150,000 Research and development expenses related to stock portion of purchase of Multikine rights from Sittona 1,747,651 Research and development expenses related to purchase of Viral Technologies, Inc. - 515,617 Depreciation and amortization 236,541 208,912 Amortization of premium (discount) on (166,102) - investments Equity in loss of joint venture - 3,772 Unrealized loss on sale of investments 13,523 - Changes in assets and liabilities, net of effect from purchase of Viral Technologies, Inc.: Decrease (increase) in interest receivable 4,139 (11,325) Decrease (increase) in accounts receivable - (46,342) Decrease (increase) in prepaid expenses (304,106) 73,362 Decrease (increase) in advances 134,801 (116,488) Increase (decrease) in other current 25,498 - liabilities Increase (decrease) in accounts payable 6,844 (136,176) ----------------- ----------------- NET CASH USED IN OPERATING ACTIVITIES (4,604,446) (3,997,580) ----------------- ----------------- CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITY: Sales of investments 5,620,000 - Purchase of investments (950,000) - Payment on note payable - (182,534) Note receivable from employee/shareholder (300,000) (114,800) Payment on note receivable from 18,100 28,700 employee/shareholder Laboratory construction (115,790) - Purchase of research and office equipment (65,667) (17,808) Patent costs (45,851) (30,800) ----------------- ----------------- NET CASH USED IN INVESTING ACTIVITY 4,160,792 (317,242) ----------------- ----------------- 7 Continued on next page CASH FLOW, CONTINUED FROM PREVIOUS PAGE CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Repurchase of preferred stock - - Issuance of preferred stock - 3,325,000 Issuance of convertible debenture - 1,250,000 Dividends paid (108,957) - Issuance of common stock 403,951 2,499,129 ----------------- ----------------- NET CASH PROVIDED BY FINANCING ACTIVITIES 294,994 7,074,129 ----------------- ----------------- NET (DECREASE) INCREASE IN CASH (148,660) 2,759,307 CASH AND CASH EQUIVALENTS: Beginning of period 3,549,810 3,886,950 ----------------- ----------------- End of period $3,401,150 $6,646,257 ================= =================
SUPPLEMENTAL DISCLOSURES: In October 1995, CEL-SCI issued 159,170 shares of common stock as consideration for the purchase of the remaining 50% of Viral Technology, Inc. In conjunction with this acquisition, CEL-SCI obtained net assets with a fair value of $170,000. During the quarter ended December 31, 1996, 600 shares of Series A Preferred Stock were converted into 127,945 shares of common stock and 1,900 shares of Series B Preferred Stock were converted into 527,774 shares of common stock. During the quarter ended March 31, 1997, 500 shares of Series C Preferred Stock were converted into 125,000 shares of common stock. During the quarter ended June 30, 1997, 250 shares of Series B Preferred Stock was converted into 69,444 shares of common stock and 2,350 shares of Series C Preferred Stock were converted into 790,271 shares of common stock. In March 1997, CEL-SCI issued 751,678 shares of common stock as consideration for the purchase of the rights to its Multikine technology. In addition, the Company paid $500,000 in cash for the rights, included in research and development expense. In April 1997, CEL-SCI issued 33,378 shares of common stock to Cell-Med as a milestone payment for the company's heteroconjugate technology. CEL-SCI also paid $50,000 in cash for Cell-Med, included in research and development expense. See notes to condensed financial statements. 8 CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NINE MONTHS ENDED JUNE 30, 1997 AND 1996 (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, 1996. 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 June 30, 1997 and the results of operations for the nine-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 Effective September 30, 1994, the Company adopted, on a prospective basis, Statement of Financial Accounting Standard No. 115, "Accounting for Certain Debt and Equity Securities" (SFAS 115) and revised its policy for 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 based on the weighted average number of common shares outstanding during the period. Common stock equivalents, including options to purchase common stock, are excluded from the calculation as they are antidilutive. 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. CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NINE MONTHS ENDED JUNE 30, 1997 AND 1996 (unaudited) (continued) 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 was due on December 31, 1996. At that time, the loan was extended and the balance is now due September 30, 1997. Payments have been made on the note and the balance on June 30, 1997 is $281,900. C. STOCKHOLDERS' EQUITY During 1996, the Company sold 5,000 shares of Series B Preferred Stock (Series B Stock) for $1,000 per share. Holders of Series B Stock are entitled to dividends, payable quarterly if declared, at the rate of $17.50 per quarter. Dividends which are not declared will not accrue nor be cumulative. Each share of Series B Stock is convertible into 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 on or after 10 days from the effective registration date of the common shares, and 85% of the closing price on or after 40 days from the effective date, with the conversion price not less than $3.60 nor more than $14.75. Dividends were declared and paid on Series B Stock during the quarter ended December 31,1996. During the quarter ending December 31, 1996, 1,900 shares of Series B Stock were converted into 527,774 shares of common stock at a price of $3.60 per share of common stock. During the quarter ended December 31, 1996, 2,850 shares of Series B Stock were repurchased by the Company. During the quarter ended June 30, 1997 the remaining 250 shares of the Series B Preferred Stock were converted into 69,444 shares of the Company's common stock.. During the quarter ended December 31, 1996, the Company sold 2,850 shares of Series C Preferred Stock (Series C Stock) for $1,000 per share. Series C Stock is convertible into shares of the Company's common stock on the basis of one share of Series C Stock for shares of common stock equal in number to the amount determined by dividing $1,000 by 85% of the average closing price of the Company's common stock over the five-day trading period ending on the day prior to the conversion of the Series C Stock. The conversion price may not be more than $4.00. Beginning 90 days after December 17, 1996, one-half of the Series C Stock is 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 that, if the Company's common stock trades for more than $8.00 at any time, then all shares of the Series C Stock will thereafter be immediately convertible into shares of the Company's common stock. In addition, 379,796 Series A warrants and 379,763 Series B warrants were sold with the Series C Stock. The Series A warrants entitle 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. As of June 30, 1997, all shares of the Series C Preferred Stock have been converted into shares of common stock. CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS NINE MONTHS ENDED JUNE 30, 1997 AND 1996 (unaudited) (continued) D. NEW ACCOUNTING PRONOUNCEMENTS In October 1995, the Financial Accounting Standards Board issued Statement No. 123, Accounting for Stock Based Compensation (SFAS 123), which provides an alternative to APB Opinion No. 25 in accounting for stock-based compensation issued to employees. As permitted by SFAS 123, the Company plans to continue to account for stock-based compensation in accordance with APB Opinion No. 25. The Company will present in its annual financial statements the additional disclosure required by SFAS 123. As of June 30, 1997, there are 140,000 options outstanding to non-employees ranging in exercise price from $3.50 to $3.94. All of these options were granted in April, 1997. In February 1997, the Financial Accounting Standards Board issued Statement No. 128, Earnings per Share (SFAS 128), which establishes standards for computing and presenting earnings per share. Because the Company has a loss from continuing operations, potential exercise of warrants and options would have an antidilutive effect, and are therefore not included in the earnings per share calculation. E. PURCHASE OF RIGHTS TO MULTIKINETM On March 10, 1997, the Company purchased from Sittona Company, B.V., Netherlands, all rights to its Multikine technology, including all patents and trade secrets. The previous agreement with Sittona required Cel-Sci to pay a 10% royalty on sales and a 15% royalty on sublicenses for the use of the technology, know-how and trade secrets. The Company purchased these rights with $500,000 in cash and 751,678 shares of its common stock. This purchase was expensed as research and development expense. F. PURCHASE OF HETEROCONJUGATE TECHNOLOGY In April 1997, the Company purchased the rights to Cell-Med's heteroconjugate technology. To date, the milestone payments include $50,000 in cash and 33,378 shares of the Company's common stock. This purchase was expensed as research and development expense. 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 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. During 1996, the Company issued Preferred Stock. See Footnote C, Stockholders' Equity. Results of Operations Interest income during the nine months ending June 30, 1997 reflects interest accrued on investments. Research and development expenses have increased due to the beginning of new clinical studies with cancer and AIDS patients. Research and development expenses also increased due to the purchase of the Multikine rights from the Sittona Company, which was expensed as research and development expense. PART II Item 6. (a) Exhibits No exhibits are filed with this document. (b) Reports on Form 8-K The Company filed no reports on Form 8-K during the fiscal quarter ended June 30, 1997. 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: August 14, 1997 /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
5 0000725363 CEL-SCI CORPORATION 9-MOS SEP-30-1997 JUN-30-1997 $3,401,150 $1,994,914 $72,376 0 0 $6,335,022 $1,917,339 $1,064,297 $7,663,646 $306,752 0 0 0 $103,892 $7,233,364 $7,663,646 0 $378,264 0 $6,831,499 0 0 0 $(6,453,235) 0 $(6,453,235) 0 0 0 $(6,453,235) (0.72) (0.72)
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