10-Q/A

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

 (Mark One)

☒            QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2020

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 001-11889

CEL-SCI CORPORATION

Colorado	84-0916344
State or other jurisdiction incorporation	(IRS) Employer Identification Number

 8229 Boone Boulevard, Suite 802

 Vienna, Virginia 22182

 Address of principal executive offices

 (703) 506-9460

 Registrant's telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common Stock	CVM	NYSE American

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 ☒           No ☐

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check One):

Large accelerated filer	☐	Accelerated filer	☒
Non-accelerated filer	☐	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).

Yes ☐           No ☒

Class of Stock	No. Shares Outstanding	Date
Common	37,633,894	May 5, 2020

EXPLANATORY NOTE

This amended 10-Q is filed to correct the manner in which the Company accounted for the adoption of ASC 842. See Note I. Restatement, to the accompanying financial statements, for further information.

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1.		Page
	Condensed Balance Sheets at March 31, 2020 and September 30, 2019 (unaudited)	3
	Condensed Statements of Operations for the six months ended March 31, 2020 and 2019 (unaudited)	4
	Condensed Statements of Operations for the three months ended March 31, 2020 and 2019 (unaudited)	5
	Condensed Statement of Stockholders’ Equity for the six months ended March 31, 2020 and 2019 (unaudited)	6
	Condensed Statements of Cash Flows for the six months ended March 31, 2020 and 2019 (unaudited)	7
	Notes to Condensed Financial Statements(unaudited)	9
Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures about Market Risks	26
Item 4.	Controls and Procedures	26
PART II
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	28
Item 6.	Exhibits	28
	Signatures	29

2

CEL-SCI CORPORATION

CONDENSED BALANCE SHEETS

	RESTATED
	MARCH 31,	SEPTEMBER 30,
ASSETS	2020	2019
	(UNAUDITED)
Current Assets:
Cash and cash equivalents	$14,329,870	$8,444,774
Receivables	62,289	62,765
Prepaid expenses	565,246	524,953
Supplies used for R&D and manufacturing	849,548	782,363
Total current assets	15,806,953	9,814,855
Finance lease right of use assets	14,670,746	-
Operating lease right of use assets	899,508	-
Property and equipment, net	3,286,273	15,825,636
Patent costs, net	312,380	311,586
Deposits	1,670,917	1,670,917
Total Assets	$36,646,777	$27,622,994
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$1,139,914	$1,586,478
Accrued expenses	316,866	34,432
Due to employees	675,408	709,442
Derivative instruments, current portion	2,156,857	674,442
Lease liabilities, current portion	977,264	-
Other current liabilities	5,000	14,956
Total current liabilities	5,271,309	3,019,750
Derivative instruments, net of current portion	4,067,436	5,813,868
Finance lease obligations, net of current portion	12,232,493	13,508,156
Operating lease obligations, net of current portion	812,479	-
Other liabilities	125,000	147,553
Total liabilities	22,508,717	22,489,327
Commitments and Contingencies
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value-200,000 shares authorized;
-0- shares issued and outstanding	-	-
Common stock, $.01 par value - 600,000,000 shares authorized;
37,336,411 and 35,231,776 shares issued and outstanding
at March 31, 2020 and September 30, 2019, respectively	373,365	352,318
Additional paid-in capital	379,943,932	358,507,603
Accumulated deficit	(366,179,237)	(353,726,254)
Total stockholders' equity	14,138,060	5,133,667
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$36,646,777	$27,622,994
See notes to condensed financial statements.

3

CEL-SCI CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

SIX MONTHS ENDED MARCH 31, 2020 and 2019

(UNAUDITED)

	RESTATED
	2020	2019
Grant income	$334,232	$277,183
Operating Expenses:
Research and development	8,711,360	6,304,260
General and administrative	5,197,418	3,313,985
Total operating expenses	13,908,778	9,618,245
Operating loss	(13,574,546)	(9,341,062)
Other income	36,896	36,127
(Loss)/gain on derivative instruments	(2,282,518)	4,589,135
Other non-operating gains	1,725,180	421,353
Interest expense, net	(504,190)	(907,332)
Net loss	(14,599,178)	(5,201,779)
Modification of warrants	(21,734)	-
Net loss available to common shareholders	$(14,620,912)	$(5,201,779)
Net loss per common share
BASIC	$(0.41)	$(0.18)
DILUTED	$(0.41)	$(0.19)
Weighted average common shares outstanding
BASIC	35,621,711	28,543,417
DILUTED	35,621,711	28,548,818
See notes to condensed financial statements.

4

CEL-SCI CORPORATION

CONDENSED STATEMENTS OF OPERATIONS

THREE MONTHS ENDED MARCH 31, 2020 and 2019

(UNAUDITED)

	RESTATED
	2020	2019
Grant income	$298,726	$150,769
Operating Expenses:
Research and development	4,458,547	2,832,546
General and administrative	2,558,522	1,624,823
Total operating expenses	7,017,069	4,457,369
Operating loss	(6,718,343)	(4,306,600)
Other income	18,448	18,216
Loss on derivative instruments	(3,049,027)	(967,171)
Other non-operating gains (losses)	934,511	(730,823)
Interest expense, net	(253,407)	(461,303)
Net loss	(9,067,818)	(6,447,681)
Modification of warrants	(21,734)	-
Net loss available to common shareholders	$(9,089,552)	$(6,447,681)
Net loss per common share
BASIC	$(0.25)	$(0.22)
DILUTED	$(0.25)	$(0.22)
Weighted average common shares outstanding
BASIC	36,165,050	29,113,910
DILUTED	36,165,050	29,113,910
See notes to condensed financial statements.

5

CEL-SCI CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY

(UNAUDITED)

			Additional
	Common	Stock	Paid-In	Accumulated
	Shares	Amount	Capital	Deficit	Total
BALANCES AT OCTOBER 1, 2019	35,231,776	$352,318	$358,507,603	$(353,726,254)	$5,133,667
Adoption of new accounting standard- RESTATED				2,146,195	2,146,195
Issuance of common stock	606,395	6,064	5,043,939	-	5,050,003
Warrant exercises	132,900	1,329	295,772	-	297,101
Equity based compensation - employees	-	-	1,800,225	-	1,800,225
401(k) contributions paid in common stock	4,474	45	40,892	-	40,937
Stock issued to nonemployees for service	15,819	158	84,289	-	84,447
Purchase of stock by officer	3,725	37	24,963	-	25,000
Share issuance costs	-	-	(92,150)	-	(92,150)
Net loss- RESTATED	-	-	-	(5,531,360)	(5,531,360)
RESTATED BALANCES DECEMBER 31, 2019	35,995,089	359,951	365,705,533	(357,111,419)	8,954,065
Proceeds from the sale of common stock	721,459	7,215	7,860,414	-	7,867,629
Warrant exercises	562,100	5,621	4,313,085	-	4,318,706
Equity based compensation - employees	-	-	1,780,979	-	1,780,979
401(k) contributions paid in common stock	3,376	34	38,925	-	38,959
Stock issued to nonemployees for service	17,120	171	234,853	-	235,024
Purchase of stock by officers and directors	16,787	168	159,822	-	159,990
Option exercises	20,480	205	49,693	-	49,898
Share issuance costs	-	-	(199,372)	-	(199,372)
Net loss - RESTATED	-	-		(9,067,818)	(9,067,818)
RESTATED BALANCES AT MARCH 31, 2020	37,336,411	$373,365	$379,943,932	$(366,179,237)	$14,138,060

			Additional
	Common	Stock	Paid-In	Accumulated
	Shares	Amount	Capital	Deficit	Total
BALANCES AT OCTOBER 1, 2018	28,034,487	$280,346	$331,312,184	$(331,591,614)	$916
Warrant exercises	298,682	2,987	646,766	-	649,753
401(k) contributions paid in common stock	12,279	123	35,118	-	35,241
Stock issued to nonemployees for service	62,784	628	201,752	-	202,380
Shares returned for settlement of clinical research costs	(564,905)	(5,649)	5,649	-	-
Equity based compensation - employees	-	-	573,660	-	573,660
Net income	-	-	-	1,245,902	1,245,902
BALANCES AT DECEMBER 31, 2018	27,843,327	278,435	332,775,129	(330,345,712)	2,707,852
Warrant exercises	1,523,933	15,239	2,640,395	-	2,655,634
401(k) contributions paid in common stock	10,419	104	36,779	-	36,883
Stock issued to nonemployees for service	77,449	774	224,855	-	225,629
Equity based compensation - employees	(3,500)	(35)	530,865	-	530,830
Shares issued for settlement of clinical research costs	500,000	5,000	1,285,000	-	1,290,000
Share issuance costs	-	-	(43,625)	-	(43,625)
Net loss	-	-	-	(6,447,681)	(6,447,681)
BALANCES AT MARCH 31, 2019	29,951,628	$299,517	$337,449,398	$(336,793,393)	$955,522

See notes to condensed financial statements.

6

CEL-SCI CORPORATION

CONDENSED STATEMENTS OF CASH FLOWS

SIX MONTHS ENDED MARCH 31, 2020 and 2019

(UNAUDITED)

	RESTATED
	2020	2019
Net loss	$(14,599,178)	$(5,201,779)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization	1,064,231	316,083
Share-based payments for services	347,227	511,424
Equity based compensation	3,581,204	1,104,490
Common stock contributed to 401(k) plan	79,896	72,124
Shares issued for settlement of clinical research costs	-	1,290,000
Loss (Gain) on derivative instruments	2,282,518	(4,589,135)
Capitalized lease interest	-	64,432
(Increase)/decrease in assets:
Receivables	476	(4,579)
Prepaid expenses	96,951	(74,741)
Supplies used for R&D and manufacturing	(67,185)	(115,774)
Increase/(decrease) in liabilities:
Accounts payable	(765,872)	(1,489,234)
Accrued expenses	20,110	82,580
Due to employees	(34,034)	245,074
Other liabilities	3,438	(1,057)
Net cash used in operating activities	(7,990,218)	(7,790,092)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(752,797)	(160,920)
Expenditures for patent costs	(13,996)	(67,661)
Net cash used in investing activities	(766,793)	(228,581)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	12,917,632	-
Payments of stock issuance costs	(190,553)	(80,224)
Proceeds from the purchase of stock by officers and directors	184,990	-
Proceeds from exercises of warrants	2,069,272	3,305,387
Proceeds from exercises of options	49,898	-
Payments on obligations under finance lease	(389,132)	(2,521)
Net cash provided by financing activities	14,642,107	3,222,642
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	5,885,096	(4,796,031)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	8,444,774	10,310,044
CASH AND CASH EQUIVALENTS, END OF PERIOD	$14,329,870	$5,514,013
See notes to condensed financial statements.

7

CEL-SCI CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED MARCH 31, 2020 and 2019
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
	RESTATED
	2020	2019
Property and equipment included in current liabilities	$318,984	$-
Capitalizable patent costs included in current liabilities	$13,465	$-
Right of use asset acquired and liability incurred	$13,712	$-
Finance lease obligation included in accounts payable	$983	$428
Prepaid consulting services paid with issuance of common stock	$137,244	$83,415
Accrued consulting services to be paid with common stock	$165,000	$-
Fair value of warrant liabilities on date of exercise	$2,546,535	$-
Stock issuance costs included in current liabilities	$116,549	$10,000
Cash paid for interest	$585,748	$902,091

8

CEL-SCI CORPORATION

NOTES TO CONDENSED FINANCIAL STATEMENTS

SIX MONTHS ENDED MARCH 31, 2020 AND 2019 (UNAUDITED)

A.

BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K/A for the year ended September 30, 2019.

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2020 and the results of its operations for the six months then ended. The condensed balance sheet as of September 30, 2019 is derived from the September 30, 2019 audited financial statements. On October 1, 2019, the Company adopted Accounting Standards Update (ASU) No. 2016-02 , “Leases” and its related amendments (collectively referred to as Topic 842 and codified as Accounting Standards Codification 842, or ASC 842) using the modified retrospective transition approach. In accordance with this adoption method, results for the reporting period ended March 31, 2020 are presented under the new standard, while prior period results continue to be reported under the previous standard. All other significant accounting policies have been consistently applied in the interim financial statements and the annual financial statements. The results of operations for the six and three months ended March 31, 2020 and 2019 are not necessarily indicative of the results to be expected for the entire year.

The financial statements have been prepared assuming that the Company will continue as a going concern, but due to recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.

Summary of Significant Accounting Policies:

Research and Office Equipment and Leasehold Improvements –Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired.

Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from its disposition, is less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.

Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company charges revisions to estimated expense in the period in which the facts that give rise to the revision become known.

9

Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized. A full valuation allowance was recorded against the deferred tax assets as of March 31, 2020 and September 30, 2019.

Derivative Instruments – The Company has entered into financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities.” In accordance with ASC 815, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models considering all the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.

Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.” The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized on the straight-line allocation method as expense over the requisite service or vesting period.

The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Compensation Plans, Stock Bonus Plans and an Incentive Stock Bonus Plan. In some cases, these Plans are collectively referred to as the "Plans". All Plans have been approved by the stockholders.

The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption was based on the U.S. Treasury rate at date of the grant with term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.

Vesting of restricted stock granted under the Incentive Stock Bonus Plan is subject to service, performance and market conditions and meets the classification of equity awards. These awards were measured at market value on the grant-dates for issuances where the attainment of performance criteria is likely and at fair value on the grant-dates, using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.

Newly Adopted Accounting Pronouncements

Effective October 1, 2019, the Company adopted ASC 842. ASC 842 requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at the lease commencement date. Subsequent measurement, including the presentation of expenses and cash flows, depends on the classification of the lease as either a finance lease or an operating lease. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. The Company also elected the transition package of three practical expedients which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company elected a short-term lease exception policy permitting the option to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component. The Company’s lease portfolio includes both finance and operating leases. The impact of adopting ASC 842 was to increase long term assets by approximately $3.0 million, increase total liabilities by approximately $0.9 million and record a cumulative effect adjustment of approximately $2.1 million to opening accumulated deficit. Refer to Note I for details regarding the restatement as a result of an error relating to the adoption of ASC 842.

10

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, Compensation—Stock Compensation (Topic 718), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, and thus, the accounting for share-based payments to non-employees will be substantially aligned. The Company adopted ASU 2018-07 as of October 1, 2019 with no impact on its financial statements and related disclosures.

New Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement - Disclosure Framework (Topic 820)” (“ASU 2018-13”).The updated guidanceimproves the disclosure requirements on fair value measurements. The updated guidance becomes effective for the Company on October 1, 2021. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements. 

B.

OPERATIONS AND FINANCING

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, because of the rapid increase in exposure globally, the WHO classified the COVID-19 outbreak as a pandemic. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020.  Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak, if the pandemic continues, it may have an adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2020.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act).  The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.  While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act.  The Company does not expect the enactment of the CARES Act to have a material impact to its financial position, results of operations or cash flows.

The Company has incurred significant costs since its inception for the acquisition of certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, patent applications, research and development, administrative costs, construction of laboratory facilities, and clinical trials.  The Company has funded such costs with proceeds from loans and the public and private sale of its common stock.  The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts.  The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. The Company is taking cost-cutting initiatives, as well as exploring other sources of funding, to finance operations over the next 12 months. The Company believes there is a high likelihood that it will continue to receive funds from private and public offerings and warrant conversions similar to the way it has substantially funded operations for the past 12 months. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.

11

The Company is currently in the final stages of its large multi-national Phase 3 clinical trial for head and neck cancer with its partners TEVA Pharmaceuticals and Orient Europharma. To finance the study beyond the next twelve months, the Company plans to raise additional capital in the form of corporate partnerships, warrant exercises, debt issuances and/or equity financings. The Company believes that it will be able to obtain additional financing because it has done so consistently in the past and because Multikine is a product in the Phase 3 clinical trial stage. However, there can be no assurance that the Company will be successful in raising additional funds on a timely basis or that the funds will be available to the Company on acceptable terms or at all.  If the Company does not raise the necessary amounts of money, it may have to curtail its operations until it can raise the required funding.

The financial statements have been prepared assuming the Company will continue as a going concern, but due to the Company’s recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Nine hundred twenty-eight (928) head and neck cancer patients have been enrolled and have completed treatment in the Phase 3 study. The study end point is a 10% increase in overall survival of patients between the two main comparator groups in favor of the group receiving the Multikine treatment regimen. The determination if the study end point is met will occur when there are a total of 298 deaths in those two groups. On May 4, 2020, we announced the threshold of 298 deaths (events) was reached.

C.

STOCKHOLDERS’ EQUITY

Proceeds from the Sale of Common Stock

In March 2020, the Company sold 630,500 shares of common stock at a public offering price of $12.22 per share and received aggregate net proceeds of approximately $7.1 million. Under the terms of the Underwriting Agreement the Company granted the Underwriters a 45-day option to purchase up to an additional 94,575 shares of common stock solely to cover over-allotments. The underwriter fully exercised this option in May 2020 resulting in additional net proceeds to the Company of approximately $1.1 million.

In December 2019, the Company sold 606,395 shares of common stock at a public offering price of $9.07 per share and received aggregate net proceeds of approximately $5.0 million. In January 2020, the underwriters of that offering fully exercised the option to purchase 90,959 additional shares of common stock at the public offering price of $9.07 per share for aggregate net proceeds to the Company of approximately $0.8 million.

Equity Compensation

Underlying share information for equity compensation plans as of March 31, 2020 is as follows:

Name of Plan	Total Shares Reserved Under Plans	Shares Reserved for Outstanding Options	Shares Issued	Remaining Options/Shares Under Plans
Incentive Stock Options Plans	138,400	89,895	N/A	213
Non-Qualified Stock Option Plans	6,387,200	6,108,173	N/A	131,146
Stock Bonus Plans	783,760	N/A	339,076	444,651
Stock Compensation Plans	634,000	N/A	150,695	464,895
Incentive Stock Bonus Plan	640,000	N/A	616,500	23,500

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Underlying share information for equity compensation plans as of September 30, 2019 is as follows:

Name of Plan	Total Shares Reserved Under Plans	Shares Reserved for Outstanding Options	Shares Issued	Remaining Options/Shares Under Plans
Incentive Stock Option Plans	138,400	89,895	N/A	213
Non-Qualified Stock Option Plans	6,387,200	6,128,321	N/A	112,166
Stock Bonus Plans	783,760	N/A	331,226	452,501
Stock Compensation Plans	634,000	N/A	130,183	485,407
Incentive Stock Bonus Plan	640,000	N/A	616,500	23,500

Stock option activity:

	Six Months Ended March 31,
	2020	2019
Options granted	2,500	500
Options exercised	20,480	-
Options forfeited	1,000	24,193
Options expired	1,168	2,400

	Three Months Ended March 31,
	2020	2019
Options granted	1,500	-
Options exercised	20,480	-
Options forfeited	1,000	24,193
Options expired	1,132	-

Stock-Based Compensation Expense

	Six months Ended March 31,
	2020	2019
Employees	$3,581,204	$1,104,490
Non-employees	$347,227	$511,424

	Three months Ended March 31,
	2020	2019
Employees	$1,780,979	$530,830
Non-employees	$191,487	$272,520

Employee compensation expense includes the expense related to options issued or vested and restricted stock granted. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts.

13

Warrants and Non-Employee Options

The following chart represents the warrants and non-employee options outstanding at March 31, 2020:

Warrant/Options	Issue Date	Shares Issuable upon Exercise of Warrants/ Options	Exercise Price	Expiration Date	Reference
Series N	8/18/2008	85,339	$3.00	2/18/2021	2
Series V	5/28/2015	810,127	$19.75	5/28/2020	1
Series UU	6/11/2018	154,810	$2.80	6/11/2020	*
Series W	10/28/2015	688,930	$16.75	10/28/2020	1
Series X	1/13/2016	120,000	$9.25	1/13/2021	*
Series Y	2/15/2016	26,000	$12.00	2/15/2021	*
Series ZZ	5/23/2016	20,000	$13.75	5/18/2021	1
Series BB	8/26/2016	16,000	$13.75	8/22/2021	1
Series Z	5/23/2016	264,000	$13.75	11/23/2021	1
Series CC	12/8/2016	153,643	$5.00	12/8/2021	1
Series HH	2/23/2017	200	$3.13	2/16/2022	1
Series AA	8/26/2016	200,000	$13.75	2/22/2022	1
Series MM	6/22/2017	893,491	$1.86	6/22/2022	*
Series NN	7/24/2017	375,545	$2.52	7/24/2022	2
Series OO	7/31/2017	10,000	$2.52	7/31/2022	2
Series RR	10/30/2017	457,116	$1.65	10/30/2022	*
Series SS	12/19/2017	365,538	$2.09	12/18/2022	2
Series TT	2/5/2018	381,564	$2.24	2/5/2023	2
Series VV	7/2/2018	55,000	$1.75	1/2/2024	2
Consultants	7/28/17	10,000	$2.18	7/27/2027	*

* No current period changes to these warrants and non-employee options

1.

Warrant Liabilities

The table below presents the fair value of the warrant liabilities at the balance sheet dates:

	March 31, 2020	September 30, 2019
Series V warrants	$595,981	$674,442
Series W warrants	1,560,876	1,193,507
Series Z warrants	1,421,421	1,109,545
Series ZZ warrants	82,223	77,638
Series AA warrants	1,243,531	916,908
Series BB warrants	70,994	63,966
Series CC warrants	1,247,399	1,710,898
Series FF warrants	-	446,185
Series HH warrants	1,868	45,657
Series JJ warrants	-	66,599
Series LL warrants	-	182,965
Total warrant liabilities	$6,224,293	$6,488,310

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The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

	2020	2019
Series S warrants	$-	$33
Series V warrants	78,461	494,852
Series W warrants	(367,369)	616,028
Series Z warrants	(311,876)	114,831
Series ZZ warrants	(4,585)	12,638
Series AA warrants	(326,623)	93,268
Series BB warrants	(7,028)	7,736
Series CC warrants	(826,277)	339,698
Series DD warrants	-	1,249,287
Series EE warrants	-	1,249,287
Series FF warrants	(319,706)	34,603
Series GG warrants	-	106,750
Series HH warrants	(34,457)	10,642
Series II warrants	-	115,343
Series JJ warrants	(64,992)	15,926
Series KK warrants	-	113,467
Series LL warrants	(98,066)	14,746
Net (loss)/gain on warrant liabilities	$(2,282,518)	$4,589,135

The table below presents the losses on the warrant liabilities for the three months ended March 31:

	2020	2019
Series V warrants	$(476,570)	$(61,480)
Series W warrants	(518,743)	(10,822)
Series Z warrants	(322,425)	(89,290)
Series ZZ warrants	(19,432)	(1,685)
Series AA warrants	(391,601)	(63,951)
Series BB warrants	(6,597)	(4,374)
Series CC warrants	(803,596)	(325,908)
Series FF warrants	(312,517)	(34,459)
Series GG warrants	-	(106,032)
Series HH warrants	(34,375)	(10,309)
Series II warrants	-	(115,246)
Series JJ warrants	(64,862)	(15,536)
Series KK warrants	-	(114,628)
Series LL warrants	(98,309)	(13,451)
Net loss on warrant liabilities	$(3,049,027)	$(967,171)

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.

In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.

15

Changes in Warrant Liabilities

On December 10, 2018, 1,360,960 Series DD and 1,360,960 Series EE warrants, with an exercise price of $4.50 expired.

On October 11, 2018, 327,729 Series S warrants, with an exercise price of $31.25 expired.

Exercise of Warrant Liabilities

The following warrants recorded as liabilities were exercised during the periods ended March 31, 2020.

	Three Months			Six Months
Warrants	Warrants Exercised	Exercise Price	Proceeds	Warrants Exercised	Exercise Price	Proceeds
Series CC	123,820	$5.00	$619,100	123,820	$5.00	$619,100
Series FF	68,048	$3.91	265,812	68,048	$3.91	265,812
Series HH	6,300	$3.13	19,687	6,300	$3.13	19,687
Series JJ	9,450	$3.13	29,531	9,450	$3.13	29,531
Series LL	26,398	$3.59	94,867	26,398	$3.59	94,867
	234,016		$1,028,997	234,016		$1,028,997

No warrants recorded as liabilities were exercised during the six and three months ended March 31, 2019.

2.

Equity Warrants

Changes in Equity Warrants

On January 23, 2020, the expiration date of the Series N warrants was extended to February 18, 2021. The incremental cost of this extension was approximately $22,000, which was recorded as a deemed dividend in the financial statements for the six and three months ended March 31, 2020. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

Exercise of Equity Warrants

The following warrants recorded as equity were exercised during the periods ended March 31, 2020.

	Three Months			Six Months
Warrants	Warrants Exercised	Exercise Price	Proceeds	Warrants Exercised	Exercise Price	Proceeds
Series NN	98,253	$2.52	$247,598	98,253	$2.52	$247,598
Series OO	30,000	$2.52	75,600	40,000	$2.52	100,800
Series SS	94,474	$2.09	197,451	117,106	$2.09	244,752
Series TT	77,857	$2.24	174,400	178,125	$2.24	399,000
Series VV	27,500	$1.75	48,125	27,500	$1.75	48,125
	328,084		$743,174	460,984		$1,040,275

The following warrants recorded as equity were exercised during the periods ended March 31, 2019.

	Three Months			Six Months
Warrants	Warrants Exercised	Exercise Price	Proceeds	Warrants Exercised	Exercise Price	Proceeds
Series PP	-	-	-	60,000	$2.30	$138,000
Series SS	13,158	$2.09	$27,500	165,790	$2.09	346,501
Series TT	-	-	-	86,050	$2.24	192,752
Series VV	1,385,000	$1.75	2,423,750	1,385,000	$1.75	2,423,750
Series WW	125,775	$1.63	204,384	125,775	$1.63	204,384
	1,523,933		$2,655,635	1,822,615		$3,305,387

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3. 

Options and Shares Issued to Consultants

During the six months ended March 31, 2020 and 2019, the Company issued 32,939 and 140,233 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $9.44 and $3.04 during the six months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, the Company issued 17,120 and 77,449 shares of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $11.53 and $2.89, respectively, during the three months ended March 31, 2020 and 2019. The aggregate values of the issuances of restricted common stock and common stock options are recorded as prepaid expenses and are charged to general and administrative expenses over the periods of service.

During the six months ended March 31, 2020 and 2019, the Company recorded total expense of approximately $347,000 and $511,000, respectively, relating to these consulting agreements. At March 31, 2020 and September 30, 2019, approximately $367,000 and $230,000, respectively, are included in prepaid expenses. At March 31, 2020, the Company has accrued $165,000 for shares to be issued. As of March 31, 2020, 10,000 options issued to consultants remained outstanding, all of which were issued from the Non-Qualified Stock Option plans and are fully vested.

4. 

Securities Purchase Agreements

The Company has entered into Securities Purchase Agreements (SPA) with Ergomed plc, one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate payment of amounts due Ergomed. Under the Agreements, the Company issued Ergomed shares of common stock and the net proceeds from the sales of those shares would reduce outstanding amounts due Ergomed. Upon issuance, the Company expenses the full value of the shares as Other non-operating gain/loss and subsequently offsets the expense as amounts are realized through the sale by Ergomed and reduces accounts payable to Ergomed.

On January 9, 2019, the Company entered into an SPA under which it issued Ergomed 500,000 restricted shares of the Company’s common stock valued at approximately $1.3 million. No other shares were issued under the SPA during the periods presented.

The following table summarizes the Other Non-Operating Gains (Loss) for the six and three months ended March 31, 2020 and 2019 relating to these agreements:

	Six Months Ended		Three Months Ended
	3/31/2020	3/31/2019	3/31/2020	3/31/2019
Amount realized through the resale of shares	$1,720,680	$1,711,353	$934,511	$559,177
Fair value of shares upon issuance	-	1,290,000	-	1,290,000
Other non-operating gain (loss)	$1,720,680	$421,353	$934,511	$(730,823)

On August 15, 2019, the Company entered into an SPA under which it issued Ergomed 250,000 restricted shares of the Company’s common stock. As of March 31, 2020, Ergomed held 20,250 shares for resale.

D.

FAIR VALUE MEASUREMENTS

In accordance with ASC 820-10, “Fair Value Measurements,” the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company generally applies the income approach to determine fair value. This method uses valuation techniques to convert future amounts to a single present amount. The measurement is based on the value indicated by current market expectations with respect to those future amounts.

17

ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

● 

Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities

● 

Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and amounts derived from valuation models where all significant inputs are observable in active markets

● 

Level 3 – Unobservable inputs that reflect management’s assumptions

For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of an input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at March 31, 2020:

	Quoted Prices in Active Markets for Identical Assets or Liabilities  (Level 1)	Significant Other Observable Inputs  (Level 2)	Significant Unobservable Inputs  (Level 3)	Total
Derivative instruments	$-	$-	$6,224,293	$6,224,293

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at September 30, 2019:

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)	Significant Other Observable Inputs (Level 2)	Significant Unobservable Inputs (Level 3)	Total
Derivative instruments	$-	$-	$6,488,310	$6,488,310

The following sets forth the reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3) for the six months ended March 31, 2020 and the year ended September 30, 2019:

	Six months ended	Twelve months ended
	March 31, 2020	September 30, 2019
Beginning balance	$6,488,310	$9,317,031
Issuances	-	-
Exercises	(2,546,535)	(3,589,357)
Realized and unrealized losses	2,282,518	760,636
Ending balance	$6,224,293	$6,488,310

18

The fair values of the Company’s derivative instruments disclosed above under Level 3 are primarily derived from valuation models where significant inputs such as historical price and volatility of the Company’s stock, as well as U.S. Treasury Bill rates, are observable in active markets.

E.

RELATED PARTY TRANSACTIONS

During the six months ended March 31, 2020, officers and directors of the Company purchased 20,512 shares of restricted common stock at an aggregate fair market value of approximately $185,000. This include 16,787 shares purchased during the three months ended March 31, 2020 with an aggregate fair market value of approximately $160,000.

On January 23, 2020, the expiration date of the Series N warrants was extended to February 18, 2021. The incremental cost of this extension was approximately $22,000, which was recorded as a deemed dividend in the financial statements for the six and three months ended March 31, 2020. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

F.

COMMITMENTS AND CONTINGENCIES

Clinical Research Agreements 

Under co-development and revenue sharing agreements with Ergomed, Ergomed agreed to contribute up to $12 million towards the Company’s Phase 3 Clinical Trial in the form of discounted clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specific maximum amount. The Company accounted for the co-development and revenue sharing agreements in accordance with ASC 808 “Collaborative Arrangements”. The Company determined the payments to Ergomed are within the scope of ASC 730 “Research and Development.” Therefore, the Company records the discount on the clinical services as a credit to research and development expense on its Statements of Operations. Since the inception of the agreement with Ergomed, the Company has incurred research and development expenses of approximately $32.5 million for Ergomed’s services. This amount is net of Ergomed’s discount of approximately $11 million. During the six months ended March 31, 2020 and 2019, the Company recorded, net of Ergomed’s discount, approximately $1.6 million and $1.5 million, respectively, as research and development expense related to Ergomed’s services. During the three months ended March 31, 2020 and 2019, the Company recorded, net of Ergomed’s discount, approximately $0.8 million and $0.7 million, respectively, as research and development expense related to Ergomed’s services.

Lease Agreements

The Company determines whether a contract contains a lease at the inception of a contract by determining if the contract conveys the right to control the use of identified property, plant or equipment over a period of time in exchange for consideration. The Company leases certain real estate, machinery, equipment and office equipment for varying periods. Many of these leases include an option to either renew or terminate the lease. For purposes of calculating lease liabilities, these options are included in the lease term when it is reasonably certain that the Company will exercise such options. The incremental borrowing rate utilized to calculate the lease liabilities is based on the information available at commencement date, as most of the leases do not provide an implicit borrowing rate. Short-term leases, defined as leases with initial terms of 12 months or less, are not reflected on the balance sheet. Lease expense for such short-term leases is not material. For purposes of calculating lease liabilities, lease and non-lease components are combined.

The Company leases a manufacturing facility near Baltimore, Maryland (the San Tomas lease). The building was remodeled in accordance with the Company’s specifications so that it can be used by the Company to manufacture Multikine for the Company’s Phase 3 clinical trial and sales of the drug if approved by the FDA. The lease is for a term of twenty years and requires annual base rent to escalate each year at 3%. The Company is required to pay all real estate and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows the Company, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease, which expires in October 2028.

19

Upon adoption of ASC 842 on October 1, 2019, the Company recorded a finance lease right of use asset of approximately $15.5 million and a finance lease liability of approximately $13.5 million. As of March 31, 2020, the net book value of the finance lease right of use asset is approximately $14.7 million and the balance of the finance lease liability is approximately $13.1 million, of which approximately $0.9 million is current. These amounts include the San Tomas lease as well as several other smaller finance leases for office equipment. The finance right of use assets are being depreciated using a straight-line method over the underlying lease terms. Total cash paid related to finance leases during the six months ended March 31, 2020 was approximately $940,000, of which approximately $586,000 was for interest. The weighted average discount rate of the Company’s finance leases is 8.8% and the weighted average time to maturity is 8.8 years.

The Company was required to deposit the equivalent of one year of base rent in accordance with the lease. When the Company meets the minimum cash balance required by the lease, the deposit will be returned to the Company. The approximate $1.7 million deposit is included in non-current assets at March 31, 2020 and September 30, 2019.

Approximate future minimum lease payments under finance leases as of March 31, 2020 are as follows:

Six months ending September 30, 2020	$946,000
Year ending September 30,
2021	1,953,000
2022	2,014,000
2023	2,083,000
2024	2,148,000
2025	2,218,000
Thereafter	7,322,000
Total future minimum lease obligation	18,684,000
Less imputed interest on finance lease obligations	(5,585,000)
Net present value of lease finance lease obligations	$13,099,000

The Company rents a portion of its space on a month-to-month term basis, which requires a 30-day notice for termination. On January 3, 2020, the Company notified the tenant of the sublet property of its intention to terminate the sublease effective April 30, 2020 since this space is needed to prepare the facility to produce Multikine for commercial purposes and before the Company’s Biologics License Application (BLA) can be submitted to the FDA. The rental income for each of the six months ended March 31, 2020 and 2019 was approximately $37,000 and $36,000, respectively. The sublease rental income for each of the three months ended March 31, 2020 and 2019 was approximately $18,000.

The Company leases two facilities under 60-month operating leases – the lease for its research and development laboratory expires February 28, 2022 and the lease for its office headquarters expires June 30, 2020. During the six months ended March 31, 2020, the Company incurred approximately $80,000 in leasehold improvements costs for the research and development lab and is reasonably certain to renew the lease through February 28, 2027. The renewal period is included in the right of use asset and liability calculations. The operating leases include escalating rental payments. The Company is recognizing the related rent expense on a straight-line basis over the full 60-month terms of the leases. Upon adoption of ASC 842 on October 1, 2019, the Company recorded an operating lease right of use asset and an operating lease liability of approximately $1.0 million. As of March 31, 2020, the net book value of the operating lease right of use asset is approximately $0.9 million and the balance of the operating lease liability is approximately $0.9 million, of which approximately $0.1 million is current. The Company incurred lease expense under operating leases of approximately $135,000 and $68,000 for the six and three months ended March 31, 2020, respectively. Total cash paid related to operating leases during the six and three months ended March 31, 2020 was approximately $132,000 and $66,000, respectively.

20

As of March 31, 2020, future minimum lease payments on operating leases are as follows:

Six months ending September 30, 2020	$107,000
Year ending September 30,
2021	163,000
2022	168,000
2023	173,000
2024	178,000
2025	183,000
Thereafter	269,000
Total future minimum lease obligation	1,241,000
Less imputed interest on operating lease obligation	(317,000)
Net present value of operating lease obligation	$924,000

G.   PATENTS

During the six months ended March 31, 2020 and 2019, no patent impairment charges were recorded. For the six months ended March 31, 2020 and 2019, amortization of patent costs totaled approximately $27,000 and $23,000, respectively. For the three months ended March 31, 2020 and 2019, amortization of patent costs totaled approximately $14,000 and $11,000, respectively. Approximate estimated future amortization expense is as follows:

Six months ending September 30, 2020	$26,000
Year ending September 30,
2021	50,000
2022	46,000
2023	36,000
2024	28,000
2025	25,000
Thereafter	101,000
Total	$312,000

 H.   LOSS PER COMMON SHARE

The following tables provide the details of the basic and diluted loss per-share computations:

	Six months ended March 31,		Three months ended March 31,
	2020	2019	2020	2019
Loss per share - basic
Net loss available to common shareholders - basic	$(14,620,912)	$(5,201,779)	$(9,089,552)	$(6,447,681)
Weighted average shares outstanding - basic	35,621,711	28,543,417	36,165,050	29,113,910
Basic loss per common share	$(0.41)	$(0.18)	$(0.25)	$(0.22)
Loss per share - diluted
Net loss available to common shareholders - basic	$(14,620,912)	$(5,201,779)	$(9,089,552)	$(6,447,681)
Gain on derivatives (1)	-	(335,560)	-	-
Net loss available to common shareholders - diluted	$(14,620,912)	$(5,537,339)	$(9,089,552)	$(6,447,681)
Weighted average shares outstanding - basic	35,621,711	28,543,417	36,165,050	29,113,910
Incremental shares underlying dilutive "in the money" warrants (1)	-	5,401	-	-
Weighted average shares outstanding - diluted	35,621,711	28,548,818	36,165,050	29,113,910
Diluted loss per common share	$(0.41)	$(0.19)	$(0.25)	$(0.22)

(1)

Includes shares issuable upon the exercise of the Series GG, II and KK warrants for the six months ended March 31, 2019.

21

The gain on derivatives priced lower than the average market price during the period is excluded from the numerator and the related shares are excluded from the denominator in calculating diluted loss per share.

In accordance with the contingently issuable shares guidance of FASB ASC Topic 260, Earnings Per Share, the calculation of diluted net earnings (loss) per share excludes the following securities because their inclusion would have been anti-dilutive as of March 31:

	2020	2019
Options and Warrants	6,452,645	10,576,881
Unvested Restricted Stock	318,798	308,500
Total	6,771,443	10,885,381

I. RESTATEMENT

In October 2008, the Company entered into an agreement whereby the Company leased a building owned by a third party. The Company accounted for the lease arrangement in accordance with the build-to-suit guidance in ASC 840-40-55. On October 1, 2019, the Company adopted ASC 842 using the modified retrospective transition approach. Upon adoption of ASC 842, the Company determined the arrangement should be accounted for as a finance lease.

In December 2020, the Company determined that the opening finance right of use (ROU) asset and total stockholders’ equity balances were understated by approximately $2.04 million as of October 1, 2019, the date of adoption. The following is a summary of the components of the understated balances:

●

The unamortized value of approximately $0.6 million relating to the issuance of warrants to the landlord should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

●

The unamortized value of approximately $1.4 million relating to a payment made to the landlord at lease inception, which the Company is recovering in the form of reduced rent, should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

The changes do not impact any prior year’s financial statements but are an adjustment to the opening finance ROU asset and accumulated deficit balances effective October 1, 2019. As a result of the changes to the opening finance ROU asset and accumulated deficit balances, the accompanying financial statements for the six and three months ended March 31, 2020 have been restated to reflect the correction of the error. The following is a summary of the restatement:

	March 31, 2020
BALANCE SHEET	PREVIOUSLY REPORTED	ADJUSTMENT	RESTATED
Finance lease right of use assets	$ 12,741,195	$ 1,929,551	$ 14,670,746
Total assets	34,717,226	1,929,551	36,646,777
Accumulated deficit	(368,108,788)	1,929,551	(366,179,237)
Total stockholders' equity	12,208,509	1,929,551	14,138,060
Total liabilities and stockholders' equity	34,717,226	1,929,551	36,646,777

	Six Months Ended March 31, 2020			Three Months Ended March 31, 2020
STATEMENT OF OPERATIONS	PREVIOUSLY REPORTED	ADJUSTMENT	RESTATED	PREVIOUSLY REPORTED	ADJUSTMENT	RESTATED
Research and development expenses	$ 8,598,960	$ 112,400	$ 8,711,360	$ 4,402,347	$ 56,200	$ 4,458,547
Total operating expenses	13,796,378	112,400	13,908,778	6,960,869	56,200	7,017,069
Operating loss	(13,462,146)	(112,400)	(13,574,546)	(6,662,143)	(56,200)	(6,718,343)
Net loss	(14,486,778)	(112,400)	(14,599,178)	(9,011,618)	(56,200)	(9,067,818)
Net loss available to common shareholders	(14,508,512)	(112,400)	(14,620,912)	(9,033,352)	(56,200)	(9,089,552)
Net loss per share - basic and diluted	$ (0.41)		$ (0.41)	$ (0.25)		$ (0.25)

The impact, as a result of the restatement, to the accompanying Statement of Cash Flows is an increase to net loss offset by an increase to depreciation and amortization expense of $112,400 resulting in no impact to the cash used in operating activities.

In addition, the cumulative effect adjustment to the opening accumulated deficit balance in the statement of stockholders' equity as of October 1, 2019 increased $2.0 million from $0.1 million (previously reported) to $2.1 million (restated).

22

J.     SUBSEQUENT EVENTS

On April 6, 2020, the Company agreed to issue Ergomed 100,000 restricted shares of the Company’s common stock in payment of amounts the Company may owe Ergomed for providing services to the Company.

Under the terms of the March 2020 Underwriting Agreement the Company granted the Underwriters a 45-day option to purchase up to an additional 94,575 shares of common stock solely to cover over-allotments. The underwriter fully exercised this option on May 4, 2020 resulting in additional net proceeds to the Company of approximately $1.1 million.

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

 Liquidity and Capital Resources

The Company’s lead investigational therapy, Multikine® (Leukocyte Interleukin, Injection), is cleared for a Phase 3 clinical trial in advanced primary head and neck cancer by the regulators in twenty-four countries around the world, including the U.S.

Multikine (Leukocyte Interleukin, Injection) is the full name of this investigational therapy, which, for simplicity, is referred to in this report as Multikine. Multikine is the trademark that the Company has registered for this investigational therapy, and this proprietary name is subject to FDA review under the Company’s future anticipated regulatory submission for approval. Multikine has not been licensed or approved by the FDA or any other regulatory agency. Neither has its safety or efficacy been established for any use.

The Company also owns and is developing a pre-clinical technology called LEAPS (Ligand Epitope Antigen Presentation System).

All the Company’s projects are under development. Consequently, the Company cannot predict when it will be able to generate any revenue from the sale of any of its products.

Since inception, the Company has financed its operations through the sale of equity securities, convertible notes, loans and certain research grants. The Company’s expenses will continue to exceed its revenues as it continues the development of Multikine and brings other drug candidates into clinical trials. Until the Company becomes profitable, any or all of these financing vehicles or others may be utilized to assist in funding the Company’s capital requirements.

Capital raised by the Company has been expended primarily for patent applications, research and development, administrative costs, and the construction of the Company’s manufacturing and laboratory facilities. The Company does not anticipate realizing significant revenues until it enters into licensing arrangements for its technology and know-how or until it receives regulatory approval to sell its products (which could take several years). Thus, the Company has been dependent upon the proceeds from the sale of its securities to meet all its liquidity and capital requirements and anticipates having to do so in the future.

23

The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts. The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. The Company is taking cost-cutting initiatives, as well as exploring other sources of funding, to finance operations over the next 12 months. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.

Since the Company launched its Phase 3 clinical trial for Multikine, the Company has incurred expenses of approximately $58 million as of March 31, 2020 on direct costs for the Phase 3 clinical trial. The Company estimates it will incur additional expenses of approximately $3.2 million for the remainder of the Phase 3 clinical trial. It should be noted that this estimate is based only on the information currently available in the Company’s contracts with the Clinical Research Organizations responsible for managing the Phase 3 clinical trial and does not include other related costs, e.g., the manufacturing of the drug. This number may be affected by the rate of death accumulation in the study, foreign currency exchange rates, and many other factors, some of which cannot be foreseen today. It is therefore possible that the cost of the Phase 3 clinical trial will be higher than currently estimated.

The Company uses two CRO’s to manage the global Phase 3 study; ICON and Ergomed, which are both international leaders in managing oncology trials. As of September 2016, the study was fully enrolled with 928 patients.

Under a co-development agreement, Ergomed agreed to contribute up to $12 million towards the study where it will perform clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specified maximum amount. Approximately $11 million of these credits were realized as of March 31, 2020.

During the six months ended March 31, 2020, the Company’s cash increased by approximately $5.9 million.  Significant components of this increase include approximately $12.9 million in net proceeds from the sale of common stock through public offerings and approximately $2.1 million in proceeds from the exercise of warrants and options, offset by net cash used to fund the Company’s regular operations, including its Phase 3 clinical trial, of approximately $8.0 million, approximately $0.8 million of equipment and leasehold improvement expenditures and approximately $0.4 million in lease payments. During the six months ended March 31, 2019, the Company’s cash decreased by approximately $4.8 million.  Significant components of this decrease include net cash used to fund the Company’s regular operations, including its Phase 3 clinical trial, of approximately $7.8 million and approximately $0.2 million to purchase long term assets. The decrease was offset by net proceeds from the exercise of warrants of approximately $3.3 million.

During the six months ended March 31, 2020, 695,000 warrants were exercised at a weighted average exercise price of $2.98 for total proceeds of approximately $2.1 million. These exercises include 562,100 warrants exercised during three months ended March 31, 2020 for proceeds of approximately $1.8 million. During the six months ended March 31, 2019, 1,822,615 warrants were exercised at a weighted average exercise price of $1.81 for proceeds of approximately $3.3 million. These exercises include 1,523,933 warrants exercised during the three months ended March 31, 2019 for proceeds of approximately $2.7 million.

The Company has entered into Securities Purchase Agreements with Ergomed plc, one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate a payment of amounts due Ergomed. Under the Agreements, the Company issued Ergomed shares of common stock and the net proceeds from the sales of those shares would reduce outstanding amounts due Ergomed. Upon issuance, the Company expenses the full value of the shares as Other non-operating loss and subsequently offsets the expense as amounts are realized through the sale of the Company’s shares by Ergomed and reduces accounts payable to Ergomed. During the six months ended March 31, 2020 and 2019, the Company realized approximately $1.7 million through the sale by Ergomed of 177,750 and 545,324 shares of the Company’s common stock, respectively, and the Company reduced accounts payable to Ergomed and credited Other operating gains by those amounts. For more information regarding the SPAs refer to Item 4 under Note C above.

24

Current assets other than cash, remained constant at March 31, 2020 as compared to September 30, 2019. Receivables consist primarily of amounts due from the Company’s partners for reimbursed clinical study costs related to its Phase 3 clinical trial and amounts to be reimbursed for costs related to its Small Business Innovation Research (SBIR) grant. Prepaid expenses at March 31, 2020 were approximately $40,000 higher than the balances at September 30, 2019 due to the timing of payments and recognition of related expenses.

Supplies are purchased for use in the Company’s manufacturing and R&D efforts and vary with the study requirements. During the six months ended March 31, 2020, the supplies increased by approximately $67,000 in support of the work on modifications of the manufacturing facility to prepare the facility to produce Multikine for commercial purposes and before the Company’s Biologics License Application (BLA) can be submitted to the FDA.

Results of Operations and Financial Condition

During the six months ended March 31, 2020, research and development expenses increased by approximately $2.4 million, or 38%, compared to the six months ended March 31, 2019. Major components of this increase include approximately $1.2 million of costs incurred to prepare the manufacturing facility for the potential commercial manufacture of Multikine, $1.1 million increase in employee stock compensation expense, $0.6 million increase in depreciation expense resulting from the adoption of the new leasing standard and an increase in approximately $0.2 million in other miscellaneous research and development expenses. These increases were offset by a decrease of approximately $0.7 million in expenses related to the Company’s on-going Phase 3 clinical trial. During the three months ended March 31, 2020, research and development expenses increased by approximately $1.6 million, or 57%, compared to the three months ended March 31, 2019. Major components of this increase include approximately $0.6 million of costs incurred to prepare the manufacturing facility for the potential commercial manufacture of Multikine, $0.5 million increase in employee stock compensation expense, $0.3 million increase in depreciation expense resulting from adoption of the new leasing standard and an increase in approximately $0.2 million in other miscellaneous research and development expenses.

During the six months ended March 31, 2020, general and administrative expenses increased by approximately $1.9 million, or 57%, compared to the six months ended March 31, 2019. Approximately $1.4 million of the change relates to an increase in employee stock compensation expense. The remaining increase consists of approximately $0.5 million in net other general and administrative account variations. During the three months ended March 31, 2020, general and administrative expenses increased by approximately $0.9 million, or 58%, compared to the three months ended March 31, 2019. Approximately $0.7 million of the change relates to an increase in employee stock compensation expense. The remaining increase consists of approximately $0.2 million in net other general and administrative account variations.

The approximate $2.3 million loss on derivative instruments for the six months ended March 31, 2020 varies significantly from the approximate $4.6 million gain on derivative instruments for the six months ended March 31, 2019. The variance is the result of the change in fair value of the derivative liabilities at the respective period ends. These changes were caused mainly by fluctuation in the share price of the Company’s common stock.

Other non-operating gain increased $1.3 million for the six months ended March 31, 2020 as compared to the six months ended March 31, 2019. This gain relates to the SPA described in Item 4 under Note C. The amount of the gain or loss is a result of the timing of shares issued to Ergomed and the subsequent re-sale of those shares. During each of the six-month periods ended March 31, 2020 and 2019, the Company realized approximately $1.7 million in value upon the resale of shares. Additionally, during the six months ended March 31, 2019, the Company issued 500,000 shares to Ergomed and recorded a non-operating loss equal to the fair value of those shares of approximately $1.3 million.

Net interest expense decreased by approximately $0.4 million for the six months ended March 31, 2020 compared to the six months ended March 31, 2019 and decreased by approximately $0.2 million for the three months ended March 31, 2020 compared to the three months ended March 31, 2019 The decrease is due to a reduction in the interest rate applied to the Company’s finance leases that were re-measured in connection with the adoption of ASC 842, Leases, effective October 1, 2019.

25

Research and Development Expenses

The Company’s research and development efforts involve Multikine and LEAPS. The table below shows the research and development expenses associated with each project.

	Six months ended March 31,		Three months ended March 31,
	2020	2019	2020	2019
MULTIKINE	$7,960,163	$5,839,245	$3,947,519	$2,588,967
LEAPS	751,197	465,015	511,028	243,579
TOTAL	$8,711,360	$6,304,260	$4,458,547	$2,832,546

Clinical and other studies necessary to obtain regulatory approval of a new drug involve significant costs and require several years to complete. The extent of the Company’s clinical trials and research programs are primarily based upon the amount of capital available to the Company and the extent to which the Company has received regulatory approvals for clinical trials. The inability of the Company to conduct clinical trials or research, whether due to a lack of capital or regulatory approval, will prevent the Company from completing the studies and research required to obtain regulatory approval for any products which the Company is developing. Without regulatory approval, the Company will be unable to sell any of its products. Since all the Company’s projects are under development, the Company cannot predict when it will be able to generate any revenue from the sale of any of its products.

Critical Accounting Estimates and Policies

Management’s discussion and analysis of the Company’s financial condition and results of operations is based on its unaudited condensed financial statements. The preparation of these financial statements is based on the selection of accounting policies and the application of significant accounting estimates, some of which require management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and notes. The Company believes some of the more critical estimates and policies that affect its financial condition and results of operations are in the areas of operating leases and stock-based compensation. For more information regarding the Company’s critical accounting estimates and policies, see Part II, Item 7 of the Company’s Annual Report on Form 10-K/A for the year ended September 30, 2019. The application of these critical accounting policies and estimates has been discussed with the Audit Committee of the Company’s Board of Directors.

 Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS

The Company does not believe that it has any significant exposures to market risk.

Item 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Controls and Procedures

Under the direction and with the participation of the Company’s management, including the Company’s Principal Executive and Principal Financial Officer, the Company has conducted an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of March 31, 2020. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives. Due to the material weaknesses outlined below, CEL-SCI’s Principal Executive and Principal Financial Officer has concluded that CEL-SCI’s disclosure controls and procedures were not effective as of March 31, 2020.

26

Management’s Report on Internal Control over Financial Reporting

CEL-SCI’s management is responsible for establishing and maintaining adequate internal control over financial reporting and for the assessment of the effectiveness of internal control over financial reporting. As defined by the Securities and Exchange Commission, internal control over financial reporting is a process designed by, or under the supervision of CEL-SCI’s Principal Executive and Principal Financial Officer and implemented by CEL-SCI’s Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of CEL-SCI’s financial statements in accordance with U.S. generally accepted accounting principles.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

Under the supervision and with the participation of management, including CEL-SCI’s Principal Executive and Principal Financial Officer, CEL-SCI evaluated the effectiveness of its internal control over financial reporting as of March 31, 2020 based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission, or the COSO Framework. Management’s assessment included an evaluation of the design of CEL-SCI’s internal control over financial reporting and testing of the operational effectiveness of those controls. Due to the material weaknesses noted below, CEL-SCI's Principal Executive and Principal Financial Officer concluded that as of such date, CEL-SCI's internal controls over financial reporting were not effective.

Material Weaknesses in Internal Control Over Financial Reporting

On December 20, 2019, CEL-SCI discovered an error in the EDGAR filed Form 10-K report. The Company’s Statements of Cash Flows for the years ended September 30, 2019 and 2018 were not included, in their entirety, in the EDGAR filed Form 10-K report filed on December 16, 2019 with the SEC. However, the entire Statements of Cash Flows were included in the Interactive Data Files (“XBRL”) which were filed on December 16, 2019. The omission of the Statements of Cash Flows was the result of a failure of the Company to perform an adequate review of the EDGAR Form 10-K proof to ensure that the filing was accurate and complete. The failure of the Company to perform an adequate review of the EDGAR Form 10-K proof is a control deficiency that constitutes a material weakness.

To remediate this material weakness, the Company will change certain control activities to include the following:

●

The Company will compare the final EDGAR proofs with the Company reports that are provided to the EDGAR filing service to ensure that the EDGAR proofs are accurate and complete.

When calculating the right of use (ROU) asset under ASC 842 during the preparation of the year-end financial statements, CEL-SCI determined that the opening finance ROU asset and total stockholders’ equity balances were understated by approximately $2.04 million as of October 1, 2019, the date of adoption. The changes do not impact any prior year’s financial statements but are an adjustment to the opening finance ROU asset and accumulated deficit balances effective October 1, 2019. As a result of the changes to the opening finance ROU asset and accumulated deficit balances, the financial statements filed for the quarter ended March 31, 2020 were restated. The failure to properly value the finance ROU asset as of October 1, 2019 under ASC 842 is a control deficiency that constitutes a material weakness.

In order to remediate this material weakness, CEL-SCI will change certain control activities over financial reporting to include the following:

●

CEL-SCI will thoroughly review all leases against the guidance in ASC 842.

●

CEL-SCI will engage additional outside financial reporting specialists to assist in the review process.

●

CEL-SCI will provide additional training for those involved in the review process of new leases.

CEL-SCI is committed to maintaining a strong internal control environment and implementing measures designed to help ensure that control deficiencies contributing to the material weaknesses are remediated as soon as possible.

Based on the evaluation of CEL-SCI’s internal control over financial reporting as of March 31, 2020, and the material weaknesses identified above, CEL-SCI's Principal Executive and Principal Financial Officer has concluded that as of such date, CEL-SCI's internal control over financial reporting was not effective.

Changes in Internal Control over Financial Reporting

Other than the improvement noted in the preceding section, there were no other changes in the Company’s internal control over financial reporting that occurred during the quarter ended March 31, 2020 that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting

27

PART II

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.

During the six months ended March 31, 2020 the Company issued 32,939 restricted shares of common stock to consultants for investor relations services.

The Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933 with respect to the issuance of these shares. The individuals who acquired these shares were sophisticated investors and were provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the offer or sale of these securities. The individuals who acquired these shares acquired them for their own accounts. The certificates representing these shares bear a restricted legend which provides they cannot be sold except pursuant to an effective registration statement or an exemption from registration. No commission or other form of remuneration was given to any person in connection with the issuance of these shares.

 Item 6. Exhibits

Number              Exhibit

31

Rule 13a-14(a) Certifications

32

Section 1350 Certifications

28

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: December 30, 2020	By:	/s/ Geert Kersten
		Geert Kersten
		Principal Executive Officer*

* Also signing in the capacity of the Principal Financial Officer.

29

EX-31

EXHIBIT 31

CERTIFICATIONS

I, Geert Kersten, certify that:

1.            

I have reviewed this quarterly report on Form 10-Q/A of CEL-SCI Corporation;

2.            

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects, the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

December 30, 2020	By:	/s/ Geert Kersten
		Geert Kersten
		Principal Executive Officer

CERTIFICATIONS

I, Geert Kersten, certify that:

1.            

I have reviewed this quarterly report on Form 10-Q/A of CEL-SCI Corporation;

2.            

Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, considering the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.            

Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.            

The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15 and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a)

designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b)

designed such internal control over financial reporting, or cause such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c)

evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d)

disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.            

The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of the internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a)

all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b)

any fraud, whether or not material, that involves management or other employees who have significant role in the registrant’s internal control over financial reporting.

December 30, 2020	By:	/s/ Geert Kersten
		Geert Kersten
		Principal Financial Officer

EX-32

EXHIBIT 32

In connection with the Quarterly Report of CEL-SCI Corporation (the “Company”) on Form 10-Q/A for the period ending March 31, 2020 as filed with the Securities and Exchange Commission (the “Report”), Geert Kersten, the Principal Executive and Principal Financial Officer of the Company, certifies, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to the best of his knowledge:

(1)

The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)

The information contained in the Report fairly presents, in all material respects, the financial condition and results of the Company.

By:	/s/ Geert Kersten
	Geert Kersten
	Principal Executive and Principal Financial Officer

December 30, 2020

XML

Document and Entity Information - shares	6 Months Ended
	Mar. 31, 2020	May 05, 2020
Document And Entity Information
Entity Registrant Name	CEL SCI CORP
Entity Central Index Key	0000725363
Document Type	10-Q/A
Document Period End Date	Mar. 31, 2020
Amendment Flag	true
Amendment Description	This amended 10-Q is filed to correct the manner in which the Company accounted for the adoption of ASC 842. See Note I. Restatement, to the accompanying financial statements, for further information.
Current Fiscal Year End Date	--09-30
Is Entity's Reporting Status Current?	Yes
Entity Filer Category	Accelerated Filer
Entity Emerging Growth Company	false
Entity Small Business	true
Entity Shell Company	false
Entity Interactive Data Current	Yes
Entity Incorporation, State or Country Code	CO
Entity File Number	001-11889
Entity Common Stock, Shares Outstanding		37,633,894
Document Fiscal Period Focus	Q2
Document Fiscal Year Focus	2020

XML

BALANCE SHEETS - USD ($)	Mar. 31, 2020	Sep. 30, 2019
CURRENT ASSETS:
Cash and cash equivalents	$ 14,329,870	$ 8,444,774
Receivables	62,289	62,765
Prepaid expenses	565,246	524,953
Supplies used for R&D and manufacturing	849,548	782,363
Total current assets	15,806,953	9,814,855
Finance lease right of use assets	14,670,746	0
Operating lease right of use assets	899,508	0
Plant, property and equipment, net	3,286,273	15,825,636
Patent costs, net	312,380	311,586
Deposits	1,670,917	1,670,917
Total assets	36,646,777	27,622,994
CURRENT LIABILITIES:
Accounts payable	1,139,914	1,586,478
Accrued expenses	316,866	34,432
Due to employees	675,408	709,442
Derivative instruments, current portion	2,156,857	674,442
Lease liabilities, current portion	977,264	0
Other current liabilities	5,000	14,956
Total current liabilities	5,271,309	3,019,750
Derivative instruments - net of current portion	4,067,436	5,813,868
Finance lease obligations, net of current portion	12,232,493	13,508,156
Operating lease obligations, net of current portion	812,479	0
Other liabilities	125,000	147,553
Total liabilities	22,508,717	22,489,327
Commitments and contingencies	0	0
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value - 200,000 shares authorized; -0- shares issued and outstanding	0	0
Common stock, $.01 par value - 600,000,000 shares authorized; 37,336,411 and 35,231,776 shares issued and outstanding at March 31, 2020 and September 30, 2019, respectively	373,365	352,318
Additional paid-in capital	379,943,932	358,507,603
Accumulated deficit	(366,179,237)	(353,726,254)
Total stockholders' equity	14,138,060	5,133,667
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 36,646,777	$ 27,622,994

XML

BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2020	Sep. 30, 2019
Stockholders Equity
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	200,000	200,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	37,336,411	35,231,776
Common stock, shares outstanding	37,336,411	35,231,776

XML

STATEMENTS OF OPERATIONS - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Income Statement [Abstract]
Grant income	$ 298,726	$ 150,769	$ 334,232	$ 277,183
Operating Expenses:
Research and development	4,458,547	2,832,546	8,711,360	6,304,260
General & administrative	2,558,522	1,624,823	5,197,418	3,313,985
Total operating expenses	7,017,069	4,457,369	13,908,778	9,618,245
Operating loss	(6,718,343)	(4,306,600)	(13,574,546)	(9,341,062)
Other income	18,448	18,216	36,896	36,127
(Loss)/gain on derivative instruments	(3,049,027)	(967,171)	(2,282,518)	4,589,135
Other non-operating gain	934,511	(730,823)	1,725,180	421,353
Interest expense, net	(253,407)	(461,303)	(504,190)	(907,332)
Net loss	(9,067,818)	(6,447,681)	(14,599,178)	(5,201,779)
Modification of warrants	(21,734)	0	(21,734)	0
Net loss available to common shareholders	$ (9,089,552)	$ (6,447,681)	$ (14,620,912)	$ (5,201,779)
Net loss per common share
Basic	$ (0.25)	$ (0.22)	$ (0.41)	$ (0.18)
Diluted	$ (0.25)	$ (0.22)	$ (0.41)	$ (0.19)
Weighted average common shares outstanding
Basic	36,165,050	29,113,910	35,621,711	28,543,417
Diluted	36,165,050	29,113,910	35,621,711	28,548,818

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STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($)	Common Stock	Additional Paid-In Capital	Accumulated Deficit	Total
Beginning balance, shares at Sep. 30, 2018	28,034,487
Beginning balance, amount at Sep. 30, 2018	$ 280,346	$ 331,312,184	$ (331,591,614)	$ 916
Warrant exercises, shares	298,682
Warrant exercises	$ 2,987	646,766		649,753
Equity based compensation - employees		573,660		573,660
401(k) contributions paid in common stock, shares	12,279
401(k) contributions paid in common stock	$ 123	35,118		35,241
Stock issued to nonemployees for service, shares	62,784
Stock issued to nonemployees for service	$ 628	201,752		202,380
Shares issued (returned) for settlement of clinical research costs, shares	(564,905)
Shares issued (returned) for settlement of clinical research costs	$ (5,649)	5,649		0
Net income (loss)			1,245,902	1,245,902
Ending balance, shares at Dec. 31, 2018	27,843,327
Ending balance, amount at Dec. 31, 2018	$ 278,435	332,775,129	(330,345,712)	2,707,852
Beginning balance, shares at Sep. 30, 2018	28,034,487
Beginning balance, amount at Sep. 30, 2018	$ 280,346	331,312,184	(331,591,614)	916
Net income (loss)				(5,201,779)
Ending balance, shares at Mar. 31, 2019	29,951,628
Ending balance, amount at Mar. 31, 2019	$ 299,517	337,449,398	(336,793,393)	955,522
Beginning balance, shares at Dec. 31, 2018	27,843,327
Beginning balance, amount at Dec. 31, 2018	$ 278,435	332,775,129	(330,345,712)	2,707,852
Warrant exercises, shares	1,523,933
Warrant exercises	$ 15,239	2,640,395		2,655,634
Equity based compensation - employees, shares	(3,500)
Equity based compensation - employees	$ (35)	530,865		530,830
401(k) contributions paid in common stock, shares	10,419
401(k) contributions paid in common stock	$ 104	36,779		36,883
Stock issued to nonemployees for service, shares	77,449
Stock issued to nonemployees for service	$ 774	224,855		225,629
Shares issued (returned) for settlement of clinical research costs, shares	500,000
Shares issued (returned) for settlement of clinical research costs	$ 5,000	1,285,000		1,290,000
Share issuance costs		(43,625)		(43,625)
Net income (loss)			(6,447,681)	(6,447,681)
Ending balance, shares at Mar. 31, 2019	29,951,628
Ending balance, amount at Mar. 31, 2019	$ 299,517	337,449,398	(336,793,393)	955,522
Beginning balance, shares at Sep. 30, 2019	35,231,776
Beginning balance, amount at Sep. 30, 2019	$ 352,318	358,507,603	(353,726,254)	5,133,667
Adoption of new accounting standard			2,146,195	2,146,195
Issuance of common stock, shares	606,395
Issuance of common stock, amount	$ 6,064	5,043,939		5,050,003
Warrant exercises, shares	132,900
Warrant exercises	$ 1,329	295,772		297,101
Equity based compensation - employees		1,800,225		1,800,225
401(k) contributions paid in common stock, shares	4,474
401(k) contributions paid in common stock	$ 45	40,892		40,937
Stock issued to nonemployees for service, shares	15,819
Stock issued to nonemployees for service	$ 158	84,289		84,447
Purchase of stock by officers and directors, shares	3,725
Purchase of stock by officers and directors	$ 37	24,963		25,000
Share issuance costs		(92,150)		(92,150)
Net income (loss)			(5,531,360)	(5,531,360)
Ending balance, shares at Dec. 31, 2019	35,995,089
Ending balance, amount at Dec. 31, 2019	$ 359,951	365,705,533	(357,111,419)	8,954,065
Beginning balance, shares at Sep. 30, 2019	35,231,776
Beginning balance, amount at Sep. 30, 2019	$ 352,318	358,507,603	(353,726,254)	5,133,667
Net income (loss)				(14,599,178)
Ending balance, shares at Mar. 31, 2020	37,336,411
Ending balance, amount at Mar. 31, 2020	$ 373,365	379,943,932	(366,179,237)	14,138,060
Beginning balance, shares at Dec. 31, 2019	35,995,089
Beginning balance, amount at Dec. 31, 2019	$ 359,951	365,705,533	(357,111,419)	8,954,065
Issuance of common stock, shares	721,459
Issuance of common stock, amount	$ 7,215	7,860,414		7,867,629
Warrant exercises, shares	562,100
Warrant exercises	$ 5,621	4,313,085		4,318,706
Equity based compensation - employees		1,780,979		1,780,979
401(k) contributions paid in common stock, shares	3,376
401(k) contributions paid in common stock	$ 34	38,925		38,959
Stock issued to nonemployees for service, shares	17,120
Stock issued to nonemployees for service	$ 171	234,853		235,024
Purchase of stock by officers and directors, shares	16,787
Purchase of stock by officers and directors	$ 168	159,822		159,990
Option exercises, shares	20,480
Option exercises	$ 205	49,693		49,898
Share issuance costs		(199,372)		(199,372)
Net income (loss)			(9,067,818)	(9,067,818)
Ending balance, shares at Mar. 31, 2020	37,336,411
Ending balance, amount at Mar. 31, 2020	$ 373,365	$ 379,943,932	$ (366,179,237)	$ 14,138,060

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STATEMENTS OF CASH FLOWS - USD ($)	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (14,599,178)	$ (5,201,779)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization	1,064,231	316,083
Share-based payments for services	347,227	511,424
Equity based compensation	3,581,204	1,104,490
Common stock contributed to 401(k) plan	79,896	72,124
Shares issued for settlement of clinical research costs	0	1,290,000
Loss (gain) on derivative instruments	2,282,518	(4,589,135)
Capitalized lease interest	0	64,432
(Increase)/decrease in assets:
Receivables	476	(4,579)
Prepaid expenses	96,951	(74,741)
Supplies used for R&D and manufacturing	(67,185)	(115,774)
Increase/(decrease) in liabilities:
Accounts payable	(765,872)	(1,489,234)
Accrued expenses	20,110	82,580
Due to employees	(34,034)	245,074
Other liabilities	3,438	(1,057)
Net cash used in operating activities	(7,990,218)	(7,790,092)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment	(752,797)	(160,920)
Expenditures for patent costs	(13,996)	(67,661)
Net cash used in investing activities	(766,793)	(228,581)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock	12,917,632	0
Payments of stock issuance costs	(190,553)	(80,224)
Proceeds from the purchase of stock by officers and directors	184,990	0
Proceeds from exercise of warrants	2,069,272	3,305,387
Proceeds from exercises of options	49,898	0
Payments on obligations under finance lease	(389,132)	(2,521)
Net cash provided by financing activities	14,642,107	3,222,642
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	5,885,096	(4,796,031)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD	8,444,774	10,310,044
CASH AND CASH EQUIVALENTS, END OF PERIOD	14,329,870	5,514,013
SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES:
Property and equipment included in current liabilities	318,984	0
Capitalizable patent costs included in current liabilities	13,465	0
Right of use asset acquired and liability incurred	13,712	0
Finance lease obligation included in accounts payable	983	428
Prepaid consulting services paid with issuance of common stock	137,244	83,415
Accrued consulting services to be paid with common stock	165,000	0
Fair value of warrant liabilities on date of exercise	2,546,535	0
Stock issuance costs included in current liabilities	116,549	10,000
Cash paid for interest	$ 585,748	$ 902,091

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A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

6 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of Presentation

The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K/A for the year ended September 30, 2019.

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2020 and the results of its operations for the six months then ended. The condensed balance sheet as of September 30, 2019 is derived from the September 30, 2019 audited financial statements. On October 1, 2019, the Company adopted Accounting Standards Update (ASU) No. 2016-02 , “Leases” and its related amendments (collectively referred to as Topic 842 and codified as Accounting Standards Codification 842, or ASC 842) using the modified retrospective transition approach. In accordance with this adoption method, results for the reporting period ended March 31, 2020 are presented under the new standard, while prior period results continue to be reported under the previous standard. All other significant accounting policies have been consistently applied in the interim financial statements and the annual financial statements. The results of operations for the six and three months ended March 31, 2020 and 2019 are not necessarily indicative of the results to be expected for the entire year.

The financial statements have been prepared assuming that the Company will continue as a going concern, but due to recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.

Summary of Significant Accounting Policies:

Research and Office Equipment and Leasehold Improvements –Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired.

Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from its disposition, is less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.

Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company charges revisions to estimated expense in the period in which the facts that give rise to the revision become known.

Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized.  A full valuation allowance was recorded against the deferred tax assets as of March 31, 2020 and September 30, 2019.

Derivative Instruments – The Company has entered into financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities.” In accordance with ASC 815, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models considering all the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.

Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.” The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized on the straight-line allocation method as expense over the requisite service or vesting period.

The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Compensation Plans, Stock Bonus Plans and an Incentive Stock Bonus Plan. In some cases, these Plans are collectively referred to as the "Plans". All Plans have been approved by the stockholders.

The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption was based on the U.S. Treasury rate at date of the grant with term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.

Vesting of restricted stock granted under the Incentive Stock Bonus Plan is subject to service, performance and market conditions and meets the classification of equity awards. These awards were measured at market value on the grant-dates for issuances where the attainment of performance criteria is likely and at fair value on the grant-dates, using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.

Newly Adopted Accounting Pronouncements

Effective October 1, 2019, the Company adopted ASC 842. ASC 842 requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at the lease commencement date. Subsequent measurement, including the presentation of expenses and cash flows, depends on the classification of the lease as either a finance lease or an operating lease. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. The Company also elected the transition package of three practical expedients which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company elected a short-term lease exception policy permitting the option to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component. The Company’s lease portfolio includes both finance and operating leases. The impact of adopting ASC 842 was to increase long term assets by approximately $3.0 million, increase total liabilities by approximately $0.9 million and record a cumulative effect adjustment of approximately $2.1 million to opening accumulated deficit. Refer to Note I for details regarding the restatement as a result of an error relating to the adoption of ASC 842.

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, Compensation—Stock Compensation (Topic 718), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, and thus, the accounting for share-based payments to non-employees will be substantially aligned. The Company adopted ASU 2018-07 as of October 1, 2019 with no impact on its financial statements and related disclosures.

New Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement - Disclosure Framework (Topic 820)” (“ASU 2018-13”). The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance becomes effective for the Company on October 1, 2021. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.  

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B. OPERATIONS AND FINANCING

6 Months Ended

Mar. 31, 2020

B. Operations And Financing

B. OPERATIONS AND FINANCING

On January 30, 2020, the World Health Organization (“WHO”) announced a global health emergency because of a new strain of coronavirus originating in Wuhan, China (the “COVID-19 outbreak”) and the risks to the international community as the virus spreads globally beyond its point of origin. In March 2020, because of the rapid increase in exposure globally, the WHO classified the COVID-19 outbreak as a pandemic. The full impact of the COVID-19 outbreak continues to evolve as of the date of this report. As such, it is uncertain as to the full magnitude that the pandemic will have on the Company’s financial condition, liquidity, and future results of operations. Management is actively monitoring the impact of the global situation on its financial condition, liquidity, operations, suppliers, industry, and workforce. Given the daily evolution of the COVID-19 outbreak and the global responses to curb its spread, the Company is not able to estimate the effects of the COVID-19 outbreak on its results of operations, financial condition, or liquidity for fiscal year 2020.  Although the Company cannot estimate the length or gravity of the impact of the COVID-19 outbreak, if the pandemic continues, it may have an adverse effect on the Company’s results of future operations, financial position, and liquidity in fiscal year 2020.

On March 27, 2020, the United States enacted the Coronavirus Aid, Relief and Economic Security Act (CARES Act).  The Cares Act is an emergency economic stimulus package that includes spending and tax breaks to strengthen the United States economy and fund a nationwide effort to curtail the effect of COVID-19.  While the CARES Act provides sweeping tax changes in response to the COVID-19 pandemic, some of the more significant provisions which are expected to impact the Company’s financial statements include removal of certain limitations on utilization of net operating losses, increasing the loss carryback period for certain losses to five years, and increasing the ability to deduct interest expense, as well as amending certain provisions of the previously enacted Tax Cuts and Jobs Act.  The Company does not expect the enactment of the CARES Act to have a material impact to its financial position, results of operations or cash flows.

The Company has incurred significant costs since its inception for the acquisition of certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, patent applications, research and development, administrative costs, construction of laboratory facilities, and clinical trials.  The Company has funded such costs with proceeds from loans and the public and private sale of its common stock.  The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts.  The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. The Company is taking cost-cutting initiatives, as well as exploring other sources of funding, to finance operations over the next 12 months. The Company believes there is a high likelihood that it will continue to receive funds from private and public offerings and warrant conversions similar to the way it has substantially funded operations for the past 12 months. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.

The Company is currently in the final stages of its large multi-national Phase 3 clinical trial for head and neck cancer with its partners TEVA Pharmaceuticals and Orient Europharma. To finance the study beyond the next twelve months, the Company plans to raise additional capital in the form of corporate partnerships, warrant exercises, debt issuances and/or equity financings. The Company believes that it will be able to obtain additional financing because it has done so consistently in the past and because Multikine is a product in the Phase 3 clinical trial stage. However, there can be no assurance that the Company will be successful in raising additional funds on a timely basis or that the funds will be available to the Company on acceptable terms or at all.  If the Company does not raise the necessary amounts of money, it may have to curtail its operations until it can raise the required funding.

The financial statements have been prepared assuming the Company will continue as a going concern, but due to the Company’s recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.

Nine hundred twenty-eight (928) head and neck cancer patients have been enrolled and have completed treatment in the Phase 3 study. The study end point is a 10% increase in overall survival of patients between the two main comparator groups in favor of the group receiving the Multikine treatment regimen. The determination if the study end point is met will occur when there are a total of 298 deaths in those two groups. On May 4, 2020, we announced the threshold of 298 deaths (events) was reached.

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C. STOCKHOLDERS EQUITY

6 Months Ended

Mar. 31, 2020

Equity [Abstract]

C. STOCKHOLDERS' EQUITY

Proceeds from the Sale of Common Stock

In March 2020, the Company sold 630,500 shares of common stock at a public offering price of $12.22 per share and received aggregate net proceeds of approximately $7.1 million. Under the terms of the Underwriting Agreement the Company granted the Underwriters a 45-day option to purchase up to an additional 94,575 shares of common stock solely to cover over-allotments. The underwriter fully exercised this option in May 2020 resulting in additional net proceeds to the Company of approximately $1.1 million.

In December 2019, the Company sold 606,395 shares of common stock at a public offering price of $9.07 per share and received aggregate net proceeds of approximately $5.0 million. In January 2020, the underwriters of that offering fully exercised the option to purchase 90,959 additional shares of common stock at the public offering price of $9.07 per share for aggregate net proceeds to the Company of approximately $0.8 million.

Equity Compensation

Underlying share information for equity compensation plans as of March 31, 2020 is as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Options Plans		138,400		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,108,173		N/A		131,146
Stock Bonus Plans		783,760		N/A		339,076		444,651
Stock Compensation Plans		634,000		N/A		150,695		464,895
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Underlying share information for equity compensation plans as of September 30, 2019 is as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Option Plans		138,400		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,128,321		N/A		112,166
Stock Bonus Plans		783,760		N/A		331,226		452,501
Stock Compensation Plans		634,000		N/A		130,183		485,407
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Stock option activity:

	Six Months Ended March 31,
	2020		2019
Options granted		2,500		500
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,168		2,400

	Three Months Ended March 31,
	2020		2019
Options granted		1,500		-
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,132		-

Stock-Based Compensation Expense

	Six months Ended March 31,
	2020		2019
Employees	$	3,581,204	$	1,104,490
Non-employees	$	347,227	$	511,424

	Three months Ended March 31,
	2020		2019
Employees	$	1,780,979	$	530,830
Non-employees	$	191,487	$	272,520

Employee compensation expense includes the expense related to options issued or vested and restricted stock granted. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of their service contracts.

Warrants and Non-Employee Options

The following chart represents the warrants and non-employee options outstanding at March 31, 2020:

Warrant/Options	Issue Date	Shares Issuable upon Exercise of Warrants/ Options		Exercise Price		Expiration Date	Reference
Series N	8/18/2008		85,339	$	3.00	2/18/2021		2
Series V	5/28/2015		810,127	$	19.75	5/28/2020		1
Series UU	6/11/2018		154,810	$	2.80	6/11/2020		*
Series W	10/28/2015		688,930	$	16.75	10/28/2020		1
Series X	1/13/2016		120,000	$	9.25	1/13/2021		*
Series Y	2/15/2016		26,000	$	12.00	2/15/2021		*
Series ZZ	5/23/2016		20,000	$	13.75	5/18/2021		1
Series BB	8/26/2016		16,000	$	13.75	8/22/2021		1
Series Z	5/23/2016		264,000	$	13.75	11/23/2021		1
Series CC	12/8/2016		153,643	$	5.00	12/8/2021		1
Series HH	2/23/2017		200	$	3.13	2/16/2022		1
Series AA	8/26/2016		200,000	$	13.75	2/22/2022		1
Series MM	6/22/2017		893,491	$	1.86	6/22/2022		*
Series NN	7/24/2017		375,545	$	2.52	7/24/2022		2
Series OO	7/31/2017		10,000	$	2.52	7/31/2022		2
Series RR	10/30/2017		457,116	$	1.65	10/30/2022		*
Series SS	12/19/2017		365,538	$	2.09	12/18/2022		2
Series TT	2/5/2018		381,564	$	2.24	2/5/2023		2
Series VV	7/2/2018		55,000	$	1.75	1/2/2024		2
Consultants	7/28/17		10,000	$	2.18	7/27/2027		*

* No current period changes to these warrants and non-employee options

1. Warrant Liabilities

The table below presents the fair value of the warrant liabilities at the balance sheet dates:

	March 31, 2020		September 30, 2019
Series V warrants	$	595,981	$	674,442
Series W warrants		1,560,876		1,193,507
Series Z warrants		1,421,421		1,109,545
Series ZZ warrants		82,223		77,638
Series AA warrants		1,243,531		916,908
Series BB warrants		70,994		63,966
Series CC warrants		1,247,399		1,710,898
Series FF warrants		-		446,185
Series HH warrants		1,868		45,657
Series JJ warrants		-		66,599
Series LL warrants		-		182,965
Total warrant liabilities	$	6,224,293	$	6,488,310

The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

	2020			2019
Series S warrants	$	-		$	33
Series V warrants		78,461			494,852
Series W warrants		(367,369	)		616,028
Series Z warrants		(311,876	)		114,831
Series ZZ warrants		(4,585	)		12,638
Series AA warrants		(326,623	)		93,268
Series BB warrants		(7,028	)		7,736
Series CC warrants		(826,277	)		339,698
Series DD warrants		-			1,249,287
Series EE warrants		-			1,249,287
Series FF warrants		(319,706	)		34,603
Series GG warrants		-			106,750
Series HH warrants		(34,457	)		10,642
Series II warrants		-			115,343
Series JJ warrants		(64,992	)		15,926
Series KK warrants		-			113,467
Series LL warrants		(98,066	)		14,746
Net (loss)/gain on warrant liabilities	$	(2,282,518	)	$	4,589,135

The table below presents the losses on the warrant liabilities for the three months ended March 31:

	2020			2019
Series V warrants	$	(476,570	)	$	(61,480	)
Series W warrants		(518,743	)		(10,822	)
Series Z warrants		(322,425	)		(89,290	)
Series ZZ warrants		(19,432	)		(1,685	)
Series AA warrants		(391,601	)		(63,951	)
Series BB warrants		(6,597	)		(4,374	)
Series CC warrants		(803,596	)		(325,908	)
Series FF warrants		(312,517	)		(34,459	)
Series GG warrants		-			(106,032	)
Series HH warrants		(34,375	)		(10,309	)
Series II warrants		-			(115,246	)
Series JJ warrants		(64,862	)		(15,536	)
Series KK warrants		-			(114,628	)
Series LL warrants		(98,309	)		(13,451	)
Net loss on warrant liabilities	$	(3,049,027	)	$	(967,171	)

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.

In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.

Changes in Warrant Liabilities

On December 10, 2018, 1,360,960 Series DD and 1,360,960 Series EE warrants, with an exercise price of $4.50 expired.

On October 11, 2018, 327,729 Series S warrants, with an exercise price of $31.25 expired.

Exercise of Warrant Liabilities

The following warrants recorded as liabilities were exercised during the periods ended March 31, 2020.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series CC		123,820	$	5.00	$	619,100		123,820	$	5.00	$	619,100
Series FF		68,048	$	3.91		265,812		68,048	$	3.91		265,812
Series HH		6,300	$	3.13		19,687		6,300	$	3.13		19,687
Series JJ		9,450	$	3.13		29,531		9,450	$	3.13		29,531
Series LL		26,398	$	3.59		94,867		26,398	$	3.59		94,867
		234,016			$	1,028,997		234,016			$	1,028,997

No warrants recorded as liabilities were exercised during the six and three months ended March 31, 2019.

2. Equity Warrants

Changes in Equity Warrants

On January 23, 2020, the expiration date of the Series N warrants was extended to February 18, 2021. The incremental cost of this extension was approximately $22,000, which was recorded as a deemed dividend in the financial statements for the six and three months ended March 31, 2020. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

Exercise of Equity Warrants

The following warrants recorded as equity were exercised during the periods ended March 31, 2020.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series NN		98,253	$	2.52	$	247,598		98,253	$	2.52	$	247,598
Series OO		30,000	$	2.52		75,600		40,000	$	2.52		100,800
Series SS		94,474	$	2.09		197,451		117,106	$	2.09		244,752
Series TT		77,857	$	2.24		174,400		178,125	$	2.24		399,000
Series VV		27,500	$	1.75		48,125		27,500	$	1.75		48,125
		328,084			$	743,174		460,984			$	1,040,275

The following warrants recorded as equity were exercised during the periods ended March 31, 2019.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series PP		-		-		-		60,000	$	2.30	$	138,000
Series SS		13,158	$	2.09	$	27,500		165,790	$	2.09		346,501
Series TT		-		-		-		86,050	$	2.24		192,752
Series VV		1,385,000	$	1.75		2,423,750		1,385,000	$	1.75		2,423,750
Series WW		125,775	$	1.63		204,384		125,775	$	1.63		204,384
		1,523,933			$	2,655,635		1,822,615			$	3,305,387

3.  Options and Shares Issued to Consultants

During the six months ended March 31, 2020 and 2019, the Company issued 32,939 and 140,233 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $9.44 and $3.04 during the six months ended March 31, 2020 and 2019, respectively. During the three months ended March 31, 2020 and 2019, the Company issued 17,120 and 77,449 shares of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $11.53 and $2.89, respectively, during the three months ended March 31, 2020 and 2019. The aggregate values of the issuances of restricted common stock and common stock options are recorded as prepaid expenses and are charged to general and administrative expenses over the periods of service.

During the six months ended March 31, 2020 and 2019, the Company recorded total expense of approximately $347,000 and $511,000, respectively, relating to these consulting agreements. At March 31, 2020 and September 30, 2019, approximately $367,000 and $230,000, respectively, are included in prepaid expenses. At March 31, 2020, the Company has accrued $165,000 for shares to be issued. As of March 31, 2020, 10,000 options issued to consultants remained outstanding, all of which were issued from the Non-Qualified Stock Option plans and are fully vested.

4.  Securities Purchase Agreements

The Company has entered into Securities Purchase Agreements (SPA) with Ergomed plc, one of the Company’s Clinical Research Organizations responsible for managing the Company’s Phase 3 clinical trial, to facilitate payment of amounts due Ergomed. Under the Agreements, the Company issued Ergomed shares of common stock and the net proceeds from the sales of those shares would reduce outstanding amounts due Ergomed. Upon issuance, the Company expenses the full value of the shares as Other non-operating gain/loss and subsequently offsets the expense as amounts are realized through the sale by Ergomed and reduces accounts payable to Ergomed.

On January 9, 2019, the Company entered into an SPA under which it issued Ergomed 500,000 restricted shares of the Company’s common stock valued at approximately $1.3 million. No other shares were issued under the SPA during the periods presented.

The following table summarizes the Other Non-Operating Gains (Loss) for the six and three months ended March 31, 2020 and 2019 relating to these agreements:

	Six Months Ended				Three Months Ended
	3/31/2020		3/31/2019		3/31/2020		3/31/2019
Amount realized through the resale of shares	$	1,720,680	$	1,711,353	$	934,511	$	559,177
Fair value of shares upon issuance		-		1,290,000		-		1,290,000
Other non-operating gain (loss)	$	1,720,680	$	421,353	$	934,511	$	(730,823	)

On August 15, 2019, the Company entered into an SPA under which it issued Ergomed 250,000 restricted shares of the Company’s common stock. As of March 31, 2020, Ergomed held 20,250 shares for resale.

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D. FAIR VALUE MEASUREMENTS

6 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

D. FAIR VALUE MEASUREMENTS

In accordance with ASC 820-10, “Fair Value Measurements,” the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company generally applies the income approach to determine fair value. This method uses valuation techniques to convert future amounts to a single present amount. The measurement is based on the value indicated by current market expectations with respect to those future amounts.

ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:

●  Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities

●  Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and amounts derived from valuation models where all significant inputs are observable in active markets

●  Level 3 – Unobservable inputs that reflect management’s assumptions

For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of an input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at March 31, 2020:

	Quoted Prices in Active Markets for Identical Assets or Liabilities  (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Total
Derivative instruments	$	-	$	-	$	6,224,293	$	6,224,293

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at September 30, 2019:

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Derivative instruments	$	-	$	-	$	6,488,310	$	6,488,310

The following sets forth the reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3) for the six months ended March 31, 2020 and the year ended September 30, 2019:

	Six months ended			Twelve months ended
	March 31, 2020			September 30, 2019
Beginning balance	$	6,488,310		$	9,317,031
Issuances		-			-
Exercises		(2,546,535	)		(3,589,357	)
Realized and unrealized losses		2,282,518			760,636
Ending balance	$	6,224,293		$	6,488,310

The fair values of the Company’s derivative instruments disclosed above under Level 3 are primarily derived from valuation models where significant inputs such as historical price and volatility of the Company’s stock, as well as U.S. Treasury Bill rates, are observable in active markets.

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E. RELATED PARTY TRANSACTIONS

6 Months Ended

Mar. 31, 2020

Related Party Transactions [Abstract]

E. RELATED PARTY TRANSACTIONS

During the six months ended March 31, 2020, officers and directors of the Company purchased 20,512 shares of restricted common stock at an aggregate fair market value of approximately $185,000. This include 16,787 shares purchased during the three months ended March 31, 2020 with an aggregate fair market value of approximately $160,000.

On January 23, 2020, the expiration date of the Series N warrants was extended to February 18, 2021. The incremental cost of this extension was approximately $22,000, which was recorded as a deemed dividend in the financial statements for the six and three months ended March 31, 2020. The Series N warrants are held by the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.

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F. COMMITMENTS AND CONTINGENCIES

6 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

F. COMMITMENTS AND CONTINGENCIES

Clinical Research Agreements 

Under co-development and revenue sharing agreements with Ergomed, Ergomed agreed to contribute up to $12 million towards the Company’s Phase 3 Clinical Trial in the form of discounted clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specific maximum amount. The Company accounted for the co-development and revenue sharing agreements in accordance with ASC 808 “Collaborative Arrangements”. The Company determined the payments to Ergomed are within the scope of ASC 730 “Research and Development.” Therefore, the Company records the discount on the clinical services as a credit to research and development expense on its Statements of Operations. Since the inception of the agreement with Ergomed, the Company has incurred research and development expenses of approximately $32.5 million for Ergomed’s services. This amount is net of Ergomed’s discount of approximately $11 million. During the six months ended March 31, 2020 and 2019, the Company recorded, net of Ergomed’s discount, approximately $1.6 million and $1.5 million, respectively, as research and development expense related to Ergomed’s services. During the three months ended March 31, 2020 and 2019, the Company recorded, net of Ergomed’s discount, approximately $0.8 million and $0.7 million, respectively, as research and development expense related to Ergomed’s services.

Lease Agreements

The Company determines whether a contract contains a lease at the inception of a contract by determining if the contract conveys the right to control the use of identified property, plant or equipment over a period of time in exchange for consideration. The Company leases certain real estate, machinery, equipment and office equipment for varying periods. Many of these leases include an option to either renew or terminate the lease. For purposes of calculating lease liabilities, these options are included in the lease term when it is reasonably certain that the Company will exercise such options. The incremental borrowing rate utilized to calculate the lease liabilities is based on the information available at commencement date, as most of the leases do not provide an implicit borrowing rate. Short-term leases, defined as leases with initial terms of 12 months or less, are not reflected on the balance sheet. Lease expense for such short-term leases is not material. For purposes of calculating lease liabilities, lease and non-lease components are combined.

The Company leases a manufacturing facility near Baltimore, Maryland (the San Tomas lease). The building was remodeled in accordance with the Company’s specifications so that it can be used by the Company to manufacture Multikine for the Company’s Phase 3 clinical trial and sales of the drug if approved by the FDA. The lease is for a term of twenty years and requires annual base rent to escalate each year at 3%. The Company is required to pay all real estate and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows the Company, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease, which expires in October 2028.

Upon adoption of ASC 842 on October 1, 2019, the Company recorded a finance lease right of use asset of approximately $15.5 million and a finance lease liability of approximately $13.5 million. As of March 31, 2020, the net book value of the finance lease right of use asset is approximately $14.7 million and the balance of the finance lease liability is approximately $13.1 million, of which approximately $0.9 million is current. These amounts include the San Tomas lease as well as several other smaller finance leases for office equipment. The finance right of use assets are being depreciated using a straight-line method over the underlying lease terms. Total cash paid related to finance leases during the six months ended March 31, 2020 was approximately $940,000, of which approximately $586,000 was for interest. The weighted average discount rate of the Company’s finance leases is 8.8% and the weighted average time to maturity is 8.8 years.

The Company was required to deposit the equivalent of one year of base rent in accordance with the lease. When the Company meets the minimum cash balance required by the lease, the deposit will be returned to the Company. The approximate $1.7 million deposit is included in non-current assets at March 31, 2020 and September 30, 2019.

Approximate future minimum lease payments under finance leases as of March 31, 2020 are as follows:

Six months ending September 30, 2020	$	946,000
Year ending September 30,
2021		1,953,000
2022		2,014,000
2023		2,083,000
2024		2,148,000
2025		2,218,000
Thereafter		7,322,000
Total future minimum lease obligation		18,684,000
Less imputed interest on finance lease obligations		(5,585,000	)
Net present value of lease finance lease obligations	$	13,099,000

The Company rents a portion of its space on a month-to-month term basis, which requires a 30-day notice for termination. On January 3, 2020, the Company notified the tenant of the sublet property of its intention to terminate the sublease effective April 30, 2020 since this space is needed to prepare the facility to produce Multikine for commercial purposes and before the Company’s Biologics License Application (BLA) can be submitted to the FDA. The rental income for each of the six months ended March 31, 2020 and 2019 was approximately $37,000 and $36,000, respectively. The sublease rental income for each of the three months ended March 31, 2020 and 2019 was approximately $18,000.

The Company leases two facilities under 60-month operating leases – the lease for its research and development laboratory expires February 28, 2022 and the lease for its office headquarters expires June 30, 2020. During the six months ended March 31, 2020, the Company incurred approximately $80,000 in leasehold improvements costs for the research and development lab and is reasonably certain to renew the lease through February 28, 2027. The renewal period is included in the right of use asset and liability calculations. The operating leases include escalating rental payments. The Company is recognizing the related rent expense on a straight-line basis over the full 60-month terms of the leases. Upon adoption of ASC 842 on October 1, 2019, the Company recorded an operating lease right of use asset and an operating lease liability of approximately $1.0 million. As of March 31, 2020, the net book value of the operating lease right of use asset is approximately $0.9 million and the balance of the operating lease liability is approximately $0.9 million, of which approximately $0.1 million is current. The Company incurred lease expense under operating leases of approximately $135,000 and $68,000 for the six and three months ended March 31, 2020, respectively. Total cash paid related to operating leases during the six and three months ended March 31, 2020 was approximately $132,000 and $66,000, respectively.

As of March 31, 2020, future minimum lease payments on operating leases are as follows:

Six months ending September 30, 2020	$	107,000
Year ending September 30,
2021		163,000
2022		168,000
2023		173,000
2024		178,000
2025		183,000
Thereafter		269,000
Total future minimum lease obligation		1,241,000
Less imputed interest on operating lease obligation		(317,000	)
Net present value of operating lease obligation	$	924,000

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G. PATENTS

6 Months Ended

Mar. 31, 2020

Intangible Assets, Net (Excluding Goodwill) [Abstract]

G. PATENTS

During the six months ended March 31, 2020 and 2019, no patent impairment charges were recorded. For the six months ended March 31, 2020 and 2019, amortization of patent costs totaled approximately $27,000 and $23,000, respectively. For the three months ended March 31, 2020 and 2019, amortization of patent costs totaled approximately $14,000 and $11,000, respectively. Approximate estimated future amortization expense is as follows:

Six months ending September 30, 2020	$	26,000
Year ending September 30,
2021		50,000
2022		46,000
2023		36,000
2024		28,000
2025		25,000
Thereafter		101,000
Total	$	312,000

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H. LOSS PER COMMON SHARE

6 Months Ended

Mar. 31, 2020

Net loss per common share

H. LOSS PER COMMON SHARE

The following tables provide the details of the basic and diluted loss per-share computations:

	Six months ended March 31,						Three months ended March 31,
	2020			2019			2020			2019
Loss per share - basic
Net loss available to common shareholders - basic	$	(14,620,912	)	$	(5,201,779	)	$	(9,089,522	)	$	(6,447,681	)
Weighted average shares outstanding - basic		35,621,711			28,543,417			36,165,050			29,113,910
Basic loss per common share	$	(0.41	)	$	(0.18	)	$	(0.25	)	$	(0.22	)
Loss per share - diluted
Net loss available to common shareholders - basic	$	(14,620,912	)	$	(5,201,779	)	$	(9,089,522	)	$	(6,447,681	)
Gain on derivatives (1)		-			(335,560	)		-			-
Net loss available to common shareholders - diluted	$	(14,620,912	)	$	(5,537,339	)	$	(9,089,522	)	$	(6,447,681	)
Weighted average shares outstanding - basic		35,621,711			28,543,417			36,165,050			29,113,910
Incremental shares underlying dilutive "in the money" warrants (1)		-			5,401			-			-
Weighted average shares outstanding - diluted		35,621,711			28,548,818			36,165,050			29,113,910
Diluted loss per common share	$	(0.41	)	$	(0.19	)	$	(0.25	)	$	(0.22	)

(1) Includes shares issuable upon the exercise of the Series GG, II and KK warrants for the six months ended March 31, 2019.

The gain on derivatives priced lower than the average market price during the period is excluded from the numerator and the related shares are excluded from the denominator in calculating diluted loss per share.

In accordance with the contingently issuable shares guidance of FASB ASC Topic 260, Earnings Per Share, the calculation of diluted net earnings (loss) per share excludes the following securities because their inclusion would have been anti-dilutive as of March 31:

	2020		2019
Options and Warrants		6,452,645		10,576,881
Unvested Restricted Stock		318,798		308,500
Total		6,771,443		10,885,381

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I. RESTATEMENT

6 Months Ended

Mar. 31, 2020

Accounting Changes and Error Corrections [Abstract]

I. RESTATEMENT

In October 2008, the Company entered into an agreement whereby the Company leased a building owned by a third party. The Company accounted for the lease arrangement in accordance with the build-to-suit guidance in ASC 840-40-55. On October 1, 2019, the Company adopted ASC 842 using the modified retrospective transition approach. Upon adoption of ASC 842, the Company determined the arrangement should be accounted for as a finance lease.

In December 2020, the Company determined that the opening finance right of use (ROU) asset and total stockholders’ equity balances were understated by approximately $2.04 million as of October 1, 2019, the date of adoption. The following is a summary of the components of the understated balances:

· The unamortized value of approximately $0.6 million relating to the issuance of warrants to the landlord should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

· The unamortized value of approximately $1.4 million relating to a payment made to the landlord at lease inception, which the Company is recovering in the form of reduced rent, should have been capitalized and included as part of the finance ROU asset as of October 1, 2019.

The changes do not impact any prior year’s financial statements but are an adjustment to the opening finance ROU asset and accumulated deficit balances effective October 1, 2019. As a result of the changes to the opening finance ROU asset and accumulated deficit balances, the accompanying financial statements for the six and three months ended March 31, 2020 have been restated to reflect the correction of the error. The following is a summary of the restatement:

	March 31, 2020
BALANCE SHEET	PREVIOUSLY REPORTED			ADJUSTMENT		RESTATED
Finance lease right of use assets	$	12,741,195		$	1,929,551	$	14,670,746
Total assets		34,717,226			1,929,551		36,646,777
Accumulated deficit		(368,108,788	)		1,929,551		(366,179,237	)
Total stockholders' equity		12,208,509			1,929,551		14,138,060
Total liabilities and stockholders' equity		34,717,226			1,929,551		36,646,777

	Six Months Ended March 31, 2020									Three Months Ended March 31, 2020
STATEMENT OF OPERATIONS	PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED			PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED
Research and development expenses	$	8,598,960		$	112,400		$	8,711,360		$	4,402,347		$	56,200		$	4,458,547
Total operating expenses		13,796,378			112,400			13,908,778			6,960,869			56,200			7,017,069
Operating loss		(13,462,146	)		(112,400	)		(13,574,546	)		(6,662,143	)		(56,200	)		(6,718,343	)
Net loss		(14,486,778	)		(112,400	)		(14,599,178	)		(9,011,618	)		(56,200	)		(9,067,818	)
Net loss available to common shareholders		(14,508,512	)		(112,400	)		(14,620,912	)		(9,033,353	)		(56,200	)		(9,089,552	)
Net loss per share - basic and diluted	$	(0.41	)				$	(0.41	)	$	(0.25	)				$	(0.25	)

The impact, as a result of the restatement, to the accompanying Statement of Cash Flows is an increase to net loss offset by an increase to depreciation and amortization expense of $112,400 resulting in no impact to the cash used in operating activities.

In addition, the cumulative effect adjustment to the opening accumulated deficit balance in the statement of stockholders' equity as of October 1, 2019 increased $2.0 million from $0.1 million (previously reported) to $2.1 million (restated).

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J. SUBSEQUENT EVENTS

6 Months Ended

Mar. 31, 2020

Subsequent Events [Abstract]

J. SUBSEQUENT EVENTS

On April 6, 2020, the Company agreed to issue Ergomed 100,000 restricted shares of the Company’s common stock in payment of amounts the Company may owe Ergomed for providing services to the Company.

Under the terms of the March 2020 Underwriting Agreement the Company granted the Underwriters a 45-day option to purchase up to an additional 94,575 shares of common stock solely to cover over-allotments. The underwriter fully exercised this option on May 4, 2020 resulting in additional net proceeds to the Company of approximately $1.1 million.

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A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (POLICIES)

6 Months Ended

Mar. 31, 2020

Accounting Policies [Abstract]

Basis of Presentation

The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP) have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K/A for the year ended September 30, 2019.

In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2020 and the results of its operations for the six months then ended. The condensed balance sheet as of September 30, 2019 is derived from the September 30, 2019 audited financial statements. On October 1, 2019, the Company adopted Accounting Standards Update (ASU) No. 2016-02 , “Leases” and its related amendments (collectively referred to as Topic 842 and codified as Accounting Standards Codification 842, or ASC 842) using the modified retrospective transition approach. In accordance with this adoption method, results for the reporting period ended March 31, 2020 are presented under the new standard, while prior period results continue to be reported under the previous standard. All other significant accounting policies have been consistently applied in the interim financial statements and the annual financial statements. The results of operations for the six and three months ended March 31, 2020 and 2019 are not necessarily indicative of the results to be expected for the entire year.

The financial statements have been prepared assuming that the Company will continue as a going concern, but due to recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.

Research and Office Equipment and Leasehold Improvements

Research and Office Equipment and Leasehold Improvements –Research and office equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. The fixed assets are reviewed on a quarterly basis to determine if any of the assets are impaired.

Patents

Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustment in the asset value and period of amortization is made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from its disposition, is less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.

Research and Development Costs

Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company charges revisions to estimated expense in the period in which the facts that give rise to the revision become known.

Income Taxes

Income Taxes - The Company uses the asset and liability method of accounting for income taxes. Under the asset and liability method, deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized.  A full valuation allowance was recorded against the deferred tax assets as of March 31, 2020 and September 30, 2019.

Derivative Instruments

Derivative Instruments – The Company has entered into financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with ASC 815, “Accounting for Derivative Instruments and Hedging Activities.” In accordance with ASC 815, derivative instruments and hybrid instruments are recognized as either assets or liabilities in the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models considering all the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.

Stock-Based Compensation

Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718 “Compensation – Stock Compensation.” The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized on the straight-line allocation method as expense over the requisite service or vesting period.

The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Compensation Plans, Stock Bonus Plans and an Incentive Stock Bonus Plan. In some cases, these Plans are collectively referred to as the "Plans". All Plans have been approved by the stockholders.

The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. The Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption was based on the U.S. Treasury rate at date of the grant with term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.

Vesting of restricted stock granted under the Incentive Stock Bonus Plan is subject to service, performance and market conditions and meets the classification of equity awards. These awards were measured at market value on the grant-dates for issuances where the attainment of performance criteria is likely and at fair value on the grant-dates, using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.

New Accounting Pronouncements

Newly Adopted Accounting Pronouncements

Effective October 1, 2019, the Company adopted ASC 842. ASC 842 requires that lessees recognize right-of-use assets and lease liabilities that are measured at the present value of the future lease payments at the lease commencement date. Subsequent measurement, including the presentation of expenses and cash flows, depends on the classification of the lease as either a finance lease or an operating lease. The Company elected the optional transition method that allows for a cumulative-effect adjustment in the period of adoption and did not restate prior periods. The Company also elected the transition package of three practical expedients which eliminates the requirements to reassess prior conclusions about lease identification, lease classification and initial direct costs. Further, the Company elected a short-term lease exception policy permitting the option to not apply the recognition requirements of this standard to short-term leases (i.e., leases with terms of 12 months or less) and an accounting policy to account for lease and non-lease components as a single component. The Company’s lease portfolio includes both finance and operating leases. The impact of adopting ASC 842 was to increase long term assets by approximately $3.0 million, increase total liabilities by approximately $0.9 million and record a cumulative effect adjustment of approximately $2.1 million to opening accumulated deficit. Refer to Note I for details regarding the restatement as a result of an error relating to the adoption of ASC 842.

In June 2018, the Financial Accounting Standards Board ("FASB") issued ASU 2018-07, Compensation—Stock Compensation (Topic 718), which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees, and thus, the accounting for share-based payments to non-employees will be substantially aligned. The Company adopted ASU 2018-07 as of October 1, 2019 with no impact on its financial statements and related disclosures.

New Accounting Pronouncements

In August 2018, the FASB issued ASU 2018-13, “Fair Value Measurement - Disclosure Framework (Topic 820)” (“ASU 2018-13”). The updated guidance improves the disclosure requirements on fair value measurements. The updated guidance becomes effective for the Company on October 1, 2021. Early adoption is permitted for any removed or modified disclosures. The Company is currently assessing the timing and impact of adopting the updated provisions.

The Company has considered all other recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.

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C. STOCKHOLDERS EQUITY (Tables)

6 Months Ended

Mar. 31, 2020

Equity [Abstract]

Stock options, stock bonuses and compensation granted by the Company

Underlying share information for equity compensation plans as of March 31, 2020 is as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Options Plans		138,400		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,108,173		N/A		131,146
Stock Bonus Plans		783,760		N/A		339,076		444,651
Stock Compensation Plans		634,000		N/A		150,695		464,895
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Underlying share information for equity compensation plans as of September 30, 2019 is as follows:

Name of Plan	Total Shares Reserved Under Plans		Shares Reserved for Outstanding Options		Shares Issued		Remaining Options/Shares Under Plans
Incentive Stock Option Plans		138,400		89,895		N/A		213
Non-Qualified Stock Option Plans		6,387,200		6,128,321		N/A		112,166
Stock Bonus Plans		783,760		N/A		331,226		452,501
Stock Compensation Plans		634,000		N/A		130,183		485,407
Incentive Stock Bonus Plan		640,000		N/A		616,500		23,500

Stock option activity

	Six Months Ended March 31,
	2020		2019
Options granted		2,500		500
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,168		2,400

	Three Months Ended March 31,
	2020		2019
Options granted		1,500		-
Options exercised		20,480		-
Options forfeited		1,000		24,193
Options expired		1,132		-

Stock-based compensation expense

	Six months Ended March 31,
	2020		2019
Employees	$	3,581,204	$	1,104,490
Non-employees	$	347,227	$	511,424

	Three months Ended March 31,
	2020		2019
Employees	$	1,780,979	$	530,830
Non-employees	$	191,487	$	272,520

Derivative liabilities, warrants and other options

Warrant/Options	Issue Date	Shares Issuable upon Exercise of Warrants/ Options		Exercise Price		Expiration Date	Reference
Series N	8/18/2008		85,339	$	3.00	2/18/2021		2
Series V	5/28/2015		810,127	$	19.75	5/28/2020		1
Series UU	6/11/2018		154,810	$	2.80	6/11/2020		*
Series W	10/28/2015		688,930	$	16.75	10/28/2020		1
Series X	1/13/2016		120,000	$	9.25	1/13/2021		*
Series Y	2/15/2016		26,000	$	12.00	2/15/2021		*
Series ZZ	5/23/2016		20,000	$	13.75	5/18/2021		1
Series BB	8/26/2016		16,000	$	13.75	8/22/2021		1
Series Z	5/23/2016		264,000	$	13.75	11/23/2021		1
Series CC	12/8/2016		153,643	$	5.00	12/8/2021		1
Series HH	2/23/2017		200	$	3.13	2/16/2022		1
Series AA	8/26/2016		200,000	$	13.75	2/22/2022		1
Series MM	6/22/2017		893,491	$	1.86	6/22/2022		*
Series NN	7/24/2017		375,545	$	2.52	7/24/2022		2
Series OO	7/31/2017		10,000	$	2.52	7/31/2022		2
Series RR	10/30/2017		457,116	$	1.65	10/30/2022		*
Series SS	12/19/2017		365,538	$	2.09	12/18/2022		2
Series TT	2/5/2018		381,564	$	2.24	2/5/2023		2
Series VV	7/2/2018		55,000	$	1.75	1/2/2024		2
Consultants	7/28/17		10,000	$	2.18	7/27/2027		*

* No current period changes to these warrants and non-employee options

Tabular disclosure of derivative liabilities at fair value

	March 31, 2020		September 30, 2019
Series V warrants	$	595,981	$	674,442
Series W warrants		1,560,876		1,193,507
Series Z warrants		1,421,421		1,109,545
Series ZZ warrants		82,223		77,638
Series AA warrants		1,243,531		916,908
Series BB warrants		70,994		63,966
Series CC warrants		1,247,399		1,710,898
Series FF warrants		-		446,185
Series HH warrants		1,868		45,657
Series JJ warrants		-		66,599
Series LL warrants		-		182,965
Total warrant liabilities	$	6,224,293	$	6,488,310

Schedule of gains and (losses) on derivative liabilities

The table below presents the gains/(losses) on the warrant liabilities for the six months ended March 31:

	2020			2019
Series S warrants	$	-		$	33
Series V warrants		78,461			494,852
Series W warrants		(367,369	)		616,028
Series Z warrants		(311,876	)		114,831
Series ZZ warrants		(4,585	)		12,638
Series AA warrants		(326,623	)		93,268
Series BB warrants		(7,028	)		7,736
Series CC warrants		(826,277	)		339,698
Series DD warrants		-			1,249,287
Series EE warrants		-			1,249,287
Series FF warrants		(319,706	)		34,603
Series GG warrants		-			106,750
Series HH warrants		(34,457	)		10,642
Series II warrants		-			115,343
Series JJ warrants		(64,992	)		15,926
Series KK warrants		-			113,467
Series LL warrants		(98,066	)		14,746
Net (loss)/gain on warrant liabilities	$	(2,282,518	)	$	4,589,135

The table below presents the losses on the warrant liabilities for the three months ended March 31:

	2020			2019
Series V warrants	$	(476,570	)	$	(61,480	)
Series W warrants		(518,743	)		(10,822	)
Series Z warrants		(322,425	)		(89,290	)
Series ZZ warrants		(19,432	)		(1,685	)
Series AA warrants		(391,601	)		(63,951	)
Series BB warrants		(6,597	)		(4,374	)
Series CC warrants		(803,596	)		(325,908	)
Series FF warrants		(312,517	)		(34,459	)
Series GG warrants		-			(106,032	)
Series HH warrants		(34,375	)		(10,309	)
Series II warrants		-			(115,246	)
Series JJ warrants		(64,862	)		(15,536	)
Series KK warrants		-			(114,628	)
Series LL warrants		(98,309	)		(13,451	)
Net loss on warrant liabilities	$	(3,049,027	)	$	(967,171	)

Warrants recorded as liabilities exercised

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series CC		123,820	$	5.00	$	619,100		123,820	$	5.00	$	619,100
Series FF		68,048	$	3.91		265,812		68,048	$	3.91		265,812
Series HH		6,300	$	3.13		19,687		6,300	$	3.13		19,687
Series JJ		9,450	$	3.13		29,531		9,450	$	3.13		29,531
Series LL		26,398	$	3.59		94,867		26,398	$	3.59		94,867
		234,016			$	1,028,997		234,016			$	1,028,997

Warrants recorded as equity exercised

The following warrants recorded as equity were exercised during the periods ended March 31, 2020.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series NN		98,253	$	2.52	$	247,598		98,253	$	2.52	$	247,598
Series OO		30,000	$	2.52		75,600		40,000	$	2.52		100,800
Series SS		94,474	$	2.09		197,451		117,106	$	2.09		244,752
Series TT		77,857	$	2.24		174,400		178,125	$	2.24		399,000
Series VV		27,500	$	1.75		48,125		27,500	$	1.75		48,125
		328,084			$	743,174		460,984			$	1,040,275

The following warrants recorded as equity were exercised during the periods ended March 31, 2019.

	Three Months						Six Months
Warrants	Warrants Exercised		Exercise Price		Proceeds		Warrants Exercised		Exercise Price		Proceeds
Series PP		-		-		-		60,000	$	2.30	$	138,000
Series SS		13,158	$	2.09	$	27,500		165,790	$	2.09		346,501
Series TT		-		-		-		86,050	$	2.24		192,752
Series VV		1,385,000	$	1.75		2,423,750		1,385,000	$	1.75		2,423,750
Series WW		125,775	$	1.63		204,384		125,775	$	1.63		204,384
		1,523,933			$	2,655,635		1,822,615			$	3,305,387

Other non-operating gains and (losses) on securities purchase agreements

	Six Months Ended				Three Months Ended
	3/31/2020		3/31/2019		3/31/2020		3/31/2019
Amount realized through the resale of shares	$	1,720,680	$	1,711,353	$	934,511	$	559,177
Fair value of shares upon issuance		-		1,290,000		-		1,290,000
Other non-operating gain (loss)	$	1,720,680	$	421,353	$	934,511	$	(730,823	)

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D. FAIR VALUE MEASUREMENTS (Tables)

6 Months Ended

Mar. 31, 2020

Fair Value Disclosures [Abstract]

Measured at fair value on a recurring basis

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at March 31, 2020:

	Quoted Prices in Active Markets for Identical Assets or Liabilities  (Level 1)		Significant Other Observable Inputs  (Level 2)		Significant Unobservable Inputs  (Level 3)		Total
Derivative instruments	$	-	$	-	$	6,224,293	$	6,224,293

The table below sets forth the assets and liabilities measured at fair value on a recurring basis, by input level, in the condensed balance sheet at September 30, 2019:

	Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)		Total
Derivative instruments	$	-	$	-	$	6,488,310	$	6,488,310

Reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3)

	Six months ended			Twelve months ended
	March 31, 2020			September 30, 2019
Beginning balance	$	6,488,310		$	9,317,031
Issuances		-			-
Exercises		(2,546,535	)		(3,589,357	)
Realized and unrealized losses		2,282,518			760,636
Ending balance	$	6,224,293		$	6,488,310

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F. COMMITMENTS AND CONTINGENCIES (Tables)

6 Months Ended

Mar. 31, 2020

Commitments and Contingencies Disclosure [Abstract]

Schedule of future minimum payments under finance leases

Six months ending September 30, 2020	$	946,000
Year ending September 30,
2021		1,953,000
2022		2,014,000
2023		2,083,000
2024		2,148,000
2025		2,218,000
Thereafter		7,322,000
Total future minimum lease obligation		18,684,000
Less imputed interest on finance lease obligations		(5,585,000	)
Net present value of lease finance lease obligations	$	13,099,000

Schedule of future minimum payments under operating leases

Six months ending September 30, 2020	$	107,000
Year ending September 30,
2021		163,000
2022		168,000
2023		173,000
2024		178,000
2025		183,000
Thereafter		269,000
Total future minimum lease obligation		1,241,000
Less imputed interest on operating lease obligation		(317,000	)
Net present value of operating lease obligation	$	924,000

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G. PATENTS (Tables)

6 Months Ended

Mar. 31, 2020

Intangible Assets, Net (Excluding Goodwill) [Abstract]

Schedule of total estimated future amortization

Six months ending September 30, 2020	$	26,000
Year ending September 30,
2021		50,000
2022		46,000
2023		36,000
2024		28,000
2025		25,000
Thereafter		101,000
Total	$	312,000

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H. LOSS PER COMMON SHARE (Tables)

6 Months Ended

Mar. 31, 2020

Net loss per common share

Computation of basic and diluted loss per share

	Six months ended March 31,						Three months ended March 31,
	2020			2019			2020			2019
Loss per share - basic
Net loss available to common shareholders - basic	$	(14,620,912	)	$	(5,201,779	)	$	(9,089,522	)	$	(6,447,681	)
Weighted average shares outstanding - basic		35,621,711			28,543,417			36,165,050			29,113,910
Basic loss per common share	$	(0.41	)	$	(0.18	)	$	(0.25	)	$	(0.22	)
Loss per share - diluted
Net loss available to common shareholders - basic	$	(14,620,912	)	$	(5,201,779	)	$	(9,089,522	)	$	(6,447,681	)
Gain on derivatives (1)		-			(335,560	)		-			-
Net loss available to common shareholders - diluted	$	(14,620,912	)	$	(5,537,339	)	$	(9,089,522	)	$	(6,447,681	)
Weighted average shares outstanding - basic		35,621,711			28,543,417			36,165,050			29,113,910
Incremental shares underlying dilutive "in the money" warrants (1)		-			5,401			-			-
Weighted average shares outstanding - diluted		35,621,711			28,548,818			36,165,050			29,113,910
Diluted loss per common share	$	(0.41	)	$	(0.19	)	$	(0.25	)	$	(0.22	)

(1) Includes shares issuable upon the exercise of the Series GG, II and KK warrants for the six months ended March 31, 2019.

Schedule of antidilutive securities

	2020		2019
Options and Warrants		6,452,645		10,576,881
Unvested Restricted Stock		318,798		308,500
Total		6,771,443		10,885,381

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I. RESTATEMENT (Tables)

6 Months Ended

Mar. 31, 2020

Accounting Changes and Error Corrections [Abstract]

Balance sheet restatement

	March 31, 2020
BALANCE SHEET	PREVIOUSLY REPORTED			ADJUSTMENT		RESTATED
Finance lease right of use assets	$	12,741,195		$	1,929,551	$	14,670,746
Total assets		34,717,226			1,929,551		36,646,777
Accumulated deficit		(368,108,788	)		1,929,551		(366,179,237	)
Total stockholders' equity		12,208,509			1,929,551		14,138,060
Total liabilities and stockholders' equity		34,717,226			1,929,551		36,646,777

Statement of operations restatement

	Six Months Ended March 31, 2020									Three Months Ended March 31, 2020
STATEMENT OF OPERATIONS	PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED			PREVIOUSLY REPORTED			ADJUSTMENT			RESTATED
Research and development expenses	$	8,598,960		$	112,400		$	8,711,360		$	4,402,347		$	56,200		$	4,458,547
Total operating expenses		13,796,378			112,400			13,908,778			6,960,869			56,200			7,017,069
Operating loss		(13,462,146	)		(112,400	)		(13,574,546	)		(6,662,143	)		(56,200	)		(6,718,343	)
Net loss		(14,486,778	)		(112,400	)		(14,599,178	)		(9,011,618	)		(56,200	)		(9,067,818	)
Net loss available to common shareholders		(14,508,512	)		(112,400	)		(14,620,912	)		(9,033,353	)		(56,200	)		(9,089,552	)
Net loss per share - basic and diluted	$	(0.41	)				$	(0.41	)	$	(0.25	)				$	(0.25	)

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C. STOCKHOLDERS EQUITY (Details) - shares	Mar. 31, 2020	Sep. 30, 2019
Incentive Stock Option Plans
Total shares reserved under plans	138,400	138,400
Shares reserved for outstanding options	89,895	89,895
Shares issued	0	0
Remaining options/shares under plans	213	213
Non Qualified Stock Option Plans
Total shares reserved under plans	6,387,200	6,387,200
Shares reserved for outstanding options	6,108,173	6,128,321
Shares issued	0	0
Remaining options/shares under plans	131,146	112,166
Stock Bonus Plans
Total shares reserved under plans	783,760	783,760
Shares reserved for outstanding options	0	0
Shares issued	339,079	331,226
Remaining options/shares under plans	444,651	452,501
Stock Compensation Plan
Total shares reserved under plans	634,000	634,000
Shares reserved for outstanding options	0	0
Shares issued	150,695	130,183
Remaining options/shares under plans	464,895	485,407
Incentive Stock Bonus Plan
Total shares reserved under plans	640,000	640,000
Shares reserved for outstanding options	0	0
Shares issued	616,500	616,500
Remaining options/shares under plans	23,500	23,500

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C. STOCKHOLDERS EQUITY (Details 1) - shares	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Equity [Abstract]
Options granted	1,500	0	2,500	500
Options exercised	20,480	0	20,480	0
Options forfeited	1,000	24,193	1,000	24,193
Options expired	1,132	0	1,168	2,400

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C. STOCKHOLDERS EQUITY (Details 2) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Employee
Stock based compensation expense	$ 1,780,979	$ 530,830	$ 3,581,204	$ 1,104,490
Non-Employees
Stock based compensation expense	$ 191,487	$ 272,520	$ 347,227	$ 511,424

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C. STOCKHOLDERS EQUITY (Details 3)	6 Months Ended
	Mar. 31, 2020 $ / shares shares
Series N
STOCKHOLDERS' EQUITY
Issue date	8/18/2008
Shares issuable upon exercise of warrant | shares	85,339
Exercise price | $ / shares	$ 3.00
Expiration date	2/18/2021
Series V
STOCKHOLDERS' EQUITY
Issue date	5/28/2015
Shares issuable upon exercise of warrant | shares	810,127
Exercise price | $ / shares	$ 19.75
Expiration date	5/28/2020
Series UU
STOCKHOLDERS' EQUITY
Issue date	6/11/2018
Shares issuable upon exercise of warrant | shares	154,810
Exercise price | $ / shares	$ 2.80
Expiration date	6/11/2020
Series W
STOCKHOLDERS' EQUITY
Issue date	10/28/2015
Shares issuable upon exercise of warrant | shares	688,930
Exercise price | $ / shares	$ 16.75
Expiration date	10/28/2020
Series X
STOCKHOLDERS' EQUITY
Issue date	1/13/2016
Shares issuable upon exercise of warrant | shares	120,000
Exercise price | $ / shares	$ 9.25
Expiration date	1/13/2021
Series Y
STOCKHOLDERS' EQUITY
Issue date	2/15/2016
Shares issuable upon exercise of warrant | shares	26,000
Exercise price | $ / shares	$ 12.00
Expiration date	2/15/2021
Series ZZ
STOCKHOLDERS' EQUITY
Issue date	5/23/2016
Shares issuable upon exercise of warrant | shares	20,000
Exercise price | $ / shares	$ 13.75
Expiration date	5/18/2021
Series BB
STOCKHOLDERS' EQUITY
Issue date	8/26/2016
Shares issuable upon exercise of warrant | shares	16,000
Exercise price | $ / shares	$ 13.75
Expiration date	8/22/2021
Series Z
STOCKHOLDERS' EQUITY
Issue date	5/23/2016
Shares issuable upon exercise of warrant | shares	264,000
Exercise price | $ / shares	$ 13.75
Expiration date	11/23/2021
Series CC
STOCKHOLDERS' EQUITY
Issue date	12/8/2016
Shares issuable upon exercise of warrant | shares	153,643
Exercise price | $ / shares	$ 5.00
Expiration date	12/8/2021
Series HH
STOCKHOLDERS' EQUITY
Issue date	2/23/2017
Shares issuable upon exercise of warrant | shares	200
Exercise price | $ / shares	$ 3.13
Expiration date	2/16/2022
Series AA
STOCKHOLDERS' EQUITY
Issue date	8/26/2016
Shares issuable upon exercise of warrant | shares	200,000
Exercise price | $ / shares	$ 13.75
Expiration date	2/22/2022
Series MM
STOCKHOLDERS' EQUITY
Issue date	6/22/2017
Shares issuable upon exercise of warrant | shares	893,491
Exercise price | $ / shares	$ 1.86
Expiration date	6/22/2022
Series NN
STOCKHOLDERS' EQUITY
Issue date	7/24/2017
Shares issuable upon exercise of warrant | shares	375,545
Exercise price | $ / shares	$ 2.52
Expiration date	7/24/2022
Series OO
STOCKHOLDERS' EQUITY
Issue date	7/31/2017
Shares issuable upon exercise of warrant | shares	10,000
Exercise price | $ / shares	$ 2.52
Expiration date	7/31/2022
Series RR
STOCKHOLDERS' EQUITY
Issue date	10/30/2017
Shares issuable upon exercise of warrant | shares	457,116
Exercise price | $ / shares	$ 1.65
Expiration date	10/30/2022
Series SS
STOCKHOLDERS' EQUITY
Issue date	12/19/2017
Shares issuable upon exercise of warrant | shares	365,538
Exercise price | $ / shares	$ 2.09
Expiration date	12/18/2022
Series TT
STOCKHOLDERS' EQUITY
Issue date	2/5/2018
Shares issuable upon exercise of warrant | shares	381,564
Exercise price | $ / shares	$ 2.24
Expiration date	2/5/2023
Series VV
STOCKHOLDERS' EQUITY
Issue date	7/2/2018
Shares issuable upon exercise of warrant | shares	55,000
Exercise price | $ / shares	$ 1.75
Expiration date	1/2/2024
Consultants
STOCKHOLDERS' EQUITY
Issue date	7/28/2017
Shares issuable upon exercise of warrant | shares	10,000
Exercise price | $ / shares	$ 2.18
Expiration date	7/27/2027

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C. STOCKHOLDERS EQUITY (Details 4) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019
Equity [Abstract]
Series V warrants	$ 595,981		$ 595,981		$ 674,442
Series W warrants	1,560,876		1,560,876		1,193,507
Series Z warrants	1,421,421		1,421,421		1,109,545
Series ZZ warrants	82,223		82,223		77,638
Series AA warrants	1,243,531		1,243,531		916,908
Series BB warrants	70,994		70,994		63,966
Series CC warrants	1,247,399		1,247,399		1,710,898
Series FF warrants	0		0		446,185
Series HH warrants	1,868		1,868		45,657
Series JJ warrants	0		0		66,599
Series LL warrants	0		0		182,965
Total warrant liabilities	6,224,293		6,224,293		$ 6,488,310
Gains (losses) on Series S warrants	0	$ 0	0	$ 33
Gains (losses) on Series V warrants	(476,570)	(61,480)	78,461	494,852
Gains (losses) on Series W warrants	(518,743)	(10,822)	(367,369)	616,028
Gains (losses) on Series Z warrants	(322,425)	(89,290)	(311,876)	114,831
Gains (losses) on Series ZZ warrants	(19,432)	(1,685)	(4,585)	12,638
Gains (losses) on Series AA warrants	(391,601)	(63,951)	(326,623)	93,268
Gains (losses) on Series BB warrants	(6,597)	(4,374)	(7,028)	7,736
Gains (losses) on Series CC warrants	(803,596)	(325,908)	(826,277)	339,698
Gains (losses) on Series DD warrants	0	0	0	1,249,287
Gains (losses) on Series EE warrants	0	0	0	1,249,287
Gains (losses) on Series FF warrants	(312,517)	(34,459)	(319,706)	34,603
Gains (losses) on Series GG warrants	0	(106,032)	0	106,750
Gains (losses) on Series HH warrants	(34,375)	(10,309)	(34,457)	10,642
Gains (losses) on Series II warrants	0	(115,246)	0	115,343
Gains (losses) on Series JJ warrants	(64,862)	(15,536)	(64,992)	15,926
Gains (losses) on Series KK warrants	0	(114,628)	0	113,467
Gains (losses) on Series LL warrants	(98,309)	(13,451)	(98,066)	14,746
Net (loss)/gain on warrant liabilities	$ (3,049,027)	$ (967,171)	$ (2,282,518)	$ 4,589,135

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C. STOCKHOLDERS EQUITY (Details 5) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2020
Warrants exercised	234,016	234,016
Proceeds	$ 1,028,997	$ 1,028,997
Series CC
Warrants exercised	123,820	123,820
Exercise price	$ 5.00	$ 5.00
Proceeds	$ 619,100	$ 619,100
Series FF
Warrants exercised	68,048	68,048
Exercise price	$ 3.91	$ 3.91
Proceeds	$ 265,812	$ 265,812
Series HH
Warrants exercised	6,300	6,300
Exercise price	$ 3.13	$ 3.13
Proceeds	$ 19,687	$ 19,687
Series JJ
Warrants exercised	9,450	9,450
Exercise price	$ 3.13	$ 3.13
Proceeds	$ 29,531	$ 29,531
Series LL
Warrants exercised	26,398	26,398
Exercise price	$ 3.59	$ 3.59
Proceeds	$ 94,867	$ 94,867

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C. STOCKHOLDERS EQUITY (Details 6) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Warrants exercised	328,084	1,523,933	460,984	1,822,615
Proceeds	$ 743,174	$ 2,655,635	$ 1,040,275	$ 3,305,387
Series NN
Warrants exercised	98,253		98,253
Exercise price	$ 2.52		$ 2.52
Proceeds	$ 247,598		$ 247,598
Series OO
Warrants exercised	30,000		40,000
Exercise price	$ 2.52		$ 2.52
Proceeds	$ 75,600		$ 100,800
Series PP
Warrants exercised		0		60,000
Exercise price		$ 0.00		$ 2.30
Proceeds		$ 0		$ 138,000
Series SS
Warrants exercised	94,474	13,158	117,106	165,790
Exercise price	$ 2.09	$ 2.09	$ 2.09	$ 2.09
Proceeds	$ 197,451	$ 27,500	$ 244,752	$ 346,501
Series TT
Warrants exercised	77,857	0	178,125	86,050
Exercise price	$ 2.24	$ 0.00	$ 2.24	$ 2.24
Proceeds	$ 174,400	$ 0	$ 399,000	$ 192,752
Series VV
Warrants exercised	27,500	1,385,000	27,500	1,385,000
Exercise price	$ 1.75	$ 1.75	$ 1.75	$ 1.75
Proceeds	$ 48,125	$ 2,423,750	$ 48,125	$ 2,423,750
Series WW
Warrants exercised		125,775		125,775
Exercise price		$ 1.63		$ 1.63
Proceeds		$ 204,384		$ 204,384

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C. STOCKHOLDERS EQUITY (Details 7) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Equity [Abstract]
Amount realized through the resale of shares	$ 934,511	$ 559,177	$ 1,720,680	$ 1,711,353
Fair value of shares upon issuance	0	1,290,000	0	1,290,000
Other non-operating gain (loss)	$ 934,511	$ (730,823)	$ 1,720,680	$ 421,353

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C. STOCKHOLDERS EQUITY (Details Narrative) - USD ($)	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019
Equity [Abstract]
Total compensation expense	$ 347,000	$ 511,000
Pre-paid expenses	367,000		$ 230,000
Shares to be issued	$ 165,000

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D. FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2020	Sep. 30, 2019
Derivative instruments	$ 6,224,293	$ 6,488,310
Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1)
Derivative instruments	0	0
Significant Other Observable Inputs (Level 2)
Derivative instruments	0	0
Significant Unobservable Inputs (Level 3)
Derivative instruments	$ 6,224,293	$ 6,488,310

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D. FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	6 Months Ended	12 Months Ended
	Mar. 31, 2020	Sep. 30, 2019
Fair Value Disclosures [Abstract]
Beginning balance	$ 6,488,310	$ 9,317,031
Issuances	0	0
Exercises	(2,546,535)	(3,589,357)
Realized and unrealized losses	2,282,518	760,636
Ending balance	$ 6,224,293	$ 6,488,310

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F. COMMITMENTS AND CONTINGENCIES (Details)	Mar. 31, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Six months ending September 30, 2020	$ 946,000
2021	1,953,000
2022	2,014,000
2023	2,083,000
2024	2,148,000
2025	2,218,000
Thereafter	7,322,000
Total future minimum lease obligation	18,684,000
Less imputed interest on financing obligation	(5,585,000)
Net present value of lease financing obligation	$ 13,099,000

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F. COMMITMENTS AND CONTINGENCIES (Details 1)	Mar. 31, 2020 USD ($)
Commitments and Contingencies Disclosure [Abstract]
Six months ending September 30, 2020	$ 107,000
2021	163,000
2022	168,000
2023	173,000
2024	178,000
2025	183,000
Thereafter	269,000
Total future minimum lease obligation	1,241,000
Less imputed interest on operating lease obligation	(317,000)
Total	$ 924,000

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F. COMMITMENTS AND CONTINGENCIES (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019	Sep. 30, 2019
Commitments and Contingencies Disclosure [Abstract]
Research and development expenses	$ 800,000	$ 700,000
Finance lease right of use assets	14,670,746		$ 14,670,746		$ 0
Cash paid related to finance leases			940,000
Rental income	18,000	$ 18,000	37,000	$ 36,000
Book value of operating lease - asset	899,508		899,508		$ 0
Book value of operating lease - liability	900,000		900,000
Operating lease expense	68,000		135,000
Cash paid related to operating leases	$ 66,000		$ 132,000

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G. PATENTS (Details) - USD ($)	Mar. 31, 2020	Sep. 30, 2019
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Six months ending September 30, 2020	$ 26,000
2021	50,000
2022	46,000
2023	36,000
2024	28,000
2025	25,000
Thereafter	101,000
Total	$ 312,380	$ 311,586

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G. PATENTS (Details Narrative) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Intangible Assets, Net (Excluding Goodwill) [Abstract]
Patent impairment charges			$ 0	$ 0
Amortization of patent costs	$ 14,000	$ 11,000	$ 27,000	$ 23,000

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H. LOSS PER COMMON SHARE (Details) - USD ($)	3 Months Ended		6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019	Mar. 31, 2020	Mar. 31, 2019
Loss per share - basic
Net loss available to common shareholders - basic	$ (9,089,552)	$ (6,447,681)	$ (14,620,912)	$ (5,201,779)
Weighted average shares outstanding - basic	36,165,050	29,113,910	35,621,711	28,543,417
Basic loss per common share	$ (0.25)	$ (0.22)	$ (0.41)	$ (0.18)
Loss per share - diluted
Net loss available to common shareholders - basic	$ (9,089,552)	$ (6,447,681)	$ (14,620,912)	$ (5,201,779)
Gain on derivatives	0	0	0	(335,560)	[1]
Net loss available to common shareholders - diluted	$ (9,089,522)	$ (6,447,681)	$ (14,620,912)	$ (5,537,339)
Weighted average shares outstanding - basic	36,165,050	29,113,910	35,621,711	28,543,417
Incremental shares underlying dilutive "in the money" warrants	0	0	0	5,401	[1]
Weighted average shares outstanding - diluted	36,165,050	29,113,910	35,621,711	28,548,818
Diluted loss per common share	$ (0.25)	$ (0.22)	$ (0.41)	$ (0.19)

[1] Includes shares issuable upon the exercise of the Series GG, II and KK warrants for the six months ended March 31, 2019.

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H. LOSS PER COMMON SHARE (Details 1) - shares	6 Months Ended
	Mar. 31, 2020	Mar. 31, 2019
Antidilutive securities	6,771,443	10,885,381
Options and Warrants
Antidilutive securities	6,452,645	10,576,881
Unvested Restricted Stock
Antidilutive securities	318,798	308,500

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I. RESTATEMENT (Details) - USD ($)	Mar. 31, 2020	Dec. 31, 2019	Sep. 30, 2019	Mar. 31, 2019	Dec. 31, 2018	Sep. 30, 2018
Finance lease right of use assets	$ 14,670,746		$ 0
Total assets	36,646,777		27,622,994
Accumulated deficit	(366,179,237)		(353,726,254)
Total stockholders' equity	14,138,060	$ 8,954,065	5,133,667	$ 955,522	$ 2,707,852	$ 916
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	36,646,777		$ 27,622,994
Previously Reported
Finance lease right of use assets	12,741,195
Total assets	34,717,226
Accumulated deficit	(368,108,788)
Total stockholders' equity	12,208,509
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	34,717,226
Adjustment
Finance lease right of use assets	1,929,551
Total assets	1,929,551
Accumulated deficit	1,929,551
Total stockholders' equity	1,929,551
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,929,551

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I. RESTATEMENT (Details 1) - USD ($)	3 Months Ended				6 Months Ended
	Mar. 31, 2020	Dec. 31, 2019	Mar. 31, 2019	Dec. 31, 2018	Mar. 31, 2020	Mar. 31, 2019
Research and development	$ 4,458,547		$ 2,832,546		$ 8,711,360	$ 6,304,260
Total operating expenses	7,017,069		4,457,369		13,908,778	9,618,245
Operating loss	(6,718,343)		(4,306,600)		(13,574,546)	(9,341,062)
Net loss	(9,067,818)	$ (5,531,360)	(6,447,681)	$ 1,245,902	(14,599,178)	(5,201,779)
Net loss available to common shareholders	$ (9,089,552)		$ (6,447,681)		$ (14,620,912)	$ (5,201,779)
Net loss per share - basic and diluted	$ (.25)				$ (0.41)
Previously Reported
Research and development	$ 4,402,347				$ 8,598,960
Total operating expenses	6,960,869				13,796,378
Operating loss	(6,662,143)				(13,462,146)
Net loss	(9,011,618)				(14,486,778)
Net loss available to common shareholders	$ (9,033,352)				$ (14,508,512)
Net loss per share - basic and diluted	$ (.25)				$ (0.41)
Adjustment
Research and development	$ 56,200				$ 112,400
Total operating expenses	56,200				112,400
Operating loss	(56,200)				(112,400)
Net loss	(56,200)				(112,400)
Net loss available to common shareholders	$ (56,200)				$ (112,400)
Net loss per share - basic and diluted