As filed with the Securities and Exchange Commission on __________, 2012.
Registration No 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Registration Statement Under
THE SECURITIES ACT OF 1933
CEL-SCI CORPORATION
(Exact name of registrant as specified in charter)
Colorado
-----------------
(State or other jurisdiction of incorporation)
8229 Boone Blvd. #802
Vienna, Virginia 22182
84-09l6344 (703) 506-9460
---------------------------- ---------------------------------
(IRS Employer I.D. Number) (Address, including zip code, and
telephone number including area of
principal executive offices)
Geert Kersten
8229 Boone Blvd. #802
Vienna, Virginia 22182
(703) 506-9460
-------------------------------
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after this Registration Statement
becomes effective as determined by market conditions
If the only securities being registered on this Form are being offered pursuant
to dividend or interest reinvestment plans, please check the following box. [ ]
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration for the same offering. [ ]
1
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If this Form is a registration statement pursuant to General Instruction I.D. or
a post-effective amendment thereto that shall become effective upon filing with
the Commission pursuant to Rule 462(e) under the Securities Act, check the
following box. [ ]
If this Form is a post-effective amendment to a registration statement filed
pursuant to General Instruction I.D. filed to register additional securities or
additional classes of securities pursuant to Rule 413(b) under the Securities
Act, check the following box. [ ]
Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, or a smaller reporting company. See
the definitions of "large accelerated filer", and "smaller reporting company" in
Rule 12b-2 of the Exchange Act.
Large accelerated filer [ ] Accelerated filer [ ]
Non-accelerated filer [ ] Smaller reporting company [x]
(Do not check if a smaller reporting company)
CALCULATION OF REGISTRATION FEE
Proposed Proposed
Title of maximum maximum
securities Amount offering aggregate Amount of
to be to be price offering registration
registered registered (1) per share (2) price fee
-------------------------------------------------------------------------------
Common stock,
preferred stock,
convertible preferred
stock, promissory
notes, convertible notes,
rights, and warrants (2) (2) (2) (2)
Total $50,000,000 $50,000,000 $5,730
--------------------------------------------------------------------------------
(1) The amount of registration fee, calculated in accordance with Rule 457(o),
is the maximum aggregate offering price at which the securities subject to
this registration statement are proposed to be offered.
(2) There are being registered hereunder an indeterminate amount and number of
securities as may be sold, from time to time, by the Company.
The Company hereby amends this Registration Statement on such date or dates
as may be necessary to delay its effective date until the registrant shall file
a further amendment which specifically states that this Registration Statement
shall thereafter become effective in accordance with Section 8(a) of the
Securities Act of l933 or until the Registration Statement shall become
effective on such date as the Commission, acting pursuant to said Section 8(a),
may determine.
2
PROSPECTUS
CEL-SCI CORPORATION
Common Stock
CEL-SCI Corporation may offer from time to time shares of common stock,
preferred stock, convertible preferred stock, promissory notes, convertible
notes, rights, warrants, or securities issuable upon the exercise of warrants at
an initial offering price not to exceed $50,000,000, at prices and on terms to
be determined at or prior to the time of sale in light of market conditions at
the time of sale.
Specific terms pertaining to the securities offered by this prospectus will
be set forth in one or more accompanying prospectus supplements, together with
the terms of the offering and the initial price and the net proceeds to CEL-SCI
from the sale. The prospectus supplement will set forth, without limitation, the
number of shares of common stock or warrants and the terms of the offering and
sale of such securities.
CEL-SCI may sell the securities offered by this prospectus directly,
through agents designated from time to time, or through underwriters or dealers.
If any agents of CEL-SCI or any underwriters or dealers are involved in the sale
of the securities, the names of the agents, underwriters or dealers, any
applicable commissions and discounts, and the net proceeds to the Company will
be set forth in the applicable prospectus supplement.
CEL-SCI may not use this prospectus to complete sales of its securities
unless this prospectus is accompanied by a prospectus supplement.
The securities offered by this prospectus are speculative and involve a
high degree of risk and should be purchased only by persons who can afford to
lose their entire investment. For a description of certain important factors
that should be considered by prospective investors, see "Risk Factors" beginning
on page 10 of this prospectus.
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or has passed upon
the accuracy or adequacy of this prospectus. Any representation to the contrary
is a criminal offense.
CEL-SCI's common stock is traded on the NYSE Amex under the symbol "CVM".
On September 24, 2012 the closing price of CEL-SCI's common stock on the NYSE
Amex was $0.36.
Date of this Prospectus is _______, 2012
3
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED BY THE OTHER INFORMATION APPEARING ELSEWHERE IN THIS
PROSPECTUS.
CEL-SCI Corporation was formed as a Colorado corporation in 1983. CEL-SCI's
principal office is located at 8229 Boone Boulevard, Suite 802, Vienna, VA
22182. CEL-SCI's telephone number is 703-506-9460 and its web site is
www.cel-sci.com. We do not incorporate the information on our website into this
prospectus supplement or accompanying prospectus, and you should not consider it
part of this prospectus supplement or accompanying prospectus.
CEL-SCI makes its electronic filings with the Securities and Exchange
Commission (SEC), including its annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to these reports
available on its website free of charge as soon as practicable after they are
filed or furnished to the SEC.
CEL-SCI'S PRODUCTS
CEL-SCI's business consists of the following:
---------------------------------------------
1) Multikine(R) (Leukocyte Interleukin, Injection) investigational cancer
therapy;
2) LEAPS technology, with two investigational therapies, pandemic flu
treatment for hospitalized patients and CEL-2000, a rheumatoid
arthritis treatment vaccine in development.
MULTIKINE
---------
CEL-SCI's lead investigational therapy, Multikine (Leukocyte Interleukin,
Injection), is currently being developed as a potential therapeutic agent
directed at using the immune system to produce an anti-tumor immune response.
Data from Phase I and Phase II clinical trials suggest that Multikine simulates
the activities of a healthy person's immune system, enabling it to use the
body's own anti-tumor immune response. Multikine (Leukocyte Interleukin,
Injection) is the full name of this investigational therapy, which, for
simplicity, is referred to in the remainder of this document as Multikine.
Multikine is the trademark that CEL-SCI has registered for this investigational
therapy, and this proprietary name is subject to FDA review in connection with
our future anticipated regulatory submission for approval. Multikine has not
been licensed or approved for sale, barter or exchange by the FDA or any other
regulatory agency. Neither has its safety or efficacy been established for any
use.
Multikine has been cleared by the regulators in eight countries around the
world, including the U.S. FDA, for a global Phase III clinical trial in advanced
primary (not yet treated) head and neck cancer patients. This trial is expected
to be the largest head and neck cancer clinical study ever conducted.
4
The trial will test the hypothesis that Multikine treatment administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by
radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.
This clinical trial is thought to be the first Phase III study in the world
in which immunotherapy is given to cancer patients first, i.e., prior to their
receiving any conventional treatment for cancer, including surgery, radiation
and/or chemotherapy. This could be shown to be important because conventional
therapy may weaken the immune system, and may compromise the potential effect of
immunotherapy. Because Multikine is given before conventional cancer therapy,
when the immune system may be more intact, CEL-SCI believes the possibility
exists for it to have a greater likelihood of activating an anti-tumor immune
response under these conditions. This likelihood is one of the clinical aspects
being evaluated in the ongoing global Phase III clinical trial.
Multikine is a different kind of investigational therapy in the fight
against cancer; Multikine is a defined mixture of cytokines. It is a combination
immunotherapy, possessing both active and passive properties.
During the early investigational phase, in Phase I and Phase II clinical
trials in over 220 subjects who received the investigational therapy Multikine
in doses of 200 to 3200 IU (international units) as IL-2, no serious adverse
events were reported as being expressly due to administration of this
investigational therapy, and subjects in those clinical trials and the treating
physicians reported that this investigational therapy was well tolerated in
those early-stage clinical trials. Adverse events which were reported included
pain at the injection site, local minor bleeding and edema at the injection
site, diarrhea, headache, nausea, and constipation. No "abnormal" laboratory
results were reported following Multikine treatment - other than those commonly
seen by treating physicians in this patient population - regardless of Multikine
administration. Similarly, in these early-phase clinical studies in patients,
there was no reported increased toxicity of follow-on treatments as a result of
Multikine administration. No complications following surgery (such as increased
time for wound healing) were reported. No definitive conclusions can be drawn
from these data about the safety or efficacy profile of this investigational
therapy, further research is required and the global Phase III study is ongoing
in an effort to confirm these results.
Currently, Multikine has not yet been licensed or approved for sale, barter
or exchange by the FDA or by any other regulatory agency. Similarly, its safety
or efficacy has not been established for any use.
The following is a summary of results from CEL-SCI's last Phase II study
conducted with Multikine. This study used the same treatment protocol as will be
used in CEL-SCI's Phase III study:
o In the final Phase II clinical study, using the same dosage and
treatment regimen as is being used in the Phase III study, head and
neck cancer patients with locally advanced primary disease who
5
received the investigational therapy Multikine as first-line
investigational therapy followed by surgery and radiotherapy were
reported by the clinical investigators to have had a 63.2% overall
survival (OS) rate at 3.5 years from surgery. This percentage OS was
arrived at as follows: of the 22 subjects enrolled in this final Phase
II study, the consent for the survival follow-up portion of the study
was received from 19 subjects. One subject did not consent to the
follow-up portion of the study. The other 2 subjects did not have
squamous cell carcinoma of the oral cavity and were thus not evaluable
per the protocol. The overall survival rate of subjects receiving the
investigational therapy in this study was compared to the overall
survival rate that was calculated based upon a review of 55 clinical
trials conducted in the same cancer population (with a total of 7,294
patients studied), and reported in the peer reviewed scientific
literature between 1987 and 2007. Review of this literature showed an
approximate survival rate of 47.5% at 3.5 year from treatment.
Therefore, the results of CEL-SCI's final Phase II study were
considered to be potentially favorable in terms of overall survival
recognizing the limitations of this early-phase study. It should be
noted that an earlier investigational therapy Multikine study appears
to lend support to the overall survival findings described above
-Feinmesser et al Arch Otolaryngol. Surg. 2003. However, no definitive
conclusions can be drawn from these data about the potential efficacy
or safety profile of this investigational therapy. Moreover, further
research is required, and these results must be confirmed in the
well-controlled Phase III clinical trial of this investigational
therapy that is currently in progress. Subject to completion of that
Phase III trial and FDA's review and acceptance of CEL-SCI's entire
data set on this investigational therapy, CEL-SCI believes that these
early-stage clinical trial results indicate the potential for this
investigational therapy to become a treatment for advanced primary
head and neck cancer.
The primary clinical endpoint in CEL-SCI's ongoing Phase III clinical
trial is that a 10% improvement in overall survival in the Multikine
treatment arm, plus the current standard of care (SOC - consisting of
surgery + radiotherapy or surgery + radiochemotherapy), over that
which can be achieved in the SOC arm alone (in the well-controlled
Phase III clinical trial currently ongoing) must be achieved. Based on
what is presently known about the current survival statistics for this
population, CEL-SCI believes that achievement of this endpoint should
enable CEL-SCI, subject to further consultations with FDA, to move
forward, prepare and submit a Biologic License Application to FDA for
Multikine.
o Reported average of 50% reduction in tumor cells in Phase II trials:
The clinical investigators who administered the three week Multikine
treatment regimen used in Phase II studies reported that, as was
determined in a controlled pathology study, Multikine administration
appeared to have caused, on average, the disappearance of about half
of the cancer cells present at surgery (as determined by
histopathology assessing the area of Stroma/Tumor (Mean+/- Standard
Error of the Mean of the number of cells counted per filed)) even
before the start of standard therapy such as radiation and
chemotherapy (Timar et al JCO 2005).
6
o Reported 12% complete response in the final Phase II trial: The
clinical investigators who administered the three week Multikine
investigational treatment regimen used in the final Phase II study
reported that, as was determined in a controlled pathology study, the
tumor apparently was no longer present (as determined by
histopathology) in approximately 12 % of patients (2 of 17 evaluable
by pathology). This determination was made by three pathologists
blinded to the study from the surgical specimen after a three week
treatment with Multikine (Timar et al JCO 2005).
o Adverse events reported in clinical trials: In clinical trials
conducted to date with the Multikine investigational therapy, adverse
events which have been reported by the clinical investigators as
possibly or probably related to Multikine administration included pain
at the injection site, local minor bleeding and edema at the injection
site, diarrhea, headache, nausea, and constipation.
The clinical significance of these and other data, to date, from the
multiple Multikine clinical trialsis not yet known. These preliminary clinical
data do suggest the potential to demonstrate a possible improvement in the
clinical outcome for patients treated with Multikine.
Multikine has been cleared for a global Phase III trial in advanced primary
head and neck cancer. It has received a go-ahead by the US FDA as well as the
Canadian, Polish, Hungarian, Russian, Ukrainian, Israeli, Indian and Taiwanese
regulators.
Subject to completion of CEL-SCI's global Phase III clinical trial and
FDA's review of CEL-SCI's entire data set on this investigational therapy, if
the FDA were to conclude that the safety and efficacy of this investigational
therapy is established, the early-phase clinical data is encouraging in
suggesting the potential that approximately 60-66% (2/3) of head and neck cancer
patients with advanced primary disease could be candidates for this
investigational therapy if it were to be approved by FDA.
The trial will test the hypothesis that Multikine treatment administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by
radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.
CEL-SCI has an agreement with Orient Europharma of Taiwan which provides
Orient Europharma with the exclusive marketing rights to Multikine for all
cancer indications in Taiwan, Singapore, Hong Kong, Malaysia, South Korea, the
Philippines, Australia and New Zealand. The agreement requires Orient Europharma
to fund the clinical trials needed to obtain marketing approvals in these
countries for head and neck cancer, naso-pharyngeal cancer and potentially
cervical cancer.
CEL-SCI has an agreement with Teva Pharmaceutical Industries, Ltd., which
provides Teva with the exclusive license to market and distribute Multikine in
Israel, Turkey, and in August 2011, added Serbia and Croatia. Pursuant to the
7
agreement, Teva will participate in CEL-SCI's upcoming Phase III clinical trial
and will fund a portion of the Phase III trial in Israel.
Effective March 6, 2009, CEL-SCI entered into a licensing agreement with
Byron Biopharma LLC ("Byron") under which CEL-SCI granted Byron an exclusive
license to market and distribute Multikine in the Republic of South Africa.
Pursuant to the agreement, Byron will be responsible for registering the
product in South Africa. Once Multikine has been approved for sale, CEL-SCI will
be responsible for manufacturing the product, while Byron will be responsible
for sales in South Africa. Revenues will be divided equally between CEL-SCI and
Byron.
In August 2011, CEL-SCI entered into an exclusive Sales, Marketing and
Distribution agreement with IDC-GP Pharm LLC ("IDC-GP Pharm") under which
CEL-SCI has granted IDC-GP Pharm an exclusive license to market and Multikine in
the countries of Argentina and Venezuela (the "Territory"). IDC-GP Pharm is a
joint venture between two groups of experienced pharmaceutical entrepreneurs
with expertise in the registration and commercialization of pharmaceutical
products in South America, among other regions. One of these two groups
represents former employees of a large pharmaceutical company, while the other
group is GP Pharm, headquartered in Barcelona, Spain, with operations in each
major country in Latin America either directly or through local partners.
Pursuant to the agreement, IDC-GP Pharm will be responsible for receiving
regulatory approval to use Multikine in the territory. Once Multikine has been
approved in any of the two countries, CEL-SCI will be responsible for
manufacturing the product, while IDC-GP Pharm will be responsible for sales in
the Territory. Revenues will be split 50/50 between CEL-SCI and IDC-GP Pharm
after payment to CEL-SCI for the manufacturing costs of Multikine. If IDC-GP
Pharma does not receive governmental permission to distribute Multikine in
Argentina or Venezuela by August 31, 2013, CEL-SCI has the right to cancel the
agreement.
Before starting the Phase III trial, CEL-SCI needed to build a dedicated
manufacturing facility to produce Multikine. This facility has been completed
and validated, and has produced several clinical lots for the Phase III clinical
trial. CEL-SCI estimates the total cost of the Phase III trial, with the
exception of the parts that will be paid by its licensees, Teva Pharmaceuticals
and Orient Europharma, to be approximately $32,000,000 of which approximately
$7,000,000 has been paid as of August 31, 2012. Out of the planned 48 sites, 36
sites have completed their site initiation visits and patients are being
screened/enrolled in multiple locations. It should be noted that this estimate
is only an estimate based on the information currently available in CEL-SCI's
contracts with the Clinical Research Organization responsible for managing the
Phase III trial. This number can be affected by the speed of enrollment, foreign
currency exchange rates and many other factors, some of which cannot be foreseen
today.
Manufacturing Facility
----------------------
CEL-SCI completed validation of its new manufacturing facility in January
2010. The state-of-the-art facility is being used to manufacture Multikine for
8
CEL-SCI's Phase III clinical trial. In addition to using this facility to
manufacture Multikine, CEL-SCI, only if the facility is not being used for
Multikine, may offer the use of the facility as a service to pharmaceutical
companies and others, particularly those that need to "fill and finish" their
drugs in a cold environment (4 degrees Celsius, or approximately 39 degrees
Fahrenheit). However, priority will always be given to Multikine. Fill and
finish is the process of filling injectable drugs in a sterile manner and is a
key part of the manufacturing process for many medicines.
The fastest area of growth in the biopharmaceutical and pharmaceutical
markets is biologics, and most recently stem cell products. These compounds and
therapies are derived from or mimic human cells or proteins and other molecules
(e.g., hormones, etc.). Nearly all of the major drugs developed for unmet
medical needs (e.g., Avastin(R), Erbitux(R), Rituxan(R), Herceptin(R),
Copaxon(R), etc.) are biologics. Biologics are usually very sensitive to heat
and quickly lose their biological activity if exposed to room or elevated
temperature. Room or elevated temperatures may also affect the shelf-life of a
biologic with the result that the product cannot be stored for as long as
desired. However, these products do not generally lose activity when kept at 4
degrees Celsius.
The FDA and other regulatory agencies require a drug developer to
demonstrate the safety, purity and potency of a drug being produced for use in
humans. When filling a product at 4 degrees Celsius, minimal to no biological
losses occur and therefore the potency of the drug is maintained throughout the
final critical step of the drug's manufacturing process. If the same temperature
sensitive drug is instead aseptically filled at room temperature, expensive and
time-consuming validation studies must be conducted, first, to be able to obtain
a complete understanding of the product's potency loss during the room
temperature fill process, and second, to create solutions to the drug's potency
losses, which require further testing and validation.
CEL-SCI's unique, cold aseptic filling suite can be operated at
temperatures between 2 degrees Celsius and room temperatures, and at various
humidity levels. CEL-SCI's aseptic filling suites are maintained at FDA and EU
ISO classifications of 5/6. CEL-SCI also has the capability to formulate,
inspect, label and package biologic products at cold temperatures.
CEL-SCI's lease on the manufacturing facility expires on October 31, 2028.
Since October 2008 CEL-SCI has been required to make monthly base rent payments
of $131,250. Beginning October 31, 2009, the annual base rent escalates each
year at 3%. CEL-SCI is also required to pay all real and personal property
taxes, insurance premiums, maintenance expenses, repair costs and utilities
associated with the facility, which were approximately $33,000 per month as of
the date of this prospectus.
In August 2011, CEL-SCI paid a deposit of $1,670,917 to the landlord since
CEL-SCI's cash balances did not meet the minimum amount required by the lease.
When CEL-SCI meets the minimum cash balance required by the lease, he deposit
will be returned to CEL-SCI.
The landlord has the right to declare CEL-SCI in default if CEL-SCI fails
to pay any installment of the base rent when such failure continues for a period
of five business days after CEL-SCI's receipt of written notice from the
landlord, provided that if CEL-SCI fails to pay any installment of the base rent
9
within five business days more than twice in any twelve-month period during the
lease, the landlord will not be required to provide CEL-SCI with any further
notice and CEL-SCI will be deemed to be in default. As of the date of this
prospectus, CEL-SCI was not in default on the lease.
LEAPS
-----
CEL-SCI's patented T-cell Modulation Process, referred to as LEAPS (Ligand
Epitope Antigen Presentation System), uses "heteroconjugates" to direct the body
to choose a specific immune response. LEAPS is designed to stimulate the human
immune system to more effectively fight bacterial, viral and parasitic
infections as well as autoimmune, allergies, transplantation rejection and
cancer, when it cannot do so on its own. Administered like a vaccine, LEAPS
combines T-cell binding ligands with small, disease associated, peptide antigens
and may provide a new method to treat and prevent certain diseases.
The ability to generate a specific immune response is important because
many diseases are often not combated effectively due to the body's selection of
the "inappropriate" immune response. The capability to specifically reprogram an
immune response may offer a more effective approach than existing vaccines and
drugs in attacking an underlying disease.
Using the LEAPS technology, CEL-SCI has created a potential peptide
treatment for H1N1 (swine flu) hospitalized patients. This LEAPS flu treatment
is designed to focus on the conserved, non-changing epitopes of the different
strains of Type A Influenza viruses (H1N1, H5N1, H3N1, etc.), including "swine",
"avian or bird", and "Spanish Influenza", in order to minimize the chance of
viral "escape by mutations" from immune recognition. Therefore one should think
of this treatment not really as an H1N1 treatment, but as a pandemic flu
treatment. CEL-SCI's LEAPS flu treatment contains epitopes known to be
associated with immune protection against influenza in animal models.
On September 16, 2009, the U.S. Food and Drug Administration advised
CEL-SCI that it could proceed with its first clinical trial to evaluate the
effect of LEAPS-H1N1 treatment on the white blood cells of hospitalized H1N1
patients. This followed an expedited initial review of CEL-SCI's regulatory
submission for this study proposal.
On November 6, 2009, CEL-SCI announced that The Johns Hopkins University
School of Medicine had given clearance for CEL-SCI's first clinical study to
proceed using LEAPS-H1N1. Soon after the start of the study, the number of
hospitalized H1N1 patients dramatically declined and the study has been unable
to complete the enrollment of patients.
This pandemic flu work is being pursued in collaboration with the National
Institute of Allergy and Infectious Diseases (NIAID), part of the National
Institutes of Health, USA. In May 2011 NIAID scientists presented data at the
Keystone Conference on "Pathogenesis of Influenza: Virus-Host Interactions" in
Hong Kong, China, showing the positive results of efficacy studies in mice of
L.E.A.P.S. H1N1 activated dendritic cells (DCs) to treat the H1N1 virus.
Scientists at the NIAID found that H1N1-infected mice treated with LEAPS-H1N1
DCs showed a survival advantage over mice treated with control DCs. The work was
performed in collaboration with scientists led by Kanta Subbarao, M.B.B.S.,
10
M.P.H, of the National Institute of Allergy and Infectious Diseases (NIAID),
part of the National Institutes of Health, USA.
With its LEAPS technology, CEL-SCI also developed a second peptide named
CEL-2000, a potential rheumatoid arthritis vaccine. The data from animal studies
of rheumatoid arthritis using the CEL-2000 treatment vaccine demonstrated that
CEL-2000 is an effective treatment against arthritis with fewer administrations
than those required by other anti-rheumatoid arthritis treatments, including
Enbrel(R). CEL-2000 is also potentially a more disease type-specific therapy, is
calculated to be significantly less expensive and may be useful in patients
unable to tolerate or who may not be responsive to existing anti-arthritis
therapies.
In February 2010 CEL-SCI announced that its CEL-2000 vaccine demonstrated
that it was able to block the progression of rheumatoid arthritis in a mouse
model. The results were published in the scientific peer-reviewed Journal of
International Immunopharmacology (online edition) in an article titled
"CEL-2000: A Therapeutic Vaccine for Rheumatoid Arthritis Arrests Disease
Development and Alters Serum Cytokine/Chemokine Patterns in the Bovine Collagen
Type II Induced Arthritis in the DBA Mouse Model" with lead author Dr. Daniel
Zimmerman. The study was co-authored by scientists from CEL-SCI, Washington
Biotech, Northeastern Ohio Universities Colleges of Medicine and Pharmacy and
Boulder BioPath.
None of the LEAPS investigational products have been approved for sale,
barter or exchange by the FDA or any other regulatory agency for any use to
treat disease in animals or humans. The safety or efficacy of these products has
not been established for any use. Lastly, no definitive conclusions can be drawn
from the early-phase, preclinical-trials data involving these investigational
products. Before obtaining marketing approval from the FDA in the United States,
and by comparable agencies in most foreign countries, these product candidates
must undergo rigorous preclinical and clinical testing which is costly and time
consuming and subject to unanticipated delays. There can be no assurance that
these approvals will be granted.
THE OFFERING
Securities Offered:
CEL-SCI may offer from time to time shares of common stock, preferred
stock, promissory notes, convertible notes, rights and warrants at an initial
offering price not to exceed $50,000,000, at prices and on terms to be
determined at or prior to the time of sale in light of market conditions at the
time of sale. CEL-SCI may not use this prospectus to complete sales of its
securities unless this prospectus is accompanied by a prospectus supplement. See
the "Plan of Distribution" section of this prospectus for additional information
concerning the manner in which CEL-SCI's securities may be offered.
Common Stock Outstanding: As of September __, 2012 CEL-SCI
had ______________ outstanding shares of common
stock. The number of outstanding shares does not
give effect to shares which may be issued upon the
exercise and/or conversion of options, warrants or
11
other convertible securities. See "Comparative Share
Data" for more information.
Risk Factors: The purchase of the securities offered by
this prospectus involves a high degree of risk. Risk
factors include the lack of revenues and history of
loss, need for additional capital and need for FDA
approval. See the "Risk Factors" section of this
prospectus for additional Risk Factors.
NYSE MKT Symbol: CVM
This prospectus contains various forward-looking statements that are based
on CEL-SCI's beliefs as well as assumptions made by and information currently
available to CEL-SCI. When used in this prospectus, the words "believe",
"expect", "anticipate", "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding seeking business opportunities, payment of operating expenses, and the
like, and are subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from projections or estimates.
Factors which could cause actual results to differ materially are discussed at
length under the heading "Risk Factors". Should one or more of the enumerated
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
FORWARD LOOKING STATEMENTS
This prospectus contains various forward-looking statements that are based
on CEL-SCI's beliefs as well as assumptions made by and information currently
available to CEL-SCI. When used in this prospectus, the words "believe",
"expect", "anticipate", "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding seeking business opportunities, payment of operating expenses, and the
like, and are subject to certain risks, uncertainties and assumptions which
could cause actual results to differ materially from projections or estimates.
Factors which could cause actual results to differ materially are discussed at
length under the heading "Risk Factors". Should one or more of the enumerated
risks or uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those anticipated, estimated
or projected. Investors should not place undue reliance on forward-looking
statements, all of which speak only as of the date made.
RISK FACTORS
Investors should be aware that this offering involves the risks described
below, which could adversely affect the price of CEL-SCI's common stock. In
addition to the other information contained in this prospectus, the following
factors should be considered carefully in evaluating an investment in the
securities offered by this prospectus.
12
Risks Related to CEL-SCI
------------------------
Since CEL-SCI has earned only limited revenues and has a history of losses,
CEL-SCI will require additional capital to remain in operation, complete its
clinical trials and fund pre-marketing expenses.
CEL-SCI has had only limited revenues since it was formed in 1983. Since
the date of its formation and through June 30, 2012, CEL-SCI incurred net losses
of approximately $(200,423,000). CEL-SCI has relied principally upon the
proceeds of public and private sales of its securities to finance its activities
to date.
If CEL-SCI cannot obtain additional capital, CEL-SCI may have to postpone
development and research expenditures, which will delay CEL-SCI's ability to
produce a competitive product. Delays of this nature may depress the price of
CEL-SCI's common stock. In addition, although CEL-SCI is not aware of a direct
competitor for Multikine, it is possible that one exists. There are many
potential competitors of LEAPS. If competitors develop, any delay in the
development of CEL-SCI's products may provide opportunities to those
competitors.
The condition of the overall economy may continue to affect both the
availability of capital and CEL-SCI's stock price. In addition, future capital
raises, which will be necessary for CEL-SCI's survival, will be further dilutive
to current shareholders. There can be no assurance that CEL-SCI will be able to
raise the capital it will need.
All of CEL-SCI's potential products, with the exception of Multikine, are in the
early stages of development, and any commercial sale of these products will be
many years away.
Even potential product sales from Multikine are years away, since cancer
trials can be lengthy. Accordingly, CEL-SCI expects to incur substantial losses
for the foreseeable future.
Since CEL-SCI does not intend to pay dividends on its common stock, any
potential return to investors will result only from any increases in the price
of CEL-SCI's common stock.
At the present time, CEL-SCI intends to use available funds to finance its
operations. Accordingly, while payment of dividends rests within the discretion
of CEL-SCI's Directors, no common stock dividends have been declared or paid by
CEL-SCI and CEL-SCI has no intention of paying any common stock dividends in the
foreseeable future. Any gains for CEL-SCI's investors will most likely result
from increases in the price of CEL-SCI's common stock, which has been volatile
in the recent past. If CEL-SCI's stock price does not increase, which likely
will depend primarily upon the results of the Multikine clinical trials, an
investor is unlikely to receive any return on an investment in CEL-SCI's common
stock.
The costs of CEL-SCI's product development and clinical trials are difficult to
estimate and will be very high for many years, preventing CEL-SCI from making a
profit for the foreseeable future, if ever.
13
Clinical and other studies necessary to obtain approval of a new drug can
be time consuming and costly, especially in the United States, but also in
foreign countries. CEL-SCI's estimates of the costs associated with future
clinical trials and research may be substantially lower than what CEL-SCI
actually experiences. It is impossible to predict what CEL-SCI will face in the
development of a product, such as LEAPS. The purpose of clinical trials is to
provide both CEL-SCI and regulatory authorities with safety and efficacy data in
humans. It is relatively common to revise a trial or add subjects to a trial in
progress. These examples of common vagaries in product development and clinical
investigations demonstrate how predicted costs may exceed reasonable
expectations. The different and often complex steps necessary to obtain
regulatory approval, especially that of the United States Food and Drug
Administration ("FDA") and the European Union's European Medicine's Agency
("EMA"), involve significant costs and may require several years to complete.
CEL-SCI expects that it will need substantial additional financing over an
extended period of time in order to fund the costs of future clinical trials,
related research, and general and administrative expenses.
The extent of CEL-SCI's clinical trials and research programs are primarily
based upon the amount of capital available to CEL-SCI and the extent to which it
receives regulatory approvals for clinical trials. CEL-SCI has established
estimates of the future costs of the Phase III clinical trial for Multikine,
but, as explained above, that estimate may not prove correct.
Compliance with changing regulations concerning corporate governance and public
disclosure may result in additional expenses.
Changing laws, regulations and standards relating to corporate governance
and public disclosure may create uncertainty regarding compliance matters. New
or changed laws, regulations and standards are subject to varying
interpretations in many cases. As a result, their application in practice may
evolve over time. CEL-SCI is committed to maintaining high standards of
corporate governance and public disclosure. Complying with evolving
interpretations of new or changing legal requirements may cause CEL-SCI to incur
higher costs as it revises current practices, policies and procedures, and may
divert management time and attention from potential revenue-generating
activities to compliance matters. If CEL-SCI's efforts to comply with new or
changed laws, regulations and standards differ from the activities intended by
regulatory or governing bodies due to ambiguities related to practice, CEL-SCI's
reputation may also be harmed. Further, CEL-SCI's board members, chief executive
officer and president could face an increased risk of personal liability in
connection with the performance of their duties. As a result, CEL-SCI may have
difficulty attracting and retaining qualified board members and executive
officers, which could harm its business.
CEL-SCI has not established a definite plan for the marketing of Multikine.
CEL-SCI has not established a definitive plan for marketing nor has it
established a price structure for any of its products. However, CEL-SCI intends,
if it is in a position to do so, to sell Multikine itself in certain markets and
to enter into written marketing agreements with various major pharmaceutical
firms with established sales forces. The sales forces in turn would, CEL-SCI
believes, target CEL-SCI's products to cancer centers, physicians and clinics
involved in head and neck cancer. CEL-SCI has already licensed Multikine to four
14
companies, Teva Pharmaceuticals in Israel, Turkey, Serbia and Croatia, Orient
Europharma in Taiwan, Singapore, Hong Kong, Malaysia, South Korea, the
Philippines, Australia and New Zealand, Byron BioPharma, LLC in South Africa,
and IDC-GP Pharm in Argentina and Venezuela. CEL-SCI believes that these
companies have the resources to market Multikine appropriately in their
respective territories, but there is no guarantee that they will. There is no
assurance that CEL-SCI will find qualified parties willing to market CEL-SCI's
product in other areas.
CEL-SCI may encounter problems, delays and additional expenses in
developing marketing plans with outside firms. In addition, even if Multikine is
cost effective and proven to increase overall survival, CEL-SCI may experience
other limitations involving the proposed sale of Multikine, such as uncertainty
of third-party reimbursement. There is no assurance that CEL-SCI can
successfully market any products which it may develop.
CEL-SCI hopes to expand its clinical development capabilities in the future, and
any difficulties hiring or retaining key personnel or managing this growth could
disrupt CEL-SCI's operations.
CEL-SCI is highly dependent on the principal members of CEL-SCI's
management and development staff. If the Multikine clinical trial is successful,
CEL-SCI expects to expand its clinical development and manufacturing
capabilities, which will involve hiring additional employees. Future growth will
require CEL-SCI to continue to implement and improve CEL-SCI's managerial,
operational and financial systems and to continue to retain, recruit and train
additional qualified personnel, which may impose a strain on CEL-SCI's
administrative and operational infrastructure. The competition for qualified
personnel in the biopharmaceutical field is intense. CEL-SCI is highly dependent
on its ability to attract, retain and motivate highly qualified management and
specialized personnel required for clinical development. Due to CEL-SCI's
limited resources, CEL-SCI may not be able to manage effectively the expansion
of its operations or recruit and train additional qualified personnel. If
CEL-SCI is unable to retain key personnel or manage its growth effectively,
CEL-SCI may not be able to implement its business plan.
Multikine is made from components of human blood, which involves inherent risks
that may lead to product destruction or patient injury.
Multikine is made, in part, from components of human blood. There are
inherent risks associated with products that involve human blood such as
possible contamination with viruses, including Hepatitis or HIV. Any possible
contamination could require CEL-SCI to destroy batches of Multikine or cause
injuries to patients who receive the product, thereby subjecting CEL-SCI to
possible financial losses, lawsuits, and harm to its business.
Although CEL-SCI has product liability insurance for Multikine, the
successful prosecution of a product liability case against CEL-SCI could have a
materially adverse effect upon its business if the amount of any judgment
exceeds CEL-SCI's insurance coverage. Such a suit also could damage the
reputation of Multikine and make successful marketing of the product less
likely. CEL-SCI commenced the Phase III clinical trial for Multikine in December
15
2010. Although no claims have been brought to date, participants in CEL-SCI's
clinical trials could bring civil actions against CEL-SCI for any unanticipated
harmful effects arising from the use of Multikine or any drug or product that
CEL-SCI may attempt to develop.
CEL-SCI's directors are allowed to issue shares of preferred stock and warrants
with provisions that could be detrimental to the holders of CEL-SCI's common
stock.
The provisions in CEL-SCI's Articles of Incorporation relating to CEL-SCI's
preferred stock allow CEL-SCI's directors to issue preferred stock with rights
to multiple votes per share and dividend rights which would have priority over
any dividends paid with respect to CEL-SCI's common stock. The issuance of
preferred stock with such rights may make more difficult the removal of
management even if such removal would be considered beneficial to shareholders
generally, and will have the effect of limiting shareholder participation in
certain transactions such as mergers or tender offers if such transactions are
not favored by incumbent management. In addition, CEL-SCI has issued warrants in
the past and may do so in the future. These warrants, providing a future right
to purchase shares of CEL-SCI's common stock at the established price, may
further dilute the ownership of current shareholders.
CEL-SCI's Independent Registered Public Accountants have included in their
report on CEL-SCI's financial statements a paragraph stating that CEL-SCI may be
unable to continue as a going concern.
As a result of recurring losses from operations, CEL-SCI's independent
registered public accounting firm, BDO USA, LLP, has issued a report in
connection with their audit of CEL-SCI's consolidated financial statements for
the year ended September 30, 2011, that included an explanatory paragraph
referring to CEL-SCI's recurring losses from operations and expressing
substantial doubt in CEL-SCI's ability to continue as a going concern without
additional capital becoming available. The doubt about CEL-SCI's ability to
continue as a going concern could have an adverse impact on its ability to
execute its business plan, result in the reluctance on the part of certain
suppliers to do business with CEL-SCI, or adversely affect CEL-SCI's ability to
raise additional debt or equity capital.
Risks Related to Government Approvals
-------------------------------------
CEL-SCI's product candidates must undergo rigorous preclinical and clinical
testing and regulatory approvals, which could be costly and time-consuming and
subject CEL-SCI to unanticipated delays or prevent CEL-SCI from marketing any
products.
Therapeutic agents, drugs and diagnostic products are subject to approval,
prior to general marketing, from the FDA in the United States, the EMA in the
European Union, and by comparable agencies in most foreign countries. Before
obtaining marketing approval, these product candidates must undergo costly and
time consuming preclinical and clinical testing which could subject CEL-SCI to
unanticipated delays and may prevent CEL-SCI from marketing its product
candidates. There can be no assurance that such approvals will be granted.
16
CEL-SCI cannot be certain when or under what conditions it will undertake
clinical trials. A variety of issues may delay or prevent CEL-SCI's Phase III
clinical trial for Multikine or preclinical and early clinical trials for other
products. For example, early trials, or the plans for later trials, may not
satisfy the requirements of regulatory authorities, such as the FDA. CEL-SCI may
fail to find subjects willing to enroll in CEL-SCI's trials. CEL-SCI
manufactures Multikine, but relies on third party vendors for managing the trial
process and other activities, and these vendors may fail to meet appropriate
standards. Accordingly, the clinical trials relating to CEL-SCI's product
candidates may not be completed on schedule, the FDA or foreign regulatory
agencies may order CEL-SCI to stop or modify its research, or these agencies may
not ultimately approve any of CEL-SCI's product candidates for commercial sale.
Varying interpretations of the data obtained from pre-clinical and clinical
testing could delay, limit or prevent regulatory approval of CEL-SCI's product
candidates. The data collected from CEL-SCI's clinical trials may not be
sufficient to support regulatory approval of its various product candidates,
including Multikine. CEL-SCI's failure to adequately demonstrate the safety and
efficacy of any of its product candidates would delay or prevent regulatory
approval of its product candidates in the United States, which could prevent
CEL-SCI from achieving profitability. Although CEL-SCI had positive results in
its Phase II trials for Multikine, those results were for a very small sample
set, and CEL-SCI will not know definitively how Multikine will perform until
CEL-SCI is well into, or completes, its Phase III clinical trial.
The requirements governing the conduct of clinical trials, manufacturing,
and marketing of CEL-SCI's product candidates, including Multikine, outside the
United States vary from country to country. Foreign approvals may take longer to
obtain than FDA approvals and can require, among other things, additional
testing and different trial designs. Foreign regulatory approval processes
include all of the risks associated with the FDA approval process. Some of those
agencies also must approve prices for products approved for marketing. Approval
of a product by the FDA or the EMA does not ensure approval of the same product
by the health authorities of other countries. In addition, changes in regulatory
requirements for product approval in any country during the clinical trial
process and regulatory agency review of each submitted new application may cause
delays or rejections.
CEL-SCI has only limited experience in filing and pursuing applications
necessary to gain regulatory approvals. CEL-SCI's lack of experience may impede
its ability to obtain timely approvals from regulatory agencies, if at all.
CEL-SCI will not be able to commercialize Multikine and other product candidates
until it has obtained regulatory approval. In addition, regulatory authorities
may also limit the types of patients to which CEL-SCI or others may market
Multikine or CEL-SCI's other products. Any failure to obtain or any delay in
obtaining required regulatory approvals may adversely affect the ability of
CEL-SCI or potential licensees to successfully market CEL-SCI's products.
Even if CEL-SCI obtains regulatory approval for its product candidates, CEL-SCI
will be subject to stringent, ongoing government regulation.
If CEL-SCI's products receive regulatory approval, either in the United
States or internationally, CEL-SCI will continue to be subject to extensive
regulatory requirements. These regulations are wide-ranging and govern, among
other things:
17
o product design, development and manufacture;
o product application and use
o adverse drug experience;
o product advertising and promotion;
o product manufacturing, including good manufacturing practices
o record keeping requirements;
o registration and listing of CEL-SCI's establishments and products with
the FDA, EMA and other state and national agencies;
o product storage and shipping;
o drug sampling and distribution requirements;
o electronic record and signature requirements; and
o labeling changes or modifications.
CEL-SCI and any third-party manufacturers or suppliers must continually
adhere to federal regulations setting forth requirements, known as current Good
Manufacturing Practices, or cGMPs, and their foreign equivalents, which are
enforced by the FDA, the EMA and other national regulatory bodies through their
facilities inspection programs. If CEL-SCI's facilities, or the facilities of
CEL-SCI's contract manufacturers or suppliers, cannot pass a pre-approval plant
inspection, the FDA, EMA, or other national regulators will not approve the
marketing applications of CEL-SCI's product candidates. In complying with cGMP
and foreign regulatory requirements, CEL-SCI and any of its potential
third-party manufacturers or suppliers will be obligated to expend time, money
and effort in production, record-keeping and quality control to ensure that
CEL-SCI's products meet applicable specifications and other requirements.
If CEL-SCI does not comply with regulatory requirements at any stage,
whether before or after marketing approval is obtained, CEL-SCI may be subject
to license suspension or revocation, criminal prosecution, seizure, injunction,
fines, be forced to remove a product from the market or experience other adverse
consequences, including restrictions or delays in obtaining regulatory marketing
approval for such products or for other products for which it seeks approval.
This could materially harm CEL-SCI's financial results, reputation and stock
price. Additionally, CEL-SCI may not be able to obtain the labeling claims
necessary or desirable for product promotion. CEL-SCI may also be required to
undertake post-marketing trials, which will be evaluated by applicable
authorities to determine if CEL-SCI's products may remain on the market. If
CEL-SCI or other parties identify adverse effects after any of CEL-SCI's
products are on the market, or if manufacturing problems occur, regulatory
approval may be suspended or withdrawn. CEL-SCI may be required to reformulate
its products, conduct additional clinical trials, make changes in product
labeling or indications of use, or submit additional marketing applications to
support any changes. If CEL-SCI encounters any of the foregoing problems, its
business and results of operations will be harmed and the market price of its
common stock may decline.
18
Also, CEL-SCI cannot predict the extent of adverse government regulations
which might arise from future legislative or administrative action. Without
government approval, CEL-SCI will be unable to sell any of its products.
Foreign governments often impose strict price controls, which may adversely
affect CEL-SCI's future profitability.
CEL-SCI intends to seek approval to market Multikine in both the United
States and foreign jurisdictions. If CEL-SCI obtains approval in one or more
foreign jurisdictions, CEL-SCI will be subject to rules and regulations in those
jurisdictions relating to Multikine. In some foreign countries, particularly in
the European Union, prescription drug pricing is subject to governmental
control. In these countries, pricing negotiations with governmental authorities
can take considerable time after the receipt of marketing approval for a drug
candidate. To obtain reimbursement or pricing approval in some countries,
CEL-SCI may be required to conduct a clinical trial that compares the
cost-effectiveness of Multikine to other available therapies. If reimbursement
of Multikine is unavailable or limited in scope or amount, or if pricing is set
at unsatisfactory levels, CEL-SCI may be unable to achieve or sustain
profitability.
Risks Related to Intellectual Property
--------------------------------------
CEL-SCI may not be able to achieve or maintain a competitive position, and other
technological developments may result in CEL-SCI's proprietary technologies
becoming uneconomical or obsolete.
CEL-SCI is involved in a biomedical field that is undergoing rapid and
significant technological change. The pace of change continues to accelerate.
The successful development of products from CEL-SCI's compounds, compositions
and processes through CEL-SCI-financed research, or as a result of possible
licensing arrangements with pharmaceutical or other companies, is not assured.
Many companies are working on drugs designed to cure or treat cancer or
cure and treat viruses, such as H1N1. Many of these companies have financial,
research and development, and marketing resources, which are much greater than
CEL-SCI's, and are capable of providing significant long-term competition either
by establishing in-house research groups or by forming collaborative ventures
with other entities. In addition, smaller companies and non-profit institutions
are active in research relating to cancer and infectious diseases. CEL-SCI's
market share will be reduced or eliminated if CEL-SCI's competitors develop and
obtain approval for products that are safer or more effective than CEL-SCI's
products.
CEL-SCI's patents might not protect CEL-SCI's technology from competitors, in
which case CEL-SCI may not have any advantage over competitors in selling any
products which it may develop.
Certain aspects of CEL-SCI's technologies are covered by U.S. and foreign
patents. In addition, CEL-SCI has a number of new patent applications pending.
19
There is no assurance that the applications still pending or which may be filed
in the future will result in the issuance of any patents. Furthermore, there is
no assurance as to the breadth and degree of protection any issued patents might
afford CEL-SCI. Disputes may arise between CEL-SCI and others as to the scope
and validity of these or other patents. Any defense of the patents could prove
costly and time consuming and there can be no assurance that CEL-SCI will be in
a position, or will deem it advisable, to carry on such a defense. A suit for
patent infringement could result in increasing costs, delaying or halting
development, or even forcing CEL-SCI to abandon a product. Other private and
public concerns, including universities, may have filed applications for, may
have been issued, or may obtain additional patents and other proprietary rights
to technology potentially useful or necessary to CEL-SCI. CEL-SCI currently is
not aware of any such patents, but the scope and validity of such patents, if
any, and the cost and availability of such rights are impossible to predict.
Also, as far as CEL-SCI relies upon unpatented proprietary technology, there is
no assurance that others may not acquire or independently develop the same or
similar technology.
Much of CEL-SCI's intellectual property is protected as a trade secret, not as a
patent.
Much of CEL-SCI's intellectual property pertains to its manufacturing
system, certain aspects of which may not be suitable for patent filing and must
be protected as a trade secret. Those trade secrets must be protected diligently
by CEL-SCI to protect their disclosure to competitors, since legal protections
after disclosure may be minimal or non-existent. Accordingly, much of CEL-SCI's
value is dependent upon its ability to keep its trade secrets confidential.
Although CEL-SCI takes measures to ensure confidentiality, CEL-SCI may fail in
that attempt. In addition, in some cases a regulator considering CEL-SCI's
application for product approval may require the disclosure of some or all of
CEL-SCI's proprietary information. In such a case, CEL-SCI must decide whether
to disclose the information or forego approval in a particular country. If
CEL-SCI is unable to market its products in key countries, CEL-SCI's
opportunities and value may suffer.
Risks Related to CEL-SCI's Common Stock
---------------------------------------
Since the market price for CEL-SCI's common stock is volatile, investors may not
be able to sell any of CEL-SCI's shares at a profit.
The market price of CEL-SCI's common stock, as well as the securities of
other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. During the twelve months ended August 31, 2012, CEL-SCI's
stock price has ranged from a low of $0.27 per share to a high of $0.65 per
share. Factors such as fluctuations in CEL-SCI's operating results,
announcements of technological innovations or new therapeutic products by
CEL-SCI or its competitors, governmental regulation, developments in patent or
other proprietary rights, public concern as to the safety of products developed
by CEL-SCI or other biotechnology and pharmaceutical companies, publications by
market analysts, law suits, and general market conditions may have a significant
effect on the future market price of CEL-SCI's common stock.
20
Future sales of CEL-SCI's securities may dilute the value of current investors'
holdings.
In order to raise additional capital, CEL-SCI may need to sell shares of
its common stock, or securities convertible into common stock, at prices that
may be below the prevailing market price of CEL-SCI's common stock at the time
of sale. Since CEL-SCI's stock price has been volatile, even a sale at market
price one week may represent a substantial "discount" over the prior week's
price. Future sales of CEL-SCI's securities will dilute CEL-SCI's current
stockholders and investors and may have a negative effect on the market price of
its common stock.
Shares issuable upon the conversion of notes or upon the exercise of outstanding
warrants and options may substantially increase the number of shares available
for sale in the public market and may depress the price of CEL-SCI's common
stock.
CEL-SCI has outstanding convertible notes and debt, as well as options and
warrants, which as of the date of this prospectus, could potentially allow the
holders to acquire a substantial number of shares of CEL-SCI's common stock.
Until the convertible notes and debt are repaid, and the options and warrants
expire, the holders will have an opportunity to profit from any increase in the
market price of CEL-SCI's common stock without assuming the risks of ownership.
Holders of options and warrants may exercise these securities at a time when
CEL-SCI could obtain additional capital on terms more favorable than those
provided by the options or warrants. The conversion of the notes or debt or the
exercise of the options and warrants will dilute the voting interest of the
current owners of outstanding shares by adding a substantial number of
additional shares of common stock.
Substantially all of the shares of common stock that are issuable upon the
conversions of the notes or debt, of the exercise of outstanding options and
warrants, may be sold in the public market. The sale of common stock described
above, or the perception that such sales could occur, may adversely affect the
market price of CEL-SCI's common stock.
Any decline in the price of CEL-SCI's common stock may encourage short
sales, which could place further downward pressure on the price of CEL-SCI's
common stock. Short selling is a practice of selling shares which are not owned
by a seller at that time, with the expectation that the market price of the
shares will decline in value after the sale, providing the short seller a
profit.
COMPARATIVE SHARE DATA
Number of Shares
----------------
Shares outstanding as of August 31, 2012 273,002,429
The number of shares outstanding as of August 31, 2012 excludes shares
which may be issued upon the exercise of the options or warrants described
below.
21
Other Shares Which May Be Issued:
---------------------------------
Number of Note
Shares Reference
--------- ---------
Shares issuable upon exercise of Series L and M
warrants 7,250,000 A
Shares issuable upon the exercise of
Series N warrants 5,187,709 B
Shares issuable upon the exercise of warrants
held by private investors 8,776,875 C
Shares issuable upon exercise of options granted
to CEL-SCI's officers, directors, employees,
consultants, and third parties 37,472,088 D
Shares issuable upon exercise of Series A
warrants 1,303,472 E
Shares issuable upon conversion of loan payable
to officer and director 2,760,142 F
Shares issuable upon exercise of warrants held
by officer and director 3,497,539 F
Shares issuable upon exercise of Series B warrants 500,000 G
Shares issuable upon exercise of Series C
warrants 4,634,886 H
Shares issuable upon exercise of Series E
warrants 714,286 I
Shares issuable upon exercise of Series F
warrants 12,000,000 J
Shares issuable upon exercise of Series G
warrants 666,667 J
Shares issuable upon exercise of Series H
warrants 12,000,000 K
Shares issuable upon exercise of Series P
warrants 5,900,000 L
Shares issuable upon exercise of Series Q
warrants 12,000,000 M
A. The Series L warrants allow the holders to purchase up to:
o 250,000 shares of CEL-SCI's common stock at a price of $0.75 per share
at any time on or before April 17, 2014
22
o 1,000,000 shares of CEL-SCI's common stock at a price of $0.34 per
share at any time on or before April 17, 2013.
The Series M warrants allow the holders to purchase up to 6,000,000 shares
of CEL-SCI's common stock at a price of $0.34 per shares. The Series M warrants
expire on July 31, 2014.
B. On August 18, 2008, CEL-SCI sold 1,383,389 shares of common stock and
2,075,084 warrants in a private financing for $1,037,500. In June 2009, an
additional 1,166,667 shares and 1,815,698 warrants were issued to the investors.
In October 2011, an additional 833,334 shares and 1,296,927 warrants were issued
to the investors. Each warrant entitles the holder to purchase one share of
CEL-SCI's common stock at a price of $0.30 per share at any time prior to August
18, 2014.
C. Between May 30, 2003 and July 8, 2009, CEL-SCI sold shares of its common
stock in private transactions. In some cases warrants were issued as part of the
financings. The names of the warrant holders and the terms of the warrants are
shown below:
Shares Issuable
Issue Upon Exercise Exercise Expiration
Warrant Holder Date of Warrants Price Date
-------------- ---- ----------- ----- ----
Eastern Biotech 5/30/03 400,000 $ 0.47 5/30/13
Cher Ami Holdings 7/18/05 375,000 $ 0.65 7/18/14
Cher Ami Holdings 2/9/06 150,000 $ 0.56 2/09/14
Eastern Biotech 4/17/06 800,000 $ 1.25 6/30/13
Cher Ami Holdings 5/18/06 800,000 $ 0.82 5/17/14
VIF II CEL-SCI Partners,
LLC 1/26/09 3,787,500 $ 0.75 1/26/14
VIF II CEL-SCI Partners,
LLC 3/31/09 - 3/31/14-
6/30/09 2,296,875 $ 0.75 6/30/14
Christian Schleuning 7/8/09 167,500 $ 0.50 1/8/15
----------
8,776,875
==========
The shares of common stock issuable upon the exercise of these warrants
were registered by means of a separate registration statement.
D. The options are exercisable at prices ranging from $0.16 to $1.94 per share.
CEL-SCI may also grant options to purchase additional shares under its Incentive
Stock Option and Non-Qualified Stock Option Plans.
23
E. Between June 23 and July 1, 2009, CEL-SCI sold 15,099,346 shares of its
common stock at a price of $0.40 per share. The investors in this offering also
received 10,116,560 Series A warrants. Each Series A warrant entitles the holder
to purchase one share of CEL-SCI's common stock. The Series A warrants may be
exercised at any time on or after December 24, 2009 and on or prior to December
24, 2014 at a price of $0.50 per share. As of August 31, 2012, 8,813,088 Series
A warrants had been exercised.
F. Between December 2008 and June 2009, Maximilian de Clara, CEL-SCI's President
and a director, loaned CEL-SCI $1,104,057. The loan was initially payable at the
end of March, 2009, but was extended to the end of June, 2009. At the time the
loan was due, and in accordance with the loan agreement, CEL-SCI issued Mr. de
Clara a warrant which entitles Mr. de Clara to purchase 1,648,244 shares of
CEL-SCI's common stock at a price of $0.40 per share. The warrant is exercisable
at any time prior to December 24, 2014. Although the loan was to be repaid from
the proceeds of CEL-SCI's financing, CEL-SCI's Directors deemed it beneficial
not to repay the loan and negotiated a second extension of the loan with Mr. de
Clara on terms similar to the June 2009 financing. Pursuant to the terms of the
second extension the note is now due on July 6, 2014, but, at Mr. de Clara's
option, the loan can be converted into shares of CEL-SCI's common stock. The
number of shares which will be issued upon any conversion will be determined by
dividing the amount to be converted by $0.40. As further consideration for the
second extension, Mr. de Clara received warrants which allow Mr. de Clara to
purchase 1,849,295 shares of CEL-SCI's common stock at a price of $0.50 per
share at any time prior to January 6, 2015. On May 13, 2011, to recognize Mr. de
Clara's willingness to agree to subordinate his note to the convertible
preferred shares and convertible debt as part of the settlement agreement,
CEL-SCI extended the maturity date of the note to July 6, 2015. The loan from
Mr. de Clara bears interest at 15% per year and is secured by a lien on
substantially all of CEL-SCI's assets. CEL-SCI does not have the right to prepay
the loan without Mr. de Clara's consent. As of August 31, 2012, none of the
warrants issued to Mr. De Clara had been exercised.
G. On August 31, 2009, CEL-SCI borrowed $2,000,000 from two institutional
investors. The loans are evidenced by CEL-SCI's Series B promissory notes which
were repaid in September 2009. The Series B note holders also received Series B
warrants which allow the holders to purchase up to 500,000 shares of CEL-SCI's
common stock at a price of $0.68 per share. The Series B warrants may be
exercised at any time prior to September 4, 2014. As of August 31, 2012, none of
the Series B Warrants had been exercised.
H. On August 20, 2009, CEL-SCI sold 10,784,435 shares of its common stock to a
group of private investors for $4,852,995 or $0.45 per share. The investors also
received Series C warrants which entitle the investors to purchase 5,392,217
shares of CEL-SCI's common stock. The Series C warrants may be exercised at any
time prior to February 20, 2015 at a price of $0.55 per share. As of August 31,
2012, 757,331 Series C warrants had been exercised.
I. On September 21, 2009, CEL-SCI sold 14,285,715 shares of its common stock to
a group of private investors for $20,000,000 or $1.40 per share. The investors
also received Series D warrants which entitle the investors to purchase up to
4,714,284 shares of CEL-SCI's common stock. The Series D warrants may be
24
exercised at any time prior to September 21, 2011 at a price of $1.50 per share.
On September 21, 2011, all Series D warrants expired.
CEL-SCI paid Rodman & Renshaw, LLC, the placement agent for the offering, a
cash commission of $1,000,000, as well as an expense reimbursement of $37,500.
CEL-SCI also issued Rodman & Renshaw 714,286 Series E warrants. Each Series E
warrant entitles the holder to purchase one share of CEL-SCI's common stock. The
Series E warrants may be exercised at any time prior to August 12, 2014 at a
price of $1.75 per share. As of August 31, 2012, none of the Series E warrants
had been exercised.
J. On October 3, 2011 CEL-SCI sold 13,333,334 shares of its common stock to a
group of private investors for $4,000,000 or $0.30 per share. The investors also
received Series F warrants which entitle the investors to purchase up to
12,000,000 shares of CEL-SCI's common stock. The Series F warrants may be
exercised at any time prior to October 6, 2014 at a price of $0.40 per share.
CEL-SCI paid Chardan Capital Markets, LLC, the placement agent for this
offering, a cash commission of $140,000, and issued 666,667 Series G warrants to
Chardan. Each Series G warrant entitles the holder to purchase one share of
CEL-SCI's common stock. The Series G warrants may be exercised at any time prior
to August 12, 2014 at a price of $0.40 per share.
As of August 31, 2012, none of the Series F or G warrants had been
exercised.
K. On January 25, 2012, CEL-SCI sold 16,000,000 shares of its common stock to
institutional investors for $5,760,000 or $0.36 per share. The investors also
received Series H warrants which entitle the investors to purchase up to
12,000,000 shares of CEL-SCI's common stock. The Series H warrants may be
exercised at any time prior to August 1, 2015 at a price of $0.50 per share.
L. On February 10, 2012, CEL-SCI issued 5,900,000 Series P warrants to the
former holder of the Series O warrants as an inducement for the early exercise
of the Series O warrants. The Series P warrants allow the holder to purchase up
to 5,900,000 shares of CEL-SCI's common stock at a price of $0.45 per share. The
Series P warrants are exercisable at any time prior to March 7, 2017.
M. On June 21, 2012, CEL-SCI sold 16,000,000 shares of its common stock, at a
price of $0.35 per share, in a registered direct offering to institutional
investors, representing gross proceeds of $5,600,000. Investors also received
Series Q warrants to purchase up to 12,000,000 shares of CEL-SCI's common stock
at a price of $0.50 per share at any time on or after December 22, 2012 and
prior to December 22, 2015.
MARKET FOR CEL-SCI'S COMMON STOCK
As of August 31, 2012 there were approximately 1,100 record holders of
CEL-SCI's common stock. CEL-SCI's common stock is traded on the NYSE MKT under
the symbol "CVM". Set forth below are the range of high and low quotations for
CEL-SCI's common stock for the periods indicated as reported on the NYSE MKT.
25
The market quotations reflect inter-dealer prices, without retail mark-up,
mark-down or commissions and may not necessarily represent actual transactions.
Quarter Ending High Low
-------------- ---- ---
12/31/09 $1.79 $0.85
3/31/10 $1.12 $0.50
6/30/10 $0.76 $0.45
9/30/10 $0.84 $0.43
12/31/10 $1.05 $0.60
3/31/11 $0.86 $0.51
6/30/11 $0.74 $0.46
9/30/11 $0.57 $0.35
12/31/11 $0.42 $0.27
3/31/12 $0.65 $0.28
6/30/12 $0.58 $0.34
Holders of common stock are entitled to receive dividends as may be
declared by the Board of Directors out of legally available funds and, in the
event of liquidation, to share pro rata in any distribution of CEL-SCI's assets
after payment of liabilities. The Board of Directors is not obligated to declare
a dividend. CEL-SCI has not paid any dividends on its common stock and CEL-SCI
does not have any current plans to pay any common stock dividends.
The provisions in CEL-SCI's Articles of Incorporation relating to CEL-SCI's
preferred stock would allow CEL-SCI's directors to issue preferred stock with
rights to multiple votes per share and dividend rights which would have priority
over any dividends paid with respect to CEL-SCI's Common Stock. The issuance of
preferred stock with such rights may make more difficult the removal of
management even if such removal would be considered beneficial to shareholders
generally, and will have the effect of limiting shareholder participation in
certain transactions such as mergers or tender offers if such transactions are
not favored by incumbent management.
The market price of CEL-SCI's common stock, as well as the securities of
other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
price and volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in CEL-SCI's operating
results, announcements of technological innovations or new therapeutic products
by CEL-SCI or its competitors, governmental regulation, developments in patent
or other proprietary rights, public concern as to the safety of products
developed by CEL-SCI or other biotechnology and pharmaceutical companies, and
general market conditions may have a significant effect on the market price of
CEL-SCI's common stock.
26
PLAN OF DISTRIBUTION
CEL-SCI may sell shares of its common stock, preferred stock, convertible
preferred stock, promissory notes, convertible notes, rights, or warrants in
and/or outside the United States: (i) through underwriters or dealers; (ii)
directly to a limited number of purchasers or to a single purchaser; or (iii)
through agents. The applicable prospectus supplement with respect to the offered
securities will set forth the name or names of any underwriters or agents, if
any, the purchase price of the offered securities and the proceeds to CEL-SCI
from such sale, any delayed delivery arrangements, any underwriting discounts
and other items constituting underwriters' compensation, any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers and any compensation paid to a placement agent. Any initial public
offering price and any discounts or concessions allowed or reallowed or paid to
dealers may be changed from time to time.
Notwithstanding the above, the maximum commission or discount to be
received by any NASD member or independent broker-dealer will not be greater
than 10% in connection with the sale of any securities offered by means of this
prospectus or any related prospectus supplement, exclusive of any
non-accountable expense allowance. Any securities issued by CEL-SCI to any FINRA
member or independent broker-dealer in connection with an offering of CEL-SCI's
securities will be considered underwriting compensation and may be restricted
from sale, transfer, assignment, or hypothecation for a number of months
following the effective date of the offering, except to officers or partners
(not directors) of any underwriter or member of a selling group and/or their
officers or partners.
CEL-SCI's securities may be sold:
o At a fixed price.
o As the result of the exercise of warrants or rights, or the conversion
of preferred shares or notes, at fixed or varying prices, as
determined by the terms of the warrants, rights or convertible
securities.
o At varying prices in at the market offerings.
o In privately negotiated transactions, at fixed prices which may be
changed, at market prices prevailing at the time of sale, at prices
related to such prevailing market prices or at negotiated prices.
If underwriters are used in the sale, the offered securities will be
acquired by the underwriters for their own account and may be resold from time
to time in one or more transactions, including negotiated transactions, at a
fixed public offering price or at varying prices determined at the time of sale.
The securities may be offered to the public either through underwriting
syndicates represented by one or more managing underwriters or directly by one
or more firms acting as underwriters. The underwriter or underwriters with
respect to a particular underwritten offering of securities to be named in the
prospectus supplement relating to such offering and, if an underwriting
syndicate is used, the managing underwriter or underwriters will be set forth on
the cover of such prospectus supplement. Unless otherwise set forth in the
prospectus supplement, the obligations of the underwriters to purchase the
27
offered securities will be subject to conditions precedent and the underwriters
will be obligated to purchase all the offered securities if any are purchased.
If dealers are utilized in the sale of offered securities in respect of
which this prospectus is delivered, CEL-SCI will sell the offered securities to
the dealers as principals. The dealers may then resell the offered securities to
the public at varying prices to be determined by the dealers at the time of
resale. The names of the dealers and the terms of the transaction will be set
forth in the prospectus supplement relating to the securities sold to the
dealers.
If an agent is used in an offering of offered securities, the agent will be
named, and the terms of the agency will be set forth, in the prospectus
supplement. Unless otherwise indicated in the prospectus supplement, an agent
will act on a best efforts basis for the period of its appointment.
The securities may be sold directly by CEL-SCI to institutional investors
or others, who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale of the securities purchased by the
institutional investors. The terms of any of the sales, including the terms of
any bidding or auction process, will be described in the applicable prospectus
supplement.
CEL-SCI may permit agents or underwriters to solicit offers to purchase its
securities at the public offering price set forth in a prospectus supplement
pursuant to a delayed delivery arrangement providing for payment and delivery on
the date stated in the prospectus supplement. Any delayed delivery contract,
when issued, will contain definite fixed price and quantity terms. The
obligations of any purchaser pursuant to a delayed delivery contract will not be
subject to any market outs or other conditions other than the condition that the
delayed delivery contract will not violate applicable law. In the event the
securities underlying the delayed delivery contract are sold to underwriters at
the time of performance of the delayed delivery contract, those securities will
be sold to those underwriters. Each delayed delivery contract shall be subject
to CEL-SCI's approval. CEL-SCI will pay the commission indicated in the
prospectus supplement to underwriters or agents soliciting purchases of
securities pursuant to delayed delivery arrangements accepted by CEL-SCI.
Notwithstanding the above, while prospectus supplements may provide
specific offering terms, or add to or update information contained in this
prospectus, any fundamental changes to the offering terms will be made by means
of a post-effective amendment.
Agents, dealers and underwriters may be entitled under agreements entered
into with CEL-SCI to indemnification from CEL-SCI against certain civil
liabilities, including liabilities under the Securities Act, or to contribution
with respect to payments made by such agents, dealers or underwriters.
28
DESCRIPTION OF SECURITIES
Common Stock
------------
CEL-SCI is authorized to issue 600,000,000 shares of common stock, (the
"common stock"). Holders of common stock are each entitled to cast one vote for
each share held of record on all matters presented to shareholders. Cumulative
voting is not allowed; hence, the holders of a majority of the outstanding
common stock can elect all directors.
Holders of common stock are entitled to receive such dividends as may be
declared by the Board of Directors out of funds legally available therefor and,
in the event of liquidation, to share pro rata in any distribution of CEL-SCI's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by CEL-SCI. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock. All of the
outstanding shares of common stock are fully paid and non-assessable and all of
the shares of common stock offered as a component of the Units will be, upon
issuance, fully paid and non-assessable.
Preferred Stock
---------------
CEL-SCI is authorized to issue up to 200,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Colorado statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of CEL-SCI. As of
August 31, 2012 no shares of preferred stock were outstanding.
Warrants Held by Private Investors
----------------------------------
See "Comparative Share Data" for information concerning CEL-SCI's
outstanding options, warrants and convertible securities.
Transfer Agent
--------------
Computershare Trust Company, Inc., of Denver, Colorado, is the transfer
agent for CEL-SCI's common stock.
29
EXPERTS
The financial statements as of September 30, 2011 and 2010 and for each of
the three years in the period ended September 30, 2011 incorporated by reference
in this Prospectus have been so incorporated in reliance on the report of BDO
USA, LLP, an independent registered public accounting firm, incorporated herein
by reference, given on the authority of said firm as experts in auditing and
accounting.
INDEMNIFICATION
CEL-SCI's bylaws authorize indemnification of a director, officer, employee
or agent of CEL-SCI against expenses incurred by him in connection with any
action, suit, or proceeding to which he is named a party by reason of his having
acted or served in such capacity, except for liabilities arising from his own
misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of CEL-SCI who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling CEL-SCI pursuant to the foregoing provisions, CEL-SCI has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ADDITIONAL INFORMATION
CEL-SCI is subject to the requirements of the Securities Exchange Act of
l934 and is required to file reports, proxy statements and other information
with the Securities and Exchange Commission. Copies of any such reports, proxy
statements and other information filed by CEL-SCI can be read and copied at the
Commission's Public Reference Room at 100 F Street, N.E., Washington, D.C.,
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding CEL-SCI. The address of that site is
http://www.sec.gov.
CEL-SCI will provide, without charge, to each person to whom a copy of this
prospectus is delivered, including any beneficial owner, upon the written or
oral request of such person, a copy of any or all of the documents incorporated
by reference below (other than exhibits to these documents, unless the exhibits
are specifically incorporated by reference into this prospectus). Requests
should be directed to:
CEL-SCI Corporation
8229 Boone Blvd., #802
Vienna, Virginia 22182
(703) 506-9460
30
The following documents filed with the Commission by CEL-SCI (Commission
File No. 001-11889) are incorporated by reference into this prospectus:
(1) Annual Report on Form 10-K for the fiscal year ended September 30, 2011.
(2) Report on Form 8-K filed on October 6, 2011.
(3) Report on Form 8-K filed on December 6, 2011.
(4) Report on Form 8-K filed on January 27, 2012.
(5) Report on Form 8-K filed on February 6, 2012.
(6) Quarterly report on Form 10-Q for the three months ended December 31, 2011.
(7) Report on Form 8-K filed on February 13, 2012.
(8) Preliminary Proxy Statement on Schedule 14A filed on February 17, 2012.
(9) Definitive Proxy Statement on Schedule 14A filed on March 20, 2012.
(10) Quarterly report on Form 10-Q for the six months ended March 31, 2012.
(11) Report on Form 8-K filed on May 18, 2012.
(12) Report on Form 8-K filed on June 21, 2012.
(13) Quarterly report on Form 10-Q for the nine months ended June 30, 2012.
All documents filed with the Commission by CEL-SCI pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of this
prospectus and prior to the termination of this offering shall be deemed to be
incorporated by reference into this prospectus and to be a part of this
prospectus from the date of the filing of such documents. Any statement
contained in a document incorporated or deemed to be incorporated by reference
shall be deemed to be modified or superseded for the purposes of this prospectus
to the extent that a statement contained in this prospectus or in any
subsequently filed document which also is or is deemed to be incorporated by
reference in this prospectus modifies or supersedes such statement. Such
statement so modified or superseded shall not be deemed, except as so modified
or superseded, to constitute a part of this prospectus.
Investors are entitled to rely upon information in this prospectus or
incorporated by reference at the time it is used by CEL-SCI to offer and sell
securities, even though that information may be superseded or modified by
information subsequently incorporated by reference into this prospectus.
CEL-SCI has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of l933, as amended, with
respect to the securities offered by this prospectus. This prospectus does not
contain all of the information set forth in the Registration Statement. For
further information with respect to CEL-SCI and such securities, reference is
made to the Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as to the
contents of any contract or other documents are summaries which are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
31
Registration Statement and related exhibits may also be examined at the
Commission's internet site.
No dealer salesman or other person has been authorized to give any information
or to make any representations, other than those contained in this prospectus.
Any information or representation not contained in this prospectus must not be
relied upon as having been authorized by CEL-SCI. This prospectus does not
constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of CEL-SCI
since the date of this prospectus.
32
TABLE OF CONTENTS
Page
----
Prospectus Summary ....................................................
Risk Factors ...........................................................
Comparative Share Data .................................................
Plan of Distribution ...................................................
Description of Securities ..............................................
Legal Proceedings ......................................................
Experts ................................................................
Indemnification ........................................................
Additional Information .................................................
Common Stock
CEL-SCI CORPORATION
PROSPECTUS
33
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
--------------------------------------------
SEC Filing Fee $
Blue Sky Fees and Expenses
Printing and Engraving Expenses
Legal Fees and Expenses
Accounting Fees and Expenses
Miscellaneous Expenses
TOTAL $
All expenses other than the S.E.C. filing fees are estimated.
Item 25. Indemnification of Officers and Directors.
-----------------------------------------
It is provided by Section 7-109-102 of the Colorado Revised Statutes
and CEL-SCI's Bylaws that CEL-SCI may indemnify any and all of its officers,
directors, employees or agents or former officers, directors, employees or
agents, against expenses actually and necessarily incurred by them, in
connection with the defense of any legal proceeding or threatened legal
proceeding, except as to matters in which such persons shall be determined to
not have acted in good faith and in the best interest of CEL-SCI.
Item 16. Exhibits
--------
3(a) Articles of Incorporation Incorporated by reference to Exhibit
3(a) of CEL-SCI's combined Registration
Statement on Form S-1 and Post-Effective
Amendment ("Registration Statement"),
Registration Nos. 2-85547-D and 33-7531.
3(b) Amended Articles Incorporated by reference to Exhibit
3(a) of CEL-SCI's Registration Statement
on Form S-1, Registration Nos. 2-85547-D
and 33-7531.
3(c) Amended Articles (Name change only)Filed as Exhibit 3(c) to CEL-SCI's
Registration Statement on Form S-1
Registration Statement (No. 33-34878).
3(d)Bylaws Incorporated by reference to
Exhibit 3(b) of CEL-SCI's Registration
Statement on Form S-1, Registration Nos.
2-85547-D and 33-7531.
4 Shareholders Rights Agreement Incorporated by reference to Exhibit 4
of CEL-SCI'S report on Form 8-K dated
November 7, 2007.
34
5 Opinion of Counsel _______________
10(d) Employment Agreement with Incorporated by reference to Exhibit
Maximilian de Clara 10(d)of CEL-SCI's report on Form 8-K
(dated April 21, 2005) and Exhibit 10(d)
to CEL-SCI's report on Form 8-K dated
September 8, 2006.
10(f) Distribution and Royalty Incorporated by reference to Exhibit
Agreement with Eastern Biotech 10(x) to Amendment No. 2 to CEL-SCI's
Registration statement on Form S-3
(Commission File No. 333-106879).
10(g) Securities Purchase Agreement Incorporated by reference to Exhibit 10
(together with schedule required to CEL-SCI's report on Form 8-K dated
by Instruction 2 to Item 601 of August 4, 2006.
Regulation S-K) pertaining to
Series K notes and warrants,
together with The exhibits to
the Securities Purchase
Agreement.
10(h) Subscription Agreement (together Incorporated by reference to Exhibit 10
with Schedule required by of CEL-SCI's report on Form 8-K
Instruction 2 to Item 601 of dated April 18, 2007.
Regulation S-K) pertaining to
April 2007 sale of 20,000,000
shares of CEL-SCI's common stock,
10,000,000 Series L warrants and
10,000,000 Series M Warrants.
10(i) Warrant Adjustment Agreement with Incorporated by reference to Exhibit
Laksya Ventures 10(i) of CEL-SCI's report on Form 8-K
dated August 3, 2010.
10(j) Employment Agreement with Incorporated by reference to Exhibit
Patricia Prichep 10(j) of CEL-SCI's report on
Form 8-K dated August 30, 2010.
10(k) Employment Agreement with Eyal Incorporated by reference to Exhibit
Taylor 10(k) of CEL-SCI's report on Form 8-K
dated August 30, 2010.
10(l) Amendment to Employment Agreement
Incorporated by reference to Exhibit
10(l) of with Maximilian de Clara
CEL-SCI's report on Form 8-K dated
August 30, 2010.
10(m) Amendment to Development Supply Incorporated by reference to Exhibit
and Distribution Agreement with 10(m) filed with CEL-SCI's 10-K report
Orient Europharma. (part of for the year ended September 30, 2010.
Exhibit 10(m) has been omitted
pursuant to a request for
confidential treatment).
35
10(n) Licensing Agreement with Teva Incorporated by reference to Exhibit
Pharmaceutical Industries Ltd. 10(n) filed with CEL-SCI's 10-K report
(parts of Exhibit 10(n) have for the year ended September 30, 2010.
been omitted pursuantto a request
for confidential treatment.)
10(o) Lease Agreement (parts of Exhibit Incorporated by reference to Exhibit
10(o) have been omitted pursuant 10(o) filed with CEL-SCI's 10-K report
to a request for the for for the year ended September 30, 2010.
confidential treatment).
10(p) Loan Agreements with Maximilian de Incorporated by reference to Exhibit
Clara 10(p) filed with CEL-SCI's 10-K report
for the year ended September 30, 2010.
10(q) Licensing Agreement with Byron Incorporated by reference to Exhibit
Biopharma 10(i) of CEL-SCI's report on Form 8-K
dated March 27, 2009.
10(r) At Market Issuance Sales Agreement Incorporated by reference to Exhibit
10(r) with McNicoll, Lewis & Vlak LLC
filed with CEL-SCI's 10-K report for
the year ended September 30, 2010.
10(z) Development, Supply and Incorporated by reference to Exhibit
Distribution Agreement 10(z) with Orient Europharma filed with
CEL-SCI's report on Form 10-K for the
year ended September 30, 2003.
10(za) Employment Agreement with Incorporated by reference to Exhibit
Geert Kersten 10(za) to CEL-SCI's report on Form 8-K
dated September 1, 2011.
10(aa)Securities Purchase Agreement Incorporated by reference to Exhibit
and form of the Series F 10(aa) of CEL-SCI's report on Form 8-K
warrants, which is an exhibit dated October 3, 2011.
to the Securities Purchase
Agreement.
10(bb)Placement Agent Agreement Incorporated by reference to Exhibit
10(bb) of CEL-SCI's report on Form 8-K
dated October 3, 2011.
10(cc) Securities Purchase Agreement, Incorporation by reference to
together with the form of the Exhibit 10(cc) of CEL-SCI's report
Series H warrant, which is an on Form 8-K dated January 25, 2012.
exhibit to the securities
Purchase Agreement.
10(dd) Placement Agent Agreement Incorporation by reference to
Exhibit 10(dd) of CEL-SCI's report
on Form 8-K dated January 25, 2012.
10(ee) Warrant Amendment Agreement, Incorporation by reference to
36
together with the form of Exhibit 10(ee) of CEL-SCI's report
the Series P warrant, which on Form 8-K dated February 10, 2012.
is an exhibit to the Warrant
Amendment Agreement.
10(ff) Placement Agent Agreement Incorporation by reference to
Exhibit 10(ff) of CEL-SCI's report
on Form 8-K dated February 10, 2012.
10(gg) Securities Purchase Agreement Incorporation by reference to and
the form of the Series Q Exhibit
10(gg) of CEL-SCI's report warrant,
which is an exhibit to on Form 8-K
dated June 18, 2012. the Securities
Purchase Agreement.
10(hh) Placement Agent Agreement Incorporation by reference to
Exhibit 10(hh) of CEL-SCI's report
on Form 8-K dated June 18, 2012.
23.1 Consent of Hart & Trinen _________________
23.2 Consent of BDO USA, LLP _________________
Item 17. Undertakings.
------------
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement.
(i) To include any prospectus required by Section l0(a)(3) of the
Securities Act of l933;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement,
including (but not limited to) any addition or deletion of a managing
underwriter.
(2) That, for the purpose of determining any liability under the Securities
Act of l933, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-3
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
Insofar as indemnification for liabilities arising under the Securities Act of
l933 may be permitted to directors, officers and controlling persons of the
Registrant, the Registrant has been advised that in the opinion of the
Securities and Exchange Commission such indemnification is against public policy
as expressed in the Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the Registrant of expenses incurred or paid by a director, officer or
controlling person of the Registrant in the successful defense of any action,
suit or proceeding) is asserted by such director, officer or controlling person
in connection with the securities being registered, the Registrant will, unless
in the opinion of its counsel the matter has been settled by controlling
precedent, submit to a court of appropriate jurisdiction the question of whether
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-4
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to exe- cute in
the name and in behalf of the Registrant and any such person, individually and
in each capacity stated below, any such amendments to this Registration
Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vienna, State of Virginia, on the 25th day of
September, 2012.
CEL-SCI CORPORATION
By: /s/ Maximilian de Clara
-----------------------------------
Maximilian de Clara, President
Pursuant to the requirements of the Securities Act of l933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
Signature Title Date
--------- ----- ----
/s/ Maximilian de Clara
------------------------ Director and Principal September 25, 2012
Maximilian de Clara Executive Officer
/s/ Geert R. Kersten
------------------------ Director, Principal September 25, 2012
Geert R. Kersten Financial Officer, Principal
Accounting Officer and
Chief Executive Officer
Director
------------------------
Alexander G. Esterhazy
/s/ C. Richard Kinsolving Director September 25, 2012
------------------------
C. Richard Kinsolving, Ph.D.
/s/ Peter R. Young Director September 25, 2012
------------------------
Peter R. Young, Ph.D.
CEL-SCI CORPORATION
FORM S-3
EXHIBITS