As filed with the Securities and Exchange Commission on , 1996.
Registration No. 333-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Registration Statement
Under
THE SECURITIES ACT OF 1933
CEL-SCI Corporation
(Exact name of registrant as specified in charter)
Colorado
(State or other jurisdiction of incorporation)
66 Canal Center Plaza, Suite 510
Alexandria, Virginia 223l4
84-09l6344 (703) 549-5293
(IRS Employer I.D. (Address, including zip code, and telephone number
Number) including area of principal executive offices)
Geert Kersten
66 Canal Center Plaza, Suite 510
Alexandria, Virginia 223l4
(703) 549-5293
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications
sent to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen 1624 Washington Street
Denver, Colorado 80203 (303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
As soon as practicable after the effective date of this
Registration Statement
If the only securities being registered on this Form are being
offered pursuant to dividend or interest reinvestment plans,
please check the following box. [ ]
Page 1 of Pages
Exhibit Index Begins on Page
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in
connection with dividend or interest reinvestment plans, check the
following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number
of the earlier effective registration for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the
Securities Act registration statement number of the earlier effective
registration statement for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate
Amount of
to be to be Price Per Offering
Registration
Registered Registered Unit (1) Price
Fee
Common Stock (2) 1,389,000 $6.60 $9,167,400
$3,162
Total 1,389,000 $9,167,400
$3,162
(1) Offering price computed in accordance with Rule 457(c).
(2) Shares of Common Stock are offered as a result of the conversion of
the Company's Series B Preferred Stock into shares of common stock.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective date
until the registrant shall file a further amendment which specifically
states that this 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.
CEL-SCI CORPORATION
CROSS REFERENCE SHEET
Item in Form S-3 Location in
Prospectus
Item 1 Forepart of the Registration Statement
and Outside Front Cover Page of
Prospectus .............................. Facing Page;
Outside Front
Cover Page
Item 2 Inside Front and Outside Back Cover
Pages of Prospectus ..................... Inside Front Cover
Page;
Outside Back Cover
Page
Item 3 Summary Information, Risk Factors and
Ratio of Earnings to Fixed Changes ...... Prospectus
Summary; Risk
Factors
Item 4 Use of Proceeds ......................... Not Applicable.
Item 5 Determination of Offering Price ......... Selling
Shareholders
Item 6 Dilution ................................ Dilution
Item 7 Selling Security Holders ................ Selling
Shareholders
Item 8 Plan of Distribution .................... Selling
Shareholders
Item 9 Description of Securities to be
Registered .............................. Description of
Securities
Item l0 Interest of Named Experts and Counsel ... Experts
Item 11 Material Changes ........................ Prospectus Summary
Item 12 Incorporation of Certain Information by
Reference ............................... Documents
Incorporated by
Reference
Item l3. Disclosure of Commission Position on
Indemnification for Securities Act
Liabilities ........................... Indemnification
PROSPECTUS CEL-SCI CORPORATION
870,000 Shares of Common Stock
This Prospectus relates to the offer and sale of up to 870,000
shares of Common Stock by the holders of the Company's Series B Preferred
Stock (the "Preferred Stock") if and when the holders of the Series B
Preferred Stock elect to convert the Preferred Stock into shares of the
Company's Common Stock. The holders of the Preferred Stock may resell the
shares they receive upon conversion from time to time in the public market.
The holders of the Preferred Stock, to the extent they convert the Preferred
Stock into shares of Common Stock, are sometimes referred to in this
Prospectus as the "Selling Shareholders". The Company will not receive any
proceeds from the resale of the shares by the Selling Shareholders. The
Selling Shareholders have advised the Company that they will offer the shares
through broker/dealers at market prices with customary commissions being paid
by the Selling Shareholders. The costs of registering the shares offered by
the Selling Shareholders are being paid by the Company. The Selling
Shareholders will pay all other costs of the sale of the shares offered by
them. See "Selling Shareholders".
THESE SECURITIES ARE SPECULATIVE AND INVOLVE A HIGH DEGREE OF RISK
AND SHOULD BE PURCHASED ONLY BY PERSONS WHO CAN AFFORD TO LOSE THEIR ENTIRE
INVESTMENT. FOR A DESCRIPTION OF CERTAIN IMPORTANT FACTORS THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS, SEE "RISK FACTORS" AND "DILUTION".
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION NOR HAS THE COMMISSION PASSED UPON THE ACCURACY OR
ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
On August , 1996 the closing prices of the Company's Common Stock
and Warrants on the NASDAQ System were $ and $ , respectively. See
"Market Information".
The Date of this Prospectus is August , 1996
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of l934 and in accordance therewith is required to
file reports, proxy statements and other information with the Securities and
Exchange Commission (the "Commission"). Copies of any such reports, proxy
statements and other information filed by the Company can be inspected and
copied at the public reference facility maintained by the Commission at Room
1024, 450 Fifth Street, N.W., Washington, D.C. and at the Commission's
Regional offices in New York (7 World Trade Center, Suite 1300, New York, New
York 10048) and Chicago (Northwestern Atrium Center, 500 West Madison Street,
Suite 1400, Chicago, Illinois 60661-2511). Copies of such material can be
obtained from the Public Reference Section of the Commission at its office in
Washington, D.C. 20549 at prescribed rates. Certain information concerning
the Company is also available at the Internet Web Site maintained by the
Securities and Exchange Commission at www.sec.gov. The Company has filed with
the Commission a Registration Statement on Form S-3 (together with all
amendments and exhibits thereto, the "Registration Statement") under the
Securities Act of 1933, as amended (the "Act"), with respect to the Units
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information, reference is made to the Registration Statement.
DOCUMENTS INCORPORATED BY REFERENCE
The Company will provide, without charge, to each person to
whom a copy of this Prospectus is delivered, including any beneficial
owner, upon the written or oral request of such person, a copy of any
or all of the documents incorporated by reference herein (other than
exhibits to such documents, unless such exhibits are specifically
incorporated by reference into this Prospectus). Requests should be
directed to:
CEL-SCI Corporation
66 Canal Center Plaza, Suite 510
Alexandria, VA 22314
(703) 549-5293
Attention: Secretary
The following documents filed with the Commission by the
Company (Commission File No. 0-11503) are hereby incorporated by
reference into this Prospectus:
(1) The Company's Annual Report on Form 10-K/A for the
fiscal year ended September 30, 1995; and
(2) The Company's Quarterly Reports on Form 10-Q for the
fiscal quarters ended December 31, 1995, March 31, 1996 and June 30,
1996.
(3) The Company's Proxy Statement relating to the June 14,
1996 Annual Meeting of Shareholders.
All documents filed with the Commission by the Company
pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this Prospectus and prior to the termination
of the offering registered hereby shall be deemed to be incorporated
by reference into this Prospectus and to be a part hereof from the
date of the filing of such documents. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein
shall be deemed to be modified or superseded for the purposes of this
Prospectus to the extent that a statement contained herein or in any
subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such
statement. Such statement so modified or superseded shall not be
deemed, except as so modified or superse- ded, to constitute a part of
this Prospectus.
PROSPECTUS SUMMARY
THIS SUMMARY SHOULD BE READ IN CONJUNCTION WITH, AND IS
QUALIFIED IN ITS ENTIRETY BY, THE MORE DETAILED INFORMATION AND
FINANCIAL STATEMENTS APPEARING ELSEWHERE IN THIS PROSPECTUS.
The Company
CEL-SCI Corporation (the "Company") was formed as a Colorado
corporation in 1983. The Company is involved in the research and
development of certain drugs and vaccines. The Company's first
product, MULTIKINETM, manufactured using the Company's proprietary
cell culture technologies, is a combination, or "cocktail", of natural
human interleukin-2 ("IL-2") and certain lymphokines and cytokines.
MULTIKINE is being tested to determine if it is effective in improving
the immune response of advanced cancer pantients. The Company's
second product, HGP-30, is being tested to determine if it is an
effective treatment/ vaccine against the AIDS virus. In addition, the
Company recently acquired a new patented T-cell Modulation Process
which uses "heteroconjugates" to direct the body to chose a specific
immune response. The Company intends to use this new technology to
improve the cellular immune response of persons vaccinated with HGP-30
and to develop a potential tuberculosis ("TB") treatment/vaccine.
Before human testing can begin with respect to a drug or
biological product, preclinical studies are conducted in laboratory
animals to evaluate the potential efficacy and the safety of a
product. Human clinical studies generally involve a three-phase
process. The initial clinical evaluation, Phase I, consists of
administering the product and testing for safe and tolerable dosage
levels. Phase II trials continue the evaluation of immunogenicity and
determine the appropriate dosage for the product, identify possible
side effects and risks in a larger group of subjects, and provide
preliminary indications of efficacy. Phase III trials consist of
testing for actual clinical efficacy for safety within an expanded
group of patients at geographically dispersed test sites. See
"Business Government Regulation" for a more detailed description of
the foregoing.
Between 1983 and 1986 the Company was primarily involved in
funding pre-clinical and Phase I clinical trials of MULTIKINE. These
trials were conducted at St. Thomas's Hospital Medical School in
London, England pursuant to authority granted by England's Department
of Health and Social Security. In July, 1991 physicians at a southern
Florida medical institution began human clinical trials using
MULTIKINE. The focus of these trials was the treatment of metastatic
malignant melanoma and unresectable head and neck cancer using
MULTIKINE. The clinical trials in Florida were conducted pursuant to
approvals obtained by the medical institution from the Florida
Department of Health and Rehabilitative Services.
In March 1995, the Canadian Health Protection Branch, Health
and Welfare Ministry gave clearance to the Company to start a phase
I/II cancer study using Multikine. The study, which will enroll up to
30 head and neck cancer patients who have failed conventional
treatments, will be conducted at
several sites in the United States and Canada and is designed to
evaluate safety, tumor responses and immune responses in patients
treated with multiple courses of Multikine. The length of time that
each patient will remain on the investigational treatment will depend
on the patient's response to treatment. In May l995, the U.S. Food
and Drug Administration (FDA) authorized the export of the Company's
Multikine drug to Canada for purposes of this study.
In February 1996 the FDA authorized the Company to conduct
two human clinical studies using MULTIKINE and focusing on prostate
and head and neck cancer. The prostate study is being conducted at
Jefferson Hospital in Philadelphia, Pennsylvania and will involve up
to 15 prostate cancer patients who have failed on hormonal therapy.
The head and neck cancer study will involve up to 30 cancer patients
who have failed using conventional therapies. The head and neck
cancer study in the U.S. is being conducted in conjunction with the
Company's Canadian head and neck cancer study.
Viral Technologies, Inc. ("VTI"), a wholly-owned subsidiary
of the Company, is engaged in the development of a possible
treatment/vaccine for AIDS. VTI's technology may also have application
in the treatment of AIDS-infected individuals and the diagnosis of
AIDS. VTI's AIDS treatment/ vaccine, HGP-30, has completed certain
Phase I human clinical trials. In the Phase I trials, the vaccine was
administered to volunteers who were not infected with the HIV virus in
an effort to determine safe and tolerable dosage levels.
In April 1995 VTI, with the approval of the California
Department of Health Services Food and Drug Branch (FDB), began
another clinical trial in California using volunteers who received two
vaccinations. The volunteers receiving the two lowest dosage levels
were asked to donate blood for a SCID mouse HIV challenge study. The
SCID mouse is considered to be the best available animal model for HIV
because it lacks its own immune system and therefore permits human
cell growth. White blood cells from the five (5) vaccinated
volunteers and from normal donors were injected into groups of SCID
mice. They were then challenged with high levels of a different
strain of the HIV virus than the one from which HGP-30 is derived.
Infection by virus was determined and confirmed by two different
assays, p24 antigen, a component of the virus core, and reverse
transcriptase activity, an enzyme critical to HIV replication.
Approximately 78% of the SCID mice given blood from vaccinated
volunteers showed no HIV infection after virus challenge as compared
to 13% of the mice given blood from unvaccinated donors.
In December l987, VTI signed a licensing agreement with
Nippon Zeon Co., Ltd. ("Nippon Zeon"), a Japanese chemical
manufacturer, granting Nippon Zeon exclusive rights to VTI's prototype
AIDS vaccine and improvements in the Pacific Area. Under the
agreement, VTI received an initial licensing payment, as well as a pre-
commercialization payment, and was also entitled to receive additional
pre-commercialization payments dependent upon receipt of certain
regulatory approvals. In l995 Nippon Zeon released its rights to
VTI's technology in consideration for VTI's agreement to pay Nippon
Zeon a royalty on sales of products made with VTI's technology in the
licensed area. In July l996 Nippon Zeon agreed to surrender its
royalty rights, as well as any other rights it may have had to VTI's
technology, in exchange for 45,000 shares of the Company's common
stock.
In January 1996 the Company acquired a new patented T-cell
Modulation Process which uses "heteroconjugates" to direct the body to
chose a specific immune response. The ability to generate a specific
immune response is important because many diseases are often not
combatted 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.
The Company intends to use this new technology to improve the
cellular immune response of VTI's HIV HGP-30 immunogen which is
currently in two clinical studies. In addition, the Company intends
to use the technology to develop a potential Tuberculosis (TB)
vaccine/treatment. TB is the largest killer of all infectious
diseases worldwide and new strains of drug resistant TB are emerging
daily. The technology is also a potential platform technology which
could also work with many other peptides. Using this new technology,
the Company is currently conducting in vitro laboratory and in vivo
animal studies.
The T-Cell Modulation Process was acquired from Cell-Med,
Incorporated ("CELL-MED") in consideration for the Company's agreement
to pay certain liabilities of CELL-MED in the amount of approximately
$6,000. If the Company elects to retain ownership in the technology
after March 30, 1997, the Company must pay CELL-MED $200,000, plus
additional payments ranging between $100,000 and $600,000, depending
upon the Company's ability to obtain regulatory approval for clinical
studies using the technology. In addition, should the Company receive
FDA approval for the sale of any product incorporating the technology,
the Company is obligated to pay CELL-MED an advance royalty of
$500,000, a royalty of 5% of the sales price of any product using the
technology, plus 15% of any amounts the Company receives as a result
of sublicensing the technology. So long as the Company retains rights
in the technology, the Company has also agreed to pay the future costs
associated with pursuing and or maintaining CELL-MED's patent and
patent applications relating to the technology. As of February 29,
1996, CELL-MED had been issued patents in Australia and from the
European Patent Office covering the technology and had several U.S.
and foreign patent applications pending.
All of the Company's products are in the early stages of
development. The Company does not expect to develop commercial
products for several years, if at all. The Company has had operating
losses since its inception, has an accumulated deficit of
approximately $28,500,000 at June 30, 1996, and expects to incur
substantial losses for the foreseeable future.
The Company's executive offices are located at 66 Canal
Center Plaza, Suite 510, Alexandria, Virginia 22314, and its
telephone number is (703) 5495293.
THE OFFERING
Securities Offered: Up to 870,000 shares of Common Stock are
offered for
public sale by the holders of the Company's
Series B Preferred Stock if and when the
holders of the Preferred Stock elect to
convert the Preferred Stock into shares of the
Company's Common Stock. The holders of the
Preferred Stock, to the extent they convert
the Preferred Stock into Common Stock, may
resell the shares they receive upon conversion
from time to time in the public market. The
holders of the Preferred Stock are sometimes
referred to in this Prospectus as the "Selling
Shareholders". The Company will not receive
any proceeds from the sale of the shares
offered by the Selling Shareholders. See
"Selling Shareholders".
Common Stock Outstand-
ing Prior To and After
Offering: As of August 15, 1996, the Company had
7,438,372
shares of Common Stock issued and outstanding.
Assuming all of the shares of the Series B
Preferred Stock are converted to shares of the
Company's Common Stock, there will be
8,308,372 shares of Common Stock issued and
outstanding. The number of outstanding shares
before and after this Offering does not give
effect to shares which may be issued upon the
exercise and/or conversion of options,
warrants or other convertible securities
previously issued by the Company. See
"Dilution and Comparative Share Data",
"Selling Shareholders" and "Description of
Securities".
Risk Factors: The purchase of the Securities offered by this
Prospectus involves a high degree of risk.
Risk factors include the following: lack of
revenues and history of loss, need for
additional capital, government regulation,
need for FDA approval, and dilution. See
"Risk Factors."
NASDAQ Symbols: Common Stock: CELI
Warrants: CELIW
Summary Financial Data
For the Years Ended September 30,
1995 1994 1993 1992 1991
Investment Income &
Other Revenues $423,765 $624,670 $997,964 $434,180 $35,972
Expenses:
Research and
Development 1,824,661 2,896,109 1,307,042 481,697 108,771
Depreciation
and
Amortization 262,705 138,755 55,372 33,536 32,582
General and
Administrative 1,713,912 1,621,990 1,696,119 1,309,475 795,015
Equity in loss
of joint
venture 501,125 394,692 344,423 260,388 290,166
Net Loss$(3,878,638) $(4,426,876) $(2,404,992)$(1,650,916)$(1,190,562)
Loss per
common share $(0.89) $(1.06) $(0.58) $(0.42) $(0.35)
Weighted average
common
shares out-
standing 4,342,628 4,185,240 4,155,431 3,953,233 3,400,546
Nine Months Ended June
30,
1996 1995
Investment Income & Other Revenues $ 188,256 $ 313,005
Expenses:
Research and Development 2,350,600 1,383,978
Depreciation and Amortization 208,912 201,197
General and Administrative 2,113,884 1,268,677
Equity in loss of joint venture 3,772 395,224
Net Loss $(4,488,912) $(3,249,076)
Loss per common share $(0.74) $(0.70)
Weighted average common shares
outstanding 6,086,492 4,194,563
Balance Sheet Data:
September 30,
1995 1994 1993 1992 1991
Working Capital $3,983,699 $5,795,191 $10,296,472 $13,043,012 $ 82,831
Total Assets 6,359,011 8,086,670 11,633,090 13,769,5041,611,899
Total
Liabilities 1,516,978 1,407,602 688,231 467,086 672,595
Shareholders'
Equity 4,842,033 6,679,068 10,944,859 13,302,4l8 939,304
June 30, 1996
Working Capital $6,979,975
Total Assets $8,723,934
Total Liabilities $1,191,000
Shareholders' Equity $7,532,934
No dividends have been declared by the Company since its inception.
RISK FACTORS
An investment in the Company's Securities involves a high
degree of risk. Prospective investors are advised that they may lose
all or part of their investment. Prospective investors should
carefully review the following risk factors.
Lack of Revenues and History of Loss. The Company has had
only limited revenues since it was formed in 1983. Since the date of
its formation and through June 30, 1996, the Company has incurred net
losses of approximately $28,500,000. During the years ended September
30, 1993, 1994 and 1995 the Company suffered losses of $2,404,992,
$4,426,876 and $3,878,638 respectively. The Company has relied
principally upon the proceeds of public and private sales of
securities to finance its activities to date. See "Management's
Discussion and Analysis". All of the Company's potential products are
in the early stages of development, and any commercial sale of these
products will be many years away. Accordingly, the Company expects to
incur substantial losses for the foreseeable future.
Need for Additional Capital. Clinical and other studies
necessary to obtain approval of a new drug can be time consuming and
costly, especially in the United States, but also in foreign
countries. The different steps necessary to obtain regulatory
approval, especially that of the Food and Drug Administration ("FDA"),
involve significant costs. The Company expects that it will need
additional financing in order to fund the costs of future clinical
trials, related research, and general and administrative expenses.
The Company may be forced to delay or postpone development and
research expenditures if the Company is unable to secure adequate
sources of funds. These delays in development may have an adverse
effect on the Company's ability to produce a timely and competitive
product. There can be no assurance that the Company will be able to
obtain additional funding from other sources.
Viral Technologies, Inc. ("VTI"), a wholly-owned subsididary
of the Company, is dependent upon funding from the Company for its
operations and research programs.
Cost Estimates. The Company's estimates of the costs
associated with future clinical trials and research may be
substantially lower than the actual costs of these activities. If the
Company's cost estimates are incorrect, the Company will need
additional funding for its research efforts.
Government Regulation - FDA Approval. Products which may be
developed by the Company or Viral Technologies, Inc. (or which may be
developed by affiliates or licensees) will require regulatory
approvals prior to sale. In particular, therapeutic agents and
diagnostic products are subject to approval, prior to general
marketing, by the FDA in the United States and by comparable agencies
in most foreign countries. The process of obtaining FDA and
corresponding foreign approvals is costly and time consuming,
particularly for pharmaceutical products such as those which might
ultimately be developed by the Company, Viral Technologies, Inc. or
its licensees, and there can be no assurance that such approvals will
be granted. Any failure to obtain or any delay in obtaining such
approvals may adversely affect the ability of potential licensees or
the Company to successfully market any products developed. Also, the
extent of adverse government regulations which might arise from future
legislative or administrative action cannot be predicted. The
clinical trial which the Company's affiliate, Viral Technologies,
Inc., is conducting in California is regulated by government agencies
in California and obtaining approvals from states for clinical trials
is likewise expensive and time consuming.
Dependence on Others to Manufacture Product. The Company has
an agreement with an unrelated corporation for the production, until
1997, of MULTIKINE for research and testing purposes. At present,
this is the Company's only source of MULTIKINE. If this corporation
could not, for any reason, supply the Company with MULTIKINE, the
Company estimates that it would take approximately six to ten months
to obtain supplies of MULTIKINE under an alternative manufacturing
arrangement. The Company does not know what cost it would incur to
obtain this alternative source of supply.
Licensed Technology - Potential Conflicts of Interest. The
Company's clinical studies and research have been focused on
compounds, compositions and processes which were licensed to the
Company by Sittona Company, B.V. ("Sittona") in 1983. Maximilian de
Clara, the Company's president and a director, acquired control of
Sittona in 1985. Any commercial products developed by the Company and
based upon the technology licensed by Sittona will belong to Sittona,
subject to the Company's right to manufacture and sell such products
in accordance with the terms of the licensing agreement. The
Company's license remains in effect until the expiration or
abandonment of all patent rights or until the compounds, compositions
and processes subject to the license enter into the public domain,
whichever is later. The license may be terminated earlier for other
reasons, including the insolvency of the Company. Accordingly, a
conflict of interest may arise between the Company and Mr. de Clara
concerning the Company's continued rights to the licensed technology.
Any future transactions between the Company and Sittona will be
subject to the review and approval by a majority of the Company's
disinterested directors.
Technological Change. The biomedical field in which the
Company is involved is undergoing rapid and significant technological
change. The successful development of therapeutic agents and
diagnostic products from the compounds, compositions and processes
licensed to the Company, through Company financed research or as a
result of possible licensing arrangements with pharmaceutical or other
companies, will depend on its ability to be in the technological
forefront of this field. There can be no assurance that the Company
will achieve or maintain such a competitive position or that other
technological developments will not cause the Company's proprietary
technologies to become uneconomical or obsolete.
Patents. Since 1983 the Company, on behalf of the owners of
the compounds, compositions and processes licensed to the Company, has
filed applications for United States and foreign patents covering
certain aspects of the technology. Although the Company has paid the
costs of applying for and obtaining patents, the technology covered by
the patents is not owned by the Company, but by an affiliated party
which has licensed the technology to the Company. As of the date of
this Prospectus nine patents have been issued in the United States and
three patents have been issued in Europe. 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 the owners of the patents and the Company.
Disputes may arise between the owners of the patents or the Company
and others as to the scope, validity and ownership rights of these or
other patents. Any defense of the patents could prove costly and time
consuming and there can be no assurance that the Company or the owners
of the patents will be in a position, or will deem it advisable, to
carry on such a defense. Other private and public concerns, including
universities, may have filed applications for, or may have been
issued, patents and are expected to obtain additional patents and
other proprietary rights to technology potentially useful or necessary
to the Company. The scope and validity of such patents, if any, the
extent to which the Company or the owners of the patents may wish or
need to acquire the rights to such patents, and the cost and
availability of such rights are presently unknown. Also, as far as
the Company relies upon unpatented proprietary technology, there is no
assurance that others may not acquire or independently develop the
same or similar technology. The first patent licensed to the Company
will expire in the year 2000. Since the Company's Investigational New
Drug application relating to MULTIKINE has only recently been cleared
by the FDA, and since the Company does not know if it will ever be
able to sell Multikine on a commercial basis, the Company cannot
predict what effect the expiration of this patent will have on the
Company. Notwithstanding the above, the Company believes that later
issued patents will protect the technology associated with Multikine
past the year 2000.
Product Liability Insurance. Although the Company has product
liability insurance for MULTIKINE and its HGP-30 vaccine, the
successful prosecution of a product liability case against the Company
could have a materially adverse effect upon its business if the amount
of any judgment exceeds the Company's insurance coverage.
Dependence on Management and Scientific Personnel. The
Company is dependent for its success on the continued availability of
its executive officers. The loss of the services of any of the
Company's executive officers could have an adverse effect on the
Company's business. The Company does not carry key man life insurance
on any of its officers. The Company's future success will also depend
upon its ability to attract and retain qualified scientific personnel.
There can be no assurance that the Company will be able to hire and
retain such necessary personnel.
Options, Warrants and Convertible Securities. The Company
has issued options, warrants and other convertible securities
("Derivative Securities") which allow the holders to acquire
additional shares of the Company's Common Stock. In some cases the
Company has agreed that, at its expense, it will make appropriate
filings with the Securities and Exchange Commission so that the
securities underlying certain Derivative Securities will be available
for public sale. Such filings could result in substantial expense to
the Company and could hinder future financings by the Company.
For the terms of these Derivative Securities, the holders
thereof will have an opportunity to profit from any increase in the
market price of the Company's Common Stock without assuming the risks
of ownership. Holders of such Derivative Securities may exercise
and/or convert them at a time when the Company could obtain additional
capital on terms more favorable than those provided by the Derivative
Securities. The exercise or conversion of the Derivative Securities
will dilute the voting interest of the owners of presently outstanding
shares of the Company's Common Stock and may adversely affect the
ability of the Company to obtain additional capital in the future.
The sale of the shares of Common Stock issuable upon the exercise or
conversion of the Derivative Securities could adversely affect the
market price of the Company's stock. See "Dilution and Comparative
Share Data".
Competition. The competition in the research, development
and commercialization of products which may be used in the prevention
or treatment of cancer and AIDS is intense. Major pharmaceutical and
chemical companies, as well as specialized genetic engineering firms,
are developing products for these diseases. Many of these companies
have substantial financial, research and development, and marketing
resources and are capable of providing significant long-term
competition either by establishing in-house research groups or by
forming collaborative ventures with other entities. In addition, both
smaller companies and non-profit institutions are active in research
relating to cancer and AIDS and are expected to become more active in
the future.
The clinical trials sponsored to date by the Company and VTI
have not been approved by the FDA, but rather have been conducted
pursuant to approvals obtained from regulatory agencies in England,
Canada and certain states. Since the results of these clinical trials
may not be accepted by the FDA, companies which are conducting
clinical trials approved by the FDA may have a competitive advantage
in that the products of such companies are further advanced in the
regulatory process than those of the Company or VTI.
Lack of Dividends. There can be no assurance the Company
will be profitable. At the present time, the Company intends to use
available funds to finance the Company's operations. Accordingly,
while payment of dividends rests within the discretion of the Board of
Directors, no dividends have been declared or paid by the Company.
The Company does not presently intend to pay dividends and there can
be no assurance that dividends will ever be paid. Pursuant to the
terms of a loan agreement with a bank, the Company may not pay any
dividends without the consent of the bank.
Dilution. Persons purchasing the securities offered by this
Prospectus will suffer an immediate dilution in the per share net
tangible book value of their Common Stock. See "Dilution and
Comparative Share Data."
Preferred Stock. The Company's Articles of Incorporation
authorize the Company's Board of Directors to issue up to 200,000
shares of Preferred Stock. The provisions in the Company's Articles
of Incorporation relating to the Preferred Stock allow the Company's
directors to issue Preferred Stock with multiple votes per share and
dividends rights which would have priority over any dividends paid
with respect to the Company's Common Stock. The issuance of Preferred
Stock with such rights may make the removal of management difficult
even if such removal would be considered beneficial to shareholders
generally, and will have the effect of limiting shareholder
participation in certain transactions such as mergers or tender offers
if such transactions are not favored by incumbent management.
DILUTION AND COMPARATIVE SHARE DATA
As of August 15, 1996, the present shareholders of the Company
owned 7,438,372 shares of Common Stock, which had a net tangible book
value of approximately $1.00 per share. The following table
illustrates the comparative stock ownership of the other stockholders
of the Company, as compared to the investors in this Offering,
assuming all shares offered are sold.
Shares outstanding (1) 7,438,372
Shares to be issued upon conversion of
Series B Preferred Stock, based upon
closing price of the Company's common
stock on August 21, 1996 ($6.60) 870,000
Shares outstanding (pro forma basis) (1) 8,308,372
Net tangible book value per share $1.00
Equity ownership by present shareholders
after this offering 90%
Equity ownership by investors in this
Offering 10%
(1) Amount excludes shares which may be issued upon the exercise and/or
conversion of options, warrants and other convertible securities
previously issued by the Company. See table below.
The purchasers of the securities offered by this Prospectus will
suffer an immediate dilution if the price paid for the securities
offered is greater than the net tangible book value of the Company's
Common Stock.
"Net tangible book value" is the amount that results from
subtracting the total liabilities and intangible assets of the Company
from its total assets. "Dilution" is the difference between the
offering price and the net tangible book value of shares immediately
after the Offering.
The following table reflects the additional shares which may
be issued as the result of the exercise of outstanding options and
warrants or the conversion of other securities issued by the Company.
Number of Note
Shares Reference
Outstanding as of August 15, 1996 7,438,372
Shares Subject to this Offering:
Shares issuable upon conversion of
the Series B preferred stock 870,000 A
Shares outstanding (pro forma basis) 8,308,372
Other Shares Which May Be Issued:
Shares issuable upon conversion of
Series A Preferred Stock, based on
closing price of the Company's
Common Stock on August 21, 1996 ($6.60) 375,000 B
Shares issuable upon exercise of
warrants issued to Selling Agent,
or its assigns, in connection with
the Company's June and September 1995
Private Offerings 115,000 C
Shares issuable upon exercise of
warrants sold in Company's 1992
Public Offering 517,500 D
Shares issuable upon exercise of
warrants sold to Underwriter in
connection with Company's 1992
Public Offering 90,000 E
Shares issuable upon exercise of
options granted to Company's officers,
directors, employees and consultants 981,926 F
10,387,798
A. In August 1996 the Company sold, in a private transaction,
5,000 shares of its Series B Preferred Stock (the "Preferred
Shares") for $5,000,000 or $1,000 per share. At the purchasers'
option, up to 2,500 Preferred Shares are convertible, on or after
ten days from the date of this Prospectus (the "Effective Date"),
into shares of the Company's Common Stock on the basis of one
share of Preferred Stock for shares of Common Stock equal in
number to the amount determined by dividing $1,000 by 87% of the
Closing Price of the Company's Common Stock. All Preferred Shares
are convertible, on or after 40 days from the Effective Date, on
the basis of one share of Preferred Stock for shares of the
Company's Common Stock equal in number to the amount determined by
dividing $1,000 by 85% of the Closing Price of the Company's
Common Stock. The term "Closing Price" is defined as the average
closing bid price of the Company's Common Stock over the five-day
trading period ending on the day prior to the conversion of the
Preferred Stock. Notwithstanding the above, the conversion price
may not be less than $3.60 nor more than $14.75. The Preferred
Shares, if issued, are entitled to a quarterly dividend of $17.50
per share. Any Preferred Shares which are outstanding on the
second anniversary of the Effective Date will be automatically
converted into shares of the Company's Common Stock. The
Preferred Shares have a liquidation preference over the Company's
Common Stock. The shares issuable upon the conversion of the
Preferred Stock are offered by means of this Prospectus. See
"Selling Shareholders."
B. In May 1996 the Company sold, in a private transaction, 3,500
shares of its Series A Preferred Stock (the "Preferred Shares")
for $3,500,000 or $1,000 per share. At the purchasers' option, up
to 1,750 Preferred Shares are convertible, on or after 60 days
from the closing date of the purchase of such shares (the
"Closing"), into shares of the Company's Common Stock on the basis
of one share of Preferred Stock for shares of Common Stock equal
in number to the amount determined by dividing $1,000 by 85% of
the Closing Price of the Company's Common Stock. All Preferred
Shares are convertible, on or after 90 days from the Closing, on
the basis of one share of Preferred Stock for shares of the
Company's Common Stock equal in number to the amount determined by
dividing $1,000 by 83% of the Closing Price of the Company's
Common Stock. The term "Closing Price" is defined as the average
closing bid price of the Company's Common Stock over the five-day
trading period ending on the day prior to the conversion of the
Preferred Stock. Notwithstanding the above, the conversion price
may not be less than $3.00 nor more than $8.00, except that if the
Closing Price is less than $3.00, then the conversion price will
be equal to the Closing Price. The Preferred Shares are entitled
to a quarterly dividend of $17.50 per share. Any Preferred Shares
which are outstanding on the second anniversary of the Closing
will be automatically converted into shares of the Company's
Common Stock. The Preferred Shares have a liquidation preference
over the Company's Common Stock. By means of a separate
Registration Statement, the shares issuable upon the conversion of
the Series A Preferred Stock have been registered for public sale.
As of August 15, 1996, 1,450 shares of the Series A Preferred
Stock had been converted into shares of the Company's Common
Stock.
C. In connection with the Company's June and September Private
Offerings, Neidiger/Tucker/Bruner, Inc., the Sales Agent for these
offerings, re- ceived a commission, a non-accountable expense
allowance and warrants to purchase (i) 57,500 shares of the
Company's Common Stock at $2.00 per share, (ii) 57,500 shares at
$2.40 per share, and (ii) an additional 115,000 shares at $3.25
per share. Prior to the date of this Prospectus the Sales Agent
(and/or its assigns) collectively exercised Warrants pertaining to
115,000 shares of the Company's Common Stock. By means of a
separate Registration Statement, the shares of Common Stock
issuable upon the exercise of the remaining Warrants issued to the
Sales Agent have been registered for public sale.
D. See "Description of Securities".
E. The Underwriter's Warrants provide that the Company, at its
expense, will make appropriate filings with the Securities and
Exchange Commission so that the securities underlying the
Underwriter's Warrants will be available for public sale.
F. The options are exercisable at prices ranging from $2.87 to $19.70
per share. The Company may also grant options to purchase
1,117,407 addi- tional shares under its Incentive Stock Option and
Non-Qualified Stock Option Plans.
SELLING SHAREHOLDERS
In August 1996 the Company sold 5,000 shares of its Series B
Pre- ferred Stock (the "Preferred Shares") for $5,000,000 or $1,000
per share. At the purchasers' option, the Preferred Shares are
convertible from time to time, in whole or in part, into shares of the
Company's Common Stock upon certain terms. See "Description of
Securities". The holders of the Preferred Shares, to the event they
convert their Preferred Shares into shares of Common Stock, are
sometimes referred to in this Prospectus as the "Selling Shareholders"
and the shares issuable upon the conversion of the Preferred Shares
are being offered by means of this Prospectus. The Company will not
receive any proceeds from the sale of the shares by the Selling
Shareholders.
The names and addresses of the Selling Shareholders are:
Shares Which
may be Acquired Shares to Share
Shares Upon Conver- be Sold in Owner-
Presently sion of Pre- This ship After
Name and Address Owned ferred Shares(1) Offering (2)Offering
Infinity Investors Ltd. - 435,000 435,000 -
27 Wellington Road
Cork, Ireland
Professional Edge (3) - 87,000 87,000 -
Fund L.P.
190 Market Street
#702
Philadelphia, PA 19103
Pro Futures Special - 87,000 87,000 -
Equities Fund, L.P.
1310 Highway 620 South
Suite 200
Austin, TX 78734
Seacrest Capital Limited - 87,000 87,000 -
27 Wellington Road
Cork, Ireland
Baskerville Trading - 87,000 87,000 -
Corporation
50 Shirley Street
P.O. Box 13937
Nassau, Bahamas
Buchanan Partners Ltd. - 43,500 43,500 -
Buchanan House
3 St. James Square
London, England SW1Y 4JU
The Buchanan Fund - 43,500 43,500 -
6 Front Street
Hamilton, Bermuda
870,000 870,000
(1) Represents shares issuable upon the conversion of the Series B
Preferred Stock based upon the closing price of the Company's
Common Stock on August 21, 1996 ($6.60). The actual number of
shares to be issued upon the conversion of the Preferred Shares
will depend upon the price of the Company's Common Stock at the
time of conversion. See "Description of Securities."
(2) Assumes all shares owned, or which may be acquired, by the Selling
Share- holders, are sold to the public by means of this
Prospectus.
(3) Professional Edge Fund L.P. is the holder of 500 shares of the
Company's Series A Preferred Stock. Amount in this column
excludes shares issuable upon the conversion of the Series A
Preferred Stock.
Manner of Sale. The shares of Common Stock
owned, or which may be acquired, by the Selling Shareholders may be
offered and sold by means of this Prospectus from time to time as
market conditions permit in the over-the-counter market, or otherwise,
at prices and terms then prevailing or at prices related to the then-
current market price, or in negotiated transactions. These shares may
be sold by one or more of the following methods, without limitation:
(a) a block trade in which a broker or dealer so engaged will attempt
to sell the shares as agent but may position and resell a portion of
the block as principal to facilitate the transaction; (b) purchases by
a broker or dealer as principal and resale by such broker or dealer
for its account pursuant to this Prospectus; (c) ordinary brokerage
transactions and transactions in which the broker solicits purchasers;
and (d) face-to-face transactions between sellers and purchasers
without a broker/dealer. In effecting sales, brokers or dealers
engaged by the Selling Shareholders may arrange for other brokers or
dealers to participate. Such brokers or dealers may receive
commissions or discounts from Selling Shareholders in amounts to be
negotiated.
The Selling Shareholders and any broker/dealers who act in
connection with the sale of the Shares hereunder may be deemed to be
"underwriters" within the meaning of 2(11) of the Securities Acts of
1933, and any commissions received by them and profit on any resale of
the Shares as principal might be deemed to be underwriting discounts
and commissions under the Securities Act. The Company has agreed to
indemnify the Selling Shareholders and any securities broker/dealers
who may be deemed to be underwriters against certain liabilities,
including liabilities under the Securities Act as underwriters or
otherwise.
The Company has advised the Selling Shareholders that they
and any securities broker/dealers or others who may be deemed to be
statutory underwriters will be subject to the Prospectus delivery
requirements under the Securities Act of 1933. The Company has also
advised each Selling Shareholder that in the event of a "distribution"
of the shares owned by the Selling Shareholder, such Selling
Shareholder, any "affiliated purchasers", and any broker/dealer or
other person who participates in such distribution may be subject to
Rule 10b-6 under the Securities Exchange Act of 1934 ("1934 Act")
until their participation in that distribution is completed. A
"distribution" is defined in Rule 10b-6 as an offering of securities
"that is distinguished from ordinary trading transactions by the
magnitude of the offering and the presence of special selling efforts
and selling methods". The Company has also advised the Selling
Shareholders that Rule 10b-7 under the 1934 Act prohibits any
"stabilizing bid" or "stabilizing purchase" for the purpose of
pegging, fixing or stabilizing the price of the Common Stock in
connection with this offering.
Rule 10b-6 makes it unlawful for any person who is
participating in a distribution to bid for or purchase stock of the
same class as is the subject of the distribution. If Rule 10b-6
applies to the offer and sale of any of the Shares, then participating
broker/dealers will be obligated to cease market-making activities
nine business days prior to their participation in the offer and sale
of such Shares and may not recommence market-making activities until
their participation in the distribution has been completed. If Rule
10b-6 applies to one or more of the principal market-makers in the
Company's Common Stock, the market price of such stock could be
adversely affected.
DESCRIPTION OF SECURITIES
Common Stock
The Company is authorized to issue 100,000,000 shares of
Common Stock, (the "Common Stock"). Holders of Common Stock are each
entitled to cast one vote for each share held of record on all matters
presented to shareholders. Cumulative voting is not allowed; hence,
the holders of a majority of the 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 the Company's assets after payment of
liabilities. The board is not obligated to declare a dividend. It is
not anticipated that dividends will be paid in the foreseeable future.
Holders of Common Stock do not have preemptive rights to
subscribe to additional shares if issued by the Company. There are no
conversion, redemption, sinking fund or similar provisions regarding
the Common Stock. All of the outstanding shares of Common Stock are
fully paid and nonassessable and all of the shares of Common Stock
offered as a component of the Units will be, upon issuance, fully paid
and non-assessable.
Preferred Stock
The Company is authorized to issue up to 200,000 shares of
Preferred Stock. The Company's Articles of Incorporation provide that
the Board of Directors has the authority to divide the Preferred Stock
into series and, within the limitations provided by Colorado statute,
to fix by resolution the voting power, designations, preferences, and
relative participation, special rights, and the qualifications,
limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the
terms of, and to issue, the Preferred Stock without shareholder
approval, the Preferred Stock could be issued to defend against any
attempted takeover of the Company.
In August 1996 the Company sold 3,500 shares of its Series A
Preferred Stock (the "Preferred Shares") for $3,500,000 or $1,000 per
share. At the purchasers' option, up to 2,500 Preferred Shares are
convertible, on or after ten days from the date of this Prospectus
(the "Effective Date"), into shares of the Company's Common Stock on
the basis of one share of Preferred Stock for shares of Common Stock
equal in number to the amount determined by dividing $1,000 by 87% of
the Closing Price of the Company's Common Stock. All Preferred Shares
are convertible, on or after 40 days from the Effective Date, on the
basis of one share of Preferred Stock for shares of the Company's
Common Stock equal in number to the amount determined by dividing
$1,000 by 85% of the Closing Price of the Company's Common Stock.
The term "Closing Price" is defined as the average closing bid price
of the Company's Common Stock over the five-day trading period ending
on the day prior to the conversion of the Preferred Stock.
Notwithstanding the above, the conversion price may not be less than
$3.60 nor more than $14.75, except that if the Closing Price is less
than $3.60, then the conversion price will be equal to the Closing
Price. The Preferred Shares, if issued, are entitled to a quarterly
dividend of $17.50 per share. Any Preferred Shares which are
outstanding on the second anniversary of the Closing will be
automatically converted into shares of the Company's Common Stock.
The Preferred Shares have a liquidation preference over the Company's
Common Stock. The shares issuable upon the conversion of the Series A
Preferred Shares have been registered for sales pursuant to a
sepasrate Registration Statement. See "Risk Factors" and "Dilution
and Comparative Share Data".
In August 1996 the Company sold 5,000 shares of its Series B
Preferred Stock (the "Series B Preferred Shares") for $5,000,000 or
$1,000 per share. At the purchasers' option, up to 2,500 Preferred
Shares are convertible, on or after 10 days from the date of this
Prospectus (the "Effective Date"), into shares of the Company's Common
Stock on the basis of one share of Preferred Stock for shares of
Common Stock equal in number to the amount determined by dividing
$1,000 by 87% of the Closing Price of the Company's Common Stock. All
Preferred Shares are convertible, on or after 40 days from the
Effective Date, on the basis of one share of Preferred Stock for
shares of the Company's Common Stock equal in number to the amount
determined by dividing $1,000 by 85% of the Closing Price of the
Company's Common Stock. The term "Closing Price" is defined as the
average closing bid price of the Company's Common Stock over the five-
day trading period ending on the day prior to the conversion of the
Preferred Stock. Notwithstanding the above, the conversion price may
not be less than $3.60 nor more than $14.75. The Preferred Shares are
entitled to a quarterly dividend of $17.50 per share. Any Preferred
Shares which are outstanding on the second anniversary of the
Effective Date will be automatically converted into shares of the
Company's Common Stock. The Preferred Shares have a liquidation
preference over the Company's Common Stock. The shares issuable upon
the conversion of the Preferred Shares are being offered by means of
this Prospectus. See "Selling Shareholders".
Publicly Traded Warrants
In connection with the Company's February, 1992 public
offering, the Company issued 5,175,000 Warrants. Every ten Warrants
entitle the holder to purchase one share of the Company's Common Stock
at a price of $46.50 per share prior to February 7, 1997. The
Company, upon 30-days notice, may accelerate the expiration date of
the Warrants, provided, however, that at the time the Company gives
such notice of acceleration (1) the Company has in effect a current
registration statement covering the shares of Common Stock issuable
upon the exercise of the Warrants and (2) at any time during the 30
day period preceding such notice, the average closing bid price of the
Company's Common Stock has been at least 20% higher than the warrant
exercise price for 15 consecutive trading days. If the expiration
date is accelerated, all Warrants not exercised within the 30-day
period will expire.
Other provisions of the Warrants are set forth below. This
information is subject to the provisions of the Warrant Certificate
representing the Warrants.
1. Holders of the Warrants may sell the Warrants rather than
exercise them. However, there can be no assurance that a market will
develop or continue as to the Warrants.
2. Unless exercised within the time provided for exercise,
the Warrants will automatically expire.
3. The exercise price of the Warrants may not be increased
during the term of the Warrants, but the exercise price may be
decreased at the discretion of the Company's Board of Directors by
giving each Warrant holder notice of such decrease. The exercise
period for the Warrants may be extended by the Company's Board of
Directors giving notice of such extension to each Warrant holder of
record.
4. There is no minimum number of shares which must be
purchased upon exercise of the Warrants.
5. The holders of the Warrants in certain instances are
protected against dilution of their interests represented by the
underlying shares of Common Stock upon the occurrence of stock
dividends, stock splits, reclassifications, and mergers.
6. The holders of the Warrants have no voting power and are
not entitled to dividends. In the event of a liquidation,
dissolution, or winding up of the Company, holders of the Warrants
will not be entitled to participate in the distribution of the
Company's assets.
Convertible Notes
In March 1996 the Company sold $l,250,000 of Convertible
Notes ("Notes") to two persons. The Notes are convertible from time
to time in whole or in part, into shares of the Company's Common
Stock. The conversion price is the lesser of (i) $5 per share or (ii)
80% of the average closing bid price of the Company's Common Stock
during the five trading days immediately preceding the date of such
conversion. Prior to July 31, 1996, all of the Notes were converted
into 250,000 shares of the Company's common stock. The Company has
agreed to make appropriate filings with the Securities and Exchange
Commission such that the shares issuable upon the conversion of the
Notes will be available for public sale. See "Risk Factors".
Transfer Agent
American Securities Transfer, Inc., of Denver, Colorado, is
the transfer agent for the Company's Common Stock.
LITIGATION
In February 1996 the Company filed a lawsuit against ImmunoRx
and Dr. John Hadden for contract breach, tortious interference of
contract and patent infringement concerning the Company's Multikine
drug. The lawsuit, filed in the U.S. District Court for the Middle
District of Florida, seeks damages and the termination of certain
research and clinical studies being conducted by ImmunoRx and Dr.
Hadden. From 1984 to 1992, Dr. Hadden consulted with the Company,
performed research on Multikine and manufactured Multikine for the
Company's head and neck cancer study in Florida. In early 1993, Dr.
Hadden signed a separation agreement with the Company acknowledging
the Company's ownership of both Multikine and the research results.
The Company has learned that Dr. Hadden and ImmunoRx are apparently
making copies of Multikine, in contravention of the separation
agreement and the patents covering Multikine, and have begun clinical
studies in a foreign country using a copy of Multikine. See "Business
Compounds and Processes Licensed to the Company".
EXPERTS
The financial statements as of September 30, 1995 and 1994
and for each of the three years in the period ended September 30, 1995
incorporated by reference in this prospectus have been audited by
Deloitte & Touche LLP, independent auditors, as stated in their report
appearing herein, and are incorporated by reference upon the report of
such firm given upon their authority as experts in accounting and
auditing.
INDEMNIFICATION
The Company's Bylaws authorize indemnification of a director,
officer, employee or agent of the Company against expenses incurred by
him in connection with any action, suit, or proceeding to which he is
named a party by reason of his having acted or served in such
capacity, except for liabilities arising from his own misconduct or
negligence in performance of his duty. In addition, even a director,
officer, employee, or agent of the Company who was found liable for
misconduct or negligence in the performance of his duty may obtain
such indemnification if, in view of all the circumstances in the case,
a court of competent jurisdiction determines such person is fairly and
reasonably entitled to indemnification. Insofar as indemnification
for liabilities arising under the Securities Act of 1933 may be
permitted to directors, officers, or persons controlling the Company
pursuant to the foregoing provisions, the Company 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
The Company has filed with the Securities and Exchange
Commission, 450 5th Street, N.W., Washington, D.C. 20001, a
Registration Statement under the Securities Act of l933, as amended,
with respect to the securities offered hereby. This Prospectus does
not contain all of the information set forth in the Registration
Statement. For further information with respect to the Company and
such securities, reference is made to the Registration Statement and
to the Exhibits filed therewith. Statements contained in this
Prospectus as to the contents of any contract or other documents are
summaries which are not necessarily complete, and in each instance
reference is made to the copy of such contract or other document filed
as an Exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. Copies of each document
may be inspected at the Commission's offices at 450 Fifth Street,
N.W., Washington, D.C., 20549, and at the Northeast Regional Office, 7
World Trade Center, 13th Floor, New York, New York 10048 and the
Midwest Regional Office, Suite 1400, 500 West Madison Street, Chicago,
Illinois 60681-2511. This Registration Statement and the related
exhibits may also be inspected at the Internet Web Site maintained by
the Securities and Exchange Commission at www.sec.gov. Copies may be
obtained at the Washington, D.C. office upon payment of the charges
prescribed by the Commission.
2329D
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 the Company. This Prospectus does not constitute an
offer to sell, or a solicitation of an offer to buy, the securities
offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the
delivery of this Prospectus nor any sale made hereunder shall, under
any circumstances, create an implication that there has been no change
in the affairs of the Company since the date hereof.
TABLE OF CONTENTS
Page
Prospectus Summary
Risk Factors
Dilution and Comparative Share Data
Selling Shareholders
Description of Securities
Litigation
Experts
Indemnification
Additional Information
Financial Statements
870,000 Shares of Common Stock CEL-
SCI CORPORATION
PROSPECTUS
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution.
SEC Filing Fee $ 3,162
NASD Filing Fee 1,416
Blue Sky Fees and Expenses 500
Printing and Engraving Expenses 200
Legal Fees and Expenses 25,000
Accounting Fees and Expenses 5,000
Transfer Agent Fees 100
Miscellaneous Expenses 4,622
TOTAL $40,000
All expenses other than the S.E.C. and NASD filing fees
are estimated.
Item 25. Indemnification of Officers and Directors.
It is provided by Section 7-109-102 of the Colorado Revised
Statutes and the Company's Bylaws that the Company may indemnify any
and all of its officers, directors, employees or agents or former
officers, directors, employees or agents, against expenses actually
and necessarily incurred by them, in 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 the Company.
Item 16. Exhibits
3(a) Articles of Incorporation Incorporated by reference to Exhibit
3(a) of the Company's combined
Registration Statement on Form S-1
and Post-Effective Amendment
("Registration Statement"),
Registration Nos. 2-85547-D and 33-
7531.
(b) Amended Articles Incorporated by reference to
Exhibit 3(a) of the Company's
Registration Statement on Form
` S-1, Registration Nos. 2-
85547-D and 33-7531.
(c) Amended Articles Filed as Exhibit 3(c) to the
(Name change only) Company's Registration
Statement on Form S-1
(No. 33-34878).
(d) Bylaws Incorporated by reference to
Exhibit 3(b) of the Company's
Registration Statement on Form
S-1, Registration Nos. 2-85547-
D and 33-7531.
4(a) Specimen copy of Incorporated by reference to
Stock Certificate Exhibit 4(a) of the Company's
Registration Statement on Form
S-1, Registration Nos. 2-85547-D
and 33-7531.
(c) Form of Common Stock Incorporated by reference to
Purchase Warrant Exhibit 4(c) filed as an
exhibit to the Company's
Registration Statement on Form
S-1 (Registration No. 33-
43281).
5. Opinion of Counsel
10(a) Purchase Agreement Incorporated by reference to
dated April 21, 1986 Exhibit 10(a) of the
with Alpha I Biomedical Company's Registration
Statement on Form S-1,
Registration Nos. 2-85547-D
and 33-7531.
(b) Agreement with Sittona Incorporated by reference to
Company B.V. dated Exhibit 10(c) of the Company's
May 3, 1983 Registration Statement on Form
S-1, Registration
Nos. 2-85547-D and 33-7531.
(c) Addendum effective May 3, Incorporated by reference to Exhibit
1983 to Licensing Agree- 10(e) of the Company's Registration
ment with Sittona Company,Statement on Form S-1, Registration
B.V. Nos. 2-85547-D and 33-7531.
(d) Addendum effective October Incorporated by reference to Exhibit
13, 1989 to Licensing Agree- 10(d) of Company's Annual Report on ment
with Sittona Company, Form 10-K for the year ended September
B.V. 30, 1989.
10(e)Employment Agreement with Filed with Amendment Number 1 to the
Geert Kersten Company's Registration Statement on
Form S-1 (Commission File Number 3343281).
10(g)Agreement between Viral Filed with Amendment Number 2 to the
Technologies, Inc. and Company's Registration Statement on
Nippon Zeon Co., Ltd. Form S-1 (Commission File Number 33-90230).
23(a) Consent of Hart & Trinen
(b) Consent of Deloitte &
Touche LLP
24. Power of Attorney Included as part of signature page.
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this Registration Statement.
(i) To include any Prospectus required by Section
l0(a)(3) of the Securities Act of l933;
(ii) To reflect in the Prospectus any facts or events
arising after the effective date of the Registration
Statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate,
represent a fundamental change in the information set
forth in the Registration Statement; (iii) To include
any material information with respect to the plan of
distribution not previously disclosed in the
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.
(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.
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 execute in the
name and in behalf of the Registrant and any such person, individually
and in each capacity stated below, any such amendments to this
Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933,
the 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 Alexandria,
State of Virginia, on the 28th day of August, 1996.
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 August 28, 1996
MAXIMILIAN DE CLARA Executive Officer
/s/ Geert R. Kersten Director, Principal August 28, 1996
GEERT R. KERSTEN Financial Officer
and Chief Executive
Officer
/s/ Mark V. Soresi Director August 28, 1996
MARK V. SORESI
/s/ F. Donald Hudson Director August 28, 1996
F. DONALD HUDSON
/s/ Edwin A. Shalloway Director August 28, 1996
EDWIN A. SHALLOWAY
August 29, 1996
CEL-SCI Corporation
66 Canal Center Plaza
Suite 510
Alexandria, Virginia 223l4
Gentlemen:
This letter will constitute an opinion upon the legality of the sale
by CEL-SCI Corporation, a Colorado corporation ("the Company"), of up
to 1,389,000 shares of Common Stock, all as referred to in the
Registration Statement on Form S-1 filed by the Company with the
Securities and Exchange Commission.
We have examined the Articles of Incorporation, the Bylaws and the
minutes of the Board of Directors of the Company and the applicable
laws of the State of Colorado, and a copy of the Registration
Statement. In our opinion, the Company is authorized to issue the
shares of stock mentioned above and such shares, when issued, will
represent fully paid and non-assessable shares of the Company's Common
Stock.
Very truly yours,
HART & TRINEN
William T. Hart
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of CEL-SCI
Corporation, whereby the Company proposes to sell up to 1,389,000
shares of the Company's Common Stock. Reference is also made to
Exhibit 5 included in the Registration Statement relating to the
validity of the securities proposed to be sold.
We hereby consent to the use of our opinion concerning the validity of
the securities proposed to be issued and sold.
Very truly yours,
HART & TRINEN
William T. Hart
Denver, Colorado
August 29, 1996
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of CEL-SCI Corporation on Form S-3 of our report dated
November 29, 1995, except for Note 14, as to which the date is
December 23, 1995, appearing in the Annual Report on Form 10-KA of CEL-
SCI Corporation for the year ended September 30, 1995, and to the
reference to us under the heading "Experts" in the Prospectus, which
is part of this Registration Statement.
DELOITTE & TOUCHE LLP
Washington, DC
August 30, 1996
