As filed with the Securities and Exchange Commission on
November 12, 1997.
Registration No.
333 31489 SECURITIES
AND EXCHANGE COMMISSION
Washington, D.C.
20549
FORM S-3
Amendment
No. 1
Registration
Statemen
t 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
Registra-
Registered
Registered
Unit (1) Price tion Fee
(5)
Common Stock (2) 1,035,000 $6.00 $6,210,000
$2,142
Series A Warrants (3) 1,035,000 - -
Common Stock (5) 1,035,000 $18.00 $18,630,000
$6,425
Total $24,840,000
$8,567
(1) Offering price computed in accordance with Rule 457(c).
(2) Shares issuable upon exercise of Warrants or in connection
with Exchange Offer
(3) Series A Warrants issued in connection with Exchange
Offer. As part of the Exchange Offer, investors may
acquire one share of
common stock and one Series A Warrant for $6.00. For purposes
of calculating the registration fee, the $6.00 offering price
has all been allocated to the shares of common stock issuable
as part of the Exchange Offer.
(4) Shares of Common Stock issuable upon exercise of Series A
Warrants (5) A fee of $1,317 was paid upon the initial filing
of this
Registration Statement
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.
PROSPECTUS
CEL-SCI
CORPORATION This
Prospectus relates to the
sale by the Company of upon to
1,035,000 shares of common stock which are issuable upon the
exercise of 5,175,000 Warrants which were issued in connection
with the Company's February 1992 public offering of Units.
Each Unit sold in such offering consisted of five shares of
Common Stock and five Common Stock Purchase Warrants (the
"Warrants").
The Warrants are exercisable at any time prior to
February 7, 1998 (the "Warrant Expiration Date"). The
terms of the
Warrants
presently provide that every five Warrants allows the holder
to purchase one share of the Company's Common Stock at a price
of $6.00 per share. 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 l5
consecutive trading days. If the expiration date is
accelerated, all Warrants not exercised within the 30-day
period will expire.
Notwithstanding the above, at any time prior to
, l997 every five Warrants will allow the holder to purchase,
for $6.00, one share of the Company's common stock and one
Series A Warrant. Each Series A Warrant entitles the holder
to purchase one share of the Company's Common Stock at a price
of $18.00 per share at any time prior to February 7, 2000.
The foregoing offer (the "Exchange Offer"), unless extended by
the Company, will expire on , l997 (the
"Expiration Date"). The expiration date of the Series A
Warrants may be accelerated under certain conditions. The
shares of Common
Stock
and
Series A Warrants will be separately transferable immediately
upon issuance. See "Plan of Distribution" and "Description of
Securities".
This offering is only
being made to
holders of the Company's
outstanding Warrants.
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" BEGINNING ON PAGE
OF THIS PROSPECTUS AND "DILUTION AND COMPARATIVE
SHARE DATA".
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 November 14, 1997 the closing prices of the Company's
Common Stock and Warrants on the American Stock Exchange were
$ and $ respectively.
As of the date of this Prospectus, there were 5,175,000
Warrants and 11,159,660 shares of Common Stock outstanding.
The Company does not intend to pay any commissions or
other forms of compensation to any person in connection with
this offering.
The expenses payable by the Company in connection
with this
offering are estimated to be $40,000.
The exercise of any Warrants pursuant to the Exchange
Offer will be revocable until the Expiration Date and, if not
yet accepted by the Company, after , or forty days from
the
commencement
of the Exchange
Offer. The Company intends to accept the exercise of all
Warrants timely submitted to the Company in proper form.
Warrants that are not exercised pursuant to the
Exchange Offer, or are exercised but timely withdrawn, may
nevertheless be exercised
until February 7, 1998 (the "Warrant Expiration Date"). Any
Warrants not exercised pursuant to the Exchange Offer will be
of no value after the Warrant Expiration Date. See
"Description of Securities".
Any holder of the Warrants desiring to exercise all
or any portion of the Warrants should either (1) complete and
sign the Letter of Transmittal (or facsimile thereof) in
accoradnce with the instructions in the Letter of Transmittal
and mail it or deliver it with the certificate(s) representing
such Warrants together with the required cash payment to the
Warrant Agent or (2) request his broker, dealer, commercial
bank, trust company or other nominee to effect the transaction
for such holder. A Warrant holder having Warrants registered
in the name of a broker, dealer, commercial bank, trust
company or other nominee must contact such person if the
Warrant holder desires to exercise the Warrants.
This offering is not contingent upon the exercise of any
minimum number of Warrants.
The date of this
Prospectus is November 14, 1997
AVAILABLE
INFORMATION
The Company is subject to the informational
requirements of
the Securities Exchange Act of l934 and in accordance
therewith is required to file reports, proxy statements and
other information with the Securities and Exchange Commission
(the "Commission"). Copies of any such reports, proxy
statements and other information filed by the Company can be
inspected and copied at the public reference facility
maintained by the Commission at Room 1024, 450 Fifth Street,
N.W., Washington, D.C. and at the Commission's Regional
offices in New York (7 World Trade Center, Suite 1300, New
York, New York 10048) and Chicago (Northwestern Atrium Center,
500 West Madison Street, Suite 1400, Chicago, Illinois 60661-
2511). Copies of such material can be obtained from the Public
Reference Section of the Commission at its office in
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 S3 (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, 1996; and
(2) The Company's report on Form 10-Q for the nine
months ending June 30, 1997
(3) The Company's Proxy Statement relating to the
Company's June 3, 1997 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 superseded, 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
("IL2") and certain lymphokines and cytokines. MULTIKINE is
being
tested to determine if it is effective in improving the immune
response of cancer pantients. The Company's second product,
HGP30, 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 Tcell 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 potential
treatments and/or vaccines against various diseases. Present
target diseases are herpes simplex, malaria, tuberculosis,
prostate cancer and breast cancer.
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.
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 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 was
conducted at Jefferson Hospital in Philadelphia, Pennsylvania
and involved prostate cancer patients who had failed on
hormonal therapy. Five patients completed the treatment and
the
data from this study demonstrated the safety and feasibility of
using Multikine in the treatment of prostrate cancer. Biopsies
from the patients in the study also suggest the recruitment of
inflammatory cells to the tumor site. Based on these findings,
investigators are currently preparing a new protocol for
evaluation by the FDA to study the ability of Multikine to
treat patients with prostate cancer. The study is expected to
test Multikine as a therapy to be used prior to surgical
removal of the prostate gland. 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.
In January 1997 the FDA authorized a clinical trial using
Multikine to determine its safety in the potential treatment of
HIV infected individuals and to determine its effect on various
immune system responses.
In April 1997, pursuant to authorization from Israeli
health authorities, a clinical trial was begun using Multikine
to treat head and neck cancer patients. In September 1997 the
Company started a similiar clinical trial in Canada. The
Canadian study will involve up to 21 patients who are
scheduled for surgery or radiation. The first clinical center
to start treatment is Hospital Notre Dame in Montreal, Canada.
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 September 1997 VTI completed a Phase I safety
study of the HGP-30 AIDS vaccine in 24 HIV infected patients.
The study showed that immunizations with the HGP-30 vaccine
coupled with KLH were safe in AIDS patients. The Company's
main focus is now to determine the ability of
the HGP-30 vaccine to prevent, as opposed to only treat, AIDS.
All of the Company's products are in the early stages
of
development. The Company does not expect to develop commercial
products for several years, if at all. The Company has had
operating losses since its inception, had an accumulated
deficit of approximately $36,850,000 at June 30, 1997, and
expects to incur substantial losses for the foreseeable
future.
In August 1996 the Company sold, in a private
transaction, 5,000 shares of its Series B Preferred Stock (the
"Series B Preferred Shares") for $5,000,000 or $1,000 per
share. At the purchasers' option, up to 2,500 Series B
Preferred Shares were convertible, on or after ten days from
the date the shares were registered for public sale (the
"Effective Date"), into shares of the Company's Common Stock
on the basis of one share of Preferred Stock for shares of
Common Stock equal in number to the amount determined by
dividing $1,000 by 87% of the Closing Price of the Company's
Common Stock. All Preferred Shares were 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" was defined as the
average closing bid price of the Company's Common Stock over
the five-day trading period ending on the day prior to the
conversion of the Preferred Stock. Notwithstanding the above,
the conversion price could not be less than $3.60 nor more
than $14.75. Each Preferred Share was entitled to a quarterly
dividend, if, as, and when declared by the Board of Directors,
of $17.50. By means of a separate Registration Statement
filed with the Securities and Exchange Commission, the shares
issuable upon the conversion of the Series B Preferred Shares
were registered for public sale. Prior to December 20, 1996
1,900 Series B Preferred Shares were converted into 527,774
shares of the Company's common stock. In December 1996 the
Company repurchased 2,850 Series B Preferred Shares for
$2,850,000 plus warrants which allow the holders to purchase
up to 99,750 shares of the Company's common stock for $4.25
per share at
any time prior to December 15, 1999. The Company raised funds
required for this repurchase from the sale of its Series C
Preferred Stock. In May 1997 all remaining 250 shares of the
Series B Preferred Stock were converted into 69,444 shares of
common stock.
In December 1996 the Company raised $2,850,000 from
the sale of units consisting of 2,850 shares of the Company's
Series C Preferred Stock, 379,763 Series A Warrants and
379,763 Series B Warrants. The Series C Preferred Shares were
convertible into shares of the Company's Common Stock on the
basis of one share of Preferred Stock for shares of Common
Stock equal in number to the amount determined by dividing
$1,000 by 85% of the Closing Price of the Company's Common
Stock (the "Conversion Price"). The term "Closing Price" was
defined as the average closing bid price of the Company's
Common Stock over the five day trading period ending on the
day prior to the conversion of the Preferred Stock.
Notwithstanding the above, the Conversion Price could not be
more than $4.00. Each Series A Warrant entitles the holder to
purchase one share of the Company's common stock at a price of
$4.50 per share at any time prior to March 15, 1998. Each
Series B Warrant entitles the holder to purchase one share of
the Company's common stock at a price of $4.50 per share at
any time prior to March 15, 1999. The shares issuable upon
the conversion of the Series C Preferred Shares and the
exercise of the Warrants are being offered for public sale by
means of a separate Registration Statement. As of June 30,
1997 all shares of the Series C Preferred Stock had been
converted into 9l5,27l shares of the Company's common stock.
Acquisition of MULTIKINE Technology
The MULTIKINE technology being tested by the Company was
developed by a group of researchers and was assigned, during
l980 and l98l, to Hooper Trading Company, N.V., a Netherlands
Antilles' corporation ("Hooper"), and Shanksville Corporation,
also a Netherlands Antilles corporation ("Shanksville"). The
MULTIKINE technology assigned to Hooper and Shanksville was
licensed to Sittona Company, B.V., a Netherlands corporation
("Sittona"), effective September, l982 pursuant to a licensing
agreement which required Sittona to pay Hooper and Shanksville
royalties on income received by Sittona with respect to the
MULTIKINE technology. In l983, Sittona licensed the MULTIKINE
Technology to the Company and received from the Company a
$1,400,000 advance royalty payment. At such time as the
Company generated revenues from the sale or sublicense of this
technology, the Company was required to pay royalties to
Sittona equal to l0% of net sales and l5% of the licensing
royalties received from third parties. In that event,
Sittona, pursuant to its licensing agreements with Hooper and
Shanksville, was required to pay to those companies a minimum
of l0% of any royalty payments received from the Company. The
license agreement with Sittona also required the Company to
bear the expense of preparing, filing and processing patent
applications
and to obtain and maintain patents in the United States and
foreign countries on all inventions, developments and
improvements made by or on behalf of the Company relating to
the MULTIKINE technology. The license was to remain in effect
until the expiration or abandonment of all patent rights or
until the MULTIKINE technology entered into the public domain,
whichever was later.
Prior to October, 1996, Maximilian de Clara, an Officer,
Director and shareholder of the Company, owned 50% and 30%,
respectively, of Hooper and Shanksville. Between 1985 and
October 1996 Mr. de Clara owned all of the issued and
outstanding stock of Sittona. In October 1996, Mr. de Clara
disposed of his interest in Hooper, Shanksville and Sittona.
In January 1997 Hooper and Shanksville sold all of
their
rights in the MULTIKINE technology to Sittona. Immediately
following these transactions, Sittona sold all of its rights
in the MULTIKINE technology to the Company, including all
rights acquired from Hooper and Shanksville, in consideration
for $500,000 in cash and 751,678 shares of the Company's
common stock. The shares of the Company's Common Stock
acquired by Sittona as a result of this transaction are being
offered to the public by means of a separate registration
statement.
The Company's executive offices are located at 66 Canal
Center Plaza, Suite 510, Alexandria, Virginia 22314, and its
telephone number is (703) 549-5293.
The Offering
This Prospectus relates to the sale by the Company of
1,035,000 shares of common stock which are issuable upon the
exercise of 5,175,000 Warrants which were issued in connection
with the Company's February 1992 public offering of Units.
Each Unit sold in such offering consisted of five shares of
Common Stock and five Common Stock Purchase Warrants (the
"Warrants").
The Warrants are exercisable at any time prior to
February 7, 1998 (the "Warrant Expiration Date"). The terms
of the Warrants presently provide that every five Warrants
allows the holder to purchase one share of the Company's
Common Stock at a price of $6.00 per share. The Company, upon
certain conditions, may accelerate the expiration date of the
Warrants.
Notwithstanding the above, at any time prior to
, l997 every five Warrants will allow the holder to purchase,
for $6.00, one share of the Company's common stock and one
Series A Warrant. Each Series A Warrant entitles the holder
to purchase one share of the Company's Common Stock at a
price of $18.00 per share at any time prior to February 7,
2000. The foregoing offer (the "Exchange Offer"), unless
extended by the Company, will expire on , l997
(the "Expiration Date"). The expiration date of the Series A
Warrants may be accelerated under certain conditions. The
shares of Common Stock and Series A Warrants will be
separately transferable immediately upon issuance. See "Plan
of Distribution" and "Description of Securities".
Use of proceeds. The proceeds from this offering
will be used
to finance the Company's business, including research,
clinical trials and general and administrative expenses. See
"Use of Proceeds".
Shares Outstanding. As of October 31, 1997 the
Company had 11,159,660 issued and outstanding shares of common
stock. The number of shares outstanding excludes shares of
Common Stock issuable upon the exercise of currently
outstanding options and warrants, and shares of Common Stock
issuable upon the
conversion of other convertible securities issued by the
Company. See "Dilution and Comparative Share Data."
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."
AMEX Symbols: Common Stock: HIV
Warrants: HIV WS
Series A Warrants: HIV
WA (1)
(1) The Company has made an application to have the
Series A Warrants listed on the American Stock
Exchange. No assuarance
can be given that the American Stock Exchange will approve the
listing
of the Series A Warrants. See "Risk Factors."
Summary Financial Data
Nine Months Ended Years
Ended September 30,
June 30,
1997 1996
1996 1995 Investment Income
& Other
Revenues $378,264 $188,256
$322,370
$423,765
Expenses:
Research and
Development
4,795,504 2,350,600
3,471,477
1,824,661 Summary Financial Data
Nine Months Ended Years
Ended
September 30, June 30,
1997 1997 1996
1996
1995
Depreciation
and
Amortization
236,541 208,912
290,829
262,705 General and
Administrative
1,799,454 2,113,884
2,882,958
1,713,912 Equity in loss of
joint venture
3,772 3,772
501,125 Net Loss $(6,453,235) $(4,488,912)
$(6,326,666)
$(3,878,638)
Loss per
common share
$(0.72) $(0.74) $(0.98)
$(0.89)
Weighted average
common shares
outstanding
8,970,583 6,086,492 6,425,316
4,342,628
Balance Sheet Data
June 30,
September
30,
1997 1996 1996
1995
Total Assets $7,663,646 $8,723,934 $11,878,370
$6,359,011 Working Capital 6,028,270 6,979,975
10,266,104
3,983,699
Current
Liabilities
306,752 355,684 274,410
491,860
Long Term and
Other Liabilities
19,638 835,316 19,638
1,025,118
Total
Liabilities
326,390 1,191,000 294,048
1,516,978
Shareholders'
Equity
7,337,256
7,532,934 11,584,322
4,842,033
Book Value per Share $0.70 $1.06 $1.47
$0.90
No common stock dividends have been declared by the Company
since its inception.
RISK FACTORS
An investment in the Company's Securities involves a
high degree of risk. Prospective investors are advised that
they may lose all or part of their investment. Prospective
investors should
carefully review the following risk factors.
Lack of Revenues and History of Loss. The Company
has had only limited revenues since it was formed in 1983.
Since the date of its formation and through June 30, 1997, the
Company has incurred net losses of approximately $36,850,000.
During the years ended September 30, 1994, 1995 and 1996 the
Company suffered losses of $4,426,876, $3,878,638 and
$6,326,666 respectively. The Company has relied principally
upon the proceeds of public and private sales of securities to
finance its activities to date. All of the Company's potential
products are in the early stages of development, and any
commercial sale of these products will be many years away.
Accordingly, the Company expects to incur substantial losses
for the foreseeable future.
Need for Additional Capital. Clinical and other
studies necessary to obtain approval of a new drug can be time
consuming and costly, especially in the United States, but
also in foreign countries. The different steps necessary to
obtain regulatory approval, especially that of the Food and
Drug Administration ("FDA"), involve significant costs. The
Company expects that it will need additional financing in
order to fund the costs of future clinical trials, related
research, and general and administrative expenses. The
Company
may be forced to delay or postpone development and research
expenditures if the Company is unable to secure adequate
sources of funds. These delays in development may have an
adverse effect on the Company's ability to produce a timely
and competitive product. There can be no
assurance that the Company will be able
to obtain additional funding from other sources.
Viral Technologies, Inc. ("VTI"), a wholly-owned
subsididary of the Company, is dependent upon funding from the
Company for its operations and research programs.
Cost Estimates. The Company's estimates of the costs
associated with future clinical trials and research may be
substantially lower than the actual costs of these activities.
If the Company's cost estimates are incorrect, the Company
will need additional funding for its research efforts.
Government Regulation - FDA Approval. Products which
may be developed by the Company or Viral Technologies, Inc.
(or which may be developed by affiliates or licensees) will
require regulatory approvals prior to sale. In particular,
therapeutic agents and diagnostic products are subject to
approval, prior to general marketing, by the FDA in the United
States and by comparable agencies in most foreign countries.
The process of obtaining FDA and corresponding foreign
approvals is costly and time consuming, particularly for
pharmaceutical products such as those which might ultimately
be developed by the Company, VTI 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 VTI 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 1998, 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.
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. Certain aspects of the Company's
technologies are covered by U.S. and foreign patents. In
addition, the Company has a number of patent applications
pending. There is no assurance that patent applications filed
by the Company 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 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 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 Company's first Multikine patent will
expire in the year 2000. 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. 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.
Determination of Offering Price. The exercise price
of the Warrants (and the terms of the Exchange Offer) were
determined by the Company based upon factors such as the
Company's capital needs, the percentage of ownership to be
held by Warrant holders, the general condition of the
securities markets and other relevant factors. Neither the
exercise price of the Warrants nor the terms of the Exchange
Offer necessarily bear any relationship to the Company's
assets, book value, earnings history or other investment
criteria.
Offering Proceeds. There is no minimum number of
Warrants which are required to be exercised in connection with
in this Offering. Accordingly, if only a limited number of
Warrants are exercised, the corresponding proceeds to the
Company from this Offering may be small. See "Use of
Proceeds".
Warrants. In connection with the Exchange Offer, the
Company has applied to have the Series A Warrants listed for
trading on the American Stock Exchange. In order for the
Series A Warrants to be listed on the American Stock Exchange,
there must be at least 100,000 Series A Warrants issued and
outstanding. Since there is no minimum number of Warrants
which are required to be exercised in the Exchange Offer, no
assurance can be given that the number of Series A Warrants
which will be issued and outstanding following the expiration
of the Exchange Offer will be sufficient so as to allow the
listing of the Series A Warrants on the American Stock
Exchange. If the Series A Warrants cannot be listed on the
American Stock Exchange, the Company will attempt to have the
Warrants listed for trading on the NASD's Electronic Bulletin
Board.
Lack of Dividends. There can be no assurance the
Company will be profitable. At the present time, the Company
intends to use available funds to finance the Company's
operations. Accordingly, while payment of dividends rests
within the discretion of the Board of Directors, no common
stock dividends have been declared or paid by the Company.
The Company does not presently intend to pay dividends on its
common stock and there can be no assurance that common stock
dividends will ever be paid.
Dilution. Persons purchasing the securities offered
by this Prospectus will suffer immediate dilution since the
price paid for the securities offered will likely be more than
the net tangible
book value of the Company's 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.
USE OF PROCEEDS
The net proceeds to the Company from this (assuming all
Warrants are exercised) are estimated to be approximately
$6,200,000.
The Company anticipates that the net proceeds from this
offering will be used to finance the Company's research,
clinical trials and general and administrative expenses.
Notwithstanding the above, there is no minimum number
of Warrants which is required to be sold in this Offering.
Accordingly, if only a limited number of Warrants are
exercised, the corresponding proceeds to the Company from this
Offering will be minimal.
DILUTION AND COMPARATIVE
SHARE DATA As of October 31, 1997 the Company had
11,159,660 shares of
Common Stock issued and outstanding with a net tangible book
value (total assets less total liabilities and intangible
assets) of $0.67 per share. The following illustrates per
share dilution to investors in this offering as well as other
comparative share data, assuming all Warrants are exercised.
The number of shares outstanding excludes shares of Common
Stock issuable on exercise of outstanding options, warrants
and other convertible securities previously issued by the
Company or which may be issued by the Company in connection
with this offering.
Regular
Warrant
Exchange
Exercise Offer
(2)
Public Offering Price (Price of
One Share of Common Stock Upon
Exercise of Warrants) ................ $6.00
$6.00
Shares Outstanding As Of October
31, 1997
............................. 11,159,660
11,159,660
Shares to be issued in this
Offering.(1) ......................... 1,035,000
1,035,000
Shares Outstanding After This
Offering (3)
......................... 12,194,660
12,194,660
Net Tangible Book Value Per Share
of Common Stock Prior To This
Offering ................ ............
$0.67
$0.67
Pro Forma Net Tangible Book Value
Per Share of Common Stock After
This Offering ........................
$1.15
$1.15
Gain in Book Value Per Share to
Present Shareholders .................
$0.48
$0.48
Dilution Per Share to Purchasers
of Common Stock ......................
$4.85
$4.85
Equity Ownership by Present
Shareholders Following Offering ......
91%
91%
Equity Ownership by Investors in
this Offering ........................
9%
9%
"Net tangible book value" is the amount that
results from subtracting the total liabilities and
intangible assets of the Company from its total assets.
Tangible assets exclude deposits and patent costs.
"Dilution" is the difference between the public offering
price and the net tangible book value of the Company's
shares of Common Stock immediately after the Offering.
(1) Assumes all Warrants are exercised, of which
there
can
be no assurance. In the case of the Exchange Offer, does
not reflect hares of common stock issuable upon the exercise
of the Series A Warrants.
(2) Every five Warrants will allow the holder to
purchase, for $6.00, one share of the Company's Common Stock
and one Series A Warrant. See "Plan of Distribution"
(3) Does not
reflect shares of common stock
issuable upon the
exercise of the Series A Warrants or 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, as shown by the
following:
Number
of
Note
Shares
Reference Outstanding as of October 31, 1997
11,159,660 Shares offered by this Prospectus
1,035,000
Other Shares Which May Be Issued:
Shares issuable upon exercise of
Series A Warrants 1,035,000
A
Shares issuable upon exercise of
Class A and Class B Warrants 233,188
B
Shares issuable upon exercise of warrants
held by former holders of the
Company's Series B Preferred Stock. 82,250
C
Shares issuable upon exercise of
options granted to Company's officers,
directors, employees and consultants 2,481,654
D
Shares outstanding (as adjusted),
assuming all Warrants are exercised: 16,026,752
(A) Pursuant to the terms of the Exchange Offer, at any
time prior to , every five Warrants will allow
the
holder to
purchase, for $6.00, one share of the Company's common
stock and one Series A Warrant. Each Series A Warrant
entitles the holder to purchase one share of the Company's
Common Stock at a price of $18.00 per share at any time
prior to February 7, 2000. The Exchange Offer, unless
extended by the Company, will expire on , l997 (the
"Expiration Date"). See "Description of Securities".
B. In December 1996 the Company raised $2,850,000 from the
sale of units consisting of 2,850 shares of the Company's
Series C Preferred Stock, 379,763 Class A Warrants and
379,763 Class B Warrants. The Series C Preferred Shares
were convertible into shares of the Company's Common Stock
on the basis of one share of Preferred Stock for shares of
Common Stock equal in number to the amount determined by
dividing $1,000 by the 85% of Closing Price of the
Company's Common Stock (the "Conversion Price"). The term
"Closing Price" was defined as the average closing bid
price of the Com- pany'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 could not be more than $4.00. Each Class
A Warrant entitles the holder to purchase one share of the
Company's common stock at a price of $4.50 per share at
any time prior to March 15, 1998. Each Class B Warrant
entitles the holder to purchase one share of the Company's
common stock at a price of $4.50 per share at any time
prior to March 15, 1999. By means of a separate
Registration Statement, the shares issuable upon the
conversion of the Series C Preferred Shares and the
exercise of the Class A Warrants and Class B Warrants are
being offered for public sale. As of October 31, 1997 all
shares of the Series C Preferred Stock had been converted
into 9l5,27l shares of the Company's common stock, 273,163
Series A Warrants had been exercised and 253,175 Series B
Warrants had been exercised.
C. In August 1996 the Company sold, in a private
transaction, 5,000 shares of its Series B Preferred Stock
(the "Preferred Shares") for $5,000,000 or $1,000 per
share. At the purchasers' option, up to 2,500 Preferred
Shares were convertible, on or after November 7, 1996 (the
"Effective Date"), into shares of the Company's Common
Stock on the basis of one share of Preferred Stock for
shares of Common Stock equal in number to the amount
determined by dividing $1,000 by 85% of the Closing Price
of the Company's Common Stock. All Preferred Shares were
convertible, on or after 40 days from the Effective Date,
on the basis of one share of Preferred Stock for shares of
the Company's Common Stock equal in number of the amount
determined by dividing $1,000 by 85% of the Closing Price
of the Company's Common Stock. The term "Closing Price"
was defined as the average closing bid price of the
Company's Common Stock over the five-day trading period
ending on the day prior to the conversion of the Preferred
Stock. Notwithstanding the above, the conversion price
could not be less than $3.60 nor more than $14.75. The
Preferred Shares were entitled to a quarterly dividend of
$17.50 per share. By means of a separate Registration
Statement filed with the Securities and Exchange
Commission, the shares issued upon the conversion of the
Series B Preferred Shares were registered for public sale.
Prior to December 20, 1996 1,900 Series B Preferred Shares
were converted into 527,774 shares of the Company's common
stock. In December 1996 the Company repurchased 2,850
Series B Preferred Shares for $2,850,000 plus warrants
which allow the holders to purchase up to 99,750 shares of
the Company's common stock for $4.25 per share at any time
prior to December 15, 1999. The Company raised the funds
required for this repurchase from the sale of its Series C
Preferred Stock. In May 1997 all remaining 250 shares
of the Series B Preferred Stock were converted into 69,444
shares of common stock. As of October 31, l997 Warrants
for the purchase of 17,500 shares of common stock had
been exercised.
D. The options are exercisable at prices ranging from $2.38
to $19.70 per share. The Company may also grant options
to
purchase 300,907 additional shares under its Incentive
Stock Option and NonQualified Stock Option Plans.
MARKET FOR THE
COMPANY"S COMMON STOCK
As of October 31, 1997, there were approximately
2,800 record holders of the Company's Common Stock and
approximately 100 record holders of the Company's Public
Warrants. Prior to June 5, 1997, the Company's Common Stock
and Warrants were traded on the National Association of
Securities Dealers Automatic Quotation ("NASDAQ") System.
Since June 5, 1997 the Company's Common Stock and Public
Warrants have traded on the American Stock Exchange. Set forth
below are the range of high and low quotations for the periods
indicated as reported by NASDAQ and the American Stock
Exchange, and as adjusted for the 10 for 1 reverse stock split
which was approved by the Company's shareholders on April 28,
1995 and became effective on May 1, 1995. The market
quotations reflect inter-dealer prices, without retail mark-
up, markdown or commissions and may not necessarily represent
actual transactions.
Quarter
Ending Common Stock
Warrants
High Low High
Low
12/31/94 $ 7.50 $ 3.40 $0.25
$0.09
3/31/95 $ 4.00 $ 3.75 $0.22
$0.13
6/30/95 $ 5.30 $ 2.78 $0.15
$0.06
9/30/95 $ 5.46 $ 3.56 $0.28
$0.09
12/31/95 $ 4.75 $ 2.28 $0.25
$0.09
3/31/96 $ 7.12 $ 2.68 $0.28
$0.03
6/30/96 $14.38 $ 4.56 $0.41
$0.16
9/30/96 $12.00 $ 5.62 $0.44
$0.21
12/31/96 $ 6.63 $ 3.50 $0.28
$0.12
3/31/97 $ 6.12 $ 4.19 $0.22
$0.12
6/30/97 $ 5.12 $ 2.75 $0.44
$0.09
9/30/97 $ 8.06 $ 3.12 $0.69
$0.19
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 of
Directors is not obligated to declare a dividend. The
Company has not paid any
dividends on it's Common Stock
and the Company does not have any current plans to pay any
Common Stock dividends.
The provisions in the Company's Articles of Incorporation
relating to the Company's Preferred Stock would allow the
Company's directors to issue Preferred Stock with rights to
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 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.
PLAN OF
DISTRIBUTION Regular Warrant Exercise
The Warrants are exercisable at any time prior to
February 7, 1998 (the "Warrant Expiration Date"). The terms of
the Warrants presently provide that every five Warrants allows
the holder to purchase one share of the
Company's Common Stock at a price of $6.00 per share. The
Company, upon 30-days notice, may accelerate the expiration
date of the Warrants.
The Warrants may be exercised by sending properly
completed and
signed certificates to the Warrant Agent accompanied by payment
in full of the exercise price for each share of Common Stock as
to which the Warrants are being exercised. Payment for the
exercise price of Warrants may be made by cash, wire transfer,
bank cashier's check or personal check. Payments should be
made to "American Securities Transfer". If payment is made by
personal check the shares of common stock issuable upon the
exercise of the Warrants will not be issued until the check has
been paid by the Warrantholder's bank.
Exchange Offer
The terms of the Exchange Offer provide that at any
time prior to
, l997 every five Warrants will allow the holder to
purchase, for $6.00, one share of the Company's common stock
and one Series A Warrant. Each Series A Warrant entitles the
holder to purchase one share of the Company's Common Stock at a
price of $18.00 per share at any time prior to February 7,
2000. The foregoing offer
(the "Exchange Offer"), unless extended by the Company, will
expire on , l997 (the "Expiration Date"). "Description of
Securities" for further information concerning the terms of the
Series A Warrant.
The purpose of the Exchange Offer is to provide an
incentive
for the exercise of the Company's outstanding Warrants. To the
extent that Warrants are exercised pursuant to this Exchange
Offer, the Company will benefit from the receipt of the cash
received in conjunction with the exercise. Any Warrants
accepted for exercise will be retired.
The Board of Directors of the Company believes the
Exchange Offer is in the best interests of the Company and that
the Company will benefit from the receipt of cash proceeds, if
any, received pursuant to the Exchange Offer. However, the
Board of Directors is not making any recommendations to the
holders of the Warrants as to whether they should excercise or
refrain from exercising any or all of their Warrants. Each
Warrant holder must make his or her own decision as to whether
to
exchange all or any portion of the Warrants owned by such
person. Subject to the terms and conditions as set
forth herein, the
Company will accept all Warrants which are timely and properly
tendered to American Securities Transfer, Inc., (the "Warrant
Agent") under the terms of this Exchange Offer prior to 6:00
p.m. Denver, Colorado Time on (the "Expiration Date"). The
Company at its sole option may extend the Exchange Offer for an
additional period of time by giving written or oral
notification of such extension to the Exchange Agent and by
causing notice of any extension of the Exchange Offer to be
mailed to all Warrant holders of record, and to be published in
The New York Times,
the Wall Street Journal or any other newspaper of national
circulation selected by the Company. The Company has no
present intention to extend the Exchange Offer beyond the
Expiration Date.
The Company reserves the
right to withdraw, cancel, modify or
terminate this Exchange Offer at any time prior to the
Expiration Date (by written or oral notice to the Warrant Agent
and by causing notice thereof to be given to all Warrant
Holders of record) if, in the opinion of counsel for the
Company, there exists any actual or threatened legal impediment
to the Exchange Offer, including any material legal action or
administrative proceeding instituted or threatened against the
Company or the Warrant Agent with respect to the Exchange
Offer. No such impediments are presently known by the Company
to exist. Upon any such termination of the Exchange Offer, the
Company will return all such Warrants and cash payments without
interest thereon or deduction therefrom, and have no further
obligation or liability with respect to the Exchange Offer.
Should any funds of any tendering Warrant holder whose
exercise has not been accepted by the Company be left on
deposit with the Warrant Agent for any reason including, but
not limited to, termination of the Exchange Offer, the Warrant
Agent will promptly refund such funds without interest thereon
or deduction therefrom. No variation in the terms of the
Exchange Offer is presently
contemplated. However, if for any reason the terms should be
changed, the revised terms will apply for all tendering Warrant
holders whether they tendered before or after such change.
Requests for additional copies of this Prospectus or
the Letter of Transmittal or assistance in completing an
exchange should be made by mail or telephone to any of the
following:
WARRANT AGENT:
American Securities Transfer, Inc.
938 Quail St., Suite l0l Lakewood,
Colorado 802l5 Telephone: (303) 534
5300 Attention:
THE COMPANY:
CEL-SCI Corporation
66 Canal Center Plaza Suite 510
Alexandria, Virginia 22314
Telephone: (703)
549-5293
Attention: Patricia B.
Prichep Vice President of Operations
The Warrant certificates and payments should NOT be sent to the
Company. Warrant certificates and payments should be sent to
the Warrant Agent. Payment should be made to "American
Securities Transfer".
If a holder of Warrants does not tender Warrants
pursuant to the terms of this Exchange Offer, such holder may
nevertheless exercise the Warrants in accordance with the terms
of the Warrants. Such terms provide that every five Warrants
entitle the holder to purchase one (1) share of the Company'
Common Stock at a price of $6.00 at any time prior to February
7, 1998 (the "Warrant Expiration Date").
Procedure for Exchange Offer
Except as otherwise stated below, to be properly
tendered pursuant to this Exchange Offer, a Warrantholder must
send the Warrant Certificates, together with a properly
completed and executed Letter of Transmittal and the applicable
payment to the Warrant Agent prior to the Expiration Date. The
certificates, Letter of Transmittal and the payment should not
be sent to the Company. The method of delivery of the
Warrants, the payment and other documents forwarded to the
Warrant Agent is at the election and risk of the holder, but if
such delivery is by mail it is suggested that registered mail
with return receipt requested be used. The applicable payment
accompanying the Warrants must be made by cash, wire transfer,
bank cashier's check or personal check payable in United States
dollars to American Securities Transfer, Inc. as Warrant Agent.
If payment is made by personal check, the shares of common
stock and Series A Warrants will not be issued until the check
has been paid by the Warrantholder's bank.
All questions as to the validity, form, eligibility
(including time of receipt) and acceptance of the Warrants or
payments tendered will be determined by the Company, which
determination shall be final and binding. The Company reserves
the absolute right to reject any or all tenders of any Warrants
and payments not properly tendered or any acceptence of which
would, in the opinion of the Company, be unlawful. The Company
also reserves the right to waive any irregularities or
conditions of tender as to any particular Warrants, and the
Company's interpretation of the terms and conditions of the
Exchange Offer (including the instrutions and Letter of
Transmittal) shall be final and binding. Any irregularities in
connection with the tenders, unless waived, must be cured
within such time as the Company shall determine, which time may
be extended beyond the Expiration Date. Neither the Company
nor the Warrant Agent shall be under any duty to give
notification of defects in such tenders or incur any liability
for failure to give such notification. Tenders of the Warrants
and payments received by the Warrant Agent that are not
properly tendered and as to which the irregularities have not
been cured or waived will be returned (without interest on the
payment or deduction therefrom) by the Warrant Agent to the
appropriate
Warrant holder as soon as practicable.
Procedure for Late Delivery of Warrants
If the Warrant Agent receives, prior to the Expiration
Date, the applicable payment with respect to the number of
Warrants being exercised, together with a letter or facsimile
transmission from a commercial bank or trust company in the
United States, a member of the National Association of
Securities Dealers, Inc. or a member firm of a national
securities exchange stating the number of Warrants being
excercised, the name of the holder of the Warrants and
guaranteeing that the Warrants and/or Letter of Transmittal, as
the case may be, and any other documents required for such
exercise will be received by the Warrant Agent within three (3)
business days of the Expiration Date, such tender will be
accepted subject to the receipt by the Warrant Agent of the
guaranteed items within the specified period. The guarantee of
delivery of Warrants may also be effected by executing and
delivering to the Warrant Agent prior to the Expiration Date,
the applicable payment and a Letter of Transmittal with the
guarantee of delivery contained therein separately executed by
one of the aforementioned institutions. Withdrawal Rights
Tenders of Warrants and payments may be withdrawn at
any time prior to the termination of the Exchange Offer and, if
not yet accepted for excercise, after (40 business days
after commencement of the Exchange Offer).
For a withdrawal to be effective, a written or facsimile
transmission notice of withdrawal must be timely received by
the Warrant Agent at its address as set forth above. Such
notice of
withdrawal must set forth the name of the tendering Warrant
holder, the name of the registered holder if different from
that of the Warrant holder, the number of Warrants (and, if
available, the certificate numbers) and the amount of the
payment to be withdrawn. All questions as to the validity
(including time of receipt) or notices of withdrawal will be
determined by the Company, whose determination shall be final
and binding. All Warrants and payments withdrawn in the manner
specified above will not be considered to have been duly
exercised.
Delivery of Common Stock and Series A Warrants
Upon the terms and subject to the conditions of this
Exchange Offer, delivery of the Common Stock and Series A
Warrants in exchange for the Warrants and cash payments validly
tendered and accepted by the Company will be made as soon as
practicable after the Expiration Date. It is anticipated that
the certificates for the Shares of Common Stock and Series A
Warrants will be mailed within three business days of the
Expiration Date. All deliveries will be made through the
Warrant Agent.
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 nonassessable.
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 May 1996 the Company sold 3,500 shares of its Series
A Preferred Stock (the "Preferred Shares") for $3,500,000 or
$1,000 per share. All Preferred Shares were convertible on the
basis of one share of Preferred Stock for shares of the
Company's Common Stock equal in number to the amount determined
by dividing $1,000 by 83% of the Closing Price of the
Company's Common Stock. The term "Closing Price"
was defined as the average closing bid price of the Company's
Common Stock over the five-day trading period ending on the day
prior to the conversion of the Preferred Stock. All
outstanding shares of the Series A Preferred Stock have since
been converted into 632,041 shares of the Company's Common
Stock. The shares issued upon the conversion of the Series A
Preferred Stock were
offered for public sale by means of a separate registration
statement.
See "Dilution and Comparative Share Data" for information
concerning the Company's Series B and Series C Preferred Stock.
Publicly Traded Warrants
In connection with the Company's February, 1992 public
offering, the Company issued 5,175,000 Warrants. Every five
Warrants entitle the holder to purchase one share of the
Company's Common Stock at a price of $6.00 per share prior to
February 7, 1998. The Warrants were issued pursuant to the
terms of a Warrant Agreement between the Company and American
Securities Transfer, Inc. (the "Warrant Agent"). The Company
has authorized and reserved for issuance l,035,000 shares of
Common Stock issuable upon the exercise of the Warrants.
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.
Series A Warrants
Each Series A Warrant entitles the holder to purchase
one share of the Company's Common Stock at a price of $18.00
per share at any time prior to February 7, 2000. The Company,
upon 30-days notice, may accelerate the expiration date of the
Series A 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 Series A
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 Series A Warrants not exercised within
the 30day period will expire.
Other provisions of the Series A 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 Series A
Warrants.
2. Unless exercised within the time provided for
exercise, the Series A Warrants will automatically expire.
3. The exercise price of the Series A Warrants may
not be increased during the term of the Series A 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 Series A
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 Series A Warrants.
5. The holders of the Series A 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 Series A 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 Series A Warrants will not be entitled to
participate in the distribution of the Company's assets.
Transfer Agent
American Securities Transfer, Inc., of Denver,
Colorado, is the transfer agent and registrar for the Company's
Common Stock and Warrants.
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 incorporated by reference in
this prospectus by reference from the Company's Annual Report
on Form l0 K have been audited by Deloitte & Touche LLP,
independent auditors, as stated in their report which is
incorporated herein,
and have been so incorporated in reliance 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. 2800D:1-27
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
........................................... 5
Risk Factors
................................................. 10
Use of
Proceeds...............................................
14 Dilution and Comparative Share Data
..........................
14
Market for the Company's Common
Stock......................... 18
Plan of Distribution
.........................................
17
Description of Securities
.................................... 18
Litigation
................................................... 21
Experts
......................................................
21 Indemnification
.............................................. 21
Additional Information
....................................... 21
CEL-SCI CORPORATION
PROSPECTUS
2800D:28
PART II
Information Not Required in
Prospectus
Item 14. Other Expenses of Issuance and Distribution.
SEC Filing Fee
$8,567
NASD Filing Fee
- -
Blue Sky Fees and
Expenses Printing and
Engraving Expenses 5,000
Legal Fees and Expenses
20,000 Accounting Fees
and
Expenses 5,000
Transfer Agent Fees
-
Miscellaneous Expenses
1,433
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 Regis- tration
Statement on Form S-1
and PostEffective
Amendment ("Registration
Statement"),
Registration Nos. 2-
85547D and 337531.
(b) Amended
Articles Incorporated by reference to
Exhibit
3(a) of the Company's
Registration Statement on Form S1, Registration Nos. 2-85547-D
and 33 7531.
(c) Amended Articles Filed as Exhibit 3(c)
to
the
Company's
(Name change only) Registration Statement
on
Form
S-
1
Registration Statement
(No. 33 34878).
(d) Bylaws
Incorporated by reference to
Exhibit
3(b) of the Company's
Registration Statement
on Form S1, Registration
Nos. 285547-D
and 33-7531.
II-1
4(a) Specimen copy of Incorporated by
reference
to
Exhibit
Stock Certificate 4(a) of the Company's
Registration
Statement on Form S-1,
Registration Nos. 2-85547D and 33-7531.
(c) Form of Common Stock Incorporated by
reference
to
Exhibit
Purchase Warrant 4(c) filed as an exhibit
to
the
Company's
Registration
Statement on Form S-
1 (Registration No.
3343281).
(d) Form of Series A
Warrant
(e) Letter of Transmittal
5. Opinion of Counsel
10(e)
Employment
Agreement with
Filed with Amendment
Number 1 to
the Geert Kersten
Company's
Registration
Statement on Form S-1
(Commission File
Number 33 43281).
23(a) Consent of Hart & Trinen
(b) Consent of Deloitte & Previously filed
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.
II-2
(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.
II-3
2800D:29-31
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
S3 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 day of October, 1997.
CEL-SCI CORPORATION
By:
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
Director and Principal
October , 1997 MAXIMILIAN DE CLARA Executive Officer
Director, Principal
October , 1997 GEERT R. KERSTEN Financial
Officer
and Chief
Executive Officer Director
October ,
1997
MARK V. SORESI
Director
October
,
1997
F. DONALD HUDSON
2800D:32
[TEXT]
IMPORTANT: EXCHANGE OFFER EXPIRES 6:00 P.M. DENVER,
COLORADO TIME ON , l997 UNLESS EXTENDED LETTER OF
TRANSMITTAL TO ACCOMPANY COMMON STOCK PURCHASE WARRANTS AND
CASH
TENDERED PURSUANT TO THE EXCHANGE OFFER
OF CEL SCI CORPORATION
The Warrant
Agent: AMERICAN
SECURITIES
TRANSFER, INC.
By Mail: By Facsimile:
By Hand:
938 Quail Street
938 Quail Street
Suite l0l
Suite l0l
Lakewood, Colorado 802l5
Lakewood,
Colorado 802l5
Wire transfer instructions:
The instructions accompanying this
Letter of Transmittal should be read
carefully before this Letter of Transmittal
is completed. The undersigned hereby tenders
to CEL-SCI Corporation, a (the "Company"),
Common Stock Purchase Warrants (the
"Warrants"), together with payment in the
amount of $6.00 for every five Warrants
tendered in exchange for (i) one share of the
Company's Common Stock, and (ii) one Series A
Warrant. Such Warrants and cash are tendered
in accordance with the terms and conditions
of the Exchange Offer as set forth in the
Company's Prospectus dated
, l997
Every five Warrants tendered
pursuant to the Exchange Offer must be
accompanied by payment in the amount of
$6.00. Payment may be made to the Warrant
Agent by cash, wire transfer, bank cashier's
check, postal money order or personal check.
In the case of payment by personal check, the
shares of common stock and Series A Warrants
will not be issued to the tendering
Warrantholder until the check has cleared the
Warrantholder's bank.
The name and address of the registered
owner(s) have been
printed below exactly as they appear on the
certificate(s) representing Warrants tendered
hereby. The certificate(s) and the number of
Warrants that the undersigned wishes to
tender are indicated in the appropriate
boxes.
The undersigned represents that he
or she has full authority to sell and to
transfer the tendered Warrants and that the
Company will acquire good title thereto free
and clear of all liens, claims and
encumbrances. The undersigned will, upon
request, execute any additional documents
necessary to complete the sale and transfer
of the tendered Warrants. All authority
conferred or agreed to be conferred in this
Letter of Transmittal shall be binding upon
the successors, assigns, heirs, executors,
administrators and legal representatives of
the undersigned and shall not be affected by
and shall survive the death or incapacity of
the undersigned.
The undersigned hereby irrevocaby
constitutes the Warrant Agent as attorney
with full power of substitution to deliver
the tendered Warrants and the required
payment together with all accompanying
evidences of authority to or upon the order
of the Company and to cause the tendered
Warrants to be cancelled on the books of the
Company.
Please issue and deliver the
certificates for the shares of
Common Stock and Series A Warrants to the
undersigned at the address specified below
unless otherwise indicated under Special
Instructions.
DESCRIPTI
ON
OF WARRANTS
TENDERED
C
e
r
t
i
f
i
c
a
t
e
s
E
n
c
l
o
s
e
d
N
u
m
b
e
r
o
f
Warrant
Warrants
Number
of
Print Name and Address of Certificate
Represented By
Warrants
Registered Owner(s)
Number Certificate
Tendered
SIGN HERE
Signature(s) of
Warrantholder(s)
Signature Guaranteed:
Necessary only in cases specified in
Instruction l. The signature(s) must be
guaranteed by an elgible guarantor institution
(Banks, Stockbrokers, Savings and Loan
Associations and Credit Unions with membership
in an approved signature guarantee
Medallion Program) pursuant to S.E.C.
Rule 17Ad-15.
Must be signed by registered holder(s)
exactly as name(s)
appear(s)
on warrant certificate(s) or by person
authorized to become registered
holder(s) by certificates
and documents transmitted. If signature
is
by executor, administrator, trustee,
guardian, attorney, agent or other
person acting in a fiduciary or
representative capacity, please set
forth full title. See Instructions.
Dated:
Name(s):
(Please Print)
Capacity:
Address:
(Include Zip Code)
Telephone Number:
(Include Area Code)
Tax Identification or Social Security
No.:
SPECIAL INSTRUCTIONS
To be completed ONLY if
certificates for the shares of Common
Stock and Series A Warrants are to be
issued in the name of and sent to someone
other than the undersigned. Issue
Certificates To: Name:
(Please Print)
Address:
(Include
Zipe
Code) Telephone No.:
Tax Identification or Social Security
No.:
GUARANTEE OF DELIVERY
Use Only if Certificates Are Not Tendered
with this
Letter of
Transmittal
(See
Instruction
2)
The undersigned:
A member of a national securities
exchange
A member of the NASD
A commercial bank or trust
company having an office in the
United States guarantees that
the Warrants indicated in the
box on page l as tendered are
held for its own account, or for
the account(s) of others who
have authorized this tender, and
guarantees to deliver to the
Warrant Agent in proper form for
transfer, certificates for the
Warrants tendered by this Letter
of Transmittal within three (3)
business days after expiration
of the Exchange Offer and
confirms that the tender of such
Warrants is in compliance with
Rule l4e4 promulgated under the
Securities Exchange act of l934.
Firm Name:
Address:
Authorized Signature:
Area Code and Telephone Number:
Date:
INSTRUCTIONS
Forming Part of the Terms and
Conditions of the Exchange Offer
l. Delivery of Letter of
Transmittal and Certificates;
Signature Guarantees. Tenders made by
means of this Letter of Transmittal, or a
facsimile thereof, signed by the
registered holder(s) or the persons(s)
authorized to become a registered holder
of the tendered Warrants, must be
received by the Warrant Agent prior to
6:00 P.M., Denver, Colorado time, on
, 1997 (the "Expiration Date"), unless
the Offer is extended. If Warrants are
tendered by a registered holder who has
completed the box entitled "Special
Instructions," signatures on the Letter
of Transmittal must be guaranteed by an
elgible guarantor institution (Banks,
Stockbrokers, Savings and Loan
Associations and Credit Unions with
membership in an approved signature
guarantee Medallion Program), pursuant to
S.E.C. Rule 17Ad-15, unless tendered on
behalf of such member, commercial bank or
trust company. If certificates are
registered in the name of a person other
than the signer of the Letter of
Transmittal, the certificate(s) must be
duly endorsed, or accompanied by
appropriate powers signed, by the
registered
holder with the signature endorsement or
appropriate power guaranteed thereon and
on the Letter of Transmittal as provided
above. If the Letter of Transmittal is
executed by an officer on behalf of a
corporation or by an executor,
administrator, trustee, guardian,
attorney, agent or other person acting in
a fiduciary or a representative capacity,
proper documentary evidence must be
furnished of the authority of the person
executing the same. If the tendered
certificates are owned of record by two
or more joint owners, all such owners
must sign the Letter of Transmittal.
Questions regarding such evidence of
authority may be referred to the Warrant
Agent.
2. Guarantee of Delivery.
Prior to the Expiration Date, tenders may
be made without the concurrent deposit of
warrant certificates if such tenders are
made by or through members of a national
securites exchange or the NASD or by
commercial banks
or trust companies having an office in
the United
States (an "Eligible Institution") and
are accompanied by the applicable
payment. In such cases, the Letter of
Transmittal and the applicable payment
must be received prior to the Expiration
Date by the Warrant Agent and the
Guarantee of delivery contained in the
Letter of Transmittal must be executed by
such Eligible Institution. In addition,
the certificates tendered thereby must be
received by the Warrant Agent no later
than three (3) business days after the
Expiration Date.
The Company expressly reserves
the right to extend the Expiration Date
by giving oral or written notice of such
extension to the Warrant Agent and by
causing written notice of such extension
to be mailed to all Warrant holders of
record, and to be published in The Wall
Street Journal, the New York Times or
other newspapers of national circulation
selected by the Company.
If a Warrantholder desires to
tender Warrants pursuant to the Offer and
time will not permit his or her Letter of
Transmittal to reach the Warrant Agent
prior to the Expiration Date, his or her
tender may be
effected if, prior to the Expiration
Date, the Warrant Agent has received the
applicable payment and a telegram or
letter from an Eligible Institution
setting forth the name of the
Warrantholder, the number of Warrants
tendered and a statement that the tender
is being made thereby and guaranteeing
that the warrant certificates, together
with the Letter of Transmittal, and any
other required documents, will be
received by the Warrant Agent no later
than three (3) business days after the
Expiration Date and representing that the
Warrantholder on whose behalf the tender
is being made is deemed to own the
Warrants being tendered within the
meaning of Rule l4e-4 promulgated under
the Securities Exchange Act of l934, as
amended.
The exchange, in any event, for
Warrants
tendered pursuant to the Offer will be
made only after the timely receipt by the
Warrant Agent of certificates and payment
therefor, and any other required
documents.
3. Partial Tenders. If fewer
than all
the Warrants evidenced by
any certificate submitted are to be
tendered, fill in the Number of Warrants
which are to be tendered in the box
entitled "Number of Warrants Tendered."
A new certificate for the remainder of
the Warrants which were evidenced by your
old certificate(s) will be sent to you,
unless otherwise provided in the
appropriate box on this Letter of
Transmittal, as soon as
practicable after the expiration of the
Offer. All Warrants represented by
certificates listed are deemed to have
been tendered unless otherwise indicated.
4. Methods of Delivery of Letter of
Transmittal and
Certificates.
The method of delivery of this Letter of
Transmittal, the warrant certificates,
cash payment and any other required
documents is at the option and risk of
the Warrantholder, but, except as
otherwise provided
in Instruction 2 above, the delivery will
be deemed made only when actually
received by the Warrant Agent. If such
delivery is by mail, registered mail with
return receipt requested, properly
insured, is recommended.
5. Payments. The applicable
payments to accompany the
Warrants
tendered may be made by cash, wire
transfer, bank cashier's check, personal
check, or postal money order or personal
check, payable in United States dollars
to the order of American Securities
Transfer, Inc., as Warrant Agent for CEL-
SCI Corporation. If payment is made by
personal check the shares of common stock
and Series A Warrants will not be issued
to the tendering Warrantholder until the
check has cleared the
Warrantholder's bank.
6. No Conditional Tenders. No
alternative, conditional,
irregular
or contingent tenders will be accepted.
7. Multiple Registrations. If
a Warrantholder's Warrants are registered
differently on several
certificates, it will be necessary for
the Warrant holder to complete, sign and
submit as many separate Letters of
Transmittal as there are different
registrations of Warrants.
8. Inadequate Space. If the
space provided on page l of this
Letter of Transmittal is inadequate, the
certificate numbers and number of
Warrants should be listed on a separate
signed schedule attached to this
document.
9. Withdrawal Rights. Tenders
of Warrants and payments may
be
withdrawn at any time prior to the
termination of this Offering, and if not
yet accepted for exchange after
, l997 (40 business days
after the commencement of this Offering).
For withdrawal to be effective, a
written, or facsimile transmission notice
of withdrawal must be timely received by
the Warrant Agent at the address as set
forth above. Such notice of withdrawal
must set forth the name of the tendering
Warrantholder, the name of the registered
holder if different from that of the
Warrantholder, the number of Warrants
(and, if available, the certificate
numbers) and the amount of the payment to
be withdrawn. All questions as to the
validity (including time of receipt) of
notices of withdrawal will be determined
by the Company,
whose determination shall be final and
binding. All Warrants and payments
withdrawn in the manner specified above
will not be considered to have been duly
tendered.
l0. Odd-Lot Tenders. Warrants
may be tendered in amounts other than
multiples of 100.
11. Waiver of Conditions. The
Company reserves the absolute right to
waive any of the specified conditions in
the Offer in the case of any Warrants
tendered.
l2. Requests for Assistance or
Additional Copies. Questions and
requests for assistance or additional
copies of the Prospectus and the Letter
of Transmittal may be directed to the
Warrant Agent or to the Company as set
forth below:
Warrant Agent:
Company:
American Securities Transfer, Inc. CEL-
SCI Corporation
938 Quail Street, Suite l0l
66 Canal Center Plaza, Suite 510
Lakewood, Colorado 802l5
Alexandria, Virginia
22314 Telephone: (303) 234-5300
Telephone: (703) 5495293 Telecopy: (303)
234 5340
Telecopy: (703) 549-6269
2800D:34-41
<\texr>
2800D:42
SERIES A
WARRANT
FOR
COMMON
STOCK
CEL-SCI
CORPORATION No. W -
Warrants
THIS IS TO CERTIFY that, for value received and
subject to the terms and conditions herein set forth,
or registered assigns
(the "Warrant Holder"), is entitled to purchase, pursuant to
this Warrant, at any time before 12:00 p.m. on February 7,
2000, at a price of $18.00 per share, as adjusted from time to
time as herein set forth (the "Purchase Price"), one share of
the common stock, (the "Common Stock"), of Cel-Sci Corporation,
a Colorado corporation (the "Company"), for each warrant
represented by this certificate. The shares of Common Stock
purchasable upon exercise of the Warrant are herein called the
"Warrant Stock." Notwithstanding anything contained herein to
the contrary, this Warrant may not be exercised unless a
current Registration Statement covering the Warrant Stock is in
effect with the Securities and Exchange Commission and any
applicable state securities commission.
1. Term of Warrant. Subject to the foregoing, this
Warrant may be exercised at any time prior to 12:00 p.m. on
February 7, 2000, or earlier if so terminated by the Company
under Paragraph 2; provided, however, that the Company may
extend the exercise period of this Warrant by giving notice of
such extension.
2. Notice of Earlier Termination. The Company, upon
30 days notice, may accelerate the expiration date of this
Warrant, provided, however, that at the time the Company gives
such notice of acceleration (1) the Company has in effect a
current registration statement with the United States
Securities Exchange Commission covering the shares of the
Common Stock issuable upon the exercise of this Warrant 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. All Warrants not exercised within
the 30day period will expire.
3. Adjustment for Merger, Consolidation, etc. If
there is any change in the Common Stock of the Company through
merger, consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure of
the Company, appropriate adjustments will be made so that the
Warrant Holder has the right thereafter to receive, upon the
exercise of the Warrant, the kind and amounts of shares of
stock or other securities or property to which it would have
been entitled if, immediately prior to such merger,
consolidation, reclassification, reorganization,
recapitalization, or other change in the capital structure, it
had held the number of shares of Common Stock that were then
purchasable upon the exercise of the
Warrant.
4. Adjustment to Purchase Price. The Company may,
in
its sole discretion, lower the purchase price at any time, or
from time to time. When any adjustment is made in the Purchase
Price, the Company shall cause a copy
of such statement to be mailed to the Warrant Holder, as of a
date within ten days after the date when the purchase price has
been adjusted.
5. Reservation of Common Stock. The Company agrees
that the number of shares of Common Stock sufficient to provide
for the exercise of the Warrant upon the basis herein set forth
will at all times during the term of this Warrant be reserved
for the exercise thereof.
6. Manner of Exercise. Exercise may be made of all
or any part of the Warrant by surrendering it, with the
purchase form provided for herein duly executed by the Warrant
Holder or by the Warrant Holder's duly authorized attorney,
plus payment of the Purchase Price in cash at the office of the
Company's transfer agent, or at such other office or agency as
the Company may designate in writing.
7. Issuance of Common Stock upon Exercise. The
Company, at its expense, shall cause to be issued, within ten
days after exercise of this Warrant, a certificate or
certificates in the name requested by the Warrant Holder of the
number of shares of Common Stock (or other securities or
property or combination thereof) to which the Warrant Holder is
entitled upon such exercise. All shares of Common Stock or
other securities delivered upon the exercise of the Warrant
shall be validly issued, fully paid, and non-assessable.
Irrespective of the date of issuance and delivery of a
certificate or certificates for any shares of Common Stock or
other securities or property or combination thereof issuable
upon the exercise of this Warrant, each person (including a
corporation) in whose name any such certificate or certificates
is to be issued will for all purposes be deemed to have become
the holder of record of the Common Stock, the securities,
and/or property represented thereby on the date on which a duly
executed notice of exercise of this Warrant and payment for the
number of shares of Warrant Stock as to which this Warrant
Holder has exercised are delivered to the Company.
8. No Right as Stockholder. The Warrant Holder is
not, by virtue of ownership of the Warrant, entitled to any
rights whatsoever of a stockholder of the Company.
9. No Dilution or Impairment. The Company will not,
by amendment of its certificate of incorporation or through
reorganization, consolidation, merger, dissolution, sale of
assets, or any other voluntary action, avoid or seek to avoid
the observance or performance of any of the terms of this
Warrant, but will at all times in good faith take all such
action as may be necessary or appropriate in order to protect
the rights of the Warrant Holder against dilution or other
impairment.
10. Assignment. This Warrant is freely assignable by
the Warrant Holder hereof.
EXECUTED on this day of , 1997.
CEL-SCI CORPORATION
By
President
2800D:43-44
ELECTION TO
PURCHASE The undersigned hereby irrevocably elects to
exercise
warrants represented by this Warrant Certificate, and to
purchase the common shares issuable upon the exercise of such
warrants, and requests that the certificates for such shares
shall be issued in the name of:
Address
Social Security or
other identifying
number
and be delivered to
Name
at Address
and, if said number of Warrants shall not be all the
Warrants evidenced by this Warrant certificate, that a new
Warrant certificate for the balance of such Warrants be
registered in the name of, and delivered to, the
undersigned at the address stated below.
Dated: , 19
Name of Warrantholder:
Address:
Signature:
2800D:45
November 11, 1997
CEL-SCI Corporation
66 Canal Center Plaza
Suite 510
Alexandria, Virginia 22314
This letter will constitute an opinion upon the legality of the
sale by CELSCI Corporation (the "Company"), of up to 1,035,000
shares of Common Stock, up to 1,035,000 Series A Warrants, and up
to 1,035,000 shares of common stock issuable upon the exercise of
the Series A Warrants, all as referred to in the Registration
Statement on Form S3 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 shares of Common
Stock and Series A Warrants have been lawfully issued and such
securities, when issued, will be fully paid and non-assessable.
It is our further opinion that the shares of Common Stock
issuable upon the exercise of the Series A Warrants will, when
issued in accordance with the terms of the Series A Warrants, be
lawfully issued and fully paid and nonassessable shares of the
Company's Common Stock.
Very truly yours,
HART & TRINEN
William T. Hart
2800D:47
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of CEL-
SCI Corporation, whereby the Company proposes to sell up
to 2,070,000 shares of Common Stock and 1,035,000 Series
A Warrants. 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
November 11, 1997
2800D:49
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
S3 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 12th day of November, 1997.
CEL-SCI CORPORATION
By:/s/ Maximilian de Clara
MAXIMILIAN DE CLARA,
PRESIDENT
Pursuant to the requirements of the Securities Act of
l933, this Registration Statement has been signed by the
following persons in the capacities and on the dates
indicated. Signature Title
Date
/s/ Maximilian de Clara Director and Principal
November
12,
1997
MAXIMILIAN DE CLARA Executive Officer
/s/ Geert R. Kersten Director, Principal
November
12,
1997
GEERT R. KERSTEN Financial Officer
and Chief
Executive Officer
/s/ Mark V. Soresi Director
November
12,
1997
MARK V. SORESI
Director
November
,
1997
F. DONALD HUDSON
II-3
2800D:50
