UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15
(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996.
OR
( ) TRANSITION REPORT
PURSUANT
TO
SECTION 13 OR 15 (d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______________ to
______________.
Commission File Number 0-11503
CEL-SCI CORPORATION
Colorado
84-0916344
____________________________
____________________________
State or other
jurisdiction
(IRS) Employer
incorporation Identification Number
66 Canal Center Plaza, Suite 510
Alexandria, Virginia 22314
_____________________________
Address of principal executive offices
(703) 549-5293
_____________________________
Registrant's telephone number, including area code
Indicate by check mark whether the Registrant
(1) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities
Exchange
Act of 1934 during
the preceding 12
months (or for such shorter period that the
Registrant
was
required to file such reports) and (2) had been subject
to such filing requirements for the past 90 days.
Yes ____X_____ No __________
Class of Stock No. Shares
Outstanding
Date
Common 8,555,800
February
4,1997
Page
1 of 13 pages
TABLE OF CONTENTS
PART I FINANCIAL INFORMATION
Item 1.
Page
Balance Sheets 3-
4
Statement of Operations
5
Statements of Cash Flow 6-
7
Notes to Financial Statements
8
Item 2.
Management's Discussion and
Analysis
11
PART II
Item 6.
Exhibits and Reports on Form 8-K
12 Signatures
13
Item I. FINANCIAL STATEMENTS
CELSCI CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
ASSETS
(unaudited)
December 31,
September 30 1996
1996
CURRENT ASSETS:
Cash and cash equivalents $4,971,085
$3,549,810
Investments, net 4,049,932
6,498,812
Interest receivable 61,549
76,515
Prepaid expenses 262,063
272,404
Short-term loan to
officer/shareholder 300,000
- -
Advances to officer/
shareholder and employees 113,208
142,973
Total Current Assets 9,757,837 10,540,514
RESEARCH AND OFFlCE EQUIPMENT-
Less accumulated depreciation
of $926,261 and $863,899
819,358
871,983
DEPOSITS
18,178
18,178
PATENT COSTS- less accumulated
amortization of $364,841
and $352,990 442,968
447,695
$11,038,341
$11,878,370
See notes to condensed financial statements.
3
CEL-SCI CORPORATION
CONSOLIDATED CONDENSED BALANCE SHEETS
(continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
(unaudited)
December 31, September
30 1996
1996
CURRENT LIABILITIES:
Accounts payable $ 107,806 $
274,410
Other current liabilities 500,000
- -
Total current liabilities 607,806
274,410 DEFERRED RENT 19,638
19,638
Total liabilities 627,444
294,048
STOCKHOLDERS' EQUITY
Preferred stock, Series A,
$.01 par value - authorized
3,500 shares; issued and out-
standing, 0 and 600 shares -
6
Preferred stock, Series B,
$.01 par value - authorized
5,000 shares; issued and out-
standing, 250 and 5,000 shares 3
50
Preferred stock, Series C,
$.01 par value - authorized
3,600 shares; issued and out-
standing, 2,850 and 0 shares 28
- -
Common stock, $01 parvalue;
authorized, 100,000,000
shares; issued and out-
standing, 8,521,450 and
7,831,481 shares 85,214
78,315
Additional paid-in capital 42,017,042
41,918,036
Net unrealized loss on equity
securities (15,078)
(16,078)
Dividends (98,968)
Deficit (31,577,344) (30,396,007)
TOTAL STOCKHOLDERS'
EQUITY 10,410,897
11,584,322
$ 11,038,341 $
11,878,370
See notes to condensed financial statements.
4
CEL-SCI CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(unaudited) Three
Months Ended
December 31,
1996
1995 REVENUES:
Gross Sales $1,375 $
- -
Interest income 123,670
44,421
Other income -
18,080
TOTAL INCOME 125,045
62,501
EXPENSES:
Research and development 683,959
1,238,197
Depreciation and
amortization 74,214
71,268
General and administrative 548,209
477,888
TOTAL OPERATING EXPENSES 1,306,382
1,787,353
EQUITY IN LOSS OF JOINT VENTURE -
3,772
NET LOSS $1,181,337
$1,728,624
LOSS PER COMMON SHARE $ 0.14 $
0.32
WEIGHTED AVERAGE COMMON
SHARES OUTSTANDING 8,153,409
5,457,431
See notes to condensed financial statements.
5
CEL-SCI CORPORATION
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW
(unaudited)
Three Months Ended
December 31,
1996
1995 CASH FLOWS FROM OPERATING
ACTIVITIES:
NET LOSS $ (1,181,337) $
(1,728,624)
Adjustments to reconcile net
loss to net cash used in
operating activities:
Research and development
expenses related to purchase
of Viral Technologies, Inc.
- -
536,619
Depreciation and amortization 74,214
71,268
Amortization of premium (discount)
on investments (75,120) -
Equity in loss of joint venture -
3,772
Realized loss on sale of investments - -
Changes in assets and liabilities,
net of effect from purchase
of Viral Technologies, Inc.:
Decrease (increase) in interest receivable 14,966
(2,063)
Decrease (increase) in accounts receivable -
Decrease (increase) in prepaid expenses 10,341
37,333 Decrease (increase) in advances 29,765
6,304 Increase (decrease) in other current
liabilities 500,000 -
Increase (decrease) in accounts payable (166,604)
(184,417) NET CASH USED IN OPERATING ACTIVITIES
(793,775) (1,259,808)
CASH FLOWS PROVIDED BY (USED IN)
INVESTING ACTIVITY:
Sales of investments 2,525,000 -
Purchase of investments - -
Advance to Joint Venture - -
Payment on note payable -
(80,845)
Note receivable from employee/
shareholder (300,000) -
Payments received on note
receivable from employee/shareholder -
Laboratory construction ` (8,205)
- -
Purchase of research and office equipment (1,533)
Patent costs (7,124)
(5,885)
NET CASH USED IN INVESTING ACTIVITY 2,208,138
(86,730) 6
Continued on next page
CASH FLOW, CONTINUED FROM PREVIOUS PAGE
CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES:
Repurchase of preferred stock (2,850,000)
Issuance of preferred stock 2,850,000 -
Dividends paid (98,968)
Issuance of common stock 105,880 500,000
NET CASH PROVIDED BY FINANCING
ACTIVITIES 6,912 500,000
NET (DECREASE) INCREASE IN CASH 1,421,275
(846,538)
CASH AND CASH EQUIVALENTS:
Beginning of period 3,549,810
3,886,950
End of period $ 4,971,085 $
3,040,412
SUPPLEMENTAL DISCLOSURES:
In October1995, CEL-SCI issued 159,170 shares of common stock as
consideration for remaining 50% of Viral Technology, Inc.
In conjunction with this acquisition, CEL-SCI obtained net assets
with a fair value of$170,000.
During the quarter ended December 31,1996, 600 shares of Series A
Preferred Stock were converted into 127,945 shares of common stock and
1,900 shares of Series B Preferred Stock were converted into 527,774
common stock.
See notes to condensed financial statements.
7
CEL-SCI CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 1996
AND 1995 (unaudited)
A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying financial statements have been prepared
in accordance with rules established by the Securities
and Exchange Commission for Form 10-Q. Not all
financial disclosures required to present the financial
position and results of operations in accordance with
generally accepted accounting principles are included
herein. The reader is referred to the Company's
Financial Statements included in the registrant's
Annual Report on Form 10-K for the year ended
September 30, 1996. In the opinion of management, all
accruals and adjustments (each of which is of a
normal recurring nature) necessary for a fair
presentation of the financial position as of December
31, 1996 and the results of operations for the three-
month period then ended have
been made. Significant accounting policies have
been consistently applied in the interim financial
statements and the annual financial statements.
Investments
Effective September 30, 1994, the Company adopted,
on a prospective basis, Statement of
Financial Accounting Standard No. 115, "Accounting
for Certain Debt and Equity Securities" (SFAS 115) and
revised its policy for investments. Investments that
may be sold as part of the liquidity management of the
Company or for other factors are classified as available-
for-sale and are carried at fair market value.
Unrealized gains and losses on such securities are
reported as a separate component of
stockholders' equity. Realized gains and losses on
sales of securities are reported in earnings and
computed using the specific identified cost basis.
Loss per Share
Net loss per common share is based on the weighted
average number of common shares outstanding
during the period.
Common stock equivalents, including options to
purchase common stock, are excluded from the
calculation as they are antidilutive.
Long-lived Assets
Statement of Accounting Standards No. 121, "Accounting
for the Impairment of Long-lived Assets and for Long-lived
Assets to be Disposed of" is effective for financial
statements for
fiscal years beginning after December 15, 1995. It is
the Company's opinion that the adoption of the
statement would have no material effect on its Financial
Statements.
CEL-SCI CORPORATION
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31,
1996
AND 1995
(unaudited)
(continued)
B. RELATED PARTY TRANSACTIONS
In October, 1996, the Company loaned $300,000 to an
officer and shareholder. The loan carried an interest
rate of 5% and was due on December 31, 1996. At
that time, the loan was extended and is now due March
31, 1997.
C. STOCKHOLDERS' EQUITY
During 1996, the Company authorized 5,000 shares of
Series B Preferred Stock (Series B Stock) with a par
value of $.01 per share. Holders of Series B Stock
are entitled to dividends, payable quarterly if
declared, at the rate of $17.50 per quarter.
Dividends which are not declared will not accrue nor
be cumulative. Each share of Series B Stock is
convertible into shares of common stock equal in number
to the amount determined by dividing $1,000 by 87% of
the closing price of the Company's common stock on or
after 10 days from the effective registration date of
the common shares, and 85% of the closing price on or
after 40 days from the effective date, with the
conversion price not less
than $3.60 nor more than $14.75. Dividends were
declared and paid on Series B Stock during the quarter
ended December 31,1997. During the quarter, 1,900
shares of Series B Stock were converted into 527,774
shares of common stock at a price of $3.60 per
share of common stock. Two thousand, eight
hundred fifty shares of Series B Stock were
repurchased by the Company during the quarter ended
December 31, 1996.
Also during the quarter ended December 31, 1996, the
Company issued 2,850 shares of Series C Preferred Stock
(Series C Stock) with a par value of $.01 per share.
Series C Stock is convertible into shares of the
Company's common stock on the basis of one share of
Series C Stock for shares of common stock equal in
number to the amount determined by dividing $1,000 by
85% of the average closing price of the Company's common
stock over the fiveday trading period ending on the day
prior to the conversion of the Series C Stock.
The
conversion price may not be more than $4.00. Beginning
90 days after December 17, 1996, one-half of the Series
C Stock is convertible into share of the Company's
common stock. All preferred shares are convertible
into shares of the Company's common stock beginning
180 days after December 17, 1996 provided that, if the
Company's common
stock trades for more than $8.00 at any time, then all
shares of the Series C Stock will thereafter be
immediately convertible into shares of the Company's
common stock. In addition, warrants were included with
the Series C Stock. The Series A warrants entitle the
holder to purchase one share of the Company's common
stock at a price of $4.50 per share at any time prior to
March 15, 1998. Each Series B warrant entitles the
holder to
purchase one share of the Company's common stock at a
price of $4.50 per share at any time prior to March 15,
1999. None of the Series C Stock was converted into
common
stock nor were any warrants exercised before December
31, 1996.
CEL-SCI CORPORATION
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
THREE MONTHS ENDED DECEMBER 31, 1996
AND 1995 (unaudited)
(continued)
D. NEW ACCOUNTING PRONOUNCEMENT
In October 1995, the Financial Accounting
Standards Board issued Statement No. 123, Accounting for
Stock Based Compensation (SFAS 123), which provides an
alternative to APB Opinion No. 25 in accounting
for stock-based compensation issued to employees. As
permitted
by SFAS 123, the Company plans to continue to account
for stock-based compensation in accordance with APB
Opinion No. 25. The Company will present in its
annual financial statements the additional disclosure
required by SFAS 123.
CEL-SCI CORPORATION
Item 2. MANAGEMENT'S DISCUSSION AND
ANALYSIS
Liquidity and Capital Resources
The Company has had only
limited revenues from operations
since its inception in March 1983.
The Company has relied upon proceeds
realized from the public and private
sale of its Common Stock and short-
term borrowings to meet its funding
requirements. Funds raised by the
Company have been expended primarily
in connection with the acquisition of
an exclusive worldwide license to
certain patented and unpatented
proprietary technology and know-how
relating to the human immunological
defense system, the funding of
VTI's research and development
program, patent applications, the
repayment of debt, the continuation of
Company sponsored research and
development and administrative costs,
and the construction of laboratory
facilities. Inasmuch
as the
Company does not anticipate realizing
significant revenues until such time
as it enters into licensing
arrangements regarding the technology
and know-how licensed to it or until
such time it receives permission
to sell its product (which could
take a number of years), the Company
is mostly dependent upon short-term
borrowings and the proceeds from the
sale of its securities to meet all
of its liquidity and capital resource
requirements.
In February, 1992, the Company
sold 1,035,000 Units at $15.50 per
Unit in a public offering. Each unit
consisted of five shares of Common
Stock and five Common Stock
Purchase Warrants. Ten Warrants
entitle the holder to purchase one
additional share of Common Stock at a
price of $46.50 per share prior to
February 7, 1997.
In June and September, 1995,
the Company completed private
offerings whereby it sold a total of
1,150,000 units at $2.00 per unit.
Each unit consisted of one share of
Common Stock and one Warrant. Each
Warrant entitles the holder to
purchase one additional share of
Common Stock at a price of $3.25 per
share at any time prior to June 30,
1997. The net proceeds to the Company
from these offerings, after the
payment of Sales Agent's
commissions and other offering
expenses, were approximately
$2,000,000. On November 30, 1995 the
Company and the investors in these
Private Offerings agreed to reduce the
exercise price of the Warrants to
$1.60 per share in return for the
commitment on the part of the
investors to exercise 312,500 Warrants
($500,000) prior to December 23,
1995 and an additional 312,500
Warrants ($500,000) prior to January
31, 1996. All of these warrants were
exercised.
During 1996, the Company
issued Preferred Stock. See
Footnote C, Stockholders' Equity.
Results of Operations
Interest income during the three
months ending December 31, 1996
reflects interest accrued on
investments. Research and
development expenses have increased
due to new research on the TB vaccine,
increased work to follow up on
positive findings with the AIDS
vaccine and the conduct of three
clinical studies with cancer and
AIDS patients. However, research
and development expenses decreased
from last year because the purchase
of the remaining 50% of Viral
Technologies, Inc. in October 1995,
was expensed as research and
development expense during the 1996
fiscal year.
PART II
Item 6.
(a) Exhibits
No exhibits are filed with this
document.
(b) Reports on Form 8-K
The Company filed no
reports on Form 8-K during
the fiscal quarter ended
December 31, 1996.
SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the
Registrant has duly caused this report
to be signed on its behalf by the
undersigned thereunto duly authorized.
CEL
SCI Corporation
Date:2/14, 1997 /s/Geert
Kersten
Geert Kersten
Chief Executive Officer*
*Also signing in the capacity of the
Chief Accounting Officer and Principal
Financial Officer.
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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<PERIOD-END> DEC-30-1996
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