As filed with the Securities and Exchange Commission on March 1, 2000.
Registration No 333-94675
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
Amendment No. 1
Registration Statement
Under
THE SECURITIES ACT OF 1933
CEL-SCI Corporation
(Exact name of registrant as specified in charter)
Colorado
(State or other jurisdiction of incorporation)
8229 Boone Blvd. #802
Vienna, Virginia 22182
84-09l6344 (703) 506-9460
(IRS Employer I.D. (Address, including zip code, and telephone
Number) number including area of principal executive offices)
Geert Kersten
8229 Boone Blvd. #802
Vienna, Virginia 22182
(703) 506-9460
(Name and address, including zip code, and telephone number,
including area code, of agent for service)
Copies of all communications, including all communications sent
to the agent for service, should be sent to:
William T. Hart, Esq.
Hart & Trinen
1624 Washington Street
Denver, Colorado 80203
(303) 839-0061
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
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>
If any of the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering pursuant
to Rule 462(b) under the Securities Act, please check the following box and list
the Securities Act registration statement number of the earlier effective
registration for the same offering.[ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c) under
the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
Title of each Proposed Proposed
Class of Maximum Maximum
Securities Securities Offering Aggregate Amount of
to be to be Price Per Offering Registration
Registered Registered Unit (1) Price Fee
- ---------- ---------- --------- ---------- ----------
Common stock (2) 1,148,592 $2.45 $2,814,050 $ 744
Common stock (3) 402,007 $2.45 984,918 260
Common stock (4) 1,327,300 $2.45 3,251,885 858
Common stock (5) 25,000 $2.45 61,250 16
------------ ----------- ---------
Total 2,902,899 $7,112,103 $1,878
========= ========== ======
(1) Offering price computed in accordance with Rule 457(c). (2) Shares of common
stock to be sold by the selling shareholders.
(3) Shares of common stock issuable upon the exercise of Series A Warrants. The
Series A Warrants were issued in connection with the sale of CEL-SCI's
common stock to the selling shareholders. Includes additional shares which
may be issued due to potential adjustments to Warrant exercise price.
(4) Shares of common stock which may be issuable upon the exercise of Series B
Warrants. The Series B Warrants were also issued in connection with the sale
of CEL-SCI's common stock to the selling shareholders. The actual number of
shares issuable upon the exercise of the Series B warrants (if any) will
vary depending upon a number of factors, including the price of the
Company's common stock at certain dates.
(5) Shares of common stock issuable upon the exercise of Sales Agent's Warrants.
Pursuant to Rule 416, this Registration Statement includes such
indeterminate number of additional securities as may be required for issuance
upon the exercise of the warrants as a result of any adjustment in the number of
securities issuable by reason of the anti-dilution provisions of the Series A
Warrants, the Series B Warrants and/or the Sales Agent's Warrants.
<PAGE>
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.
<PAGE>
PROSPECTUS
CEL-SCI CORPORATION
Common Stock
By means of this prospectus certain shareholders of CEL-SCI Corporation
are offering to sell up to 1,575,599 shares of CEL-SCI's common stock. The
owners of the shares to be sold by means of this prospectus are sometimes
referred to as the selling shareholders.
The selling shareholders may be deemed to be "underwriters" within the
meaning of the Securities Act of 1933 in connection with the sale of their
shares.
The securities offered by this prospectus are speculative and involve a high
degree of risk and should be purchased only by persons who can afford to lose
their entire investment. Prospective investors should consider certain important
factors described under "Risk Factors" beginning on page ___ of this prospectus.
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.
CEL-SCI's common stock is traded on the American Stock Exchange. On February
__, 2000 the closing price of CEL-SCI's common stock on the American Stock
Exchange was $_____.
The date of this prospectus is February ___, 2000
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED IN ITS ENTIRETY BY THE MORE DETAILED INFORMATION
APPEARING ELSEWHERE IN THIS PROSPECTUS.
CEL-SCI
CEL-SCI Corporation was formed as a Colorado corporation in 1983. CEL-SCI is
involved in the research and development of certain drugs and vaccines. CEL-SCI
manufactures MULTIKINE, its first, and main, product, using CEL-SCI's
proprietary cell culture technologies, which involve a combination, or
"cocktail", of natural human interleukin-2 and certain lymphokines and
cytokines. CEL-SCI is testing MULTIKINE to determine if it is effective in
improving the immune response of cancer patients. CEL-SCI is testing its second
most advanced product, HPG-30W, to determine if it is an effective
vaccine/treatment against the AIDS virus. The third technology CEL-SCI is
developing, Ligand Epitope Antigen Presentation System (LEAPS), is a T-cell
modulation technology which health care professionals can use to direct a
specific immune response in persons vaccinated with HGP-30W and to develop
potential treatments and/or vaccines against various diseases. Present target
diseases are AIDS, 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 safety 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 within an
expanded group of patients at geographically dispersed test sites.
CEL-SCI has funded the costs associated with the clinical trials
relating to CEL-SCI's technologies, research expenditures and CEL-SCI's
administrative expenses with the public and private sales of shares of CEL-SCI's
common stock and borrowings from third parties, including affiliates of CEL-SCI.
CEL-SCI does not expect to develop commercial products for several
years, if at all. CEL-SCI has had operating losses since its inception, had an
accumulated deficit of approximately $(54,332,000) at December 31, 1999, and
expects to incur substantial losses for the foreseeable future.
CEL-SCI's executive offices are located at 8229 Boone Blvd., #802, Vienna,
Virginia 22182, and its telephone number is (703) 506-9460.
<PAGE>
THE OFFERING
Securities Offered:
By means of this prospectus certain CEL-SCI shareholders are offering
to sell up to 2,902,899 shares of the common stock of CEL-SCI. CEL-SCI refers to
the owners of these shares as the selling shareholders in this prospectus.
Common Stock Outstanding: As of February 15, 2000, CEL-SCI
had 18,977,351 shares of common stock issued and
outstanding. The number of outstanding shares does
not give effect to shares which may be issued upon
the exercise and/or conversion of options, warrants
or other convertible securities held by the selling
shareholders or other persons. See "Comparative
Share Data".
Risk Factors: The purchase of the securities offered by
this prospectus involves a high degree of risk. Risk
factors include the lack of revenues and history of
loss, need for additional capital and need for FDA
approval. See the "Risk Factors" section of this
prospectus for additional Risk Factors.
AMEX Symbol: CVM
Summary Financial Data
Three Months Ended Years Ended September 30,
December 31, 1999 1999 1998
Investment Income and
Other Revenues $30,048 $ 469,518 $ 792,994
Expenses:
Research and Development 995,024 4,461,051 3,833,854
Depreciation and Amortization 70,780 268,210 295,331
General and Administrative 668,652 3,230,982 3,106,492
------------- ----------- ------------
Net Loss $(1,704,408) $(7,490,725) $(6,442,683)
============ ============ ============
Accretion of Preferred Stock -- -- 1,980,000
Preferred Stock Dividends -- -- --
-----------------------------------------------------
Net Loss attributable to
common stock holders $(1,704,408) $(7,490,725) $(8,422,683)
============ ============ ============
Loss per common share (basic) $ (0.10) $ (0.52) $ (0.74)
============== ============ ============
<PAGE>
Loss per common share
(diluted) $ (0.10) $ (0.52) $ (.74)
============== ============ =============
Weighted average
common shares
outstanding 17,270,008 14,484,352 11,379,437
========== ========== ==========
Balance Sheet Data
December 31, September 30,
1999 1999 1998
Working Capital $6,840,980 $6,152,715 $12,926,014
Total Assets 8,081,817 7,559,772 14,431,813
Current Liabilities 263,508 433,265 427,147
Long Term and Other Liabilities 28,321 28,321 29,382
Total Liabilities 291,829 461,586 456,529
Shareholders' Equity 7,789,988 7,098,186
13,975,284
RISK FACTORS
Investors should be aware that this offering involves certain risks,
including those described below, which could adversely affect the value of their
holdings of common stock. CEL-SCI does not make, nor has it authorized any other
person to make, any representation about the future market value of CEL-SCI's
common stock. In addition to the other information contained in this prospectus,
the following factors should be considered carefully in evaluating an investment
in the Shares offered by this prospectus
CEL-SCI Has Earned Only Limited Revenues and Has a History of Losses.
CEL-SCI has had only limited revenues since it was formed in 1983.
Since the date of its formation and through December 31, 1999 CEL-SCI incurred
net losses of approximately $(54,332,000). During the years ended September 30,
1997, 1998 and 1999 CEL-SCI suffered losses of $(8,189,458), $(6,442,683) and
$(7,490,725) respectively. CEL-SCI has relied principally upon the proceeds of
public and private sales of securities to finance its activities to date. All of
CEL-SCI's potential products are in the early stages of development, and any
commercial sale of these products will be many years away. Accordingly, CEL-SCI
expects to incur substantial losses for the foreseeable future.
There can be no assurance CEL-SCI will be profitable. At the present
time, CEL-SCI intends to use available funds to finance CEL-SCI'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 CEL-SCI.
CEL-SCI 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.
<PAGE>
If Cel-Sci cannot obtain additional capital, Cel-Sci may have to delay or
postpone development and research expenditures which may influence Cel-Sci's
ability to produce a timely and competitive product.
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, involve significant costs
and may require several years to complete. CEL-SCI expects that it will need
additional financing over an extended period of time in order to fund the costs
of future clinical trials, related research, and general and administrative
expenses. There can be no assurance that CEL-SCI will be able to obtain
additional funding from other sources.
If Cost Estimates for Clinical Trials and Research Are Inaccurate CEL-SCI Will
Require Additional Funding.
CEL-SCI's estimates of the costs associated with future clinical trials
and research may be substantially lower than the actual costs of these
activities. If CEL-SCI's cost estimates are incorrect, CEL-SCI will need
additional funding for its research efforts.
Any failure to obtain or any delay in obtaining required regulatory approvals
may adversely affect the ability of potential licensees or CEL-SCI to
successfully market any products they may develop.
Therapeutic agents, drugs 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
CEL-SCI, VTI or its licensees, and there can be no assurance that such approvals
will be granted. Also, the extent of adverse government regulations which might
arise from future legislative or administrative action cannot be predicted.
CEL-SCI has, at the present time, only one source of multikine and if this
source could not, for any reason, supply CEL-SCI with Multikine, CEL-SCI
estimates that it would take approximately six to ten months to obtain supplies
of Multikine under an alternative manufacturing arrangement.
CEL-SCI has an agreement with an unrelated corporation for the
production, until August 2000, of Multikine for research and testing purposes.
CEL-SCI does not know what cost it would incur to obtain an alternative source
of supply.
There can be no assurance that CEL-SCI will achieve or maintain a competitive
position or that other technological developments will not cause CEL-SCI's
proprietary technologies to become uneconomical or obsolete.
The biomedical field in which CEL-SCI is involved is undergoing rapid
and significant technological change. The successful development of therapeutic
agents from CEL-SCI's compounds, compositions and processes through
<PAGE>
CEL-SCI-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.
Many pharmaceutical and biotechnology companies are developing products
for the prevention or treatment of cancer and AIDS. 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.
CEL-SCI's Patents Might Not Protect CEL-SCI's Technology from Competitors.
Certain aspects of CEL-SCI's technologies are covered by U.S. and
foreign patents. In addition, CEL-SCI has a number of patent applications
pending. There is no assurance that the applications still pending or which may
be filed in the future will result in the issuance of any patents. Furthermore,
there is no assurance as to the breadth and degree of protection any issued
patents might afford CEL-SCI. Disputes may arise between CEL-SCI and others as
to the scope and validity of these or other patents. Any defense of the patents
could prove costly and time consuming and there can be no assurance that CEL-SCI
will be in a position, or will deem it advisable, to carry on such a defense.
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 CEL-SCI. The scope and validity of such patents, if any, the
extent to which CEL-SCI 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 CEL-SCI relies upon unpatented proprietary technology, there is no assurance
that others may not acquire or independently develop the same or similar
technology. CEL-SCI's first MULTIKINE patent will expire in the year 2000. Since
CEL-SCI does not know if it will ever be able to sell MULTIKINE on a commercial
basis, CEL-SCI cannot predict what effect the expiration of this patent will
have on CEL-SCI. Notwithstanding the above, CEL-SCI believes that trade secrets
and later issued patents will protect the technology associated with Multikine
past the year 2000.
CEL-SCI's Product Liability Insurance May Not Be Adequate to Protect CEL-SCI
from Possible Losses.
Although CEL-SCI has product liability insurance for Multikine and its
HGP-30 vaccine, the successful prosecution of a product liability case against
CEL-SCI could have a materially adverse effect upon its business if the amount
of any judgment exceeds CEL-SCI's insurance coverage.
The Loss of Management and Scientific Personnel Could Adversely Affect CEL-SCI.
CEL-SCI is dependent for its success on the continued availability of
its executive officers. The loss of the services of any of CEL-SCI's executive
officers could have an adverse effect on CEL-SCI's business. CEL-SCI does not
<PAGE>
carry key man life insurance on any of its officers. CEL-SCI's future success
will also depend upon its ability to attract and retain qualified scientific
personnel. There can be no assurance that CEL-SCI will be able to hire and
retain such necessary personnel.
Shares Issuable Upon the Conversion of Options, Warrants and Convertible
Securities May Depress the Price of CEL-SCI's Common stock.
CEL-SCI has issued options to its officers, directors, employees and
consultants which allow the holders to acquire additional shares of CEL-SCI's
common stock. In some cases CEL-SCI has agreed that, at its expense, it will
make appropriate filings with the Securities and Exchange Commission so that the
securities issuable upon the exercise of the options will be available for
public sale. Such filings could result in substantial expense to CEL-SCI and
could hinder future financings by CEL-SCI.
Until the options expire, the holders will have an opportunity to
profit from any increase in the market price of CEL-SCI's common stock without
assuming the risks of ownership. Holders of the options may exercise them at a
time when CEL-SCI could obtain additional capital on terms more favorable than
those provided by the options. The exercise of the options will dilute the
voting interest of the owners of presently outstanding shares of CEL-SCI's
common stock and may adversely affect the ability of CEL-SCI to obtain
additional capital in the future. The sale of the shares of common stock
issuable upon the exercise of the options could adversely affect the market
price of CEL-SCI's stock.
In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to three private investors.
The Series A warrants permit the holders of the warrants to purchase 402,007
shares of CEL-SCI's common stock at a price of $2.925 per share at any time
prior to December 8, 2002. The Series B warrants allow the investors, under
certain circumstances, to acquire additional shares of CEL-SCI's common stock at
a nominal price in the event:
o The price of CEL-SCI's common stock falls below $2.4375 per share or
o CEL-SCI raises in excess of $1,000,000 at a price which is below either
the then prevailing market price of CEL-SCI's common stock or $2.4375
per share.
Since the price of CEL-SCI's common stock has been volatile in the past,
investors could experience substantial dilution upon the exercise of the Series
B warrants if there is a decline in the market price of CEL-SCI's common stock.
See "Comparative Share Data".
The 1,148,592 shares of common stock sold in the private offering
referred to above, as well as the shares of common stock issuable upon the
exercise of the Series A and B warrants, are being offered for public sale by
means of this prospectus. The issuance of common stock upon the exercise of the
Series A and B warrants, as well as future sales of such common stock, or the
perception that such sales could occur, could adversely affect the market price
of CEL-SCI's common stock.
<PAGE>
CEL-SCI may be required to make payments to the holders of the Series B
warrants.
In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to a group of private
investors for $2,800,000. The Series B warrants allow the holders, under certain
circumstances, to acquire additional shares of CEL-SCI's common stock at a
nominal price in the event (i) the price of CEL-SCI's common stock falls below
$2.44 per share prior to certain vesting dates, or (ii) CEL-SCI raises in excess
of $1,000,000 at a price which his below either the then prevailing market price
of CEL-SCI's common stock or $2.44 per share. The actual number of shares
issuable upon the exercise of the Series B warrants (if any) will vary depending
upon a number of factors, including the price of CEL-SCI's common stock at
certain dates.
CEL-SCI's common stock trades on the American Stock Exchange. The rules of
the AMEX require a corporation, the securities of which are listed on the AMEX,
to obtain shareholder approval if 20% or more of a corporation's common stock
will be sold in a private offering and below the greater of the book value or
market price of the corporation's common stock.
For purposes of applying this particular rule to the Series B warrants,
the AMEX will consider the issuance of any common stock upon the exercise of the
Series B warrants to be a sale of CEL-SCI's common stock at less than market
price since the exercise price of the Series B warrants is nominal.
Immediately prior to the issuance of the Series B warrants, CEL-SCI had
17,002,341 outstanding shares of common stock. Consequently, the AMEX rule would
prohibit CEL-SCI from issuing more than 3,400,297 shares of common stock as a
result of the exercise of the Series B warrants unless shareholder approval is
obtained for the issuance of the additional shares.
It is possible, depending upon the future market price of CEL-SCI's common
stock, that more than 3,400,297 shares could be issued upon the exercise of the
Series B warrants.
In order to avoid any violation of the AMEX rules relating to the issuance
of shares below the market price of CEL-SCI's common stock, the terms of the
Series B warrants provide that no more than 3,400,297 shares may be issued
unless CEL-SCI obtains shareholder approval for the issuance of such additional
shares.
If CEL-SCI fails to obtain or elects not to obtain shareholder approval
for the issuance of the additional shares CEL-SCI will be required to pay the
holders of the Series B warrants an amount equal to the then market value of the
shares which would otherwise be issuable upon the exercise of the Series B
warrants had shareholder approval been obtained.
The Market Price for CEL-SCI's Common Stock is Volatile.
The market price of CEL-SCI's common stock, as well as the securities
of other biopharmaceutical and biotechnology companies, have historically been
highly volatile, and the market has from time to time experienced significant
<PAGE>
price and volume fluctuations that are unrelated to the operating performance of
particular companies. Factors such as fluctuations in CEL-SCI's operating
results, announcements of technological innovations or new therapeutic products
by CEL-SCI or its competitors, governmental regulation, developments in patent
or other proprietary rights, public concern as to the safety of products
developed by CEL-SCI or other biotechnology and pharmaceutical companies, and
general market conditions may have a significant effect on the market price of
CEL-SCI's common stock.
COMPARATIVE SHARE DATA
As of February 15, 2000, the present shareholders of CEL-SCI owned
18,027,982 shares of common stock. The following table illustrates the
comparative stock ownership of the present shareholders of CEL-SCI, as compared
to the investors in this offering, assuming all warrants held by the selling
shareholders are exercised.
Number of Note
Shares Reference
Shares outstanding as of February 15, 2000 18,977,351
Shares offered by selling shareholders:
Shares purchased from CEL-SCI 1,148,592
Shares issuable upon exercise of 402,007 A
Series A warrants
Shares issuable upon exercise of
Series B warrants -- A
Shares issuable upon exercise of 25,000 B
sales agent warrants
Shares which will be outstanding, assuming the
exercise of all warrants listed above 19,404,358
Percentage of CEL-SCI's common stock
represented by shares offered by this
prospectus, assuming the exercise of all
warrants listed above 8.1%
The number of shares outstanding as of February 15, 2000 excludes shares
which may be issued upon the exercise and/or conversion of options, warrants and
other convertible securities previously issued by CEL-SCI. See table below.
Other Shares Which May Be Issued:
The following table lists additional shares of CEL-SCI's common stock
which may be issued as the result of the exercise of outstanding options,
warrants or the conversion of other securities issued by CEL-SCI:
<PAGE>
Number of Note
Shares Reference
Shares issuable upon exercise of 1,100,000 C
warrants sold to investors in
December 1997 private offering
Shares issuable upon exercise of
options granted to investor relations
consultants 135,000 D
Shares issuable upon exercise
of options and warrants granted
to CEL-SCI's officers, directors,
employees, consultants, and third
parties 3,153,448 E
A. In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to a group of private
investors for $2,800,000. The Series A warrants allow the holders to
purchase up to 402,007 shares of CEL-SCI's common stock at a price of $2.925
per share at any time prior to December 8, 2002. The Series B warrants allow
the holders, under certain circumstances, to acquire additional shares of
CEL-SCI's common stock at a nominal price in the event:
o the price of CEL-SCI's common stock falls below $2.4375 per share prior to
certain vesting dates, or
o CEL-SCI raises in excess of $1,000,000 at a price which is below either
the then prevailing market price of CEL-SCI's common stock or $2.4375
per share.
The fixed vesting dates for the purposes of the Series B warrants are:
December 8, 2000
June 8, 2001
December 8, 2001
June 8, 2002
December 8, 2002
Other vesting dates will occur when an extraordinary event occurs, such as
a change in the control of CEL-SCI, the bankruptcy or liquidation of CEL-SCI, or
the failure of CEL-SCI's common stock to be listed on the American Stock
Exchange, the NASDAQ Stock Market or the NASDAQ SmallCap market.
Upon the occurrence of a vesting date, the additional shares (if any)
which CEL-SCI will be required to issue to the holders of the Series B warrants
will be determined in accordance with the following formula:
<PAGE>
[(C x PA) / A] - C
C = The number of shares purchased by the Series B warrant holder and
not yet sold
PA = The Adjustment Price from the immediately preceding
vesting date or, with respect to the first vesting date,
$2.4375.
A = Adjustment price, which is equal to the lesser of
$2.4375, or the average of the 10 lowest closing bid
prices of CEL-SCI's common stock during the 30 trading
days immediately preceding the vesting date.
In addition to the foregoing, if CEL-SCI raises in excess of $1,000,000
through the sale of common stock, or securities convertible into common stock,
at a price which is below either the then prevailing market price of CEL-SCI's
common stock or $2.4375 per share, then the holders of the Series B warrants
will be entitled to receive additional shares of CEL-SCI's common stock in
accordance with the following formula:
[(C x $2.4375) / D] - C
C = The number of shares purchased by the Series B warrant
holder and not yet sold on the date of the financing.
D = An amount equal to the lesser of the average of the
closing bid prices of CEL-SCI's common stock for the 10
trading days immediately preceding the date of the
financing, or the price per share of the common stock,
or common stock equivalent (as the case may be), sold in
the financing.
The actual number of shares issuable upon the exercise of the Series B
warrants (if any) will vary depending upon a number of factors, including the
price of CEL-SCI's common stock at certain dates. Accordingly, the number of
shares (if any) which may be issued upon the exercise of the Series B warrants
cannot be determined at this time. However, based upon the market price of
CEL-SCI's common stock on January 12, 2000, CEL-SCI would not be required to
issue any material shares of its common stock if the Series B warrants were
exercised as of that date.
B. In connection with CEL-SCI's December 1999 sale of common stock and
warrants, Reedland Capital Partners, a division of Financial West Group,
acted as the sales agent for such offering and received a commission of
$125,000 plus Series A warrants to purchase 25,000 shares of CEL-SCI's
common stock. The sales agent warrants are exercisable at a price of $2.925
per share at any time prior to December 8, 2002. The shares issuable upon
the exercise of the sales agent warrants are being offered for sale to the
public by means of this prospectus. See "Selling Shareholders".
<PAGE>
C. In December 1997, CEL-SCI sold 10,000 shares of its Series D Preferred
Stock, and 1,100,000 warrants, to ten institutional investors for
$10,000,000. All Series D Preferred shares were subsequently converted into
5,201,400 shares of CEL-SCI's common stock. Warrants for the purchase of
550,000 shares of common stock are exercisable at a price of $8.62 at any
time prior to December 22, 2001. Warrants for the purchase of 550,000
shares of common stock are exercisable at a price of $9.31 at any time
prior to December 22, 2001. As of December 31, 1999 none of the warrants
had been exercised. The shares issuable upon the exercise of warrants are
being offered for sale to the public by means of a separate registration
statement which has been filed with the Securities and Exchange Commission.
D. CEL-SCI has granted options for the purchase of 135,000 shares of common
stock to certain investor relations consultants in consideration for
services provided to CEL-SCI. The options are exercisable at prices ranging
between $2.50 and $5.00 per share and expire between June 2000 and February
2004. The 135,000 shares issuable upon the exercise of these options are
being offered for sale to the public by means of a separate registration
statement which has been filed with the Securities and Exchange Commission.
E. The options are exercisable at prices ranging from $2.38 to $11.00 per
share. CEL-SCI may also grant options to purchase additional shares under
its Incentive Stock Option and Non-Qualified Stock Option Plans.
SELLING SHAREHOLDERS
In December 1999 and January 2000, CEL-SCI sold 1,148,592 shares of its
common stock, plus Series A and Series B warrants, to three private investors.
The Series A warrants permit the holders of the warrants to purchase 402,007
shares of CEL-SCI's common stock at a price of $2.925 per share at any time
prior to December 8, 2002. The Series B warrants allow the investors, under
certain circumstances, to acquire additional shares of CEL-SCI's common stock at
a nominal price in the event
o the price of CEL-SCI's common stock falls below $2.4375 per share, or o
CEL-SCI raises in excess of $1,000,000 at a price which is below either the
then prevailing market price of CEL-SCI's common stock or $2.4375 per
share.
The actual number of shares issuable upon the exercise of the Series B
warrants (if any) will vary depending upon a number of factors, including the
price of CEL-SCI's common stock at certain dates. Accordingly, the number of
shares (if any) which may be issued upon the exercise of the Series B warrants
cannot be determined at this time. However, based upon the market price of
CEL-SCI's common stock on January 12, 2000, CEL-SCI would not be required to
issue any material shares of its common stock if the Series B warrants were
exercised as of that date. See "Comparative Share Data". The 1,148,592 shares
sold to the three investors, as well as the shares issuable upon the exercise of
the Series A and Series B warrants, are being offered to the public by means of
this prospectus.
In connection with the December 1999 financing, Reedland Capital Partners,
an Institutional Division of Financial West Group, received a commission of
<PAGE>
$125,000 plus Series A warrants to purchase 25,000 shares of Cel-Sci's common
stock at $2.925 per share for its role as sales agent. The 25,000 shares are
also being offered to the public by means of this prospectus.
The three private investors and the sales agent are referred to in this
prospectus as the "selling shareholders". CEL-SCI will not receive any proceeds
from the sale of the shares by the selling shareholders.
Genesee International Inc., of which Mr. Donald R. Morken is the
controlling stockholder, has voting and investment power over the securities
beneficially owned by Advantage Fund II Ltd. Koch Industries, Inc., of which
Messrs. Charles Koch and David Koch are controlling stockholders, have voting
and investment power over the securities beneficially owned by Koch Investment
Group Ltd. Mooring Capital Fund is controlled by John M. Jacquemin. Mr.
Jacquemin is a director of CEL-SCI Corporation.
The names of the selling shareholders are:
Shares Shares
Which Which
May be May be
Acquired Acquired Share
Upon Upon Shares to Owner-
Exercise of Exercise of be Sold ship
Shares Series A Series B in this After
Name Owned (1) Warrants Warrants(2) Offering Offering
- ---------------- ----------- -------- ----------- ------- --------
Advantage Fund II Ltd. 820,513 287,179 -- 1,107,692 --
Koch Investment Group, Ltd. 205,128 71,795 -- 276,923 --
Mooring Capital Fund 122,951 43,033 -- 165,984 --
Reedland Capital Partners -- 25,000 -- 25,000 --
--------- -------- --------- ------
1,148,592 427,007 1,575,599
========= ======= =========
(1) Excludes shares issuable upon the exercise of the Series A or Series B
warrants.
(2) Based upon the price of CEL-SCI's common stock as of February 15, 2000, no
shares are issuable pursuant to the terms of the Series B warrants.
For purposes of the foregoing table, it is assumed that all shares owned,
or which may be acquired, by the selling shareholders are sold to the public by
means of this prospectus.
Each Series A and Series B warrant holder is prohibited from exercising
the warrants to the extent that such exercise would result in such holder,
together with any affiliate of the warrant holder, beneficially owning in excess
of 4.999% of the outstanding shares of CEL-SCI's common stock following such
exercise. This restriction may be waived by each holder on not less than 61
days' notice to CEL-SCI. However, the 4.999% limitation would not prevent each
warrant holder from acquiring and selling in excess of 4.999% of CEL-SCI's
common stock through a series of acquisitions and sales under the warrants so
long as the warrant holder never beneficially owns more than 4.999% of CEL-SCI's
common stock at any one time.
<PAGE>
Plan of Distribution
The selling shareholders and any of their pledgees, assignees and
successors-in-interest may, from time to time, sell any or all of their shares
of common stock on any stock exchange, market or trading facility on which the
shares are traded or in private transactions. These sales may be at fixed or
negotiated prices. The selling shareholders may use any one or more of the
following methods when selling shares:
o ordinary brokerage transactions and transactions in which the broker-dealer
solicits purchasers;
o block trades in which the broker-dealer will attempt to sell the shares as
agent but may position and resell a portion of the block as principal to
facilitate the transaction;
o purchases by a broker-dealer as principal and resale by the broker-dealer
for its account;
o an exchange distribution in accordance with the rules of the applicable
exchange;
o privately negotiated transactions;
o short sales;
o broker-dealers may agree with the Selling Stockholders to sell a specified
number of such shares at a stipulated price per share; o a combination of
any such methods of sale; and o any other method permitted pursuant to
applicable law.
The selling shareholders may also sell shares under Rule 144 under the
Securities Act, if available, rather than under this prospectus.
The selling shareholders may also engage in short sales against the box,
puts and calls and other transactions in securities of CEL-SCI or derivatives of
CEL-SCI securities and may sell or deliver shares in connection with these
trades. The selling shareholders may pledge their shares to their brokers under
the margin provisions of customer agreements. If a selling shareholder defaults
on a margin loan, the broker may, from time to time, offer and sell the pledged
shares.
Broker-dealers engaged by the selling shareholders may arrange for other
brokers-dealers to participate in sales. Broker-dealers may receive commissions
or discounts from the selling shareholders (or, if any broker-dealer acts as
agent for the purchaser of shares, from the purchaser) in amounts to be
negotiated. The selling shareholders do not expect these commissions and
discounts to exceed what is customary in the types of transactions involved.
The selling shareholders and any broker-dealers or agents that are
involved in selling the shares may be deemed to be "underwriters" within the
meaning of the Securities Act in connection with such sales. In such event, any
commissions received by such broker-dealers or agents and any profit on the
resale of the shares purchased by them may be deemed to be underwriting
commissions or discounts under the Securities Act.
CEL-SCI is required to pay all fees and expenses incident to the
registration of the shares, including fees and disbursements of counsel to the
selling shareholders. CEL-SCI has agreed to indemnify the selling shareholders
against certain losses, claims, damages and liabilities, including liabilities
under the Securities Act.
<PAGE>
CEL-SCI has advised the selling shareholders that in the event of a
"distribution" of the shares owned by the selling shareholder, such selling
shareholders, any "affiliated purchasers", and any broker/dealer or other person
who participates in such distribution may be subject to Rule 102 under the
Securities Exchange Act of 1934 ("1934 Act") until their participation in that
distribution is completed. A "distribution" is defined in Rule 102 as an
offering of securities "that is distinguished from ordinary trading transactions
by the magnitude of the offering and the presence of special selling efforts and
selling methods". CEL-SCI has also advised the selling shareholders that Rule
102 under the 1934 Act prohibits any "stabilizing bid" or "stabilizing purchase"
for the purpose of pegging, fixing or stabilizing the price of the common stock
in connection with this offering. Rule 101 makes it unlawful for any person who
is participating in a distribution to bid for or purchase stock of the same
class as is the subject of the distribution.
CEL-SCI has agreed to indemnify the selling shareholders and any
securities broker/dealers who may be deemed to be underwriters against certain
liabilities, including liabilities under the Securities Act as underwriters or
otherwise.
DESCRIPTION OF SECURITIES
Common Stock
CEL-SCI 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 CEL-SCI's
assets after payment of liabilities. The board is not obligated to declare a
dividend. It is not anticipated that dividends will be paid in the foreseeable
future.
Holders of common stock do not have preemptive rights to subscribe to
additional shares if issued by CEL-SCI. There are no conversion, redemption,
sinking fund or similar provisions regarding the common stock . All of the
outstanding shares of Common stock are fully paid and non-assessable.
Preferred Stock
CEL-SCI is authorized to issue up to 200,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that the Board of Directors has the
authority to divide the preferred stock into series and, within the limitations
provided by Colorado statute, to fix by resolution the voting power,
designations, preferences, and relative participation, special rights, and the
qualifications, limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish the terms of,
and to issue, the preferred stock without shareholder approval, the preferred
stock could be issued to defend against any attempted takeover of CEL-SCI.
<PAGE>
See "Comparative Share Data" for information concerning CEL-SCI's Series D
preferred stock.
Transfer Agent
American Securities Transfer, Inc., of Denver, Colorado, is the
transfer agent for CEL-SCI's common stock.
EXPERTS
The consolidated financial statements of CEL-SCI Corporation as of
September 30, 1999 and 1998, and for each of the three years in the period ended
September 30, 1999 incorporated by reference in this prospectus from CEL-SCI's
Annual Report on Form 10-K for the year ended September 30, 1999, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
report, which is incorporated herein by reference, and have been so incorporated
in reliance upon the report of such firm given upon their authority as experts
in accounting and auditing.
INDEMNIFICATION
CEL-SCI's bylaws authorize indemnification of a director, officer,
employee or agent of CEL-SCI against expenses incurred by him in connection with
any action, suit, or proceeding to which he is named a party by reason of his
having acted or served in such capacity, except for liabilities arising from his
own misconduct or negligence in performance of his duty. In addition, even a
director, officer, employee, or agent of CEL-SCI who was found liable for
misconduct or negligence in the performance of his duty may obtain such
indemnification if, in view of all the circumstances in the case, a court of
competent jurisdiction determines such person is fairly and reasonably entitled
to indemnification. Insofar as indemnification for liabilities arising under the
Securities Act of 1933 may be permitted to directors, officers, or persons
controlling CEL-SCI pursuant to the foregoing provisions, CEL-SCI has been
informed that in the opinion of the Securities and Exchange Commission, such
indemnification is against public policy as expressed in the Act and is
therefore unenforceable.
ADDITIONAL INFORMATION
CEL-SCI is subject to the requirements of the Securities Exchange Act
of l934 and is required to file reports, proxy statements and other information
with the Securities and Exchange Commission. Copies of any such reports, proxy
statements and other information filed by CEL-SCI can be read and copied at the
Commission's Public Reference Room at 450 Fifth Street, N.W., Washington, D.C.,
20549. The public may obtain information on the operation of the Public
Reference Room by calling the Commission at 1-800-SEC-0330. The Commission
maintains an Internet site that contains reports, proxy and information
statements, and other information regarding CEL-SCI. The address of that site is
http://www.sec.gov.
CEL-SCI will provide, without charge, to each person to whom a copy of
this prospectus is delivered, including any beneficial owner, upon the written
or oral request of such person, a copy of any or all of the documents
incorporated by reference below (other than
<PAGE>
exhibits to these documents, unless the exhibits are specifically incorporated
by reference into this prospectus). Requests should be directed to:
CEL-SCI Corporation
8229 Boone Blvd., #802
Vienna, Virginia 22182
(703) 506-9460
The following documents filed with the Commission by CEL-SCI
(Commission File No. 0-11503) are incorporated by reference into this
prospectus:
(1) CEL-SCI's Annual Report on Form 10-K for the fiscal year ended September 30,
1999.
(2) CEL-SCI's Quarterly Report on Form 10-Q for the quarter ended December 31,
1999.
(3) CEL-SCI's Proxy Statement relating to the March 17, 2000 shareholders'
meeting.
All documents filed with the Securities and Exchange Commission by
CEL-SCI pursuant to Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act
subsequent to the date of this prospectus and prior to the termination of this
offering shall be deemed to be incorporated by reference into this prospectus
and to be a part of this prospectus from the date of the filing of such
documents. Any statement contained in a document incorporated or deemed to be
incorporated by reference shall be deemed to be modified or superseded for the
purposes of this prospectus to the extent that a statement contained in this
prospectus or in any subsequently filed document which also is or is deemed to
be incorporated by reference 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.
CEL-SCI has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of l933, as amended, with
respect to the securities offered by this prospectus. This prospectus does not
contain all of the information set forth in the Registration Statement. For
further information with respect to CEL-SCI and such securities, reference is
made to the Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as to the
contents of any contract or other documents are summaries which are not
necessarily complete, and in each instance reference is made to the copy of such
contract or other document filed as an exhibit to the Registration Statement,
each such statement being qualified in all respects by such reference. The
Registration Statement and related exhibits may also be examined at the
Commission's internet site.
<PAGE>
No dealer salesman or other person has been authorized to give any
information or to make any representations, other than those contained in this
prospectus. Any information or representation not contained in this prospectus
must not be relied upon as having been authorized by CEL-SCI. This prospectus
does not constitute an offer to sell, or a solicitation of an offer to buy, the
securities offered hereby in any state or other jurisdiction to any person to
whom it is unlawful to make such offer or solicitation. Neither the delivery of
this prospectus nor any sale made hereunder shall, under any circumstances,
create an implication that there has been no change in the affairs of CEL-SCI
since the date of this prospectus.
TABLE OF CONTENTS
Page
Prospectus Summary............................................... 5
Risk Factors.................................................... 9
Comparative Share Data........................................... 12
Selling shareholders.............................................. 15
Description of Securities.......................................... 19
Experts............................................................ 20
Indemnification..................................................... 20
Additional Information............................................... 21
Common stock
CEL-SCI CORPORATION
PROSPECTUS
<PAGE>
PART II
Information Not Required in Prospectus
Item 14. Other Expenses of Issuance and Distribution
SEC Filing Fee $ 5,429
Blue Sky Fees and Expenses 2,000
Printing and Engraving Expenses 2,000
Legal Fees and Expenses 10,000
Accounting Fees and Expenses 3,000
Miscellaneous Expenses 2,571
---------
TOTAL $25,000
All expenses other than the S.E.C. filing fees are estimated.
Item 25. Indemnification of Officers and Directors.
It is provided by Section 7-109-102 of the Colorado Revised Statutes
and CEL-SCI's Bylaws that CEL-SCI may indemnify any and all of its officers,
directors, employees or agents or former officers, directors, employees or
agents, against expenses actually and necessarily incurred by them, in
connection with the defense of any legal proceeding or threatened legal
proceeding, except as to matters in which such persons shall be determined to
not have acted in good faith and in the best interest of CEL-SCI.
Item 16. Exhibits
3(a) Articles of Incorporation Incorporated
by reference to Exhibit 3(a) of
CEL-SCI's combined Registration
Statement on Form S-1 and Post-Effective
Amendment ("Registration Statement"),
Registration Nos.
2-85547-D and 33-7531.
(b) Amended Articles Incorporated by
reference to Exhibit 3(a) of CEL-SCI's
Registration Statement on Form S-1,
Registration Nos. 2-85547-D and 33-7531.
(c) Amended Articles Filed as Exhibit 3(c) to CEL-SCI'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 CEL-SCI's Registration Statement
on Form S-1, Registration Nos.
2-85547-D and 33-7531.
II-1
<PAGE>
(a) Specimen copy of Incorporated by reference to Exhibit 4(a) of Stock
Certificate CEL-SCI's Registration Statement on
Form S-1 Registration Nos. 2-85547-D and 33-7531.
5. Opinion of Counsel
10(e) Employment Agreement Filed with Amendment Number 1 to CEL-SCI's
with Geert Kersten Registration Statement on Form S-1 (Commission
File Number 33-43281).
10(i) Securities Purchase Agreement
(schedule) _____________________________________
10(j) Form of Callable (Series A) Warrant Previously Filed.
10(k) Form of Adjustable (Series B)
Warrant Previously Filed.
10(l) Registration Rights Agreement Previously Filed.
23(a) Consent of Hart & Trinen
(b) Consent of Deloitte & Touche, LLP __________________________________
Item 17. Undertakings.
The undersigned Registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement.
(i) To include any prospectus required by Section l0(a)(3) of the Securities
Act of l933;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement;
(iii)To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement,
including (but not limited to) any addition or deletion of a managing
underwriter.
(2) That, for the purpose of determining any liability under the
Securities Act of l933, each such post-effective amendment shall be deemed to be
a new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
II-2
<PAGE>
(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
<PAGE>
POWER OF ATTORNEY
The registrant and each person whose signature appears below hereby
authorizes the agent for service named in this Registration Statement, with full
power to act alone, to file one or more amendments (including post-effective
amendments) to this Registration Statement, which amendments may make such
changes in this Registration Statement as such agent for service deems
appropriate, and the Registrant and each such person hereby appoints such agent
for service as attorney-in-fact, with full power to act alone, to execute in the
name and in behalf of the Registrant and any such person, individually and in
each capacity stated below, any such amendments to this Registration Statement.
SIGNATURES
Pursuant to the requirements of the Securities Act of l933, the
Registrant certifies that it has reasonable grounds to believe that it meets all
the requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Vienna, State of Virginia, on the 28th day of
February, 2000.
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 February 28, 2000
Maximilian de Clara Executive Officer
/s/ Geert R. Kersten Director, Principal February 28,
2000
Geert R. Kersten Financial Officer
and Chief Executive
Officer
______________________ Director
Alexander G. Esterhazy
/s/ John M. Jacquemin Director February 28, 2000
- ------------------------
John M. Jacquemin
February 28, 2000
CEL-SCI Corporation
8229 Boone Blvd., #802
Vienna, Virginia 22182
This letter will constitute an opinion upon the legality of the sale by certain
selling shareholders of CEL-SCI Corporation, a Colorado corporation ("CEL-SCI"),
of up to 2,902,899 shares of common stock, all as referred to in the
Registration Statement on Form S-3 filed by CEL-SCI with the Securities and
Exchange Commission.
We have examined the Articles of Incorporation, the Bylaws and the minutes of
the Board of Directors of CEL-SCI and the applicable laws of the State of
Colorado, and a copy of the Registration Statement. In our opinion, CEL-SCI was
authorized to issue the shares of stock mentioned above and such shares
represent fully paid and non-assessable shares of CEL-SCI's common stock.
Very truly yours,
HART & TRINEN
William T. Hart
CEL-SCI CORPORATION
SCHEDULE TO EXHIBIT 10 (i)
The form of the Securities Purchase Agreement was filed as Exhibit 10(i) as
part of the Company's original filing.
This schedule provides information regarding those persons who were parties
to the acquired the Company's securities pursuant to the terms of the Securities
Purchase Agreement as well as other information required by Instruction 2 to
Item 601 of Regulation S-K.
The names and addresses of the investors which are parties to the Securities
Purchase Agreement, and the shares and warrants issued to the investors, are:
Name and Address Number of Shares Series A Warrants
Advantage Fund II, Ltd. 820,513 287,179
c/o CITCO
Kaya Flamboyan 9
Curacao, Netherlands Antilles
Attention: W.R. Webber
Koch Investment Group, Ltd. 205,128 71,795
4111 East 37th Street North
Wichita, Kansas 67270
Attention: Josh Taylor
Mooring Capital Fund 122,951 43,033
8614 Westwood Center Drive
Suite 650
Vienna, Virginia 22182
The Series A Warrant is sometimes referred to in the Securities Purchase
Agreement as the "Callable Warrant". The exercise price of the Series A Warrant
is $2.925 per share.
The Series B Warrant is sometimes referred to in the Securities Purchase
Agreement as the "Adjustable Warrant". The investors listed above all received
Series B Warrants in the transaction. However, the number of shares issuable
pursuant to the Series B Warrants cannot be determined at this time.
<PAGE>
Series A The Series A Warrants allow the investors the purchase shares
Warrants of the Company's common stock at a price of $2.925 per share
at any time prior to December 8, 2002
The Series A Warrant are callable by the Company if the
closing price of the Company's common stock is above $7.00
for 20 consecutive trading days.
Series B The Series B Warrants allow the investors to acquire shares
Warrants of the Company's common stock at a nominal price in
accordance with the following terms:
If subsequent to December 8, 1999 the Company shall close any
equity or debt financing at a price below $2.4375, then on the
closing date of that financing (the "Anti-Dilution Reset Date")
additional Common Shares shall be issued to the Investor, equal
to the following:
[(C x I) / A] - C
C = Common Shares held by the Investor on the Reset Date
(excluding hedged Common Shares)
I = $2.4375
A = "Adjustment Price", equal to the lesser of (x)
$2.4375, (y) the average of the closing bid prices
of the Common Stock on the American Stock Exchange
for the 10 trading days immediately preceding the
Anti-Dilution Reset Date, or (z) the price of the
subsequent financing in excess of $1 million (the
lowest determinable conversion price for a
convertible financing; the lowest share price for a
common stock financing, the strike price for
warrants, etc
On December 8, 2000 and each six month anniversary thereafter
through and including the December 8, 2002 (each a "Periodic
Reset Date"), additional Common Shares may be issued to the
Investors to reset the value per share to the lesser of (y)
$2.4375, or (z) the Reset Price as of that Periodic Reset Date.
The following formula shall be used to determine any additional
Common Shares to be issued:
[(C x PA) / A] - C
C = Common Shares held by the Investor on the Reset Date
(excluding hedged Common Shares)
PA = Adjustment Price from immediately preceding Reset
Date ($2.4375 if no previous Reset Dates)
A= Adjustment Price equal to the lesser of (y) $2.4375,
or (z) the average of the 10 lowest closing bid
prices of the Common Stock over the 30 trading days
immediately preceding the Periodic Reset Date. The
investors agree not to sell or short any CEL-SCI
shares during the 35 trading days prior to the
Reset Date.
CONSENT OF ATTORNEYS
Reference is made to the Registration Statement of CEL-SCI, whereby certain
selling shareholders propose to sell up to 2,902,899 shares of CEL-SCI's common
stock. Reference is also made to Exhibit 5 included in the Registration
Statement relating to the validity of the securities proposed to be sold.
We hereby consent to the use of our opinion concerning the validity of the
securities proposed to be issued and sold.
Very truly yours,
HART & TRINEN
William T. Hart
Denver, Colorado
February 28, 2000
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration Statement
of CEL-SCI Corporation on Amendment No. 1 to Form S-3 of our report dated
December 6, 1999 appearing in the Annual Report on Form 10-K of CEL-SCI
Corporation for the year ended September 30, 1999. We also consent to the
reference to us under the heading "Experts" in the Prospectus which is part of
this Registration Statement.
/s/ Deloitte & Touche LLP
Washington, DC
February 29, 2000
