cvm_ex99
Exhibit 99
CEL-SCI CORPORATION
Common
Stock
THESE
SECURITIES INVOLVE A HIGH DEGREE OF RISK. SEE "RISK
FACTORS".
THESE
SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS
THE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
This
Prospectus relates to shares (the "Shares") of common stock (the
"Common Stock") of CEL-SCI Corporation which may be issued pursuant
to certain employee compensation plans adopted by CEL-SCI. The
employee compensation plans provide for the grant, to selected
employees of CEL-SCI and other persons, of either shares of
CEL-SCI’s common stock or options to purchase shares of
CEL-SCI’s common stock. Persons who received Shares pursuant
to the Plans and who are offering such shares to the public by
means of this Prospectus are referred to as the "Selling
Shareholders".
CEL-SCI
has Incentive Stock Option Plans, Non-Qualified Stock Option Plans,
Stock Bonus Plans, Stock Compensation Plans and a 2014 Incentive
Stock Bonus Plan. In some cases these plans are collectively
referred to as the "Plans". The terms and conditions of any stock
grants and the terms and conditions of any options, including the
price of the shares of Common Stock issuable on the exercise of
options, are governed by the provisions of the respective Plans and
any particular agreements between CEL-SCI and the Plan
participants.
The
Selling Shareholders may offer the shares from time to time in
negotiated transactions through the NYSE American Exchange, at
fixed prices which may be changed from time to time, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to
or through securities broker/dealers, and such broker/dealers may
receive compensation in the form of discounts, concessions, or
commissions from the Selling Shareholders and/or the purchasers of
the Shares for whom such broker/dealers may act as agent or to whom
they sell as principal, or both (which compensation as to a
particular broker/dealer might be in excess of customary
commissions). See "Selling Shareholders" and "Plan of
Distribution".
None of
the proceeds from the sale of the Shares by the Selling
Shareholders will be received by CEL-SCI. CEL-SCI has agreed to
bear all expenses of registering the Shares with the Securities and
Exchange Commission (other than underwriting discounts, selling
commissions and fees and expenses of counsel and other advisers to
the Selling Shareholders).
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, beginning on page 9.
Neither
the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or has
passed upon the accuracy or adequacy of this prospectus. Any
representation to the contrary is a criminal offense.
The
date of this Prospectus is April __, 2020.
AVAILABLE INFORMATION
CEL-SCI
is subject to the information requirements of the Securities
Exchange Act of 1934 (the "Exchange Act") and in accordance
therewith, files reports and other information with the Securities
and Exchange Commission (the "Commission"). Proxy statements,
reports and other information concerning CEL-SCI can be inspected
and copied at the Commission's office at 100 F Street, NE,
Washington, D.C. 20549. Certain information concerning CEL-SCI is
also available at the Internet Web Site maintained by the
Securities and Exchange Commission at www.sec.gov. This Prospectus
does not contain all information set forth in the Registration
Statement of which this Prospectus forms a part and exhibits
thereto which CEL-SCI has filed with the Commission under the
Securities Act and to which reference is hereby made.
DOCUMENTS INCORPORATED BY REFERENCE
The
following documents filed with the Commission by CEL-SCI
(Commission File No. 001-11889) are incorporated by reference into
this prospectus:
●
our Annual Report
on Form 10-K and 10-K/A for the fiscal year ended September 30,
2019 that we filed with the SEC on December 16, 2019 and December
23, 2019;
●
our quarterly
report on Form 10-Q for the period ended December 31, 2019 that we
filed with the SEC on February 10, 2020;
●
our current reports
on Form 8-K filed with the SEC on October 15, 2019, December 23,
2019, December 26, 2019, February 20, 2020, March 24, 2020 and
April 17, 2020;
●
our Proxy Statement
relating to our April 17, 2020 Annual Meeting of Shareholders;
and
●
the description of
our common stock contained in our Registration Statement on Form
8-A filed with the SEC on July 2, 1996 and all amendments and
reports updating that description.
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 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
8229
Boone Blvd., Suite 802
Vienna,
Virginia 223l4
(703)
506-9460
Attention:
Secretary
All
documents filed with the Commission by CEL-SCI pursuant to Sections
13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the
date of this prospectus and prior to the termination of this
offering shall be deemed to be incorporated by reference into this
prospectus and to be a part of this prospectus from the date of the
filing of such documents. Any statement contained in a document
incorporated or deemed to be incorporated by reference shall be
deemed to be modified or superseded for the purposes of this
prospectus to the extent that a statement contained in this
prospectus or in any subsequently filed document which also is or
is deemed to be incorporated by reference in this prospectus
modifies or supersedes such statement. Such statement so modified
or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this prospectus.
Investors are
entitled to rely upon information in this prospectus or
incorporated by reference at the time it is used by CEL-SCI even
though that information may be superseded or modified by
information subsequently incorporated by reference into this
prospectus.
CEL-SCI
has filed with the Securities and Exchange Commission a
Registration Statement under the Securities Act of l933, as
amended, with respect to the securities offered by this prospectus.
This prospectus does not contain all of the information set forth
in the Registration Statement. For further information with respect
to CEL-SCI and such securities, reference is made to the
Registration Statement and to the exhibits filed with the
Registration Statement. Statements contained in this prospectus as
to the contents of any contract or other documents are summaries
which are not necessarily complete, and in each instance reference
is made to the copy of such contract or other document filed as an
exhibit to the Registration Statement, each such statement being
qualified in all respects by such reference. The Registration
Statement and related exhibits may also be examined at the
Commission’s internet site (www.sec.gov).
TABLE OF CONTENTS
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PAGE
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THE
COMPANY
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6
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FORWARD
LOOKING STATEMENTS
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7
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|
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RISK
FACTORS
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9
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|
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DILUTION
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10
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|
|
USE OF
PROCEEDS
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10
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SELLING
SHAREHOLDERS .
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11
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PLAN OF
DISTRIBUTION
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15
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DESCRIPTION
OF SECURITIES
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15
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THE COMPANY
We are
a clinical-stage biotechnology company focused on finding the best
way to activate the immune system to fight cancer and infectious
diseases. Our lead investigational therapy Multikine®
(Leukocyte Interleukin, Injection) is currently in a pivotal Phase
3 clinical trial for patients who are newly diagnosed with advanced
primary squamous cell carcinoma of the head and neck, for which we
have received Orphan Drug Status from the U.S. Food and Drug
Administration, or FDA. The study was fully enrolled with 928
patients in September 2016. The study’s primary end-point is
a 10% increase in overall survival of patients between the two main
comparator groups in favor of the group receiving the Multikine
treatment regimen. The determination if the study’s primary
end-point is met will occur when there are a total of 298 deaths in
those two groups. If the primary end-point of this global study is
achieved, we expect to use the results to support a Biologics
License Application, or BLA, to the FDA for Multikine for
neoadjuvant therapy in patients with squamous cell carcinoma of the
head and neck, or SCCHN (hereafter also referred to as advanced
primary head and neck cancer).
Our
investigational immunotherapy, Multikine, is being used in a
different way than cancer immunotherapy is usually used. It is
given before standard of care surgery has been administered because
that is when the immune system is thought to be strongest (i.e., as
a neoadjuvant). It is also administered locally around the tumors
and near the draining lymph node. For example, in the Phase 3
clinical trial, Multikine was given locally for three weeks, five
days per week as a first line treatment before surgery, radiation
and/or chemotherapy. The goal is to help the intact immune system
kill the micro metastases that usually cause recurrence of the
cancer. In short, we believe that local administration of this
neoadjuvant therapy and administration before weakening of the
immune system by surgery, chemotherapy and radiation will result in
improved outcomes and better overall survival rates for patients
suffering from head and neck cancer.
We are
also developing a peptide-based immunotherapy as a vaccine for
rheumatoid arthritis using our LEAPS technology platform, a product
candidate for the potential treatment of pandemic influenza in
hospitalized patients, and a product candidate to potentially treat
the COVID-19 coronavirus. We were awarded a Phase 2 Small Business
Innovation Research (SBIR) grant in the amount of $1.5 million from
the National Institutes of Health (NIH) in September 2017. This
grant will provide funding to allow us to advance our first LEAPS
product candidate, CEL-4000, towards an Investigational New Drug
(IND) application.
We were
formed as a Colorado corporation in 1983. Our principal office is
located at 8229 Boone Boulevard, Suite 802, Vienna, VA 22182. Our
telephone number is 703-506-9460 and our website is
www.cel-sci.com. We do not incorporate the information on our
website into this Prospectus, and you should not consider it part
of this Prospectus.
We make
our electronic filings with the Securities and Exchange Commission
(SEC), including our annual reports on Form 10-K, quarterly reports
on Form 10-Q, current reports on Form 8-K and amendments to these
reports. These filings are available on our website free of charge
as soon as practicable after they are filed or furnished to the
SEC.
RECENT
DEVELOPMENTS
The
Independent Data Monitoring Committee (IDMC) for our Phase 3
clinical trial of Multikine announced on October 14, 2019 that it
has completed its most recent review of the Phase 3 study data,
which it performs periodically at regular intervals as required by
our study protocol. The data from all 928 enrolled patients were
provided to the IDMC by the clinical research organization (CRO)
responsible for data management of this Phase 3 study.
The
IDMC recommended that we continue the trial until the appropriate
number of events have occurred.
IDMCs
are committees commonly used by sponsors of clinical trials to
protect the interests of the patients and the integrity of the
study data in ongoing trials, especially when the trials involve
patients with life threatening diseases, and when, as in cancer
clinical trials, they extend over long periods of time. The
continuation of our Phase 3 trial could be the result of factors
other than Multikine and may not be indicative of a potential
positive outcome for the trial.
We
announced in March 2020 that we are developing an immunotherapy
with the potential to treat the COVID-19 coronavirus using our
patented LEAPS peptide technology and that we have signed a
collaboration agreement with the University of Georgia’s
Center for Vaccines and Immunology to develop LEAPS COVID-19
immunotherapy. The LEAPS peptides will utilize conserved regions of
coronavirus proteins to stimulate protective cell mediated T cell
responses and reduce viral load. The LEAPS peptide technology can
be used to construct immunotherapeutic peptides that exhibit both
antiviral and anti-inflammatory properties. Consequently, these
products not only target the virus infection against which they are
directed, but also elicit the appropriate protective response(s)
against it. However, the development of this technology is in a
preliminary stage and we do not have, at this point, sufficient
data to submit to the FDA in order to obtain clearance to begin a
Phase I clinical trial. There can be no assurance that our LEAPS
technology will be successful in treating any disease.
In this
prospectus, unless otherwise specified or the context requires
otherwise, the terms “CEL-SCI,” the
“Company,” “we,” “us” and
“our” to refer to CEL-SCI Corporation. Our fiscal year
ends on September 30.
OUR PRODUCT CANDIDATES
We are a
clinical-stage biotechnology company dedicated to research and
development directed at improving the treatment of cancer and other
diseases by using the immune system, the body’s natural
defense system. We are currently focused on the development of the
following product candidates and technologies:
1.
Multikine, an
investigational immunotherapy under development for the potential
treatment of certain head and neck cancers;
2.
L.E.A.P.S. (Ligand
Epitope Antigen Presentation System) technology, or LEAPS, with
four investigational therapies, CEL-2000 and CEL-4000, vaccine
product candidates under development for the potential treatment of
rheumatoid arthritis, and LEAPS-H1N1-DC, a product candidate under
development for the potential treatment of pandemic influenza in
hospitalized patients, and LEAPS COVID-19, a product candidate
under development to potentially treat the COVID-19
coronavirus.
FORWARD LOOKING STATEMENTS
This
prospectus and the documents that are incorporated or deemed to be
incorporated by reference into this prospectus, contain or
incorporate by reference “forward-looking statements”
within the meaning of the Private Securities Litigation Reform Act
of 1995, Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Exchange Act of 1934, as amended. You
can generally identify these forward-looking statements by
forward-looking words such as “anticipates,”
“believes,” “expects,”
“intends,” “future,” “could,”
“estimates,” “plans,” “would,”
“should,” “potential,”
“continues” and similar words or expressions (as well
as other words or expressions referencing future events, conditions
or circumstances). These forward-looking statements involve risks,
uncertainties and other important factors that may cause our actual
results, performance or achievements to be materially different
from any future results, performance or achievements expressed or
implied by such forward-looking statements, including, but not
limited to:
●
the progress and
timing of, and the amount of expenses associated with, our
research, development and commercialization activities for our
product candidates, including Multikine;
●
our expectations
regarding the timing, costs and outcome of any pending or future
litigation matters, lawsuits or arbitration
proceedings;
●
the success of our
clinical studies for our product candidates;
●
our ability to
obtain U.S. and foreign regulatory approval for our product
candidates and the ability of our product candidates to meet
existing or future regulatory standards;
●
our expectations
regarding federal, state and foreign regulatory
requirements;
●
the therapeutic
benefits and effectiveness of our product candidates;
●
the safety profile
and related adverse events of our product candidates;
●
our ability to
manufacture sufficient amounts of Multikine or our other product
candidates for use in our clinical studies or, if approved, for
commercialization activities following such regulatory
approvals;
●
our plans with
respect to collaborations and licenses related to the development,
manufacture or sale of our product candidates;
●
business disruption
and related risks resulting from the recent pandemic of the novel
coronavirus 2019 (COVID-19);
●
our expectations as
to future financial performance, expense levels and liquidity
sources;
●
our ability to
compete with other companies that are or may be developing or
selling products that are competitive with our product
candidates;
●
anticipated trends
and challenges in our potential markets;
●
our ability to
attract, retain and motivate key personnel;
●
our ability to
continue as a going concern; and
All
forward-looking statements contained herein are expressly qualified
in their entirety by this cautionary statement, the risk factors
set forth under the heading “Risk Factors” and
information elsewhere in this prospectus and in the documents
incorporated or deemed to be incorporated by reference into this
prospectus. The forward-looking statements contained in this
prospectus and any document incorporated or deemed to be
incorporated by reference in this prospectus, speak only as of
their respective dates. Except to the extent required by
applicable laws and regulations, we undertake no obligation to
update these forward-looking statements to reflect new information,
events or circumstances after the date of this prospectus or
to reflect the
occurrence of unanticipated events. In light of these risks and
uncertainties, the forward-looking events and circumstances
described in this prospectus and the documents that are
incorporated by reference into this prospectus may not occur and
actual results could differ materially from those anticipated or
implied in such forward-looking statements. Accordingly, you are
cautioned not to place undue reliance on these forward-looking
statements.
RISK FACTORS
Investing in our securities involves a high degree of risk. In
addition to the other information contained in this prospectus
supplement and in the documents we incorporate by reference, you
should carefully consider the risks discussed below and under the
heading “Risk Factors” in our Annual Report on Form
10-K/A, as amended, for the fiscal year ended September 30, 2019
before making a decision about investing in our securities. The
risks and uncertainties discussed below and in our Annual Report on
Form 10-K/A for the fiscal year ended September 30, 2019 are not
the only ones facing us. Additional risks and uncertainties not
presently known to us may also harm our business. If any of these
risks occur, our business, financial condition and operating
results could be harmed, the trading price of our common stock
could decline and you could lose part or all of your
investment.
Risks Related to our Business
We face business disruption and related risks resulting from the
recent pandemic of the novel coronavirus 2019 (COVID-19), which
could have a material adverse effect on our business
plan.
The
development of our product candidates could be disrupted and
materially adversely affected by the recent outbreak of COVID-19.
As a result of measures imposed by the governments in affected
regions, businesses and schools have been suspended due to
quarantines intended to contain this outbreak. The spread of SARS
CoV-2 from China to other countries has resulted in the Director
General of the World Health Organization declaring COVID-19 a
pandemic on March 11, 2020. International stock markets have
reflected the uncertainty associated with the slow-down in the
world economies. The significant declines in the Dow Industrial
Average were largely attributed to the effects of COVID-19. We are
still assessing our business plans and the impact COVID-19 may have
on our ability to conduct our preclinical studies and clinical
trials, but there can be no assurance that this analysis will
enable us to avoid part or all of any impact from the spread of
COVID-019 or its consequences, including downturns in business
sentiment generally. The extent to which the COVID-19 pandemic and
global efforts to contain its spread will impact our operations
will depend on future developments, which are highly uncertain and
cannot be predicted at this time, and include the duration,
severity and scope of the pandemic and the actions taken to contain
or treat the COVID-19 pandemic.
Risks Related to this Offering
A provision in our Bylaws regarding shareholder claims may not be
enforceable.
Article
X of our bylaws provides that stockholder claims brought against
us, or our officers or directors, including any derivative claim or
claim purportedly filed on our behalf, must be brought in the U.S.
District Court for the district of Delaware.
Although it is our
intent that this provision applies to actions arising under the
Securities Act of 1933 and the Securities Exchange Act of 1934
there is uncertainty as to whether a court would enforce this
provision since Section 22 of the Securities Act creates concurrent
jurisdiction for federal and state courts over all suits brought to
enforce any duty or liability created by the Securities Act or the
rules and regulations under the Securities Act.
In
addition, since this provision in our bylaws applies to state law
claims there is uncertainty as to whether any court would enforce
this provision.
Risks Related to our Common Stock
You may experience future dilution as a result of future equity
offerings or other equity issuances.
We
expect that significant additional capital will be needed in the
future to continue our planned operations. To raise additional
capital, we may in the future offer additional shares of our common
stock or other securities convertible into or exchangeable for our
common stock. To the extent we raise additional capital
by issuing equity securities, our stockholders may experience
substantial dilution. These sales may result in material dilution
to our existing stockholders, and new investors could gain rights
superior to our existing stockholders.
Our outstanding options and warrants may adversely affect the
trading price of our common stock.
As of
April 21, 2020, there were outstanding warrants which allow the
holders to purchase 5,007,303 shares of common stock, with a
weighted average exercise price of $8.35 per share, and outstanding options which allow the holders
to purchase up to 8,757,068 shares of common stock, with a
weighted average exercise price of $7.09 per share. The outstanding
options and warrants could adversely affect our ability to obtain
future financing or engage in certain mergers or other
transactions, since the holders of options and warrants can be
expected to exercise them at a time when we may be able to obtain
additional capital through a new offering of securities on terms
more favorable to us than the terms of the outstanding options and
warrants. For the life of the options and warrants, the holders
have the opportunity to profit from a rise in the market price of
our common stock without assuming the risk of ownership. The
issuance of shares upon the exercise of outstanding options and
warrants will also dilute our ownership interests existing
stockholders.
DILUTION
As of
December 31, 2019, CEL-SCI’s net book value was approximately
$0.18 per share. If the price paid for shares in this offering is
greater than $0.18 per share, an investor will suffer dilution
equal in amount to the difference between the price paid for the
shares and CEL-SCI’s net tangible book value at the time of
purchase.
USE OF PROCEEDS
All of
the shares offered by this prospectus are being offered by certain
owners of CEL-SCI’s common stock (the Selling Shareholders)
and were issued by CEL-SCI in connection with CEL-SCI's employee
stock option, bonus and compensation plans. None of the proceeds
from this offering will be received by CEL-SCI. Expenses expected
to be incurred by CEL-SCI in connection with this offering are
estimated to be approximately $10,000. The Selling Shareholders
have agreed to pay all commissions and other compensation to any
securities broker/dealers through which they sell any of the
Shares.
SELLING SHAREHOLDERS
CEL-SCI
has issued (or may in the future issue) shares of its common stock
to various persons pursuant to certain employee compensation plans
adopted by CEL-SCI. The employee compensation plans provide for the
grant or issuance to selected employees of CEL-SCI and other
persons of shares of CEL-SCI’s common stock or options to
purchase shares of CEL-SCI’s common stock. Persons who
received shares pursuant to the Plans and who are offering such
shares to the public by means of this Prospectus are referred to as
the “Selling Shareholders”.
CEL-SCI
has adopted a number of Stock Option, Stock Bonus and Stock
Compensation Plans. A summary description of these Plans follows.
In some cases these Plans are collectively referred to as the
“Plans”.
Incentive Stock
Option Plans. CEL-SCI has Incentive Stock Option Plans which
authorize the issuance of shares of CEL-SCI’s Common Stock to
persons that exercise options granted pursuant to the Plans. Only
Company employees may be granted options pursuant to the Incentive
Stock Option Plans.
Non-Qualified Stock
Option Plans. CEL-SCI has Non-Qualified Stock Option Plans
which authorize the issuance of shares of CEL-SCI’s Common
Stock to persons that exercise options granted pursuant to the
Plans. CEL-SCI’s employees, directors, officers, consultants
and advisors are eligible to be granted options pursuant to the
Plans, provided however that bona fide services must be rendered by
such consultants or advisors and such services must not be in
connection with the offer or sale of securities in a
capital-raising transaction or for directly or indirectly promoting
or maintaining a market for CEL-SCI’s securities. The option
exercise price is determined on the date the option is
granted.
Stock Bonus
Plans. CEL-SCI has Stock Bonus Plans which allow for the
issuance of shares of Common Stock to its employees, directors,
officers, consultants and advisors. However bona fide services must
be rendered by the consultants or advisors and such services must
not be in connection with the offer or sale of securities in a
capital-raising transaction or for directly or indirectly promoting
or maintaining a market for CEL-SCI’s
securities.
Stock Compensation
Plans. CEL-SCI’s Stock Compensation Plans provides for
the issuance of shares of its common stock to officers, directors
and employees of CEL-SCI, as well as consultants to CEL-SCI, that
agree to receive shares of CEL-SCI’s common stock in lieu of
all or part of the compensation owed to them by CEL-SCI. However,
bona fide services must be rendered by consultants and the services
must not be in connection with the offer or sale of securities in a
capital-raising transaction or for directly or indirectly promoting
or maintaining a market for CEL-SCI’s
securities.
2014 Incentive
Stock Bonus Plan. CEL-SCI’s 2014 Incentive Stock Bonus
Plan provides for the issuance of shares of its common stock to
officers, directors and employees of CEL-SCI when CEL-SCI reaches
certain performance goals which are established from time to time
by CEL-SCI’s board of directors. The primary purpose of the
plan is to 1) align the interests of those CEL-SCI employees whose
work is essential to CEL-SCI’s ability to commercialize its
patented Multikine technology with those of CEL-SCI’s
shareholders through performance based compensation and 2) to tie
these key employees to CEL-SCI for the rest of the foreseeable drug
development phase of Multikine.
On
August 6, 2014 CEL-SCI’s board of directors granted stock
awards (“Awarded Shares”) pursuant to the 2014
Incentive Stock Bonus Plan to the following officers of CEL-SCI
(the “Grantees”):
Grantee
|
|
|
|
Geert
Kersten
|
232,000
|
Eyal
Talor
|
124,000
|
Patricia
Prichep
|
124,000
|
John
Cipriano
|
64,000
|
(1)
The Awarded Shares
(or a portion of the shares) will only be earned based upon the
achievement of certain significant milestones leading to the
commercialization of CEL-SCI’s Multikine technology or
significant increases in the market price of CEL-SCI’s common
shares.
Upon the
achievement of the following performance goals, a percentage of the
Awarded Shares will be earned by the Grantees and will no longer be
subject to being forfeited to CEL-SCI.
i.
Upon either (a) the
enrollment of 350 patients in the Phase 3 head and neck cancer
study or (b) the closing price of a share of CEL-SCI’s common
stock on the primary exchange on which such common stock is then
traded exceeds $87.50 for ten consecutive trading days, each
Grantee shall earn 25% of the Awarded Shares.
ii.
Upon either (a) the
full enrollment of patients in the Phase 3 head and neck cancer
study or (b) the start of a pivotal clinical trial for Multikine
(the "Proprietary Technology") in a disease indication other than
head and neck cancer or (c) the closing price of a share of
CEL-SCI’s common stock on the primary exchange on which the
common stock is then traded exceeds $150.00 for ten consecutive
trading days, each Grantee will earn 50% of the Awarded Shares,
less any of the Awarded Shares previously earned.
iii.
Upon either (a) the
end of the Phase 3 head and neck cancer study or any other pivotal
study involving CEL-SCI’s proprietary technology, or (b) the
closing price of a share of CEL-SCI’s common stock on the
primary exchange on which the common stock is then traded exceeds
$225.00 for ten consecutive trading days, each Grantee will earn
75% of the Awarded Shares, less any of the Awarded Shares
previously earned.
iv.
Upon either (a) the
filing of the first marketing application for any pharmaceutical
based upon CEL-SCI’s proprietary technology in the USA,
Canada, UK, Germany, France, Italy, Spain, Japan, or Australia, or
(b) the closing price of a share of CEL-SCI’s common stock on
the primary exchange on which the common stock is then traded
exceeds $300.00 for ten consecutive trading days, each Grantee will
earn 100% of the Awarded Shares, less any of the Awarded Shares
previously earned.
The stock price per
share will be proportionately adjusted in the event of any stock
splits, stock dividends; recapitalizations or similar
events.
The
Grantees may not sell, convey, transfer, pledge, encumber or
otherwise dispose of the Awarded Shares until the shares are
earned.
The Grantees
will forfeit and return to CEL-SCI all Awarded Shares that have not
been earned as of August 5, 2024.
Notwithstanding the
above, upon the occurrence of a Level One Change in Control, all
Awarded Shares which have not previously been earned will vest and
all restrictions pertaining to the Awarded Shares (other than as
may be provided by applicable securities laws) which have not
previously been earned will lapse. Upon the occurrence of a Level
Two Change in Control, if during the period commencing on the date
that is 12 months prior to the occurrence of the Level Two Change
in Control and ending on the date that is 48 months following the
Level Two Change in Control, the Grantee's employment with the
Company is terminated, other than for Cause, or the Grantee
terminates his or her employment on account of Good Reason, all
Awarded Shares will vest and all restrictions pertaining to the
Awarded Shares (other than as may be provided by applicable
securities laws) will lapse.
(i)
A Level One Change
in Control will occur upon (a) the acquisition by any individual,
entity or group of beneficial owners (within the meaning of Rule
13d-3 of the Securities and Exchange Commission) of 50% or more of
either (1) the then outstanding shares of the common stock of
CEL-SCI, or (2) the combined voting power of the then outstanding
voting securities of CEL-SCI entitled to vote in the election of
directors or (b) a majority of the Board consists of persons who
were not nominated or appointed in the first instance by the
Board.
(ii)
A Level Two Change
in Control will occur upon acquisition by any individual, entity or
group of beneficial ownership (within the meaning of Rule 13d-3 of
the Securities and Exchange Commission) of 20% or more of either
(1) the then outstanding shares of CEL-SCI’s common stock, or
(2) the combined voting power of CEL-SCI’s then outstanding
voting securities entitled to vote in the election of
directors.
(iii)
Cause means (a)
conviction of, or pleas of nolo contendere, by the Grantee for a
felony or dishonesty while performing his employment duties, (b) a
Grantee's violation of any non-competition, non-solicitation,
confidentiality or other restrictive covenant agreement applicable
to the Grantee or (c) the Grantee's continued failure to materially
carry out his or her duties as an employee which failure has not
been cured within 30 days after the Grantee receives written notice
of such failure.
(iv)
Good Reason means
(a) a reduction in compensation (including benefits) of the Grantee
or (b) the Grantee being assigned any duties which are materially
inconsistent with the duties of the Grantee immediately prior to
the occurrence of the Level Two Change in Control or (c) the office
at which the Grantee performs his or her duties is more than 10
miles from the office at which the Grantee performed his or her
duties immediately prior to the occurrence of the Level Two Change
in Control.
Summary. The
following lists, as of April 21, 2020, the options and shares granted
pursuant to the Plans. Each option represents the right to purchase
one share of CEL-SCI's common stock.
|
Total
Shares Reserved Under Plans
|
Shares
Reserved for Outstanding Options
|
Shares
Issued as Stock Bonus/ Compensation
|
Remaining
Options/Shares Under Plans
|
Incentive Stock
Option Plans
|
138,400
|
89,895
|
N/A
|
213
|
Non-Qualified Stock
Option Plans
|
9,987,200
|
8,667,173
|
N/A
|
1,172,146
|
Stock Bonus
Plans
|
783,760
|
N/A
|
339,076
|
444,651
|
Stock Compensation
Plans
|
634,000
|
N/A
|
150,695
|
464,895
|
2014 Incentive
Stock Bonus Plan
|
640,000
|
N/A
|
616,500
|
23,500
|
Shares
issuable upon the exercise of options granted to CEL-SCI’s
officers and directors pursuant to its stock option plans, as well
as shares issued pursuant to CEL-SCI’s stock bonus plans, are
being offered by means of this Prospectus. The following table
lists the shareholdings of CEL-SCI’s officers and directors
and the shares offered by means of this prospectus as of April 21,
2020.
|
|
Number of
Shares Being Offered
|
|
|
Name of
Selling Shareholder
|
|
|
|
Stock
Compensation Shares
|
Number of
shares which will be owned on completion of the
Offering
|
|
Geert R.
Kersten
|
1,119,525(3)
|
592,000
|
116,000
|
--
|
1,119,525
|
2.99%
|
Patricia B.
Prichep
|
205,592
|
288,000
|
62,000
|
--
|
205,592
|
*
|
Eyal Talor,
Ph.D.
|
118,695
|
288,000
|
62,000
|
--
|
118,695
|
*
|
Daniel H.
Zimmerman, Ph.D.
|
114,683
|
160,000
|
--
|
--
|
114,683
|
*
|
John
Cipriano
|
83,108
|
160,000
|
32,000
|
--
|
83,108
|
*
|
Peter R. Young,
Ph.D.
|
22,014
|
128,000
|
--
|
--
|
22,014
|
*
|
Bruno
Baillavoine
|
3,923
|
128,000
|
--
|
--
|
3,923
|
*
|
Robert
Watson
|
2,381
|
128,000
|
--
|
--
|
2,381
|
*
|
* Less
than 1%.
(1)
Includes shares
awarded pursuant to CEL-SCI’s 2014 Incentive Stock Bonus Plan
that have not vested.
(2)
Represents shares
issued or issuable upon exercise of stock options. The options held
by CEL-SCI’s officers and directors are exercisable at prices
of between $1.59 and $172.50 per share.
(3)
Includes shares
held in trusts for the benefit of Mr. Kersten’s children, and
shares held in the de Clara Trust, for which Mr. Kersten is a
beneficiary.
Mr.
Kersten is an officer and director of CEL-SCI. Dr. Young, Mr.
Baillavoine and Mr. Watson are directors of CEL-SCI. The other
persons in the foregoing table are officers of
CEL-SCI.
CEL-SCI
has filed with the Commission under the Securities Act of 1933 a
Form S-8 registration statement of which this prospectus forms a
part with respect to the resale of the shares from time to time in
the public market or in privately negotiated
transactions.
PLAN OF DISTRIBUTION
The
Selling Shareholders may sell the Shares offered by this Prospectus
from time to time in negotiated transactions in the public market
at fixed prices which may be changed from time to time, at market
prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices. The Selling
Shareholders may effect such transactions by selling the Shares to
or through broker/dealers, and such broker/dealers may receive
compensation in the form of discounts, concessions, or commissions
from the Selling Shareholders and/or the purchasers of the Shares
for which such broker/dealers may act as agent or to whom they may
sell, as principal, or both (which compensation as to a particular
broker/dealer may be in excess of customary
compensation).
The
Selling Shareholders and any broker/dealers who act in connection
with the sale of the Shares hereunder may be deemed to be
“underwriters” within the meaning of Section 2(11) of
the Securities Acts of 1933, and any commissions received by them
and profit on any resale of the Shares as principal might be deemed
to be underwriting discounts and commissions under the Securities
Act.
CEL-SCI
has advised the Selling Shareholders that they and any securities
broker/dealers or others who may be deemed to be statutory
underwriters will be subject to the prospectus delivery
requirements under the Securities Act of 1933. CEL-SCI has also
advised each Selling Shareholder that in the event of a
“distribution” of the shares owned by the Selling
Shareholder, such Selling Shareholder, any “affiliated
purchasers”, and any broker/ dealer or other person who
participates in such distribution may be subject to Rule 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 101 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 the sale of the
Shares by any Selling Shareholder.
DESCRIPTION OF SECURITIES
Common Stock
CEL-SCI
is authorized to issue 600,000,000 shares of common stock, (the
"common stock"). Holders of common stock are each entitled to cast
one vote for each share held of record on all matters presented to
shareholders. Cumulative voting is not allowed; hence, the holders
of a majority of the outstanding shares of 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.
Article
X of CEL-SCI’s bylaws provides that stockholder claims
brought against CEL-SCI, or its officers or directors, including
any derivative claim or claim purportedly filed on its behalf, must
be brought in the U.S. District Court for the district of
Delaware.
Although it is
CEL-SCI’s intent that this provision applies to actions
arising under the Securities Act of 1933 and the Securities
Exchange Act of 1934, there is uncertainty as to whether a court
would enforce this provision since Section 22 of the Securities Act
creates concurrent jurisdiction for federal and state courts over
all suits brought to enforce any duty or liability created by the
Securities Act or the rules and regulations under the Securities
Act.
In
addition, since this provision in CEL-SCI’s bylaws applies to
state law claims, there is uncertainty as to whether any court
would enforce this provision.
Preferred Stock
CEL-SCI
is authorized to issue up to 200,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that the Board of
Directors has the authority to divide the preferred stock into
series and, within the limitations provided by Colorado statute, to
fix by resolution the voting power, designations, preferences, and
relative participation, special rights, and the qualifications,
limitations or restrictions of the shares of any series so
established. As the Board of Directors has authority to establish
the terms of, and to issue, the preferred stock without shareholder
approval, the preferred stock could be issued to defend against any
attempted takeover of CEL-SCI. As of the date of this prospectus no
shares of preferred stock were outstanding.
Rights Agreement
In
November 2007, CEL-SCI declared a dividend of one Series A Right
and one Series B Right, or collectively the Rights, for each share
of CEL-SCI’s common stock which was outstanding on November
9, 2007. When the Rights become exercisable, each Series
A Right will entitle the registered holder, subject to the terms of
a Rights Agreement, to purchase from CEL-SCI one share of
CEL-SCI’s common stock at a price equal to 20% of the market
price of CEL-SCI’s common stock on the distribution date,
although the price may be adjusted pursuant to the terms of the
Rights Agreement. If after a person or group of
affiliated persons has acquired 15% or more of CEL-SCI’s
common stock or following the commencement of a tender offer for
15% or more of CEL-SCI’s outstanding common stock (i) CEL-SCI
is acquired in a merger or other business combination and CEL-SCI
is not the surviving corporation, (ii) any person consolidates or
merges with CEL-SCI and all or part of CEL-SCI’s common
shares are converted or exchanged for securities, cash or property
of any other person, or (iii) 50% or more of CEL-SCI’s
consolidated assets or earning power are sold, proper provision
will be made so that each holder of a Series B Right will
thereafter have the right to receive, upon payment of the exercise
price of $100 (subject to adjustment), that number of shares of
common stock of the acquiring company which at the time of such
transaction has a market value that is twice the exercise price of
the Series B Right.
The
description and terms of the Rights are set forth in a Rights
Agreement between the Company and Computershare Trust Company,
N.A., as Rights Agent.
Distribution of Rights
Initially,
stockholders will not receive separate certificates for the Rights
as the Rights will be represented by outstanding common stock
certificates. Until the exercise date, the Rights cannot be bought,
sold or otherwise traded separately from the common stock.
Certificates for common stock will carry a notation that indicates
that Rights are attached to the common stock and incorporate the
terms of the Rights Agreement.
Separate
certificates representing the Rights will be distributed as soon as
practicable after the earliest to occur of:
●
15 business days
following a public announcement that a person or group of
affiliated or associated persons has acquired beneficial ownership
of 15% or more of CEL-SCI’s outstanding common stock,
or
●
15 business days
(or such later date as may be determined by action of
CEL-SCI’s board of directors prior to such time as any person
or group of affiliated persons has acquired 15% or more of
CEL-SCI’s common stock) following the commencement of, or
announcement of an intention to make, a tender offer or exchange
offer the consummation of which would result in the beneficial
ownership by a person or group of 15% or more of such outstanding
common stock.
The
earlier of such dates described above is called the
“distribution date.”
Until
the distribution date (or earlier redemption or expiration of the
Rights), the surrender for transfer of any certificates for common
stock outstanding as of the record date, even without such
notation, will also constitute the transfer of the Rights
associated with the common stock represented by such certificate.
As soon as practicable following the distribution date, separate
certificates evidencing the Rights will be mailed to holders of
record of the common stock as of the close of business on the
distribution date, and such separate right certificates alone will
evidence the Rights.
Exercise
and Expiration
The
holders of the Rights are not required to take any action until the
Rights become exercisable. The Rights are not exercisable until the
distribution date. Holders of the Rights will be
notified by CEL-SCI that the Rights have become
exercisable. The Rights will expire on October 30, 2020,
unless the expiration date is extended or unless the Rights are
earlier redeemed by CEL-SCI as described below.
Redemption
At any
time prior to the distribution date, CEL-SCI’s board of
directors may redeem the Rights in whole, but not in part, at a
price of $0.0001 per Right. Subject to the foregoing, the
redemption of the Rights may be made effective at such time, on
such basis and with such conditions as CEL-SCI’s board of
directors in its sole discretion may establish. Immediately upon
any redemption of the Rights, the right to exercise the Rights will
terminate and the only entitlement of the holders of Rights will be
to receive the redemption price.
Exchange Option
At any
time after a person or group of affiliated persons has acquired 15%
or more of CEL-SCI’s common stock or following the
commencement of a tender offer for 15% or more of CEL-SCI’s
outstanding common stock, and prior to the acquisition by such
person of 50% or more of the outstanding common stock,
CEL-SCI’s board of directors may exchange the Rights (other
than Rights owned by such person or group which have become void),
in whole or in part, at an exchange ratio of one share of common
stock per Right (subject to adjustment).
Transfer Agent
Computershare Trust
Company, Inc., of Denver, Colorado, is the transfer agent for
CEL-SCI's common stock.