cvm_10q.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from _______________ to ______________.

Commission File Number 001-11889

CEL-SCI CORPORATION

Colorado

84-0916344

State or other jurisdiction

of incorporation

(IRS) Employer

Identification Number

8229 Boone Boulevard, Suite 802

Vienna, Virginia 22182

Address of principal executive offices

(703) 506-9460

Registrant’s telephone number, including area code

Securities registered pursuant to Section 12(b) of the Act:

Title of Each Class		Trading Symbol(s)		Name of Each Exchange on Which Registered
Common Stock		CVM		NYSE American

Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days.Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☒ No ☐

Indicate by check mark whether the Registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer”, “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer
Non-accelerated Filer	☒	Smaller reporting company	☒
		Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the Registrant is a shell company (as defined in Exchange Act Rule 12b-2 of the Exchange Act).Yes ☐ No ☒

Class of Stock	No. Shares Outstanding	Date
Common	43,367,462	August 3, 2022

TABLE OF CONTENTS

PART I FINANCIAL INFORMATION

Item 1.		Page

	Condensed Balance Sheets at June 30, 2022 (unaudited) and September 30, 2021	3

	Condensed Statements of Operations for the nine months ended June 30, 2022 and 2021 (unaudited)	4

	Condensed Statements of Operations for the three months ended June 30, 2022 and 2021 (unaudited)	5

	Condensed Statements of Stockholders’ Equity for the nine months ended June 30, 2022 and 2021 (unaudited)	6

	Condensed Statements of Cash Flows for the nine months ended June 30, 2022 and 2021 (unaudited)	8

	Notes to Condensed Financial Statements (unaudited)	10

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risks	29

Item 4.	Controls and Procedures	29

PART II

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30

Item 6.	Exhibits	30

	Signatures	31

Table of Contents

CEL-SCI CORPORATION
CONDENSED BALANCE SHEETS


	JUNE 30,			SEPTEMBER 30,
ASSETS	2022			2021
	(UNAUDITED)
Current assets:
Cash and cash equivalents	$	28,073,673		$	36,060,148
U.S. Treasury Bills		-			6,151,385
Receivables		-			54,922
Prepaid expenses		708,621			998,482
Supplies used for R&D and manufacturing		2,173,037			2,006,584

Total current assets		30,955,331			45,271,521

Finance lease right of use assets		11,389,249			12,691,921
Operating lease right of use assets		1,928,561			2,056,178
Property and equipment, net		12,394,189			13,663,562
Patent costs, net		222,462			275,866
Deposits		-			1,910,917

Total assets	$	56,889,792		$	75,869,965


LIABILITIES AND STOCKHOLDERS' EQUITY

Current liabilities:
Accounts payable	$	852,860		$	1,675,813
Accrued expenses		992,945			859,216
Due to employees		496,005			265,993
Derivative instruments, current portion		-			437,380
Lease liabilities, current portion		1,673,653			698,665

Total current liabilities		4,015,463			3,937,067

Finance lease obligations, net of current portion		12,124,979			13,252,364
Operating lease obligations, net of current portion		1,895,987			2,021,308
Other liabilities		125,000			125,000

Total liabilities		18,161,429			19,335,739

Commitments and contingencies

STOCKHOLDERS' EQUITY
Preferred stock, $0.01 par value - 200,000 shares authorized; 0 shares issued and outstanding		-			-
Common stock, $0.01 par value - 600,000,000 shares authorized; 43,355,529 and 43,207,183 shares issued and outstanding at June 30, 2022 and September 30, 2021, respectively		433,555			432,072
Additional paid-in capital		484,729,902			474,298,566
Accumulated deficit		(446,435,094	)		(418,196,412	)

Total stockholders' equity		38,728,363			56,534,226

TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	56,889,792		$	75,869,965

See notes to condensed financial statements.

Table of Contents

CEL-SCI CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED JUNE 30, 2022 and 2021
(UNAUDITED)

	2022			2021

Operating expenses:
Research and development	$	18,893,857		$	17,818,373
General and administrative		8,220,768			9,902,120
Total operating expenses		27,114,625			27,720,493

Operating loss		(27,114,625	)		(27,720,493	)

Gain (loss) on derivative instruments		366,791			(991,562	)
Other non-operating (loss) gain		(30,793	)		1,428,260
Interest expense, net		(1,460,055	)		(872,457	)

Net loss		(28,238,682	)		(28,156,252	)
Modification of warrants		(294,409	)		(350,861	)

Net loss available to common shareholders	$	(28,533,091	)	$	(28,507,113	)

Net loss per common share - basic	$	(0.66	)	$	(0.71	)
Weighted average common shares outstanding - basic		43,124,972			39,907,624

Net loss per common share - diluted	$	(0.66	)	$	(0.74	)
Weighted average common shares outstanding - diluted		43,124,972			40,158,321

See notes to condensed financial statements.

Table of Contents

CEL-SCI CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 2022 and 2021
(UNAUDITED)

	2022			2021

Operating Expenses:
Research and development	$	6,286,873		$	7,182,099
General and administrative		2,432,518			3,274,480
Total operating expenses		8,719,391			10,456,579

Operating loss		(8,719,391	)		(10,456,579	)

Gain on derivative instruments		-			1,116,619
Other non-operating gains		-			753,024
Interest expense, net		(913,193	)		(351,332	)

Net loss		(9,632,584	)		(8,938,268	)
Modification of warrants		(294,409	)		(265,082	)

Net loss available to common shareholders	$	(9,926,993	)	$	(9,203,350	)


Net loss per common share - basic	$	(0.23	)	$	(0.22	)
Weighted average common shares outstanding - basic		43,174,775			41,020,485

Net loss per common share - diluted	$	(0.23	)	$	(0.25	)
Weighted average common shares outstanding - diluted		43,174,775			41,231,082

See notes to condensed financial statements.

Table of Contents

CEL-SCI CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
(UNAUDITED)

					Additional
	Common Stock				Paid-In			Accumulated
	Shares		Amount		Capital			Deficit			Total

BALANCES AT OCTOBER 1, 2021		43,207,183	$	432,072	$	474,298,566		$	(418,196,412	)	$	56,534,226

Warrant exercises		19,705		197		157,757			-			157,954
Equity based compensation - employees		-		-		3,262,296			-			3,262,296
401(k) contributions paid in common stock		7,605		76		52,479			-			52,555
Stock and options issued to nonemployees for service		18,020		180		142,980			-			143,160
Option exercises		6,500		65		29,770			-			29,835
Share issuance costs		-		-		(45,965	)		-			(45,965	)
Net loss		-		-		-			(8,782,606	)		(8,782,606	)

BALANCES AT DECEMBER 31, 2021		43,259,013	$	432,590	$	477,897,883		$	(426,979,018	)	$	51,351,455

Warrant exercises		5,500		55		13,805			-			13,860
Equity based compensation - employees		-		-		3,392,706			-			3,392,706
401(k) contributions paid in common stock		14,614		146		57,371			-			57,517
Stock and options issued to nonemployees for service		25,475		255		139,797			-			140,052
Share issuance costs		-		-		(4,550	)		-			(4,550	)
Net loss		-		-		-			(9,823,492	)		(9,823,492	)

BALANCES AT MARCH 31, 2022		43,304,602	$	433,046	$	481,497,012		$	(436,802,510	)	$	45,127,548

Equity based compensation - employees		-		-		2,447,772			-			2,447,772
401(k) contributions paid in common stock		12,640		126		57,082			-			57,208
Stock and options issued to nonemployees for service		38,287		383		121,883			-			122,266
Modification of warrants		-		-		634,713			-			634,713
Share issuance costs		-		-		(28,560	)		-			(28,560	)
Net loss		-		-		-			(9,632,584	)		(9,632,584	)

BALANCES AT JUNE 30, 2022		43,355,529	$	433,555	$	484,729,902		$	(446,435,094	)	$	38,728,363

Table of Contents

CEL-SCI CORPORATION

STATEMENTS OF STOCKHOLDERS' EQUITY continued

(UNAUDITED)

	Common Stock						Paid-In			Accumulated
	Shares			Amount			Capital			Deficit			Total

BALANCES AT OCTOBER 1, 2020		38,730,150		$	387,302		$	401,174,675		$	(381,835,303	)	$	19,726,674

Proceeds from the sale of common stock		1,000,000			10,000			13,549,500			-			13,559,500
Warrant exercises		15,000			150			89,100			-			89,250
Equity based compensation - employees		(2,000	)		(20	)		3,296,329			-			3,296,309
401(k) contributions paid in common stock		3,564			36			41,635			-			41,671
Stock and options issued to nonemployees for service		15,044			150			152,300			-			152,450
Option exercises		5,300			53			23,458			-			23,511
Modification of warrants		-			-			192			-			192
Share issuance costs		-			-			(117,021	)		-			(117,021	)
Net loss		-			-			-			(7,936,864	)		(7,936,864	)

BALANCES AT DECEMBER 31, 2020		39,767,058		$	397,671		$	418,210,168		$	(389,772,167	)	$	28,835,672

Warrant exercises		991,239			9,912			7,928,929			-			7,938,841
Equity based compensation - employees		-			-			3,282,742			-			3,282,742
401(k) contributions paid in common stock		3,347			33			51,387			-			51,420
Stock and options issued to nonemployees for service		13,486			135			379,142			-			379,277
Option exercises		48,845			489			138,299			-			138,788
Share issuance costs		-			-			(13,828	)		-			(13,828	)
Net loss		-			-			-			(11,281,120	)		(11,281,120	)

BALANCES AT MARCH 31, 2021		40,823,975		$	408,240		$	429,976,839		$	(401,053,287	)	$	29,331,792

Proceeds from the sale of common stock		1,610,000			16,100			33,787,826			-			33,803,926
Warrant exercises		437,312			4,373			1,375,117			-			1,379,490
Equity based compensation - employees		-			-			3,511,359			-			3,511,359
401(k) contributions paid in common stock		6,111			61			53,144			-			53,205
Stock and options issued to nonemployees for service		13,184			132			266,936			-			267,068
Option exercises		72,809			728			463,434			-			464,162
Modification of warrants		-			-			24,195			-			24,195
Share issuance costs		-			-			(103,185	)		-			(103,185	)
Net loss		-			-			-			(8,938,268	)		(8,938,268	)

BALANCES AT JUNE 30, 2021		42,963,391		$	429,634		$	469,355,665		$	(409,991,555	)	$	59,793,744


See notes to condensed financial statements.

Table of Contents

CEL-SCI CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED JUNE 30, 2022 and 2021
(UNAUDITED)

	2022			2021

Net loss	$	(28,238,682	)	$	(28,156,252	)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization		2,845,978			1,649,699
Share-based payments for services		603,147			955,900
Equity based compensation		9,102,774			10,090,410
Common stock contributed to 401(k) plan		167,280			146,296
Gain on short-term investments		(615	)		(6,578	)
Loss on patent impairment		30,793			-
Gain (loss) on derivative instruments		(366,791	)		991,562
Modification of warrants		634,713			24,387
(Increase)/decrease in assets:
Receivables		54,922			-
Prepaid expenses		147,192			232,752
Supplies used for R&D and manufacturing		(166,453	)		(759,193	)
Deposits		1,910,917			(248,712	)
Increase/(decrease) in liabilities:
Accounts payable		(410,536	)		689,812
Accrued expenses		78,729			297,928
Due to employees		230,012			84,598
Other liabilities		49,390			22,459

Net cash used in operating activities		(13,327,230	)		(13,984,932	)

CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from maturity (purchases) of US treasury bills		6,152,000			(11,145,667	)
Purchases of property and equipment		(621,826	)		(8,628,648	)
Expenditures for patent costs		(22,741	)		-

Net cash provided by (used in) investing activities		5,507,433			(19,774,315	)

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock		-			47,363,426
Share issuance costs		(50,515	)		(207,673	)
Proceeds from exercises of warrants and options		131,060			6,195,571
Proceeds from landlord funding of leasehold improvements		786,454			1,613,546
Payments on obligations under finance lease		(1,033,677	)		(756,817	)

Net cash (used in) provided by financing activities		(166,678	)		54,208,053

NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS		(7,986,475	)		20,448,806

CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD		36,060,148			15,508,909

CASH AND CASH EQUIVALENTS, END OF PERIOD	$	28,073,673		$	35,957,715

SEC Form 10-Q filed by Cel-Sci Corporation