Rule 424(b)(3)
File #333-151667
PROSPECTUS SUPPLEMENT
(to Prospectus dated July 10, 2008)
CEL-SCI CORPORATION
Common Stock
On December 30, 2008, CEL-SCI entered into an equity line of credit
agreement with Ascendiant Capital Group, LLC in order to establish a potential
source of funding for CEL-SCI. The equity line of credit agreement establishes
what is sometimes also referred to as an equity drawdown facility.
Under the equity line of credit agreement, Ascendiant has agreed to provide
CEL-SCI with up to $5,000,000 of funding prior to January 6, 2011. During this
period, CEL-SCI may request a drawdown under the equity line of credit by
selling shares of its common stock to Ascendiant and Ascendiant will be
obligated to purchase the shares. CEL-SCI may request a drawdown once every ten
trading days, although CEL-SCI is under no obligation to request any drawdowns
under the equity line of credit.
If CEL-SCI sells any shares of its common stock following a drawdown, a
prospectus supplement will be filed specifying, among other things, the number
of shares sold and the sale price per share.
The securities sold by any future prospectus supplement are speculative and
involve a high degree of risk and should be purchased only by persons who can
afford to lose their entire investment. For a description of certain important
factors that should be considered by prospective investors, see "Risk Factors"
beginning on page 4 of the accompanying prospectus.
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.
CEL-SCI's common stock is traded on the NYSE Alternext US under the symbol
"CVM". On January 2, 2009 the closing price of CEL-SCI's common stock was $0.31.
The date of this prospectus supplement is January 5, 2009.
PROSPECTUS SUMMARY
THIS SUMMARY IS QUALIFIED BY THE MORE DETAILED INFORMATION APPEARING ELSEWHERE
IN THIS PROSPECTUS SUPPLEMENT, AS WELL AS THE ACCOMPANYING PROSPECTUS DATED JULY
10, 2008.
Forward Looking Statements
This prospectus contains various forward-looking statements that are based
on CEL-SCI's beliefs as well as assumptions made by and information currently
available to CEL-SCI. When used in this prospectus, the words "believe",
"expect", "anticipate", "estimate" and similar expressions are intended to
identify forward-looking statements. Such statements may include statements
regarding CEL-SCI's research and development projects, and are subject to
certain risks, uncertainties and assumptions which could cause actual results to
differ materially from projections or estimates. Factors which could cause
actual results to differ materially are discussed at length under the heading
"Risk Factors" in the accompanying prospectus dated July 10, 2008. Should one or
more of the enumerated risks or uncertainties materialize, or should underlying
assumptions prove incorrect, actual results may vary materially from those
anticipated, estimated or projected. Investors should not place undue reliance
on forward-looking statements, all of which speak only as of the date made.
CEL-SCI
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CEL-SCI Corporation (CEL-SCI) was formed as a Colorado corporation in
1983. CEL-SCI's principal office is located at 8229 Boone Boulevard, Suite 802,
Vienna, VA 22182. CEL-SCI's telephone number is 703-506-9460 and its web site is
www.cel-sci.com. CEL-SCI makes its electronic filings with the Securities and
Exchange Commission (SEC), including its annual reports on Form 10-K, quarterly
reports on Form 10-Q, current reports on Form 8-K and amendments to these
reports available on its website free of charge as soon as practicable after
they are filed or furnished to the SEC.
MULTIKINE
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CEL-SCI's lead product, Multikine(R), is being developed for the treatment
of cancer. It is the first of a new class of cancer immunotherapy drugs called
Immune SIMULATORs. It simulates the activities of a healthy person's immune
system, which battles cancer every day. Multikine is multi-targeted; it is the
only cancer immunotherapy that both kills cancer cells in a targeted fashion and
activates the general immune system to destroy the cancer. We believe Multikine
is the first immunotherapeutic agent being developed as a first-line standard of
care treatment for cancer and it is cleared for a global Phase III clinical
trial in advanced primary (previously untreated) head and neck cancer patients.
Multikine is a new type of immunotherapy in that it is a comprehensive
immunotherapy, incorporating both active and passive immune activity. A
comprehensive immunotherapy most closely resembles the workings of the natural
immune system in the sense that it works on multiple fronts in the battle
against cancer. A comprehensive immunotherapy causes a direct and targeted
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killing of the tumor cells and activates the immune system to produce a more
robust and sustainable anti-tumor response.
Multikine is designed to target the tumor micro-metastases that are mostly
responsible for treatment failure. The basic concept is to add Multikine to the
current cancer treatments with the goal of making the overall cancer treatment
more successful. Phase II data indicated that Multikine treatment resulted in a
substantial increase in the survival of patients. The lead indication is
advanced primary (previously untreated) head & neck cancer (about 600,000 new
cases per annum). Since Multikine is not tumor specific, it may also be
applicable in many other solid tumors.
In January 2007, the US Food and Drug Administration (FDA) concurred with
the initiation of a global Phase III clinical trial in head and neck cancer
patients using Multikine. The Canadian regulatory agency, the Biologics and
Genetic Therapies Directorate, had previously concurred with the initiation of a
global Phase III clinical trial in head and neck cancer patients using
Multikine.
The protocol is designed to develop conclusive evidence of the efficacy of
Multikine in the treatment of advanced primary (previously untreated) squamous
cell carcinoma of the oral cavity (head and neck cancer). A successful outcome
from this trial should enable CEL-SCI to apply for a Biologics License to market
Multikine for the treatment of this patient population.
The trial will test the hypothesis that Multikine treatment administered
prior to the current standard therapy for head and neck cancer patients
(surgical resection of the tumor and involved lymph nodes followed by
radiotherapy or radiotherapy and concurrent chemotherapy) will extend the
overall survival, enhance the local/regional control of the disease and reduce
the rate of disease progression in patients with advanced oral squamous cell
carcinoma.
L.E.A.P.S.
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CEL-SCI's patented T-cell Modulation Process uses "heteroconjugates" to
direct the body to choose a specific immune response. The heteroconjugate
technology, referred to as L.E.A.P.S. (Ligand Epitope Antigen Presentation
System), is intended to selectively stimulate the human immune system to more
effectively fight bacterial, viral and parasitic infections as well as
autoimmune, allergies, transplantation rejection and cancer, when it cannot do
so on its own. Administered like vaccines, L.E.A.P.S. combines T-cell binding
ligands with small, disease associated, peptide antigens and may provide a new
method to treat and prevent certain diseases.
The ability to generate a specific immune response is important because
many diseases are often not combated effectively due to the body's selection of
the "inappropriate" immune response. The capability to specifically reprogram an
immune response may offer a more effective approach than existing vaccines and
drugs in attacking an underlying disease.
Using the LEAPS technology, CEL-SCI discovered a peptide, named CEL-1000,
which is currently being tested in animals for the prevention/treatment of avian
flu, herpes simplex, malaria, viral encephalitis, smallpox, vaccinia and a
number of other indications.
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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 CEL-SCI's securities and
borrowings from third parties, including affiliates of CEL-SCI.
All of CEL-SCI's products are in the development stage. As of November 30,
2008 CEL-SCI was not receiving any revenues from the sale of MULTIKINE or any
other products which CEL-SCI was developing.
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 $(124,000,000) at June 30, 2008 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.
THE OFFERING
On December 30, 2008, CEL-SCI entered into an equity line of credit
agreement with Ascendiant Capital Group, LLC in order to establish a potential
source of funding for CEL-SCI. The equity line of credit agreement establishes
what is sometimes also referred to as an equity drawdown facility.
Under the equity line of credit agreement, Ascendiant has agreed to
provide CEL-SCI with up to $5,000,000 of funding prior to January 6, 2011.
During this period, CEL-SCI may request a drawdown under the equity line of
credit by selling shares of its common stock to Ascendiant and Ascendiant will
be obligated to purchase the shares. CEL-SCI may request a drawdown once every
ten trading days, although CEL-SCI is under no obligation to request any
drawdowns under the equity line of credit. There must be a minimum of two
trading days between each drawdown request.
During the ten trading days following a drawdown request, CEL-SCI will
calculate the amount of shares it will sell to Ascendiant and the purchase price
per share. The purchase price per share of common stock will be based on the
daily volume weighted average price of CEL-SCI's common stock during each of the
ten trading days immediately following the drawdown date, less a discount of 9%.
CEL-SCI may request a drawdown by faxing a drawdown notice to Ascendiant,
stating the amount of the drawdown and the lowest price, if any, at which
CEL-SCI is willing to sell the shares. The lowest price will be set by CEL-SCI's
Chief Executive Officer in his sole and absolute discretion.
Calculation of Drawdown Amount, Purchase Price and Number of Shares Sold
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There is no minimum amount CEL-SCI can draw down at any one time. The
maximum amount CEL-SCI can draw down at any one time is an amount equal to:
o 10% of the total trading volume of CEL-SCI's common stock for the ten
trading days prior to the date of the drawdown request, multiplied by
o the weighted average price of CEL-SCI's common stock for the same ten
trading days,
or any other amount mutually agreed upon by CEL-SCI and Ascendiant.
On the day following the delivery of the drawdown notice, a valuation
period of ten trading days will start:
o On each of the ten trading days during the valuation period, the
number of shares to be sold to Ascendiant will be determined by
dividing 1/10 of the drawdown amount by the purchase price on each
trading day. The purchase price will be 91% of the volume weighted
average price of CEL-SCI's common stock on that day.
o If the purchase price on any trading day during the ten trading day
calculation period is below the minimum price specified by CEL-SCI,
then Ascendiant will not purchase any shares on that day, and the
drawdown amount will be reduced by 1/10.
Using the formula described above, if CEL-SCI had requested a drawdown on
December 12, 2008, the maximum amount CEL-SCI could draw down during the
subsequent ten trading days would have been approximately $72,125. Based upon
the volume weighted average of CEL-SCI's common stock during the ten trading
days subsequent to December 12, 2008, CEL-SCI would have sold 258,000 shares of
its common stock to Ascendiant and would have received proceeds from the sale of
these shares of approximately $72,125.
If CEL-SCI sets a minimum price which is too high and CEL-SCI's stock
price does not consistently meet that level during the ten trading days after
its drawdown request, the amount CEL-SCI can draw and the number of shares
CEL-SCI will sell to Ascendiant will be reduced. On the other hand, if CEL-SCI
sets a minimum price which is too low and its stock price falls significantly
but stays above the minimum price, CEL-SCI will have to issue a greater number
of shares to Ascendiant based on the reduced market price.
Payment for Shares
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The shares purchased on the ten trading days following a drawdown request
will be issued and paid for on the 13th trading day following the drawdown
request.
Termination of the Equity Line of Credit Agreement
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The equity line of credit agreement will be terminated if:
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o CEL-SCI's common stock is de-listed from the American Stock Exchange
unless the de-listing is in connection with CEL-SCI's subsequent
listing of its common stock on the NASDAQ National Market, the NASDAQ
SmallCap Market, the New York Stock Exchange, the OTC Bulletin Board,
o CEL-SCI files for protection from its creditors under the Federal
Bankruptcy laws.
o The shares which are to be sold to Ascendiant are not covered by an
effective registration statement,
o Ascendiant fails to honor a drawdown notice, or
o the equity line of credit agreement violates any other agreement to
which CEL-SCI is a party.
General
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On the trading day immediately prior to the date CEL-SCI sends its first
drawdown notice to Ascendiant, and in consideration for providing the equity
drawdown facility, CEL-SCI will deliver to Ascendiant shares of its common stock
equal in number to the amount determined by:
o dividing $250,000 by
o the greater of the weighted average price of CEL-SCI's common stock or
the closing bid price of CEL-SCI's common stock on the second trading
day immediately preceding the drawdown notice.
CEL-SCI paid $20,000 to Feldman Weinstein Smith LLP, legal counsel to
Ascendiant, for Ascendiant's legal expenses relating to the equity line of
credit.
Ascendiant is entitled to customary indemnification from CEL-SCI for any
losses or liabilities it suffers as a result of any breach by CEL-SCI of any
provisions of the equity line of credit agreement, or as a result of any lawsuit
brought by any shareholder of CEL-SCI, provided the shareholder instituting the
lawsuit is not an officer, director or principal shareholder of CEL-SCI.
PLAN OF DISTRIBUTION
This prospectus pertains to sales of CEL-SCI's common stock to Ascendiant
Capital Group, LLC. Ascendiant will receive shares of CEL-SCI's common stock
under the equity line of credit agreement described in the "Summary" section of
this prospectus.
CEL-SCI will not receive any proceeds from the sale of the shares by
Ascendiant. Ascendiant may resell the shares it acquires by means of this
prospectus from time to time in the public market. The costs of registering the
shares sold to Ascendiant is being paid by CEL-SCI. Ascendiant will pay all
other costs pertaining to the sale of its shares.
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Manner of Sale.
The shares of common stock owned, or which may be acquired, by Ascendiant,
may be offered and sold by Ascendiant from time to time as market conditions
permit in the over-the-counter market, or otherwise, at prices and terms then
prevailing or at prices related to the then-current market price, or in
negotiated transactions. These shares may be sold by one or more of the
following methods, without limitation:
o a block trade in which a broker or dealer so engaged 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 or dealer as principal and resale by such broker
or dealer for its account pursuant to this prospectus;
o ordinary brokerage transactions and transactions in which the broker
solicits purchasers; and
o face-to-face transactions between sellers and purchasers without a
broker/dealer.
When making sales, brokers or dealers engaged by Ascendiant may arrange
for other brokers or dealers to participate. These brokers or dealers may
receive commissions or discounts from Ascendiant in amounts to be negotiated.
Ascendiant is an "underwriter" and any broker/dealers who act in
connection with the sale of the shares by Ascendiant 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 Ascendiant, and any securities broker/dealers or
others who sell CEL-SCI's shares on behalf of Ascendiant, that they may be
deemed to be statutory underwriters. CEL-SCI has also advised Ascendiant that in
the event of a "distribution" of its shares Ascendiant, 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.
Rule 102 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. 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 Ascendiant 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 distribution of its shares.
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The shares of CEL-SCI's common stock which may be sold to Ascendiant have
been registered with the Securities and Exchange Commission to enable Ascendiant
to sell the common stock in the public market. However, CEL-SCI has no
obligation:
o to assist or cooperate with Ascendiant in the offering or disposition
of its shares;
o to obtain a commitment from an underwriter relative to the sale of any
its shares; or
o to include the shares within any underwritten offering.
DESCRIPTION OF SECURITIES
Common Stock
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CEL-SCI is authorized to issue 300,000,000 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 and all of
the shares of common stock offered as a component of the Units will be, upon
issuance, fully paid and non-assessable.
Preferred Stock
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CEL-SCI is authorized to issue up to 100,000 shares of preferred stock.
CEL-SCI's Articles of Incorporation provide that its 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 CEL-SCI's 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.
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
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statements and other information filed by CEL-SCI can be read and copied at the
Commission's Public Reference Room at 100 F. Street, N.E., 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 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, 2007.
(2) CEL-SCI's Proxy Statement relating to its March 3, 2008 shareholders'
meeting.
(3) CEL-SCI's report on Form 8-K filed on August 25, 2008.
(4) CEL-SCI's report on Form 10-Q for the three months ended December 31,
2007.
(5) CEL-SCI's report on Form 10-Q for the three months ended March 31,
2008.
(6) CEL-SCI's report on Form 10-Q for the three months ended June 30,
2008.
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.
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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.
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.