UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 2000. OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to ______________. Commission File Number 0-11503 CEL-SCI CORPORATION Colorado 84-0916344 - -------------------------- ----------------------------- State or other jurisdiction (IRS) Employer Identification incorporation Number 8229 Boone Boulevard, Suite 802 Vienna, Virginia 22182 Address of principal executive offices (703) 506-9460 -------------- Registrant's telephone number, including area code Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) had been subject to such filing requirements for the past 90 days. Yes ____X_____ No __________ - Class of Stock No. Shares Outstanding Date -------------- ---------- ---------------- Common 20,579,265 January 26, 2001 Page 1 of 12 pages
TABLE OF CONTENTS PART I FINANCIAL INFORMATION Item 1. Page ---- Balance Sheets 3-4 Statements of Operations 5 Statements of Cash Flow 6 Notes to Financial Statements 7 Item 2. Management's Discussion and Analysis 9 PART II Item 6. Exhibits and Reports on Form 8-K 11 Signatures 12
CEL-SCI CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS ASSETS (unaudited) December 31, September 30, CURRENT ASSETS: 2000 2000 ---- ---- Cash and cash equivalents $ 3,713,027 $ 6,909,263 Investments, net 3,789,538 3,760,922 Interest and other receivables 29,646 39,252 Prepaid expenses 2,442,089 1,838,376 Advances to officer/shareholder 20,932 728 --------------- ------------- Total Current Assets 9,995,232 12,548,541 REASEARCH AND OFFICE EQUIPMENT- Less accumulated depreciation of $1,753,975 and $1,721,336 601,093 594,919 DEPOSITS 139,828 139,828 PATENT COSTS-less accumulated amortization of $590,801 and $574,362 527,679 25,594 ---------------- ----------------- $ 11,263,832 $ 13,808,882 ============== =============== See notes to consolidated condensed financial statements
CEL-SCI CORPORATION CONSOLIDATED CONDENSED BALANCE SHEETS LIABILITES AND STOCKHOLDERS' EQUITY (unaudited) December 31, September 30, 2000 2000 ---- ---- CURRENT LIABILITIES: Accounts payable $ 765,032 $ 822,601 Total current liabilities 765,032 822,601 DEFERRED RENT 24,822 24,822 ------------ ----------- Total liabilities $ 789,854 $ 847,423 STOCKHOLDERS EQUITY Preferred stock, $.01 par value; authorized 1,000,000 shares; no shares issued and outstanding Common stock, $.01 par value; authorized, 100,000,000 shares; issued and outstanding, 20,479,265 and 20,459,700 shares 204,793 204,597 Additional paid in capital 73,951,849 73,924,653 Net unrealized loss on equity securities (32,948) (61,564) Deficit (63,649,716) (61,106,227) ------------ ------------ TOTAL STOCKHOLDERS' EQUITY 10,473,978 12,961,459 ---------- ---------- $ 11,263,832 $ 13,808,882 ============= ============= See notes to consolidated condensed financial statements
CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS --------------------------------- (unaudited) Three Months Ended December 31, 2000 1999 ---- ----- REVENUES: Interest income $183,211 $ 28,693 Other income 66,597 1,355 ------------ ---------- TOTAL INCOME 249,808 30,048 EXPENSES: Research and development 2,017,007 995,024 Depreciation and amortization 49,079 70,780 General and administrative 727,211 668,652 ----------- ---------- TOTAL OPERATING EXPENSES 2,793,297 1,734,456 --------- ---------- NET LOSS $2,543,489 $1,704,408 ========== ========== LOSS PER COMMON SHARE (BASIC) $ 0.12 $ 0.10 ============== ============== LOSS PER COMMON SHARE (DILUTED) $ 0.12 $ 0.10 ============== ============== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 20,459,913 17,270,008 ============== ============== See notes to condensed financial statements.
CEL-SCI CORPORATION ------------------- CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOW (unaudited) Three Months Ended December 31 --------------------- 2000 1999 CASH FLOWS FROM OPERATING ACTIVITIES NET LOSS $(2,543,489) $(1,704,408) Adjustments to reconcile net loss to net cash used in operating activities: Depreciation and amortization 49,079 70,780 Stock issued to 401(k) 27,391 22,498 Net realized loss on sale of securities -- 51,918 Decrease (increase) in receivables 9,606 7,676 Decrease (increase) in prepaid expenses (603,713) 51,151 Decrease (increase) in advances (20,204) 56,154 Increase (decrease) in accounts payable (57,569) (169,757) -------- --------- NET CASH USED IN OPERATING ACTIVITIES (3,138,899) (1,613,988) ------------ ------------ CASH FLOWS PROVIDED BY (USED IN) INVESTING ACTIVITY: Sales of investments -- 1,156,907 Purchase of investments -- -- Purchase of research and office equipment (38,813) (31,430) Patent costs (18,524) (42,888) ----------- ------------- NET CASH USED IN INVESTING ACTIVITY (57,337) 1,082,589 --------- ---------- CASH FLOWS PROVIDED BY (USED IN) FINANCING ACTIVITIES: Cash proceeds from issuance of preferred and common stock and warrant conversion for cash -- 2,355,000 ----------------- --------- NET CASH PROVIDED BY FINANCING ACTIVITIES -- 2,355,000 ------------------ --------- NET INCREASE (DECREASE) IN CASH (3,196,236) 1,823,601 CASH AND CASH EQUIVALENTS: Beginning of period 6,909,263 2,746,531 ------------- ------------ End of period $3,713,027 $4,570,132 ============ =========== See notes to condensed financial statements.
CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999 --------------------------------------------- (unaudited) A. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ------------------------------------------ Basis of Presentation The accompanying financial statements have been prepared in accordance with rules established by the Securities and Exchange Commission for Form 10-Q. Not all financial disclosures required to present the financial position and results of operations in accordance with generally accepted accounting principles are included herein. The reader is referred to the Company's Financial Statements included in the registrant's Annual Report on Form 10-K for the year ended September 30, 2000. In the opinion of management, all accruals and adjustments (each of which is of a normal recurring nature) necessary for a fair presentation of the financial position as of December 31, 2000 and the results of operations for the three-month period then ended have been made. Significant accounting policies have been consistently applied in the interim financial statements and the annual financial statements. Investments Investments that may be sold as part of the liquidity management of the Company or for other factors are classified as available-for-sale and are carried at fair market value. Unrealized gains and losses on such securities are reported as a separate component of stockholders' equity. Realized gains and losses on sales of securities are reported in earnings and computed using the specific identified cost basis. Loss per Share Net loss per common share is computed by dividing the net loss by the weighted average number of common shares outstanding during the period. Common stock equivalents, including options to purchase common stock, were excluded from the calculation because they are antidilutive due to the net losses. Long-lived Assets Statement of Accounting Standards No. 121, "Accounting for the Impairment of Long-lived Assets and for Long-lived Assets to be Disposed of" is effective for financial statements for fiscal years beginning after December 15, 1995.
CEL-SCI CORPORATION NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS THREE MONTHS ENDED DECEMBER 31, 2000 AND 1999 --------------------------------------------- (unaudited) (continued) B. COMPREHENSIVE LOSS In fiscal 1999, the Company adopted Statement of Financial Accounting Standard ("SFAS") No. 130 "Reporting Comprehensive Income" which was effective for fiscal years beginning after December 15, 1997. Comprehensive income (loss) is the change in equity of a business enterprise during a period from transactions and other events and circumstances from non-owner sources. The Company's source of other comprehensive loss, other than net losses, is from unrealized gain or loss on investments. The components of comprehensive income (loss) are as follows: Three months ended Three months ended December 31, 2000 December 31, 1999 ----------------- ----------------- Net Loss $2,543,489 $1,704,408 Other Comprehensive Income: Unrealized Loss (Gain) From Investments (28,617) (18,713) ---------- ---------- Comprehensive Loss $2,514,872 $1,685,695 ========== ==========
CEL-SCI CORPORATION Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS Liquidity and Capital Resources The Company has had only limited revenues from operations since its inception in March 1983. The Company has relied upon proceeds realized from the public and private sale of its Common Stock and short-term borrowings to meet its funding requirements. Funds raised by the Company have been expended primarily in connection with the acquisition of exclusive rights to certain patented and unpatented proprietary technology and know-how relating to the human immunological defense system, the funding of VTI's research and development program, patent applications, the repayment of debt, the continuation of Company-sponsored research and development and administrative costs, and the construction of laboratory facilities. Inasmuch as the Company does not anticipate realizing significant revenues until such time as it enters into licensing arrangements regarding its technology and know-how or until such time it receives permission to sell its product (which could take a number of years), the Company is mostly dependent upon short-term borrowings and the proceeds from the sale of its securities to meet all of its liquidity and capital resource requirements. The Company believes it has adequate cash resources to meet it's working capital requirements for the next twelve months. In June 2000, the Company entered into an agreement with Bio Science Contract Production Corp. ("BSCP") whereby BSCP agreed to provide the Company with a facility which will allow the Company to manufacture Multikine in accordance with the Good Manufacturing Practices regulations of the FDA. Company personnel will staff this facility. The Company has the right to extend the term of its agreement with BSCP until December 31, 2006. Results of Operations Interest income during the three months ending December 31, 2000 was higher than it was during the same quarter in 1999 as a result of the Company's larger cash position. Research and development expenses were significantly higher because of the expenses incurred in the validation of the new manufacturing facilities at BSCP (see above). While the expenses during the next fiscal quarter are expected to be high again for the same reason, the Company's cash outflow will decrease significantly in the next quarter since the majority of the expenses at BSCP are prepaid ($1,750,000 at December 31, 2000). General and administrative expenses have increased mostly because of the significantly higher bills from the Company's auditors and higher salaries. Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS The Company's cash flow and earnings are subject to fluctuations due to changes in interest rates in its investment portfolio of debt securities, to the fair value of equity instruments held, and, to an immaterial extent, to foreign currency exchange rates. The Company maintains an investment portfolio of various issuers, types and maturities. These securities are generally
classified as available-for-sale and, consequently, are recorded on the balance sheet at fair value with unrealized gains or losses reported as a separate component of stockholders' equity. Other-than-temporary losses are recorded against earnings in the same period the loss was deemed to have occurred. The Company does not currently hedge this exposure and there can be no assurance that other-than-temporary losses will not have a material adverse impact on the Company's results of operations in the future.
PART II Item 2. Changes in Securities and Use of Proceeds During the quarter ended December 31, 2000, 19,565 shares of common stock were issued by the Company as its contribution to the Company's 401(K) Plan. These shares were registered by means of a registration statement on Form S-8. Item 6. (a) Exhibits No exhibits are filed with this report. (b) Reports on Form 8-K The Company did not file any reports on Form 8-K during the quarter ended December 31, 2000.
SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. CEL-SCI Corporation Date: February 14, 2001 /s/ Geert Kersten -------------------------------------- Geert Kersten Chief Executive Officer* *Also signing in the capacity of the Chief Accounting Officer and Principal Financial Officer.