PART I. FINANCIAL INFORMATION This section presents the Company's condensed financial statements, including balance sheets, statements of operations, stockholders' equity, cash flows, detailed notes, and management's discussion and analysis [Condensed Balance Sheets](index=2&type=section&id=Condensed%20Balance%20Sheets) Total assets decreased to **$44.56 million** by December 31, 2022, driven by reduced cash and prepaid expenses, with corresponding declines in liabilities and stockholders' equity | Metric | Dec 31, 2022 (Unaudited) ($) | Sep 30, 2022 ($) | | :-------------------------- | :----------------------- | :----------- | | **Assets** | | | | Cash and cash equivalents | $18,017,319 | $22,672,138 | | Total current assets | $20,404,330 | $25,435,916 | | Total assets | $44,557,737 | $50,523,706 | | **Liabilities** | | | | Total current liabilities | $4,741,941 | $4,663,751 | | Total liabilities | $17,966,116 | $18,360,499 | | **Stockholders' Equity** | | | | Total stockholders' equity | $26,591,621 | $32,163,207 | [Condensed Statements of Operations](index=3&type=section&id=Condensed%20Statements%20of%20Operations) The Company reported a net loss of **$7.85 million** for the three months ended December 31, 2022, an improvement from the prior year, due to reduced operating expenses and no derivative gains | Metric | 3 months ended Dec 31, 2022 ($) | 3 months ended Dec 31, 2021 ($) | | :----------------------------------- | :-------------------------- | :-------------------------- | | Research and development | $5,392,546 | $6,083,167 | | General and administrative | $2,258,003 | $2,760,208 | | Total operating expenses | $7,650,549 | $8,843,375 | | Operating loss | $(7,650,549) | $(8,843,375) | | Gain on derivative instruments | - | $364,596 | | Net loss | $(7,853,509) | $(8,782,606) | | Net loss per common share – basic | $(0.18) | $(0.20) | | Weighted average common shares outstanding - basic | 43,440,387 (Shares) | 43,077,961 (Shares) | [Condensed Statement of Stockholders' Equity](index=4&type=section&id=Condensed%20Statement%20of%20Stockholders'%20Equity) Total stockholders' equity decreased to **$26.59 million** by December 31, 2022, primarily due to a net loss, partially offset by warrant exercises and equity compensation | Metric | Sep 30, 2022 ($) | Dec 31, 2022 ($) | | :--------------------------------------- | :------------- | :------------- | | Common Shares | 43,448,317 (Shares) | 43,725,636 (Shares) | | Common Stock Amount | $434,484 | $437,256 | | Additional Paid-In Capital | $486,625,816 | $488,904,967 | | Accumulated Deficit | $(454,897,093) | $(462,750,602) | | Total Stockholders' Equity | $32,163,207 | $26,591,621 | | Net loss (3 months ended Dec 31, 2022) | - | $(7,853,509) | | Warrant exercises (3 months ended Dec 31, 2022) | - | $447,291 | | Equity based compensation - employees (3 months ended Dec 31, 2022) | - | $1,703,931 | [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows) Cash and cash equivalents decreased by **$4.65 million** to **$18.02 million** for the three months ended December 31, 2022, driven by operating activities, partially offset by financing | Cash Flow Activity | 3 months ended Dec 31, 2022 ($) | 3 months ended Dec 31, 2021 ($) | | :------------------------------------- | :-------------------------- | :-------------------------- | | Net cash used in operating activities | $(4,666,649) | $(4,805,946) | | Net cash (used in) provided by investing activities | $(53,580) | $6,112,223 | | Net cash provided by (used in) financing activities | $65,410 | $(256,508) | | NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS | $(4,654,819) | $1,049,769 | | CASH AND CASH EQUIVALENTS, END OF PERIOD | $18,017,319 | $37,109,917 | | Non-Cash Investing and Financing Activities | 2022 ($) | 2021 ($) | | :------------------------------------------ | :-------- | :------ | | Property and equipment included in current liabilities | $105,318 | $469,005 | | Prepaid consulting services paid with issuance of common stock | $91,623 | $233,753 | | Cash paid for interest | $277,853 | $290,212 | [Notes to Condensed Financial Statements](index=6&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) This section details the Company's accounting policies, liquidity, equity changes, fair value measurements, related party transactions, commitments, patents, and loss per share calculations [A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES](index=6&type=section&id=A.%20BASIS%20OF%20PRESENTATION%20AND%20SUMMARY%20OF%20SIGNIFICANT%20ACCOUNTING%20POLICIES) This section outlines the basis of financial statement presentation and summarizes key accounting policies, including cash, investments, property, R&D, patents, stock-based compensation, leases, and derivatives - The unaudited condensed financial statements contain all necessary adjustments for fair presentation and should be read in conjunction with the annual report on Form 10-K for the year ended September 30, 2022[49](index=49&type=chunk) - There is **substantial doubt** about the Company's ability to continue as a going concern due to recurring losses and future liquidity needs[50](index=50&type=chunk) - Key accounting policies include: cash and cash equivalents (highly liquid investments < 3 months maturity), U.S. Treasury Bills (highly liquid, >3 months but <1 year maturity, recorded at **fair value**), property and equipment (straight-line depreciation 5-7 years), R&D and manufacturing supplies (recorded at cost, expensed when used), patents (capitalized, amortized over shorter of useful/legal life, impairment recognized if future undiscounted cash flows are less than **carrying value**)[51](index=51&type=chunk)[52](index=52&type=chunk)[53](index=53&type=chunk)[54](index=54&type=chunk)[55](index=55&type=chunk) - Stock-based compensation for equity awards is measured at **fair value** on grant date using Black-Scholes or Monte Carlo simulation, expensed over the service period[56](index=56&type=chunk)[57](index=57&type=chunk)[67](index=67&type=chunk)[69](index=69&type=chunk) - Leases are accounted for under ASC 842, recognizing right-of-use assets and lease liabilities for contracts conveying control over identified assets; short-term leases (**12 months or less**) are not reflected on the balance sheet[62](index=62&type=chunk) - Derivative instruments are recognized as assets or liabilities at **fair value**, with gains or losses recognized in earnings, in accordance with ASC 815[64](index=64&type=chunk) [B. LIQUIDITY](index=8&type=section&id=B.%20LIQUIDITY) This section addresses significant R&D and clinical trial costs, ongoing capital requirements, and substantial doubt about the Company's ability to continue as a going concern - The Company has incurred significant costs for technology acquisition, R&D, administrative costs, facility expansion, and clinical trials, funded primarily by loans and public/private sale of securities[88](index=88&type=chunk) - Additional capital is required to finance the Company through marketing approval, with plans to raise funds through warrant exercises, corporate partnerships, and debt/equity financings[74](index=74&type=chunk) - There is **substantial doubt** about the Company's ability to continue as a going concern due to recurring losses and future liquidity needs, with no assurance of successful fundraising on acceptable terms[75](index=75&type=chunk)[88](index=88&type=chunk) - The full impact of the COVID-19 pandemic on the Company's financial condition, liquidity, and future operations remains **uncertain**, with management actively monitoring risks[89](index=89&type=chunk) [C. STOCKHOLDERS' EQUITY](index=8&type=section&id=C.%20STOCKHOLDERS'%20EQUITY) This section details changes in stockholders' equity, including equity compensation plans, stock option activity, restricted stock issuances, warrant exercises, and derivative instrument impact Equity Compensation Plan | Equity Compensation Plan | Total Shares Reserved Under Plans (Shares) | | :----------------------------- | :-------------------------------- | | Incentive Stock Option Plans | 138,400 | | Non-Qualified Stock Option Plans | 13,787,200 | | Stock Bonus Plans | 783,760 | | Stock Compensation Plans | 634,000 | | Incentive Stock Bonus Plan | 640,000 | Stock Option Activity | Stock Option Activity | 3 months ended Dec 31, 2022 (Options) | 3 months ended Dec 31, 2021 (Options) | | :-------------------- | :-------------------------- | :-------------------------- | | Options granted | 2,500 | 251,000 | | Options exercised | - | 6,500 | | Options forfeited | 96,832 | 13,000 | | Options expired | 45,400 | - | - During the three months ended December 31, 2022, **40,236 shares** of restricted common stock were issued to consultants for services, with a weighted average grant date fair value of **$2.53 per share**, compared to **18,020 shares** issued at **$9.93 per share** in 2021[12](index=12&type=chunk)[146](index=146&type=chunk) - Stock-based compensation expense for consulting agreements was approximately **$149,000** in Q4 2022, down from **$218,000** in Q4 2021[117](index=117&type=chunk) - On October 28, 2022, the expiration date of Series RR warrants was extended by **two years**, resulting in an incremental cost of approximately **$172,000**, recorded as a deemed dividend[96](index=96&type=chunk)[102](index=102&type=chunk) Warrants Exercised (Equity) | Warrants Exercised (Equity) | 3 months ended Dec 31, 2022 (Warrants) | Proceeds (2022) ($) | 3 months ended Dec 31, 2021 (Warrants) | Proceeds (2021) ($) | | :-------------------------- | :-------------------------- | :-------------- | :-------------------------- | :-------------- | | Series RR | 17,752 | $29,291 | - | - | | Series SS | 200,000 | $418,000 | - | - | | Series NN | - | - | 4,500 | $11,340 | | Series TT | - | - | 10,000 | $22,400 | | Series CC | - | - | 15,205 | $76,000 | | Total | 217,752 | $447,291 | 29,705 | $109,740 | - No warrant liabilities were outstanding during the three months ended December 31, 2022, compared to a net gain on warrant liabilities of **$364,596** in 2021[11](index=11&type=chunk)[182](index=182&type=chunk) [D. FAIR VALUE MEASUREMENTS](index=11&type=section&id=D.%20FAIR%20VALUE%20MEASUREMENTS) This section defines fair value measurement principles, outlines the fair value hierarchy, and confirms the absence of Level 3 derivative instruments - Fair value is determined as the price to sell an asset or transfer a liability in an orderly transaction between market participants, generally using the **income approach**[98](index=98&type=chunk) - The fair value hierarchy prioritizes inputs: **Level 1** (quoted prices in active markets), **Level 2** (observable inputs other than quoted prices), and **Level 3** (unobservable inputs reflecting management's assumptions)[99](index=99&type=chunk)[118](index=118&type=chunk) - As of December 31, 2022, and September 30, 2022, the Company did not have any derivative instruments classified as **Level 3** in the fair value hierarchy[119](index=119&type=chunk)[121](index=121&type=chunk) [E. RELATED PARTY TRANSACTIONS](index=12&type=section&id=E.%20RELATED%20PARTY%20TRANSACTIONS) This section details co-development and revenue sharing agreements with Ergomed, including their **$12 million** contribution to the Phase 3 Clinical Trial and related R&D expenses - Under co-development and revenue sharing agreements, Ergomed agreed to contribute up to **$12 million** towards the Phase 3 Clinical Trial in discounted clinical services, in exchange for milestone and royalty payments[103](index=103&type=chunk)[194](index=194&type=chunk) - Approximately **$11.8 million** of Ergomed's committed **$12 million** contribution has been realized as of December 31, 2022[194](index=194&type=chunk) - The Company recorded approximately **$0.1 million** and **$0.2 million** (net of Ergomed's discount) as R&D expense related to Ergomed's services for the three months ended December 31, 2022 and 2021, respectively[103](index=103&type=chunk) [F. COMMITMENTS AND CONTINGENCIES](index=12&type=section&id=F.%20COMMITMENTS%20AND%20CONTINGENCIES) This section outlines the Company's lease obligations for manufacturing and R&D facilities, including finance and operating lease liabilities and future payment schedules - The Company leases a manufacturing facility (San Tomas lease) for a **20-year term**, expiring October 2028, with annual base rent escalating at **3%**[105](index=105&type=chunk)[175](index=175&type=chunk) - The facility was upgraded for potential commercial production of Multikine, with the landlord financing **$2.4 million**[175](index=175&type=chunk) - As of December 31, 2022, the net book value of finance lease right-of-use assets was approximately **$10.5 million**, and the finance lease liability was approximately **$12.9 million**[104](index=104&type=chunk) - The weighted average discount rate is **8.45%** with a weighted average time to maturity of **5.08 years**[104](index=104&type=chunk) Finance Lease Payments (as of Dec 31, 2022) | Finance Lease Payments (as of Dec 31, 2022) | Amount ($) | | :------------------------------------------ | :------------ | | Nine months ending September 30, 2023 | $1,937,000 | | Year ending September 30, 2024 | $2,655,000 | | Year ending September 30, 2025 | $2,741,000 | | Year ending September 30, 2026 | $2,832,000 | | Year ending September 30, 2027 | $2,923,000 | | Year ending September 30, 2028 | $3,015,000 | | Thereafter | $252,000 | | Total future minimum lease obligation | $16,355,000 | | Less imputed interest | $(3,446,000) | | Net present value of finance lease obligations | $12,909,000 | - The Company leases two facilities under operating leases, with the R&D laboratory lease renewed until February 29, 2032[149](index=149&type=chunk) - As of December 31, 2022, the net book value of operating lease right-of-use assets was approximately **$1.8 million**, and the operating lease liability was approximately **$2.0 million**[149](index=149&type=chunk) - The weighted average discount rate is **9.10%** with a weighted average time to maturity of **7.6 years**[149](index=149&type=chunk) Operating Lease Payments (as of Dec 31, 2022) | Operating Lease Payments (as of Dec 31, 2022) | Amount ($) | | :-------------------------------------------- | :------------ | | Nine months ending September 30, 2023 | $262,000 | | Year ending September 30, 2024 | $357,000 | | Year ending September 30, 2025 | $366,000 | | Year ending September 30, 2026 | $287,000 | | Year ending September 30, 2027 | $277,000 | | Year ending September 30, 2028 | $285,000 | | Thereafter | $1,040,000 | | Total future minimum lease obligation | $2,874,000 | | Less imputed interest | $(893,000) | | Net present value of operating lease obligation | $1,981,000 | [G. PATENTS](index=13&type=section&id=G.%20PATENTS) This section details patent impairment charges and amortization expenses, along with estimated future patent amortization expenses - During the three months ended December 31, 2022, the Company recorded **$0** in patent impairment charges, compared to **$31,000** in 2021[150](index=150&type=chunk) - Amortization of patent costs totaled approximately **$10,000** in 2022 and **$14,000** in 2021[150](index=150&type=chunk) Estimated Future Patent Amortization Expense | Estimated Future Patent Amortization Expense | Amount ($) | | :------------------------------------------- | :----------- | | Nine months ending September 30, 2023 | $28,000 | | Year ending September 30, 2024 | $30,000 | | Year ending September 30, 2025 | $28,000 | | Year ending September 30, 2026 | $24,000 | | Year ending September 30, 2027 | $21,000 | | Year ending September 30, 2028 | $17,000 | | Thereafter | $54,000 | | Total | $202,000 | [H. LOSS PER COMMON SHARE](index=14&type=section&id=H.%20LOSS%20PER%20COMMON%20SHARE) This section explains the calculation of basic and diluted loss per common share and lists anti-dilutive securities - Basic loss per share is calculated by dividing net loss available to common shareholders by the weighted average number of common shares outstanding; diluted loss per share excludes **anti-dilutive securities**[151](index=151&type=chunk) Loss Per Share Metric | Loss Per Share Metric | 3 months ended Dec 31, 2022 ($) | 3 months ended Dec 31, 2021 ($) | | :---------------------------------------- | :-------------------------- | :-------------------------- | | Net loss available to common shareholders - basic | $(8,025,061) | $(8,782,606) | | Weighted average shares outstanding - basic | 43,440,387 (Shares) | 43,077,961 (Shares) | | Basic loss per common share | $(0.18) | $(0.20) | | Diluted loss earnings per common share | $(0.18) | $(0.20) | Anti-Dilutive Securities (as of Dec 31) | Anti-Dilutive Securities (as of Dec 31) | 2022 (Securities) | 2021 (Securities) | | :-------------------------------------- | :----------- | :----------- | | Options and Warrants | 13,917,352 | 10,477,966 | | Unvested Restricted Stock | 149,250 | 151,250 | | Total | 14,066,602 | 10,629,216 | [I. New Accounting Pronouncements](index=7&type=section&id=I.%20New%20Accounting%20Pronouncements) This section discusses the adoption of new accounting standards, ASU 2020-06 and ASU 2019-12, and their immaterial impact on the Company's financial statements - The Company adopted ASU 2020-06 (Debt with Conversion and Other Options) effective October 1, 2021, with **no financial impact** in the period of adoption[65](index=65&type=chunk)[66](index=66&type=chunk) - The Company adopted ASU 2019-12 (Income Taxes) effective October 1, 2021, with **no impact** on its financial statements[86](index=86&type=chunk) - The Company has considered all recently issued accounting pronouncements and does not believe their adoption will have a **material impact** on its financial statements[73](index=73&type=chunk) [J. SUBSEQUENT EVENTS](index=14&type=section&id=J.%20SUBSEQUENT%20EVENTS) This section reports a subsequent event where the Company deposited **$2.3 million** to its landlord due to falling below a stipulated cash threshold - On January 11, 2023, the Company was required to deposit approximately **$2.3 million** to its landlord for falling below the stipulated cash threshold in accordance with the San Tomas lease[15](index=15&type=chunk) - This amount will be included in current assets until the minimum cash balance is met and the deposit is returned[15](index=15&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=14&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses the Company's financial condition, operational results, and liquidity for the three months ended December 31, 2022, including clinical trial progress and funding strategies [Overview](index=14&type=section&id=Overview) This overview details the completion of the Multikine Phase 3 study, its survival benefits, the impact of chemotherapy, and the development of LEAPS technology - The Company completed its **9.5-year pivotal Phase 3 study** for Multikine® (Leukocyte Interleukin, Injection) in advanced head and neck cancer (SCCHN)[8](index=8&type=chunk) - The Phase 3 study showed a long-term **5-year overall survival (OS) benefit of 14.1%** for the Multikine treatment arm followed by surgery and radiation (**62.7% vs. 48.6%** for control), with **no safety issues**; this benefit was **robust, durable, and increased over time**[8](index=8&type=chunk)[131](index=131&type=chunk) - When chemotherapy was added to the treatment arm, the immunological effect of Multikine was **negated**, leading to the combined study not achieving its primary endpoint of a **10% improvement** in overall survival[154](index=154&type=chunk) - The Company is also developing LEAPS (Ligand Epitope Antigen Presentation System) technology, investigating CEL-4000 as a potential therapeutic vaccine for **rheumatoid arthritis**[187](index=187&type=chunk) - All projects are under development, and the Company cannot predict when it will generate revenue from product sales[156](index=156&type=chunk) [Liquidity and Capital Resources](index=15&type=section&id=Liquidity%20and%20Capital%20Resources) This section discusses the Company's historical financing, ongoing capital needs for clinical trials, cash flow changes, and the necessity of raising additional capital - Since inception, operations have been financed through equity securities, convertible notes, loans, and research grants; the Company anticipates continued net operating losses and will rely on these financing vehicles[133](index=133&type=chunk) - The Company has incurred approximately **$64.2 million** in direct costs for the Phase 3 clinical trial and filing as of December 31, 2022, with an estimated additional **$0.6 million** needed for completion[134](index=134&type=chunk) - During the three months ended December 31, 2022, cash decreased by approximately **$4.7 million**, primarily due to **$4.7 million** used in regular operations, including the Phase 3 clinical trial[135](index=135&type=chunk) - The Company incurred a net operating loss of approximately **$7.7 million** for the three months ended December 31, 2022, including significant non-cash expenses like **$1.7 million** in stock-based employee compensation and **$1.0 million** in depreciation and amortization[160](index=160&type=chunk) - Prepaid expenses decreased by approximately **$0.2 million (29%)** at December 31, 2022, compared to September 30, 2022, mainly due to a decrease in prepaid stock compensation to non-employees[159](index=159&type=chunk) - The Company will need to raise additional capital or secure long-term financing to continue research and development efforts, with **no assurance** of obtaining sufficient funds[157](index=157&type=chunk) [Results of Operations and Financial Condition](index=16&type=section&id=Results%20of%20Operations%20and%20Financial%20Condition) This section analyzes changes in research and development, general and administrative expenses, derivative gains, and net interest expense for the three months ended December 31, 2022 Research and Development Expenses | Research and Development Expenses | 3 months ended Dec 31, 2022 ($) | 3 months ended Dec 31, 2021 ($) | | :-------------------------------- | :-------------------------- | :-------------------------- | | MULTIKINE | $5,294,377 | $5,791,419 | | LEAPS | $98,169 | $291,748 | | TOTAL | $5,392,546 | $6,083,167 | - Research and development expenses decreased by approximately **$0.7 million (11%)** in Q4 2022 compared to Q4 2021, primarily due to a **$0.9 million** decrease in employee stock compensation and a **$0.4 million** decrease in Phase 3 clinical study costs, partially offset by increases in commercial preparation costs (**$0.4 million**) and other R&D costs (**$0.2 million**)[138](index=138&type=chunk) - General and administrative expenses decreased by approximately **$0.5 million (18%)** in Q4 2022 compared to Q4 2021, mainly due to a **$0.7 million** decrease in employee stock compensation costs, offset by a **$0.2 million** increase in other G&A costs[178](index=178&type=chunk) - The Company recorded derivative gains of approximately **$0 million** in Q4 2022, a decrease from **$0.4 million** in Q4 2021, due to fluctuations in the common stock share price affecting the fair value of derivative liabilities[161](index=161&type=chunk) - Net interest expense remained relatively constant at approximately **$0.2 million** in Q4 2022 and **$0.3 million** in Q4 2021, primarily consisting of interest paid on lease liabilities[139](index=139&type=chunk) [Critical Accounting Estimates and Policies](index=17&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) This section highlights critical accounting estimates for lease assets and liabilities, requiring judgment in lease terms and borrowing rates, and share-based compensation valuation - Critical accounting estimates include the measurement of finance and operating lease right-of-use assets and lease liabilities, which require judgment in determining estimated lease terms and incremental borrowing rates[165](index=165&type=chunk)[179](index=179&type=chunk) - Share-based compensation cost for employees is measured at fair value using the Black-Scholes option pricing model (requiring assumptions like volatility and expected option life) or Monte-Carlo simulation for performance-based options (requiring estimates of performance/market conditions)[165](index=165&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risks](index=17&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) The Company assesses its market risk exposure and concludes that it does not have any significant market risk - The Company does not believe that it has any **significant exposure to market risk**[196](index=196&type=chunk) [Item 4. Controls and Procedures](index=17&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and procedures were not effective as of December 31, 2022, due to material weaknesses, with no material changes in internal control over financial reporting during the quarter [Evaluation of Disclosure Controls and Procedures](index=17&type=section&id=Evaluation%20of%20Disclosure%20Controls%20and%20Procedures) The CEO and CFO determined that the Company's disclosure controls and procedures were **not effective** as of December 31, 2022, due to previously identified material weaknesses - The Company's Chief Executive and Chief Financial Officer concluded that the Company's disclosure controls and procedures were **not effective** as of December 31, 2022, due to **material weaknesses** described in the Annual Report on Form 10-K for the year ended September 30, 2022[166](index=166&type=chunk) [Changes in Internal Control over Financial Reporting](index=17&type=section&id=Changes%20in%20Internal%20Control%20over%20Financial%20Reporting) No material changes in the Company's internal control over financial reporting occurred during the three months ended December 31, 2022 - There were **no changes** in the Company's internal control over financial reporting that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting during the three months ended December 31, 2022[190](index=190&type=chunk) PART II This section covers unregistered sales of equity securities and lists exhibits filed with the quarterly report [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=17&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The Company issued **40,236 restricted common shares** to consultants for investor relations services during the three months ended December 31, 2022, under a Section 4(a)(2) exemption - During the three months ended December 31, 2022, the Company issued **40,236 restricted shares** of common stock to consultants for investor relations services[146](index=146&type=chunk) - The issuance relied on the exemption provided by **Section 4(a)(2)** of the Securities Act of 1933, with shares acquired by sophisticated investors for their own accounts, without general solicitation, and bearing a restricted legend[169](index=169&type=chunk) [Item 6. Exhibits](index=18&type=section&id=Item%206.%20Exhibits) This section provides a list of exhibits filed with the quarterly report | Number | Exhibit | | :----- | :------ | | 31 | Rule 13a-14(a) Certifications | | 32 | Section 1350 Certifications | [Signatures](index=18&type=section&id=Signatures) The report was signed by Geert Kersten, Principal Executive Officer of CEL-SCI Corporation, on **February 14, 2023** - The report was signed by Geert Kersten, Principal Executive Officer, on **February 14, 2023**[170](index=170&type=chunk)

FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2022. 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 1-11889 CEL-SCI CORPORATION (Exact name of registrant as specified in its charter) | --- | --- | |----------------------------- ...

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 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 001-11889 CEL-SCI CORPORATION Colorado State or other jurisdiction of incorporation | --- | |------ ...

PART I. FINANCIAL INFORMATION [Item 1. Financial Statements](index=2&type=section&id=Item%201.%20Financial%20Statements) Presents unaudited condensed financial statements for March 31, 2022 and 2021, covering balance sheets, operations, equity, and cash flows, with detailed accounting notes [Condensed Balance Sheets](index=2&type=section&id=Condensed%20Balance%20Sheets) Condensed Balance Sheets | Metric | March 31, 2022 (Unaudited) | September 30, 2021 | | :-------------------------- | :------------------------- | :----------------- | | Cash and cash equivalents | $34,282,872 | $36,060,148 | | Total current assets | $37,275,040 | $45,271,521 | | Total assets | $64,160,646 | $75,869,965 | | Total current liabilities | $4,474,285 | $3,937,067 | | Total liabilities | $19,033,098 | $19,335,739 | | Total stockholders' equity | $45,127,548 | $56,534,226 | [Condensed Statements of Operations (Six Months)](index=3&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20six%20months%20ended%20March%2031%2C%202022%20and%202021) Condensed Statements of Operations (Six Months) | Operating Expenses | 2022 | 2021 | | :-------------------------- | :------------- | :------------- | | Research and development | $12,606,984 | $10,636,274 | | General and administrative | $5,788,250 | $6,627,640 | | Total operating expenses | $18,395,234 | $17,263,914 | | Operating loss | $(18,395,234) | $(17,263,914) | | Net loss | $(18,606,098) | $(19,217,984) | | Net loss per common share | $(0.43) | $(0.49) | [Condensed Statements of Operations (Three Months)](index=4&type=section&id=Condensed%20Statements%20of%20Operations%20for%20the%20three%20months%20ended%20March%2031%2C%202022%20and%202021) Condensed Statements of Operations (Three Months) | Operating Expenses | 2022 | 2021 | | :-------------------------- | :------------ | :------------- | | Research and development | $6,523,817 | $5,221,514 | | General and administrative | $3,028,042 | $3,311,484 | | Total operating expenses | $9,551,859 | $8,532,998 | | Operating loss | $(9,551,859) | $(8,532,998) | | Net loss | $(9,823,492) | $(11,281,120) | | Net loss per common share | $(0.23) | $(0.28) | [Condensed Statements of Stockholders' Equity](index=4&type=section&id=Condensed%20Statements%20of%20Stockholders%27%20Equity%20for%20the%20six%20months%20ended%20March%2031%2C%202022%20and%202021) Condensed Statements of Stockholders' Equity | Metric | October 1, 2021 | March 31, 2022 | | :----------------------------------- | :-------------- | :------------- | | Common Shares Outstanding | 43,207,183 | 43,304,602 | | Common Stock Amount | $432,072 | $433,046 | | Additional Paid-In Capital | $474,298,566 | $481,497,012 | | Accumulated Deficit | $(418,196,412) | $(436,802,510) | | Total Stockholders' Equity | $56,534,226 | $45,127,548 | - Key changes in stockholders' equity for the six months ended March 31, 2022, include warrant exercises of **$13,860**, equity-based compensation for employees of **$3,392,706**, and a net loss of **$(9,823,492)**[20](index=20&type=chunk)[21](index=21&type=chunk) [Condensed Statements of Cash Flows](index=5&type=section&id=Condensed%20Statements%20of%20Cash%20Flows%20for%20the%20six%20months%20ended%20March%2031%2C%202022%20and%202021) Condensed Statements of Cash Flows | Cash Flow Activity | Six Months Ended March 31, 2022 | Six Months Ended March 31, 2021 | | :---------------------------------- | :------------------------------ | :------------------------------ | | Net cash used in operating activities | $(7,537,608) | $(8,784,495) | | Net cash provided by (used in) investing activities | $5,578,398 | $(17,774,717) | | Net cash provided by financing activities | $181,934 | $17,481,637 | | Net decrease in cash and cash equivalents | $(1,777,276) | $(9,077,575) | | Cash and cash equivalents, end of period | $34,282,872 | $6,431,334 | [Notes to Condensed Financial Statements](index=7&type=section&id=Notes%20to%20Condensed%20Financial%20Statements%20%28unaudited%29) - The financial statements are prepared assuming the Company will continue as a going concern, despite recurring losses, as management believes current cash on hand is sufficient for the next twelve months[31](index=31&type=chunk)[53](index=53&type=chunk) - CEL-SCI Corporation announced positive long-term 5-year overall survival (OS) benefit from its pivotal Phase 3 study for Multikine® in advanced head and neck cancer, showing a **14.1% absolute advantage** (62.7% vs 48.6%) in the treatment arm receiving Multikine followed by surgery and radiation[50](index=50&type=chunk)[112](index=112&type=chunk) - The Company plans to raise additional capital through warrant exercises, corporate partnerships, and debt/equity financings to fund operations and bring Multikine to market, citing a history of successful fundraising[51](index=51&type=chunk)[52](index=52&type=chunk) Equity Compensation Plan Summary (March 31, 2022) | Name of Plan | Total Shares Reserved | Shares Reserved for Outstanding Options | Shares Issued | Remaining Options/Shares | | :--------------------------- | :-------------------- | :-------------------------------------- | :------------ | :----------------------- | | Incentive Stock Option Plans | 138,400 | 76,829 | N/A | 213 | | Non-Qualified Stock Option Plans | 11,787,200 | 11,198,714 | N/A | 178,258 | | Stock Bonus Plans | 783,760 | N/A | 385,305 | 398,422 | | Stock Compensation Plans | 634,000 | N/A | 153,195 | 462,395 | | Incentive Stock Bonus Plan | 640,000 | N/A | 614,500 | 25,500 | Stock-Based Compensation Expense | Category | Six Months Ended March 31, 2022 | Six Months Ended March 31, 2021 | | :------------ | :------------------------------ | :------------------------------ | | Employees | $6,655,002 | $6,579,051 | | Non-employees | $402,270 | $552,664 | | Category | Three Months Ended March 31, 2022 | Three Months Ended March 31, 2021 | | :------------ | :-------------------------------- | :-------------------------------- | | Employees | $3,392,706 | $3,282,742 | | Non-employees | $183,952 | $304,004 | Net Gain (Loss) on Warrant Liabilities | Period | 2022 | 2021 | | :-------------------------- | :---------- | :----------- | | Six Months Ended March 31 | $366,791 | $(2,108,181) | | Three Months Ended March 31 | $2,195 | $(3,041,017) | - As of March 31, 2022, there were no outstanding derivative instruments, down from **$437,380** at September 30, 2021, due to exercises and expirations[63](index=63&type=chunk)[88](index=88&type=chunk) Lease Financials (March 31, 2022) | Lease Type | Right of Use Asset (Net Book Value) | Lease Liability (Balance) | | :------------ | :---------------------------------- | :------------------------ | | Finance Lease | $11,800,000 | $14,000,000 | | Operating Lease | $2,000,000 | $2,100,000 | - The Company recorded a patent impairment charge of approximately **$31,000** for the six months ended March 31, 2022, compared to **$0** in the prior year. Amortization of patent costs was approximately **$27,000** for the same period[106](index=106&type=chunk) Loss Per Common Share | Metric | Six Months Ended March 31, 2022 | Six Months Ended March 31, 2021 | | :-------------------------------------- | :------------------------------ | :------------------------------ | | Net loss available to common shareholders | $(18,606,098) | $(19,303,763) | | Weighted average shares outstanding | 43,100,070 | 39,351,194 | | Basic and diluted loss per common share | $(0.43) | $(0.49) | [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=18&type=section&id=Item%202.%20Management%27s%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses financial performance, liquidity, and capital resources, highlighting Multikine Phase 3 trial results, capital needs, and operating expense changes - The Multikine Phase 3 study showed a robust and durable **14.1% absolute 5-year overall survival benefit** in the surgery + radiation arm for advanced head and neck cancer, exceeding the **10% target** for the overall study population. The Company plans to file for FDA approval for this specific patient population[112](index=112&type=chunk)[114](index=114&type=chunk) - The Company continues to rely on equity sales, convertible notes, and loans to finance operations due to ongoing R&D and lack of significant revenue, anticipating continued need for additional capital[118](index=118&type=chunk)[119](index=119&type=chunk) - Approximately **$63,000,000** in direct costs have been incurred for the Multikine Phase 3 clinical trial to date, with an estimated additional **$800,000** remaining for the trial and FDA report filing[122](index=122&type=chunk) - For the six months ended March 31, 2022, cash decreased by approximately **$7,900,000** (after T-bill maturity). Net cash used in operating activities was **$7,500,000**, offset by **$800,000** in landlord lease incentives and **$100,000** from warrant/option exercises[124](index=124&type=chunk) - Research and development expenses increased by approximately **$2,000,000 (19%)** for the six months ended March 31, 2022, primarily due to higher employee stock compensation, depreciation from manufacturing facility upgrades, and costs for potential commercial sale of Multikine, partially offset by decreased Phase 3 study costs[130](index=130&type=chunk) - General and administrative expenses decreased by approximately **$800,000 (13%)** for the six months ended March 31, 2022, mainly due to a **$1,000,000** decrease in employee stock compensation expense[132](index=132&type=chunk) - A **$400,000 gain** on derivative instruments was recorded for the six months ended March 31, 2022, a significant change from the **$2,100,000 loss** in the prior year, attributed to fluctuations in the Company's common stock price. All derivative warrants were exercised or expired by March 31, 2022[133](index=133&type=chunk) Research and Development Expenses by Project | Project | Six Months Ended March 31, 2022 | Six Months Ended March 31, 2021 | | :-------- | :------------------------------ | :------------------------------ | | MULTIKINE | $11,995,302 | $9,732,817 | | LEAPS | $611,682 | $903,457 | | TOTAL | $12,606,984 | $10,636,274 | [Item 3. Quantitative and Qualitative Disclosures about Market Risks](index=21&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) The Company states that it does not believe it has any significant exposures to market risk - The Company does not believe it has any significant exposures to market risk[145](index=145&type=chunk) [Item 4. Controls and Procedures](index=21&type=section&id=Item%204.%20Controls%20and%20Procedures) Management confirmed effective disclosure controls as of March 31, 2022, with no material changes in internal control over financial reporting - The Company's disclosure controls and procedures were evaluated and deemed effective as of March 31, 2022[146](index=146&type=chunk) - No material changes in the Company's internal control over financial reporting occurred during the quarter ended March 31, 2022[147](index=147&type=chunk) PART II. OTHER INFORMATION [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=21&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds.) Reports unregistered restricted common stock issuance to consultants for investor relations services under Section 4(a)(2) of the Securities Act of 1933 - During the six months ended March 31, 2022, the Company issued **43,495 restricted shares** of common stock to consultants for investor relations services[150](index=150&type=chunk) - The issuance relied on the exemption provided by Section 4(a)(2) of the Securities Act of 1933, with recipients being sophisticated investors provided full company information[151](index=151&type=chunk) [Item 6. Exhibits](index=21&type=section&id=Item%206.%20Exhibits) Lists exhibits filed as part of the quarterly report, including required SEC certifications - Exhibits include Rule 13a-14(a) Certifications (Exhibit 31) and Section 1350 Certifications (Exhibit 32)[152](index=152&type=chunk) [Signatures](index=22&type=section&id=Signatures) Contains official signatures for the quarterly report, confirming submission under the Securities Exchange Act of 1934 - The report was signed by Geert Kersten, Principal Executive Officer and Principal Accounting and Financial Officer, on May 13, 2022[155](index=155&type=chunk)

PART I - FINANCIAL INFORMATION [Item 1. Financial Statements](index=3&type=section&id=Item%201.%20Financial%20Statements) CEL-SCI reported an $8.8 million net loss for Q4 2021, with total assets decreasing to $69.7 million and stockholders' equity to $51.4 million, raising going concern doubts Financial Position | Financial Metric | Dec 31, 2021 (Unaudited) | Sep 30, 2021 | | :--- | :--- | :--- | | **Assets** | | | | Cash and cash equivalents | $37,109,917 | $36,060,148 | | Total current assets | $41,867,261 | $45,271,521 | | Total assets | $69,671,739 | $75,869,965 | | **Liabilities & Equity** | | | | Total current liabilities | $3,333,495 | $3,937,067 | | Total liabilities | $18,320,284 | $19,335,739 | | Total stockholders' equity | $51,351,455 | $56,534,226 | Statement of Operations | Line Item | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Research and development | $6,083,167 | $5,414,760 | | General and administrative | $2,760,208 | $3,316,156 | | **Operating loss** | **($8,843,375)** | **($8,730,916)** | | Gain on derivative instruments | $364,596 | $932,836 | | **Net loss** | **($8,782,606)** | **($7,936,864)** | | Net loss per common share (Basic & Diluted) | ($0.20) | ($0.21) | Cash Flow Activities | Cash Flow Activity | Three Months Ended Dec 31, 2021 | Three Months Ended Dec 31, 2020 | | :--- | :--- | :--- | | Net cash used in operating activities | ($4,805,946) | ($3,827,899) | | Net cash provided by (used in) investing activities | $6,112,223 | ($3,149,820) | | Net cash (used in) provided by financing activities | ($256,508) | $13,329,292 | | **Net increase in cash and cash equivalents** | **$1,049,769** | **$6,351,573** | [Notes to Condensed Financial Statements](index=8&type=section&id=Notes%20to%20Condensed%20Financial%20Statements) Notes disclose a going concern warning, positive Multikine Phase 3 results for FDA submission, and details on equity changes, derivative liabilities, related-party transactions, and lease commitments - The financial statements assume the Company will continue as a going concern, but recurring losses and future liquidity needs raise **substantial doubt** about this ability[24](index=24&type=chunk) - The Phase 3 study for Multikine showed a **14.1% absolute 5-year overall survival benefit** in a specific treatment arm, forming the basis for a planned FDA approval filing[44](index=44&type=chunk) - The company has significant lease commitments, including a finance lease for its manufacturing facility with a liability of approximately **$13.5 million** and operating leases with liabilities of approximately **$2.1 million** as of December 31, 2021[86](index=86&type=chunk)[93](index=93&type=chunk) - In December 2020, the company extended expiration dates of warrants held by the de Clara Trust and other officers, resulting in a deemed dividend and interest expense[80](index=80&type=chunk)[81](index=81&type=chunk) [Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations](index=16&type=section&id=Item%202.%20Management's%20Discussion%20and%20Analysis%20of%20Financial%20Condition%20and%20Results%20of%20Operations) Management discusses positive Multikine Phase 3 results, ongoing reliance on equity financing, a 12% increase in R&D expenses to $6.1 million, a 17% decrease in G&A expenses to $2.8 million, and critical accounting estimates for leases and stock compensation [Liquidity and Capital Resources](index=16&type=section&id=Liquidity%20and%20Capital%20Resources) Liquidity depends on external financing, with $62.6 million incurred for Multikine Phase 3, $4.8 million cash used in operations, and an $11.1 million manufacturing facility upgrade completed - The company announced positive results from its 9.5-year pivotal Phase 3 study for Multikine, showing a **14.1% absolute 5-year overall survival benefit** in the patient arm treated with Multikine followed by surgery and radiation[101](index=101&type=chunk) - The company has been dependent on proceeds from the sale of its securities to meet liquidity and capital requirements and anticipates this will continue, requiring additional capital for research efforts[109](index=109&type=chunk)[110](index=110&type=chunk) - During the three months ended December 31, 2021, the company used approximately **$4.8 million** in cash to fund regular operations, including its Phase 3 clinical trial[113](index=113&type=chunk) [Results of Operations](index=18&type=section&id=Results%20of%20Operations) R&D expenses increased 12% to $6.1 million due to stock compensation and depreciation, while G&A expenses decreased 17% to $2.8 million from reduced stock compensation - Research and development expenses increased by approximately **$0.7 million (12%) YoY**, driven by a **$0.6 million** increase in employee stock compensation and **$0.3 million** in depreciation, offset by a **$0.2 million** reduction in other R&D costs[118](index=118&type=chunk) - General and administrative expenses decreased by approximately **$0.6 million (17%) YoY**, largely due to a decrease in employee stock compensation costs[119](index=119&type=chunk) R&D Project Expenses | R&D Project | Expenses (Q1 FY2022) | Expenses (Q1 FY2021) | | :--- | :--- | :--- | | MULTIKINE | $5,791,419 | $5,011,950 | | LEAPS | $291,748 | $402,810 | | **TOTAL** | **$6,083,167** | **$5,414,760** | [Critical Accounting Estimates and Policies](index=18&type=section&id=Critical%20Accounting%20Estimates%20and%20Policies) Leases and stock-based compensation are critical accounting estimates requiring significant judgment for inputs like incremental borrowing rates, stock volatility, and expected option life - The company's most critical accounting estimates and policies are in the areas of leases and stock-based compensation[128](index=128&type=chunk) - Significant judgment is required to determine inputs for lease liabilities (e.g., incremental borrowing rate) and for share-based compensation models (e.g., volatility, expected life, and performance condition probabilities)[129](index=129&type=chunk) [Item 3. Quantitative and Qualitative Disclosures about Market Risks](index=19&type=section&id=Item%203.%20Quantitative%20and%20Qualitative%20Disclosures%20about%20Market%20Risks) The company asserts it has no significant exposures to market risk - The Company does not believe that it has any significant exposures to market risk[131](index=131&type=chunk) [Item 4. Controls and Procedures](index=19&type=section&id=Item%204.%20Controls%20and%20Procedures) Management concluded that disclosure controls and internal control over financial reporting were effective as of December 31, 2021, with no material changes identified - The Chief Executive and Chief Financial Officer concluded that the Company's disclosure controls and procedures were effective as of December 31, 2021[132](index=132&type=chunk) - Management concluded that the Company's internal control over financial reporting was effective as of December 31, 2021, based on the criteria in the COSO Framework[135](index=135&type=chunk) - There were no changes in the Company's internal control over financial reporting during the quarter that materially affected, or are reasonably likely to materially affect, these controls[136](index=136&type=chunk) PART II - OTHER INFORMATION [Item 2. Unregistered Sales of Equity Securities and Use of Proceeds](index=20&type=section&id=Item%202.%20Unregistered%20Sales%20of%20Equity%20Securities%20and%20Use%20of%20Proceeds) The company issued 18,020 restricted common shares to consultants for investor relations services, exempt from registration under Section 4(a)(2) of the Securities Act of 1933 - During the quarter, the Company issued **18,020 restricted shares of common stock** to consultants for investor relations services[139](index=139&type=chunk) - The issuance was exempt from registration under Section 4(a)(2) of the Securities Act of 1933, as it was made to sophisticated investors without general solicitation[140](index=140&type=chunk) [Item 6. Exhibits](index=20&type=section&id=Item%206.%20Exhibits) This section lists exhibits filed with Form 10-Q, including CEO certifications and corporate governance documents incorporated by reference - The report includes a list of exhibits, notably the CEO certifications required under Rule 13a-14(a) and Section 1350[142](index=142&type=chunk)

FORM 10-K SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 (Mark One) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 2021. 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 1-11889 CEL-SCI CORPORATION (Exact name of registrant as specified in its charter) | --- | --- | |----------------------------- ...

Clinical Trials and Product Development - The Phase 3 study of Multikine showed a 5-year overall survival benefit of 14.1% compared to the control group, translating to a 29% improvement (Multikine arm 62.7% vs control arm 48.6%) [130] - The company plans to seek FDA approval for Multikine, targeting an annual patient population of approximately 210,000 for advanced primary head and neck cancer [132] - The company has developed a pre-clinical technology called LEAPS, with potential applications for rheumatoid arthritis and COVID-19 treatment [134] Financial Performance and Expenses - Research and development expenses increased by approximately $5.1 million, or 41%, for the nine months ended June 30, 2021, primarily due to ongoing Phase 3 clinical trial costs [150] - The company incurred approximately $62.6 million in direct costs for the Phase 3 clinical trial as of June 30, 2021, with an estimated additional $4.3 million required to complete the trial [139] - General and administrative expenses rose by approximately $1.5 million, or 18%, for the nine months ended June 30, 2021, mainly due to increased employee stock compensation [151] - The company has spent approximately $7.9 million on upgrading its manufacturing facility to prepare for potential commercial production [147] - The gain on derivative instruments increased by approximately $2.6 million for the nine months ended June 30, 2021, reflecting changes in the fair value of derivative liabilities [152] - The company reported a cash increase of approximately $20.4 million during the nine months ended June 30, 2021, driven by $47.2 million in net proceeds from common stock sales [142] Capital and Financial Condition - The company anticipates needing to raise additional capital to support ongoing operations and product development efforts [137] - The Company bases its financial condition and results of operations on unaudited condensed financial statements [157] - Critical accounting estimates include operating leases and stock-based compensation, which significantly affect financial reporting [158] - The Company does not believe it has significant exposures to market risk [159]

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 March 31, 2021 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 001-11889 | --- | --- | --- | |----------------------------------------------|-------------------- ...

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 December 31, 2020 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 001-11889 | --- | --- | --- | |-----------------------------------------------------------|---- ...

PART I [Business Overview](index=3&type=section&id=ITEM%201.%20BUSINESS) CEL-SCI is a clinical-stage biotechnology company focused on developing immunotherapies for cancer and infectious diseases [Company Products](index=4&type=section&id=CEL-SCI%27S%20PRODUCTS) The company's pipeline focuses on Multikine for head and neck cancer and LEAPS technology for rheumatoid arthritis and COVID-19 - The company's primary focus is on two product development platforms: Multikine for head and neck cancer and the LEAPS technology for rheumatoid arthritis and COVID-19[22](index=22&type=chunk) [Multikine](index=4&type=section&id=MULTIKINE) Multikine, the lead immunotherapy for head and neck cancer, is in final statistical analysis of its pivotal Phase 3 trial - Multikine has been granted Orphan Drug designation by the FDA for neoadjuvant therapy in patients with SCCHN[28](index=28&type=chunk) - The pivotal Phase 3 study is fully enrolled with **928 patients** and reached the required **298 events** in late April 2020, moving it into the final analysis phase[13](index=13&type=chunk)[30](index=30&type=chunk) - As of September 30, 2020, direct costs for the Phase 3 trial totaled approximately **$58.9 million**, with an estimated **$5.9 million** in additional expenses expected for the remainder of the trial and FDA filing[33](index=33&type=chunk)[34](index=34&type=chunk) - CEL-SCI has exclusive marketing and distribution agreements for Multikine with Teva Pharmaceutical for Israel and Turkey, Orient Europharma for several Asian and Pacific countries, and Byron Biopharma for South Africa[36](index=36&type=chunk)[39](index=39&type=chunk)[44](index=44&type=chunk) [LEAPS Technology](index=7&type=section&id=LEAPS) The LEAPS platform develops immunotherapies, including LEAPS COV-19 for COVID-19 and CEL-4000 for rheumatoid arthritis - LEAPS COV-19, a therapeutic treatment candidate, achieved a statistically significant **40% survival rate** in transgenic mouse models challenged with SARS-CoV-2, compared to **0% survival** in control groups[17](index=17&type=chunk)[50](index=50&type=chunk) - The company was awarded a **$1.5 million** Phase 2 SBIR grant from the NIH to advance its LEAPS candidate for rheumatoid arthritis, CEL-4000, towards an IND application[15](index=15&type=chunk)[53](index=53&type=chunk) [Intellectual Property](index=9&type=section&id=INTELLECTUAL%20PROPERTY) Intellectual property protects Multikine and LEAPS via patents, with Multikine's manufacturing process as a trade secret Key Patent Expiration Dates | Technology | Jurisdiction | Expiration Year(s) | | :--- | :--- | :--- | | **Multikine** | U.S. | 2023 | | | Europe | 2025, 2026 | | **LEAPS** | U.S. | 2021, 2022, 2032 | | | Europe | 2029, 2034 | - The manufacturing process for Multikine, a complex biological product, is protected as a trade secret rather than by patent[69](index=69&type=chunk) [Manufacturing Facility](index=10&type=section&id=MANUFACTURING%20FACILITY) The dedicated Multikine manufacturing facility is expanding for commercial demand, with its lease expiring in 2028 - The company is expanding its manufacturing facility to meet expected demand for Multikine upon potential regulatory approval[73](index=73&type=chunk) - The lease on the manufacturing facility expires on **October 31, 2028**[74](index=74&type=chunk) [Government Regulation](index=10&type=section&id=GOVERNMENT%20REGULATION) Company products are subject to extensive FDA and global regulations, with Multikine holding Orphan Drug Designation - The FDA approval process for biologics involves multiple stages: preclinical testing, IND submission, three phases of clinical trials to establish safety and efficacy, and finally, a BLA submission for marketing approval[76](index=76&type=chunk)[81](index=81&type=chunk)[82](index=82&type=chunk)[83](index=83&type=chunk) - Multikine has received Orphan Drug Status from the FDA, which can provide **seven years of market exclusivity** if it is the first product approved for its specific indication[104](index=104&type=chunk)[106](index=106&type=chunk) - Upon commercialization, the company will be subject to various healthcare laws, including the Anti-Kickback Statute and the False Claims Act, and will face challenges related to pricing and reimbursement from third-party payors[108](index=108&type=chunk)[111](index=111&type=chunk) [Risk Factors](index=15&type=section&id=ITEM%201B.%20RISK%20FACTORS) The company faces significant risks including financial losses, Multikine dependence, high costs, and regulatory and IP challenges - The company has incurred net losses of approximately **$384 million** since inception and expects to continue incurring losses, raising substantial doubt about its ability to continue as a going concern without additional capital[128](index=128&type=chunk)[135](index=135&type=chunk) - The business is heavily dependent on the success of Multikine, its only product in late-stage clinical development; failure to obtain regulatory approval or commercialize Multikine would materially harm the company[118](index=118&type=chunk)[130](index=130&type=chunk) - The COVID-19 pandemic has caused business disruptions, including delays in the Phase 3 trial data lock and the expansion of the manufacturing facility[125](index=125&type=chunk) - The company's bylaws include fee-shifting and exclusive forum provisions that may discourage shareholder litigation[170](index=170&type=chunk)[175](index=175&type=chunk) - Intellectual property risks include the potential for patents to not provide adequate protection and the reliance on trade secrets for manufacturing, which are vulnerable to disclosure[267](index=267&type=chunk)[271](index=271&type=chunk) [Properties](index=35&type=section&id=ITEM%202.%20PROPERTIES) CEL-SCI leases corporate, lab, and a 73,000 sq ft manufacturing facility, which is being upgraded for Multikine production Leased Properties | Property | Location | Size (sq. ft.) | Lease Expiration | | :--- | :--- | :--- | :--- | | **Office Space** | Vienna, VA | N/A | Nov 30, 2025 | | **Laboratory** | Baltimore, MD | 17,900 | Feb 28, 2022 | | **Manufacturing Facility** | Near Baltimore, MD | 73,000 | Oct 31, 2028 | - The manufacturing facility is undergoing an upgrade estimated to cost **$10.5 million** to prepare for potential commercial production of Multikine; the landlord has contingently agreed to finance the final **$2.4 million** of these costs[287](index=287&type=chunk) [Legal Proceedings](index=36&type=section&id=ITEM%203.%20LEGAL%20PROCEEDINGS) The company reported no material pending legal proceedings - Not applicable[288](index=288&type=chunk) [Mine Safety Disclosures](index=36&type=section&id=ITEM%204.%20MINE%20SAFETY%20DISCLOSURES) This item is not applicable to the company - Not applicable[289](index=289&type=chunk) PART II [Market for Common Equity and Related Stockholder Matters](index=36&type=section&id=ITEM%205.%20MARKET%20FOR%20CEL-SCI%27S%20COMMON%20EQUITY%20AND%20RELATED%20STOCKHOLDER%20MATTERS.) CEL-SCI's common stock trades on NYSE American; no dividends are paid or planned, with historical price data provided - The company's common stock trades on the NYSE American under the symbol **"CVM"**[290](index=290&type=chunk) - CEL-SCI has not paid and does not plan to pay any dividends on its common stock in the foreseeable future[292](index=292&type=chunk) Quarterly Common Stock Price Range (High/Low) | Quarter Ended | High ($) | Low ($) | | :--- | :--- | :--- | | 9/30/2020 | 15.10 | 11.29 | | 6/30/2020 | 18.00 | 9.64 | | 3/31/2020 | 17.80 | 6.35 | | 12/31/2019 | 9.74 | 6.00 | | 9/30/2019 | 9.93 | 5.80 | [Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A)](index=37&type=section&id=ITEM%207.%20MANAGEMENT%27S%20DISCUSSION%20AND%20ANALYSIS%20OF%20FINANCIAL%20CONDITION%20AND%20RESULTS%20OF%20OPERATIONS) FY2020 net loss increased to $30.3 million due to higher operating expenses; the company relies on equity financing and faces going concern doubts [Results of Operations](index=37&type=section&id=Results%20of%20Operations) FY2020 saw increased R&D and G&A expenses, leading to a net loss of $30.3 million, up from $22.1 million in FY2019 Year-over-Year Financial Performance (in millions) | Metric | FY 2020 | FY 2019 | Change (%) | | :--- | :--- | :--- | :--- | | **R&D Expenses** | $17.8 | $12.7 | +41% | | **G&A Expenses** | $11.7 | $8.0 | +46% | | **Operating Loss** | ($29.0) | ($20.2) | +44% | | **Net Loss** | ($30.3) | ($22.1) | +37% | R&D Expenses by Project | Project | 2020 | 2019 | | :--- | :--- | :--- | | Multikine | $16,146,248 | $11,623,050 | | LEAPS | $1,694,042 | $1,036,237 | | **Total** | **$17,840,290** | **$12,659,287** | [Liquidity and Capital Resources](index=38&type=section&id=Liquidity%20and%20Capital%20Resources) The company relies on equity financing, with $15.5 million cash as of FY2020, facing significant capital commitments and going concern doubts - The company raised net proceeds of approximately **$25.8 million** in FY2020 and **$14.8 million** in FY2019 through stock sales and warrant/option exercises[312](index=312&type=chunk) - In December 2020 (subsequent to year-end), the company raised an additional **$13.6 million** in net proceeds from a public stock offering[312](index=312&type=chunk)[590](index=590&type=chunk) - The company's auditor has issued an opinion with an explanatory paragraph expressing substantial doubt about its ability to continue as a going concern[330](index=330&type=chunk) - Future capital needs include an estimated **$5.9 million** for the remainder of the Phase 3 trial and clinical study report, plus an estimated **$7.4 million** to complete the manufacturing facility upgrade[327](index=327&type=chunk)[329](index=329&type=chunk) [Controls and Procedures](index=42&type=section&id=ITEM%209A.%20CONTROLS%20AND%20PROCEDURES) A material weakness in internal controls over financial reporting, due to an ASC 842 ROU asset error, rendered disclosure controls ineffective - A material weakness was identified in internal control over financial reporting[348](index=348&type=chunk) - The weakness stemmed from an error in calculating the right-of-use (ROU) asset under ASC 842, which understated the opening finance ROU asset and stockholders' equity by approximately **$2.04 million** as of October 1, 2019[348](index=348&type=chunk) - As a result of the material weakness, management concluded that disclosure controls and procedures were not effective as of September 30, 2020[344](index=344&type=chunk)[353](index=353&type=chunk) PART III [Directors and Executive Officers](index=43&type=section&id=ITEM%2010.%20DIRECTORS%20AND%20EXECUTIVE%20OFFICERS%20OF%20THE%20REGISTRANT) This section details the company's directors and executive officers, highlighting their backgrounds and the board's independent members Officers and Directors | Name | Position | | :--- | :--- | | Geert R. Kersten, Esq. | Director, Chief Executive and Financial Officer | | Patricia B. Prichep | Senior Vice President of Operations | | Dr. Eyal Talor | Chief Scientific Officer | | Dr. Daniel H. Zimmerman | Senior Vice President of Research, Cellular Immunology | | John Cipriano | Senior Vice President of Regulatory Affairs | | Dr. Peter R. Young | Director | | Bruno Baillavoine | Director | | Robert Watson | Director | - The Board of Directors includes three independent directors: Dr. Peter R. Young, Bruno Baillavoine, and Robert Watson[372](index=372&type=chunk) [Executive Compensation](index=46&type=section&id=ITEM%2011.%20EXECUTIVE%20COMPENSATION) Executive compensation includes salary and stock options, with CEO Geert Kersten's FY2020 total compensation at $3.3 million, and performance-based options granted Executive Compensation Summary (FY 2020) | Name | Position | Salary ($) | Option Awards ($) | Total Comp ($) | | :--- | :--- | :--- | :--- | :--- | | Geert R. Kersten | CEO & CFO | 756,102 | 2,492,320 | 3,335,103 | | Patricia B. Prichep | SVP, Operations | 366,722 | 1,212,480 | 1,610,633 | | Dr. Eyal Talor | CSO | 308,250 | 1,212,480 | 1,539,561 | - In April 2020, the company granted **1.872 million** performance-based stock options to officers and directors from the 2020 Non-Qualified Stock Option Plan; these options vest upon achieving stock price targets ranging from **$20 to $40 per share** or the filing of a marketing application for Multikine[418](index=418&type=chunk)[545](index=545&type=chunk) - Key executives have employment agreements with change-in-control provisions, providing for lump-sum payments of **18 to 24 months of salary** upon resignation following a change in control[396](index=396&type=chunk)[404](index=404&type=chunk) [Security Ownership](index=52&type=section&id=ITEM%2012.%20SECURITY%20OWNERSHIP%20OF%20CERTAIN%20BENEFICIAL%20OWNERS%20AND%20MANAGEMENT%20AND%20RELATED%20STOCKHOLDER%20MATTERS) This section details beneficial ownership of common stock, with CEO Geert R. Kersten as the largest insider shareholder at 7.3% Beneficial Ownership of Common Stock (as of Dec 1, 2020) | Owner | Shares Beneficially Owned | Percent of Class | | :--- | :--- | :--- | | Geert R. Kersten (CEO) | 2,949,013 | 7.3% | | All Officers and Directors as a Group (8 persons) | 5,262,784 | 12.43% | [Principal Accounting Fees and Services](index=53&type=section&id=ITEM%2014.%20PRINCIPAL%20ACCOUNTING%20FEES%20AND%20SERVICES) This section discloses fees billed by BDO USA, LLP for audit and other professional services for fiscal years 2020 and 2019 Fees Billed by BDO USA, LLP | Fee Category | FY 2020 | FY 2019 | | :--- | :--- | :--- | | Audit Fees | $553,700 | $363,000 | | Audit Related Fees | - | - | | Tax Fees | - | - | Financial Statements [Report of Independent Registered Public Accounting Firm](index=57&type=section&id=Report%20of%20Independent%20Registered%20Public%20Accounting%20Firm) The auditor's report includes a "Going Concern Uncertainty" paragraph, citing recurring losses and capital needs - The auditor's report contains a "Going Concern Uncertainty" paragraph, citing recurring losses and the need to raise additional capital as factors that raise substantial doubt about the company's ability to continue operations[450](index=450&type=chunk) [Financial Statements](index=58&type=section&id=Financial%20Statements) FY2020 financial statements show a net loss of $30.3 million, with $15.5 million in cash and $19.7 million in stockholders' equity Key Financial Data (as of and for the year ended September 30) | Metric | 2020 | 2019 | | :--- | :--- | :--- | | **Statement of Operations:** | | | | Net Loss | $(30,255,244) | $(22,134,640) | | Net Loss Per Share | $(0.82) | $(0.71) | | **Balance Sheet:** | | | | Cash and cash equivalents | $15,508,909 | $8,444,774 | | Total Assets | $40,536,454 | $27,622,994 | | Total Liabilities | $20,809,780 | $22,489,327 | | Total Stockholders' Equity | $19,726,674 | $5,133,667 | [Notes to Financial Statements](index=61&type=section&id=Notes%20to%20Financial%20Statements) Notes detail going concern dependence, ASC 842 adoption and error correction, warrant and stock compensation plans, and major commitments - The company adopted the new lease accounting standard ASC 842 on October 1, 2019, resulting in the recognition of right-of-use assets and lease liabilities on the balance sheet; an error in the initial calculation understated the finance lease ROU asset and equity by approximately **$2.0 million**, which has been corrected[483](index=483&type=chunk)[485](index=485&type=chunk) - The company has a co-development and revenue sharing agreement with Ergomed, which contributes to the Phase 3 study costs in exchange for a percentage of future milestone and royalty payments; as of Sept 30, 2020, Ergomed's contribution in the form of discounted services totaled approximately **$11.1 million**[557](index=557&type=chunk) - The company has numerous series of outstanding warrants, many of which are treated as derivative liabilities and re-measured at fair value each period, causing fluctuations in the statement of operations[503](index=503&type=chunk)[511](index=511&type=chunk) - The company has contingent obligations with vendors, estimating it will incur an additional **$5.9 million** for the remainder of the Phase 3 clinical trial and the filing of the clinical study report with the FDA[570](index=570&type=chunk)