CEL-SCI (CVM) - 2025 Q1 - Quarterly Report

PART I FINANCIAL INFORMATION Item 1. Financial Statements Unaudited Q4 2024 condensed financial statements for CEL-SCI are presented, emphasizing going concern doubt Condensed Balance Sheets This section provides a summary of the company's financial position, detailing assets, liabilities, and stockholders' equity as of December 31, 2024, and September 30, 2024 Condensed Balance Sheet Summary | Metric | Dec 31, 2024 (Unaudited) | Sep 30, 2024 | | :-------------------------------- | :----------------------- | :------------- | | Total Assets | $25,698,787 | $26,991,766 | | Total Liabilities | $14,390,155 | $14,124,683 | | Total Stockholders' Equity | $11,308,632 | $12,867,083 | - Total assets decreased by approximately $1.3 million from September 30, 2024, to December 31, 2024, while total liabilities increased by approximately $0.27 million[6][8][9] - Total stockholders' equity decreased by approximately $1.56 million[6][8][9] Condensed Statements of Operations This section outlines the company's financial performance for the three months ended December 31, 2024 and 2023, focusing on operating expenses, net loss, and loss per common share Condensed Statements of Operations (Three Months Ended December 31) | Metric | 2024 (Unaudited) | 2023 (Unaudited) | | :----------------------------------- | :--------------- | :--------------- | | Research and development | $4,430,063 | $4,352,509 | | General and administrative | $2,463,355 | $2,133,378 | | Total operating expenses | $6,893,418 | $6,485,887 | | Operating loss | $(6,893,418) | $(6,485,887) | | Net loss | $(7,073,062) | $(6,709,524) | | Net loss per common share – basic and diluted | $(0.11) | $(0.14) | | Weighted average common shares outstanding | 65,325,855 | 48,470,600 | - Net loss increased to $7.07 million in Q4 2024 from $6.71 million in Q4 2023[12] - Net loss per common share improved to $(0.11) from $(0.14) due to a significant increase in weighted average common shares outstanding (from 48.47 million to 65.33 million)[12] - Total operating expenses increased by approximately $0.41 million year-over-year[12] Condensed Statements of Stockholders' Equity This section details changes in stockholders' equity for the three months ended December 31, 2024, including common stock, additional paid-in capital, and accumulated deficit Condensed Statements of Stockholders' Equity (Three Months Ended December 31) | Metric | Sep 30, 2024 | Dec 31, 2024 | | :-------------------------- | :----------- | :----------- | | Common Stock Shares | 63,787,104 | 73,084,041 | | Common Stock Amount | $637,870 | $730,839 | | Additional Paid-In Capital | $526,241,074 | $531,662,716 | | Accumulated Deficit | $(514,011,861) | $(521,084,923) | | Total Stockholders' Equity | $12,867,083 | $11,308,632 | - Total stockholders' equity decreased from $12.87 million to $11.31 million during the three months ended December 31, 2024, primarily due to a net loss of $7.07 million, partially offset by proceeds from common stock sales ($5.00 million) and equity-based compensation[14] - Common stock shares outstanding increased significantly from 63,787,104 to 73,084,041, driven by pre-funded warrant exercises and proceeds from the sale of common stock[14] Condensed Statements of Cash Flows This section presents the company's cash flow activities for the three months ended December 31, 2024 and 2023, covering operating, investing, and financing activities Condensed Statements of Cash Flows (Three Months Ended December 31) | Cash Flow Activity | 2024 | 2023 | | :----------------------------------- | :----------- | :----------- | | Net cash used in operating activities | $(4,139,973) | $(4,887,928) | | Net cash used in investing activities | $(32,954) | $(64,861) | | Net cash provided by financing activities | $4,048,869 | $4,048,494 | | Net decrease in cash and cash equivalents | $(124,058) | $(904,295) | | Cash and cash equivalents, end of period | $4,614,115 | $3,241,440 | - Net cash used in operating activities decreased from $4.89 million in Q4 2023 to $4.14 million in Q4 2024[16][17] - Net cash provided by financing activities remained stable at approximately $4.05 million in both periods[16][17] - The net decrease in cash and cash equivalents significantly improved from $(904,295) in Q4 2023 to $(124,058) in Q4 2024[16][17] Notes to Condensed Financial Statements This section provides detailed explanations and disclosures supporting the condensed financial statements, covering accounting policies, liquidity, equity, commitments, and contingencies A. Basis of Presentation and Summary of Significant Accounting Policies This section outlines the preparation basis for the unaudited financial statements and summarizes the key accounting policies adopted by the company - The financial statements are unaudited and prepared in accordance with U.S. GAAP, with certain disclosures omitted as permitted by SEC rules, and management believes they contain all necessary adjustments for fair presentation[21][22] - Due to recurring losses and future liquidity needs, there is substantial doubt about the Company's ability to continue as a going concern[24] - Key accounting policies include cash and cash equivalents, property and equipment, R&D and manufacturing supplies, patents, leases (ASC 842), share-based compensation (ASC 718), net loss per common share (ASC 260), concentration of credit risk, income taxes (ASC 740), impairment of long-lived assets (ASC 360-10), and fair value measurements (ASC 820)[25][26][27][28][29][30][35][36][37][38][39] - The Company is evaluating the impact of new accounting pronouncements: ASU 2023-07 (Segment Reporting), ASU 2023-09 (Income Tax Disclosures), SEC Climate Disclosure Rules (currently stayed), and ASU 2024-03 (Expense Disaggregation Disclosures)[44][45][46][47] B. Liquidity This section discusses the company's ability to meet its short-term and long-term financial obligations, highlighting funding sources and going concern considerations - The Company has incurred significant costs for R&D, facilities, and clinical trials, funded primarily by loans and securities sales, and requires additional capital to bring Multikine to market[48] - Plans to raise additional capital through corporate partnerships, debt, and/or equity financings, citing past success and Multikine's Phase 3 survival benefit, though timely or acceptable financing is not assured[49] - Recurring losses and future liquidity needs create substantial doubt about the Company's ability to continue as a going concern[50] C. Stockholders' Equity This section details transactions affecting stockholders' equity, including common stock sales, warrant issuances, and share-based compensation expenses - In December 2024, the Company sold 7,552,500 common shares and pre-funded warrants for approximately $4.4 million net of issuance costs, with pre-funded warrants classified as permanent equity[51][52] - In November 2023, the Company sold 2,490,000 common shares for approximately $4.5 million net of issuance costs[53] - In October 2024, 1,000,000 shares of common stock were issued to Ergomed Group Limited for services, recognized as unvested and forfeitable for accounting purposes[54] Share-Based Compensation Expense (Three Months Ended December 31) | Category | 2024 | 2023 | | :----------- | :--------- | :--------- | | Employees | $711,381 | $1,383,909 | | Non-employees | $396,839 | $218,386 | | Total | $1,108,220 | $1,602,295 | - During Q4 2024, 8,577,500 pre-funded warrants were issued, and 1,450,000 were exercised[57][58][61] - 500,000 options were issued to a consultant[57][58][61] Warrants and Non-Employee Options Outstanding (December 31, 2024) | Warrant/Options | Shares Issuable | Exercise Price | Expiration Date | | :---------------- | :-------------- | :------------- | :-------------- | | Series N | 85,339 | $3.00 | 8/18/2026 | | Series UU | 93,603 | $2.80 | 6/30/2026 | | Series X | 120,000 | $9.25 | 7/13/2026 | | Series Y | 26,000 | $12.00 | 8/15/2026 | | Series MM | 333,432 | $1.86 | 6/22/2026 | | Series NN | 200,087 | $2.52 | 7/24/2026 | | Series RR | 234,009 | $1.65 | 10/30/2026 | | Pre-Funded | 8,577,500 | $0.0001 | N/A | | Consultant Options | 610,000 | $0.70 - $2.18 | 7/27/2027 - 11/1/2034 | D. Related Party Transactions This section discloses any transactions between the company and its related parties during the reporting periods - There were no related party transactions during the three months ended December 31, 2024 and 2023[63] E. Commitments and Contingencies This section outlines the company's contractual obligations and potential liabilities, including lease agreements and clinical development service contracts - The Company entered into an agreement with Ergomed Clinical Research, Inc. in August 2024 for clinical development services, incurring approximately $0.7 million in R&D expenses as of December 31, 2024[64] - The Company leases a manufacturing facility (San Tomas lease) with a 20-year term expiring in October 2028, and other smaller finance leases[65][67] - The net book value of finance lease right-of-use assets was approximately $6.9 million, and the finance lease liability was approximately $9.5 million as of December 31, 2024[65][67] - Operating lease right-of-use assets were approximately $1.4 million, and operating lease liabilities were approximately $1.6 million as of December 31, 2024[68][70] - The Company also made a $2.3 million deposit for the San Tomas lease in January 2023[68][70] Future Minimum Lease Payments Under Finance Leases (as of December 31, 2024) | Period | Amount | | :-------------------------- | :----------- | | Nine months ending Sep 30, 2025 | $2,065,000 | | Year ending Sep 30, 2026 | $2,838,000 | | Year ending Sep 30, 2027 | $2,929,000 | | Year ending Sep 30, 2028 | $3,021,000 | | Year ending Sep 30, 2029 | $255,000 | | Total future minimum lease obligation | $11,108,000 | | Net present value of financing lease obligations | $9,486,000 | Future Minimum Lease Payments Under Operating Leases (as of December 31, 2024) | Period | Amount | | :-------------------------- | :----------- | | Nine months ending Sep 30, 2025 | $276,000 | | Year ending Sep 30, 2026 | $287,000 | | Year ending Sep 30, 2027 | $277,000 | | Year ending Sep 30, 2028 | $285,000 | | Year ending Sep 30, 2029 | $294,000 | | Year ending Sep 30, 2030 | $303,000 | | Thereafter | $443,000 | | Total future minimum lease obligation | $2,165,000 | | Net present value of operating lease obligations | $1,599,000 | G. Patents This section details the company's patent activities, including abandonments, impairment losses, and amortization expenses - During Q4 2024, the Company abandoned three patents, resulting in an impairment loss of $9,541[73] - Patent amortization for the period was approximately $8,000[73] Estimated Future Patent Amortization | Period | Amount | | :-------------------------- | :------- | | Nine months ending Sep 30, 2025 | $21,000 | | Year ending Sep 30, 2026 | $25,000 | | Year ending Sep 30, 2027 | $22,000 | | Year ending Sep 30, 2028 | $18,000 | | Year ending Sep 30, 2029 | $16,000 | | Year ending Sep 30, 2030 | $14,000 | | Thereafter | $32,000 | | Total | $148,000 | H. Loss Per Common Share This section explains the calculation of basic and diluted net loss per common share and lists anti-dilutive securities excluded from the calculation - Basic and diluted net loss per common share is calculated by dividing net loss by the weighted average common shares outstanding, with potentially dilutive shares excluded if anti-dilutive[75] Loss Per Share Reconciliation (Three Months Ended December 31) | Metric | 2024 | 2023 | | :----------------------------------- | :----------- | :----------- | | Net loss available to common shareholders | $(7,073,062) | $(6,709,524) | | Weighted average shares outstanding | 65,325,855 | 48,470,600 | | Basic and diluted loss per common share | $(0.11) | $(0.14) | Anti-Dilutive Securities Excluded from Diluted EPS (as of December 31) | Security Type | 2024 | 2023 | | :-------------------- | :----------- | :----------- | | Options and Warrants | 17,837,177 | 15,839,028 | | Unvested Common Stock | 1,000,000 | - | | Unvested Restricted Stock | 144,250 | 147,250 | | Total | 18,981,427 | 15,986,278 | J. Subsequent Events This section reports on events occurring after the balance sheet date that may require disclosure or adjustment to the financial statements - The Company has evaluated subsequent events through the filing date and found no events requiring disclosure[78] Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses CEL-SCI's business, Multikine's Phase III results, future plans, and financial condition Company Overview This section introduces CEL-SCI Corporation as a late clinical-stage biotechnology company focused on developing immunotherapies for cancer and other diseases - CEL-SCI Corporation is a late clinical-stage biotechnology company focused on developing immunotherapies for cancer and other diseases[79] - The primary product candidates are Multikine (Leukocyte Interleukin, Injection) for head and neck cancers and L.E.A.P.S. technology for rheumatoid arthritis[79][87] - None of the product candidates have received regulatory approval for sale, and their safety or efficacy has not been established[79] Multikine, The Phase III Clinical Trial Results, and Path Forward This section details the Phase III clinical trial results for Multikine in head and neck cancer, its unique mechanism, target population, and the FDA-approved path for a confirmatory registration study - The global cancer immunotherapy market is projected to reach $196.45 billion by 2030, growing at a CAGR of 7.2%[80] - Multikine is unique as a first-line investigational immunotherapy administered before standard of care (surgery) for newly diagnosed advanced primary head and neck cancer[80][86] - The target population for Multikine is newly diagnosed advanced primary head and neck cancer patients with no lymph node involvement (via PET imaging) and low PD-L1 tumor expression (TPS<10 via biopsy), accounting for approximately 100,000 patients worldwide per year[81][85][88][94] - In the target population, the Phase III study showed a 73% survival rate with Multikine vs. 45% without Multikine at 5 years, with a Hazard Ratio of 0.35 (95% CIs [0.19, 0.66])[84][99][102] - The FDA indicated in May 2024 that CEL-SCI may proceed with a confirmatory registration study for Multikine in the target population[85][108] - Multikine demonstrated no demonstrable safety signals or toxicities in approximately 740 treated subjects across multiple clinical trials, with no Multikine-related deaths or delays in surgery[90] - Multikine induces pre-surgical responses (PSR: ≥30% tumor reduction; PSD: disease downstaging), with PSRs seen in 8.5% of Multikine patients vs. none in control, and PSDs in 22% of Multikine patients vs. 13% in control across the whole Phase III trial[92][93] - The confirmatory study will be a randomized controlled trial with two arms (Multikine + SOC vs. SOC alone), expected to initiate in Q1/Q2 2025 and reach full enrollment in Q2 2026[110] - Multikine addresses a significant unmet medical need, as current standard of care offers only about a 50% chance of 5-year survival, which Multikine could increase to over 70%, targeting patients with low PD-L1 expression underserved by existing immunotherapies like Keytruda and Opdivo[114] Liquidity and Capital Resources This section analyzes the company's financial resources, historical funding methods, and future capital needs, particularly for the Multikine confirmatory study, and addresses going concern issues - The Company has historically funded operations through equity, convertible notes, loans, and grants, and anticipates continued reliance on securities sales due to ongoing net operating losses[118][119] - The estimated cost for the confirmatory registration study is approximately $30 million, necessitating additional capital or long-term financing[120] - Due to recurring losses and future liquidity needs, there is substantial doubt about the Company's ability to continue as a going concern[120] - In Q4 2024, cash decreased by approximately $0.1 million, driven by $4.5 million net proceeds from financing, offset by $4.1 million in operating activities and $0.5 million in finance lease payments[121] - In Q4 2023, cash decreased by approximately $0.9 million, with $4.9 million used in operations and $0.4 million in finance lease payments, offset by $4.5 million net proceeds from financing[122] Results of Operations and Financial Condition This section provides a detailed analysis of the company's financial performance, including operating losses, research and development expenses, and general and administrative expenses - The Company incurred a net operating loss of approximately $6.9 million for the three months ended December 31, 2024, including $1.1 million in share-based compensation and $1.0 million in depreciation and amortization[124] Research and Development Expenses (Three Months Ended December 31) | Project | 2024 | 2023 | | :-------- | :----------- | :----------- | | MULTIKINE | $4,409,465 | $4,329,252 | | LEAPS | $20,598 | $23,257 | | TOTAL | $4,430,063 | $4,352,509 | - Research and development expenses remained constant at approximately $4.4 million in Q4 2024 compared to Q4 2023, with increases in clinical studies, supplies, and other R&D expenses offset by a decrease in employee stock compensation[125] - General and administrative expenses increased by approximately $0.3 million (15%) in Q4 2024, primarily due to a $0.2 million increase in non-employee stock compensation and public relations costs, partially offset by a decrease in employee stock compensation[126] - Net interest expense remained constant at approximately $0.2 million in both periods, primarily due to interest on lease liabilities[127] Critical Accounting Estimates This section identifies and explains the accounting estimates that require significant management judgment and have a material impact on the financial statements - Critical accounting estimates include Lease Accounting (determining lease term and incremental borrowing rate) and Share-based Compensation (fair value measurement using Black-Scholes model and Monte Carlo simulation for certain awards)[132][133][135][136] - Management's judgment is crucial in developing inputs and assumptions for these estimates, which are based on historical experience, contract terms, industry trends, and external information[130][131][132] Item 3. Quantitative and Qualitative Disclosures about Market Risks The Company states that it does not believe it has any significant exposure to market risk - The Company does not believe it has any significant exposure to market risk[137] Item 4. Controls and Procedures Disclosure controls and procedures were ineffective as of December 31, 2024, due to material weaknesses - The Company's disclosure controls and procedures were not effective as of December 31, 2024, due to material weaknesses described in the Annual Report on Form 10-K for the year ended September 30, 2024[139] - No changes in internal control over financial reporting occurred during the three months ended December 31, 2024, that materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting[140] PART II Item 2. Unregistered Sales of Equity Securities and Use of Proceeds CEL-SCI issued restricted common shares to consultants for investor relations, using Section 4(a)(2) exemption - During the three months ended December 31, 2024, the Company issued 154,615 restricted shares of common stock to consultants for investor relations services[142] - 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 information, and no general solicitation[143] Item 5. Other Information No Rule 10b5-1 trading arrangements were adopted or terminated by directors or officers - None of the Company's directors or officers adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement during the quarterly period ending December 31, 2024[144] Item 6. Exhibits Exhibits filed with Form 10-Q include Rule 13a-14(a) and Section 1350 certifications Exhibits Filed | Number | Exhibit | | :----- | :-------------------------- | | 31 | Rule 13a-14(a) Certifications | | 32 | Section 1350 Certifications | Signatures The report is signed by CEL-SCI's Principal Executive and Financial Officers on February 14, 2025 - The report was signed by Geert Kersten, Principal Executive Officer, and Patricia Prichep, Principal Financial Officer, on February 14, 2025[149]