CEL-SCI (CVM) - 2022 Q2 - Quarterly Report

PART I. FINANCIAL INFORMATION Item 1. Financial Statements 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 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) 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) 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 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][21] Condensed Statements of Cash Flows 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 - 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][53] - 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][112] - 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][52] 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][88] 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] 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 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][114] - 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][119] - 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] - 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] - 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] - 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] - 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] 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 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] Item 4. Controls and Procedures 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] - No material changes in the Company's internal control over financial reporting occurred during the quarter ended March 31, 2022[147] PART II. OTHER INFORMATION Item 2. Unregistered Sales of Equity Securities and Use of Proceeds 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] - 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] Item 6. Exhibits 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] 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]