Item 1.01 Entry Into a Material Definitive Agreement.
On April 30, 2017, CEL-SCI Corporation ("CEL-SCI") entered into a
securities purchase agreement with an institutional investor whereby it sold
13,199,000 shares of its common stock for aggregate gross proceeds of
$1,517,885, or $0.115 per share, in a registered direct offering. The closing of
the offering is expected to take place on or about May 3, 2017, subject to the
satisfaction of customary closing conditions.
In a concurrent private placement, CEL-SCI also issued to the purchaser of
CEL-SCI's common stock, referred to in the preceding paragraph, warrants (Series
KK) to purchase 9,899,250 shares of CEL-SCI's common stock. The warrants can be
exercised at a price of $0.1214 per share, commencing six months after the date
of issuance and ending five and a half years after the date of issuance. The
warrants and the shares of common stock issuable upon the exercise of the
warrants are being offered pursuant to the exemption provided in Section 4(a)(2)
under the Securities Act of 1933 and Rule 506(b) promulgated thereunder.
Rodman & Renshaw, a unit of H.C. Wainwright & Co. (the "Placement Agent"),
acted as the exclusive placement agent in connection with the offering.
The net proceeds to CEL-SCI from the transaction, after deducting the
placement agent's fees and expenses and CEL-SCI's estimated offering expenses,
are expected to be approximately $1,347,000. CEL-SCI intends to use the net
proceeds from the offering for its clinical trials and general corporate
purposes. CEL-SCI has not yet determined the amount of net proceeds to be used
specifically for any of the foregoing purposes.
The shares of common stock were offered and sold by CEL-SCI pursuant to an
effective shelf registration statement on Form S-3, which was filed with the
Securities and Exchange Commission (the "SEC") on July 1, 2015 and subsequently
declared effective on October 30, 2015 (File No. 333-205444) (the "Registration
Statement"), and the base prospectus dated as of October 30, 2015 contained
therein. CEL-SCI has filed a prospectus supplement and an accompanying
prospectus with the SEC in connection with the sale of the common stock.
CEL-SCI has agreed to pay the Placement Agent a cash commission of 7% of
the gross proceeds raised in the offering. CEL-SCI has also agreed to issue
659,950 warrants to the Placement Agent (the "Agent Warrants") as part of its
compensation. The Placement Agent Warrants are subject to a 180-day lock-up and
may be exercised at any time on or after October 30, 2017 and on or before April
30, 2022 at a price of $0.14375 per share. The Placement Agent also has a
twelve-month right of first refusal period, reimbursement of certain expenses in
the amount of up to $30,000, indemnification and other customary provisions for
transactions of this nature.
On May 1, 2017, CEL-SCI issued a press release announcing that it had
priced the offering. A copy of this press release is attached as Exhibit 99.
The engagement agreement entered into with the Placement Agent, the forms
of the Securities Purchase Agreement and the Series KK Warrant, and the
Placement Agent Warrant are filed as exhibits to this Current Report on Form
8-K. The foregoing summaries of the terms of these documents are subject to, and
qualified in their entirety by, such documents, which are incorporated herein by
reference.
2