UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (date of earliest event reported): October 21, 2009
CEL-SCI CORPORATION
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(Exact name of Registrant as specified in its charter)
Colorado 0-11503 84-0916344
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(State or other jurisdiction (Commission File No.) (IRS Employer
of incorporation) Identification No.)
8229 Boone Boulevard, Suite 802
Vienna, Virginia 22182
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(Address of principal executive offices, including Zip Code)
Registrant's telephone number, including area code: (703) 506-9460
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N/A
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(Former name or former address if changed since last report)
Item 2.04 Triggering Events that Accelerate or Increase a Direct Financial
Obligation or an Obligation under an Off-Balance Sheet Arrangement
Pursuant to a Securities Purchase Agreement ("SPA") dated August 4, 2006,
CEL-SCI sold Series K convertible notes, plus Series K warrants, to a group of
private investors for $8,300,000. The notes were subsequently paid in full.
At the holder's option, the Series K notes were convertible into shares of
CEL-SCI's common stock equal in number to the amount determined by dividing each
$1,000 of note principal to be converted by the conversion price. Initially, the
conversion price was $0.86.
The Series K warrants allow the note holders to purchase shares of
CEL-SCI's common stock, initially at a price of $0.95 per share, at any time on
or prior to February 4, 2012.
If CEL-SCI sold any additional shares of common stock, or any securities
convertible into common stock, at a price below the then applicable conversion
price of the notes or the exercise price of the warrants, the conversion price
of the notes and the exercise price of the warrants would be reduced to the
price at which the shares were sold or the lowest price at which the securities
were convertible, as the case may have been.
If the warrant exercise price was decreased, the number of shares of common
stock issuable upon the exercise of the warrant would be increased
proportionately.
However, the conversion price of the Series K notes, the exercise price of
the Series K warrants, and the shares issuable upon the exercise of the warrants
would not be adjusted as the result of shares issued in connection with a
Permitted Financing, as that term was defined in the SPA. A Permitted Financing
included shares of common stock issued or sold in connection with a bona fide
licensing agreement, the primary purpose of which was not to raise cash.
In April 2007, the conversion price of the Series K notes and the exercise
price of the Series K warrants was reduced to $0.75 per share as a result of
shares sold by CEL-SCI below the original conversion price of the notes and the
exercise price of the warrants.
On March 6, 2009 CEL-SCI entered into a licensing agreement with an
unrelated third party. In connection with the licensing agreement, CEL-SCI sold
shares of its common stock to the third party for $0.20 per share, a premium to
the Company's share price at the time.
In June 2009 the conversion price of the Series K notes and the exercise
price of the Series K warrants were reduced to $0.40 per share as a result of
shares sold by CEL-SCI below the conversion price of the notes and the exercise
price of the warrants.
As previously disclosed by CEL-SCI in its public filings, one of the Series
K note holders, Iroquois Master Fund, Ltd. ("Iroquois") advised CEL-SCI that the
conversion price of the Series K notes, as well as the exercise price of the
Series K warrants, should be $0.20 since it did not believe that the sale of
CEL-SCI's shares of its common stock on March 6, 2009 was a Permitted Financing.
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It is CEL-SCI's position that that the shares sold on March 6, 2009 were
sold in connection with a Permitted Financing and did not cause a reduction in
the conversion price of the Series K notes or the exercise price of the Series K
warrants.
On October 21, 2009 Iroquois filed suit against CEL-SCI in the United
States District Court for the Southern District of New York. In its complaint,
alleging, breach of contract, breach of fiduciary duty, conversion, and
negligence, Iroquois seeks $30 million in actual damages, $90 million in
punitive damages, the issuance of an additional 4,264,681 shares of CEL-SCI's
common stock, the issuance of warrants to purchase an additional 6,460,757
shares of CEL-SCI's common stock, and a ruling by the court that the conversion
price of the notes and the exercise price of the warrants are both $0.20.
CEL-SCI believes that Iroquois's claims are without merit and plans to
defend the lawsuit, denying all of Iroquois' claims.
3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Date: October 27, 2009 CEL-SCI CORPORATION
By: /s/ Geert R. Kersten
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Geert R. Kersten, Chief Executive Officer
