VIENNA, Va., Jan. 17 /PRNewswire-FirstCall/ -- CEL-SCI CORPORATION reports financial results for the fiscal year ending September 30, 2006.
CEL-SCI reports a net operating loss for fiscal year 2006 of $5,349,196 versus a net operating loss of $4,080,767 in fiscal year 2005.
During the year ended September 30, 2006, general and administrative expenses increased by about $1,476,000. The increase was mostly due to: 1) costs related to the restatement of the financial statements, 2) an increase in public relations and corporate presentation expenses, 3) an increase in filing and registration fees and 4) the employee stock option expense required by SFAS 123R. Many of the expenses listed above are non-cash charges.
The issuance of the Series K convertible debt in the summer of 2006 resulted in an additional charge of approximately $4,791,500. This charge included $568,710 paid as fees to the agent, legal fees and $223,907 in placement warrants issued to the agent. The remaining $3,998,800 (approximate) represent the immediate charge upon issuance of the convertible debt for the fair value accounting for the debt and the warrants. This charge is a non-cash charge. The interest expense of $216,737 is a result of the amortization of the discount on the convertible debt ($104,351) and actual interest paid in stock and cash ($112,386) for the interest expense on the Series K convertible debt.
The gain on derivative instruments of approximately $2,325,800 for the year ended September 30, 2006 was the result of several factors: 1) a decrease in the value of the stock between the date of the issuance (August 2006) of the Series K convertible debt and September 30, 2006 resulted in the biggest part of the gain (approximately $2,311,000), 2) reclassification to equity of all previous derivative instruments (approximately $13,300), and 3) expiration of the Series E warrants (approximately $1,500). CEL-SCI's future financial statements are expected to show significant gains and losses on derivative instruments due to the requirement to mark the value of the convertible debt to market, as measured by the stock price of CEL-SCI's common stock.
CEL-SCI Corporation is developing new immune system-based treatments for cancer and infectious diseases. The Company has operations in Vienna, Virginia and Baltimore, Maryland.
CEL-SCI CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS YEARS ENDED SEPTEMBER 30, 2006 and 2005 2006 2005 GRANT REVENUE AND OTHER $125,457 $269,925 OPERATING EXPENSES: Research and development (excluding R&D depreciation of $74,043 and $96,442 respectively, included below) 1,896,976 2,229,729 Depreciation and amortization 170,902 190,420 General & administrative 3,406,775 1,930,543 Total operating expenses 5,474,653 4,350,692 NET OPERATING LOSS (5,349,196) (4,080,767) GAIN ON DERIVATIVE INSTRUMENTS 2,325,784 363,028 COSTS ASSOCIATED WITH CONVERTIBLE DEBT (4,791,548) - OTHER INCOME - 625,472 INTEREST INCOME 92,487 52,660 INTEREST EXPENSE (216,737) - NET LOSS BEFORE INCOME TAXES $(7,939,210) $(3,039,607) INCOME TAX PROVISION - - NET LOSS $(7,939,210) (3,039,607) NET LOSS PER COMMON SHARE BASIC $(0.10) $(0.04) DILUTED $(0.11) $(0.05) WEIGHTED AVERAGE COMMON SHARES OUTSTANDING BASIC 78,971,290 72,703,395 DILUTED 93,834,078 73,581,925 See notes to consolidated financial statements.
CEL-SCI CorporationCONTACT: Gavin de Windt of CEL-SCI Corporation, +1-703-506-9460
Web site: http://www.cel-sci.com/
