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SEC Comment Letter for CEL SCI CORP (CVM) (CIK 0000725363) (CVM) — Mar 27, 2015

CEL SCI CORP (CVM) (CIK 0000725363)
Date: March 27, 2015 · CIK: 0000725363 · Accession: 0000000000-15-018390

AI Filing Summary & Sentiment

Sentiment
Urgency
Document Type
Confidence
SEC Posture
Company Posture

Summary

Reasoning

Date
March 27, 2015
Author
/s/ Bryan J. Pitko for
Form
UPLOAD
Company
CEL SCI CORP (CVM) (CIK 0000725363)

Letter

March 27, 2015 Via E -mail Geert Kersten Chief Executive Officer Cel-Sci Corporation 8229 Boone Blvd., Suite 802 Vienna, Virginia 22182

Re: Cel-Sci Corporation Form 10-K for Fiscal Year Ended September 30, 2014 Filed December 23, 2014 File No. 001 -11889

Dear Mr. Kersten :

We have reviewed your filing an d have the following comments. Please respond to these comments within ten busine ss days by providing the requested information or advis e us as soon as possible when you will respond. If you do not believe our comments apply to your facts and circumstances, please tell us why in your response.

After reviewing your response and any amendment you may file in response to these comments , we may have additional comments.

Business

1. In an appropriately titled subsection, please expand your disclosure in your Business section to include a discussion of your material patents and patent applications, including the following:

 Specific products, product groups and technologies to which such patents or patent applications relate;  Whether the patents or patent applications are owned or licensed from third parties (please identify the relevant party if they are licensed);  Type of patent protection such as composition of matter, use or process;  Patent expiration dates and expected expiration dates for pending patent applications;  Identification of applicable jurisdictions where patents are issued or where patent applications are pending;  Contested proceedings and/or third -party claims over any of your patents or patent applications.

Geert Kersten Cel-Sci Corporation March 27, 2015 Page 2

2. We note your brief discussion of your agreements with Teva Pharmaceutical Industries Ltd., Orient Europharma of Taiwan and Byron Biopharma LLC regarding exclusive licenses to market and distribute Multikine and that yo u have filed these agreements as exhibits pursuant to Item 601(b)(10) of Regulation S -K. Please expand your disclosure regarding each of these agreements to provide the material terms of the agreements, including all of the parties’ rights and obligations , the duration of the agreements, termination provisions and any payment provisions or profit or revenue sharing provisions.

3. We note that you entered into three co -development agreements with Ergomed, one in April 2013 and two in October 2013 . Please expa nd your disclosure to provide the material terms of the agreements, including the duration of the agreements and termination provisions, and any payment provisions for the two October 2013 agreements in addition to the $3 million that Ergomed is contributi ng in clinical and regulatory costs under each agreement. Also, please file each of the agreements as exhibits pursuant to Item 601(b)(10) of Regulation S -K.

Risk Factors, page 10

4. We note that on February 18, 2015 you adopted new bylaws which include a fee shifting provision for shareholder claims in Article X whereby in the event that any shareholder initiates or asserts a claim against you, or any of your officers or directors, including any derivative claim or claim purportedly filed on your behalf, a nd the shareholder does not obtain a judgment on the merits that substantially achieves, in substance and amount, the full remedy sought, then such shareholder shall be obligated to reimburse you and any of your officers or directors for all fees, costs an d expenses of every kind and description that you or your officers or directors may incur in connection with such claim . Please provide proposed risk factor disclosure to be inclu ded in your next periodic report under a separate heading disclosing that yo u have amended your bylaws to include a fee - reimbursement provision. Your risk factor disclosure should include the following information with respect to the scope of the provision :

 The types of actions subject to rei mbursement;  The level of recovery required by the plaintiff to avoid payment (e.g., define “a judgment on the merits” and “substantially achieves, in both substance and amount”); and  Who is subject to the provision (e.g., former and current shareholders, l egal counsel, expert witnesses);  Who would be allowed to recover (e.g. company, directors, officers, affiliates); and  Whether the bylaw is intended to apply to potential federal securities law claims.

Your risk factor disclosure should also note the risk that this provision could possibly discourage shareholder lawsuits that might benefit the company or its shareholders.

Geert Kersten Cel-Sci Corporation March 27, 2015 Page 3

5. We also note that Article X of your amended bylaws provides that shareholder claims must be brought in the U.S. District Court for the district of Delaware and that with respect to any such claim, th e laws of Delaware will apply. Please provide proposed risk factor disclosure to be included in your next periodic report under a separate heading disclosing that you have amended your by laws to include an exclusive forum provision. Please also highlight that such provisions may limit a shareholder’s ability to bring a claim in a judicial forum that it finds favorable for disputes with directors, officers or other employees, and may disco urage lawsuits with respect to such claims.

Executive Compensation Stock Option, Bonus and Compensation Plans, page 46

6. We note that you have an Incentive Stock Option Plan, a Non -Qualified Stock Option Plan, a Stock Bonus Plan, a Stock Compensation Pla n and an Incentive Stock Bonus Plan. Please file these plans as exhibits.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure in the filing to be certain that the filing includes the information the Securities Exchange Act of 1934 and all applicable Exchange Act rules require. Since the company and its management are in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy and adequacy of the disclosures they have made.

In responding to our comments, please provide a written statement from the company acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the Uni ted States.

You may contact Johnny Gharib at (202) 551 -3170, Bryan Pitko at (202) 551 -3203 or me at (202) 551 -3715 with any questions.

Sincerely,
/s/ Bryan J. Pitko for

Show Raw Text
March 27, 2015

Via E -mail
Geert Kersten
Chief Executive Officer
Cel-Sci Corporation
8229 Boone Blvd., Suite 802
Vienna, Virginia 22182

Re: Cel-Sci Corporation
 Form 10-K for Fiscal Year Ended September 30, 2014
Filed December 23, 2014
File No. 001 -11889

Dear Mr. Kersten :

We have reviewed your filing an d have the following comments.  Please respond to these
comments  within ten busine ss days by providing the requested information or advis e us as soon
as possible when you will respond.  If you do not believe our comments apply to your facts and
circumstances, please tell us why in your response.

After reviewing your response and any amendment you may file in response to these
comments , we may have  additional comments.

Business

1. In an appropriately titled subsection, please expand your disclosure in your Business
section to include a discussion of your material patents and patent applications, including
the following:

 Specific products, product groups and technologies to which such patents or
patent applications relate;
 Whether the patents or patent applications are owned or licensed from third
parties (please identify the relevant party if they are licensed);
 Type of patent protection such as composition of matter, use or process;
 Patent expiration dates and expected expiration dates for pending patent
applications;
 Identification of applicable jurisdictions where patents are issued or where patent
applications are pending;
 Contested proceedings and/or third -party claims over any of your patents or
patent applications.

Geert Kersten
Cel-Sci Corporation
March 27, 2015
Page 2

 2. We note your brief discussion of your agreements with Teva Pharmaceutical Industries
Ltd., Orient Europharma of Taiwan and Byron Biopharma LLC regarding exclusive
licenses to market and distribute Multikine and that yo u have filed these agreements as
exhibits pursuant to Item 601(b)(10) of Regulation S -K.  Please expand your disclosure
regarding each of these agreements to provide the material terms of the agreements,
including all of the parties’ rights and obligations , the duration of the agreements,
termination provisions and any payment provisions or profit or revenue sharing
provisions.

3. We note that you entered into three co -development agreements with Ergomed, one in
April 2013 and two in October 2013 .  Please expa nd your disclosure to provide the
material terms of the agreements, including the duration of the agreements and
termination provisions, and any payment provisions for the two October 2013 agreements
in addition to the $3 million that Ergomed is contributi ng in clinical and regulatory costs
under each agreement.  Also, please file each of the agreements as exhibits pursuant to
Item 601(b)(10) of Regulation S -K.

Risk Factors, page 10

4. We note that on February 18, 2015 you adopted new bylaws which include a fee shifting
provision for shareholder claims in Article X whereby in the event that any shareholder
initiates or asserts a claim against you, or any of your officers or directors, including any
derivative claim or claim purportedly filed on your behalf, a nd the shareholder does not
obtain a judgment on the merits that substantially achieves, in substance and amount, the
full remedy sought, then such shareholder shall be obligated to reimburse you and any of
your officers or directors for all fees, costs an d expenses of every kind and description
that you or your officers or directors may incur in connection with such claim .  Please
provide proposed risk factor disclosure to be inclu ded in your next periodic report under a
separate heading disclosing that yo u have amended your bylaws to include a fee -
reimbursement provision.  Your risk  factor disclosure should include the following
information  with respect to the scope  of the provision :

 The types of actions subject to rei mbursement;
 The level of recovery required by the plaintiff to avoid payment (e.g., define “a
judgment on the merits” and “substantially achieves, in both substance and
amount”); and
 Who is subject to the provision (e.g., former and current shareholders, l egal
counsel, expert witnesses);
 Who would be allowed to recover (e.g. company, directors, officers, affiliates);
and
 Whether the bylaw is intended to apply to potential federal securities law claims.

Your risk factor disclosure should also note the risk that this provision could possibly
discourage shareholder lawsuits that might benefit the company or its shareholders.

Geert Kersten
Cel-Sci Corporation
March 27, 2015
Page 3

5. We also note that Article X of your amended bylaws provides that shareholder claims
must be brought in the U.S. District Court for the district of Delaware and that with
respect to any such claim, th e laws of Delaware will apply.  Please provide proposed risk
factor disclosure to be included in your next periodic report under a separate heading
disclosing that you have amended your by laws to include an exclusive forum provision.
Please also highlight that such provisions may limit a shareholder’s ability to bring a
claim in a judicial forum that it finds favorable for disputes with directors, officers or
other employees, and may disco urage lawsuits with respect to such claims.

Executive Compensation
Stock Option, Bonus and Compensation Plans, page 46

6. We note that you have an Incentive Stock Option Plan, a Non -Qualified Stock Option
Plan, a Stock Bonus Plan, a Stock Compensation Pla n and an Incentive Stock Bonus
Plan.  Please file these plans as exhibits.

We urge all persons who are responsible for the accuracy and adequacy of the disclosure
in the filing to be certain that the filing includes the information the Securities Exchange  Act of
1934 and all applicable Exchange Act rules require.   Since the company and its management are
in possession of all facts relating to a company’s disclosure, they are responsible for the accuracy
and adequacy of the disclosures they have made.

 In responding to our comments, please provide  a written statement from the company
acknowledging that:

 the company is responsible for the adequacy and accuracy of the disclosure in the filing;

 staff comments or changes to disclosure in response to staff comments do not foreclose
the Commission from taking any action with respect to the filing; and

 the company may not assert staff comments as a defense in any proceeding initiated by
the Commission or any person under the federal securities laws of the Uni ted States.

You may contact Johnny Gharib  at (202) 551 -3170, Bryan Pitko at (202) 551 -3203  or me
at (202) 551 -3715  with any  questions.

Sincerely,

 /s/ Bryan J. Pitko for

 Jeffrey P. Riedler
Assistant Director