CELSCISci Corp (CVM, Financial) filed Amended Quarterly Report for the period ended 2008-12-31.
Celscisci Corp has a market cap of $115.8 million; its shares were traded at around $0.71 with and P/S ratio of 1428.6.
cash totaling $612,311 and $1,653,800, respectively. For the three months ended
December 31, 2008 and 2007, cash used in operating activities totaled $1,159,800
and $1,440,094. For the three months ended December 31, 2008 and 2007, cash
provided by financing activities totaled $114,922 and cash used by financing
activities totaled $180,597, respectively. Private placement proceeds of
$499,982 and receipt of the short-term loan of $100,000 provided funds. The
repayment of convertible notes ($270,000), financing costs (15,060) and the
repayment of the short-term loan ($200,000) was used in financing activities
during the three months ended December 31, 2008. For the three months ended
December 31, 2007, cash was provided by financing was from the exercise of
employee options ($14,403). Repayment of convertible notes of $195,000 used cash
in financing activities. Cash provided by investing activities was $432,567 and
$33,109 was used in investing activities for the three months ended December 31,
2008 and 2007, respectively. The use of cash in investing activities consisted
of purchases of equipment and legal costs incurred in patent applications and,
for the three months ended December 31, 2008, the sale of the final $200,000 in
ARPs.
The Company has two partners who have agreed to participate in and pay for part
of the Phase III clinical trial for Multikine. However in light of the current
capital market environment, the Company believes it is prudent not to start the
Phase III clinical trial until it has firm commitments in the form of
partnerships and/or money raised for a substantial amount of cash to support the
Phase III clinical trial. In the meantime, the Company will operate at
significantly reduced cash expenditure levels and additional cash may be raised
by offering contract manufacturing services to the pharmaceutical industry in
its new manufacturing facility. The Company expects that it will need to raise
additional capital in fiscal year 2009 in the form of corporate partnerships
and/or equity financings to support its operations at its current rate. The
Company is currently working towards a transaction which it expects to complete
in fiscal 2009 which will finance its Phase III clinical trial of Multikine. The
Company believes that it will be able to obtain additional financing since
Multikine is a Phase III product designed to treat cancer, an area that
pharmaceutical companies are increasingly targeting. The Company is working on a
sale-leaseback program for the equipment it owns which would provide the Company
approximately $1.5 million in additional cash. It is important to note that the
Company's expenditures for fiscal year 2008 included several very large
non-recurring expenses that amounted to several million dollars, mostly related
to the build out of the manufacturing facility. These expenses will not recur in
fiscal year 2009, thereby reducing the Company's expenditures significantly.
Beyond those savings the Company has also made other very significant cuts in
its expenditures. In addition, the Company has put in place a $5 million Equity
Line of Credit (see Note E). With this Equity Line of Credit in place the
Company believes it will have the required capital to continue operations into
March 2010. However, if necessary the Company can make further reductions in
expenditures by a reduction in force or by implementation of a salary reduction
program.
The Company has determined that the convertible debt holders of the Series K
Notes may require repayment of the entire remaining principal balance at any
time after August 4, 2009. This debt can be paid in stock and may not require a
cash payment. In addition, in December 2008, CEL-SCI was not in compliance with
certain lease requirements (i.e., failure to pay an installment of Base Annual
Rent). However, the landlord has not declared the Company formally in default
under the terms of the lease and has renegotiated the lease. The landlord
currently has the right to declare the Company in default if the Company fails
to pay any installment of the Base Annual Rent when such failure continues for a
period of 5 business days after the Company's receipt of written notice thereof
from the Landlord, provided that if the Company fails to pay any of the
foregoing within 5 business days more than two (2) times in any twelve (12)
month period during the lease term, the Landlord shall not be required to
provide the Company with any further notice and the Company shall be deemed to
be in default. Per the renegotiated lease (see Note L), the landlord has agreed
to defer 3 months (December - February) of rent which will be paid back
incrementally only after future financings. CEL-SCI then will begin paying basic
annual rent starting in March 2009 and failure to pay the entire monthly
installment thereafter shall constitute a material default under the lease. In
return, CEL-SCI extended 3,000,000 warrants by one year and repriced these
warrants from $1.25 to $0.75 and the landlord was issued an additional 787,000
warrants at $0.75. Both warrants expire on January 26, 2014.
During the three-month period ended December 31, 2008, general and
administrative expenses decreased by $730,623 compared to the three-month period
ended December 31, 2007. This decrease is caused by the Company having extended
and repriced options during the three-month period ended December 31, 2007 of
$465,008 and the expensing of stock issued to employees in the three-month
period ended December 31, 2007 of $378,350 compared to a cost of employee stock
issued in prior periods but expensed in the three-month period ended December
31, 2008 of only $40,686, a decrease of $337,664. This decrease from December
31, 2007 to December 31, 2008 was partially offset by higher insurance costs of
approximately $16,500.
The interest expense of $84,616 for the three months ended December 31, 2008 was
composed of three elements: 1) amortization of the Series K discount ($43,649),
2) interest paid and accrued on the Series K debt ($40,154) and 3) margin
interest ($813). This is a decline of approximately $59,400 from the three
months ended December 31, 2007 because of the lower balance of Series K debt.
$3,150,000 towards the remodeling costs, which will be recouped by reductions in
the annual base rent of $303,228 in years six through twenty of the lease. In
January 2008, the Company signed a second amendment to the lease. In accordance
with the lease, on February 8, 2008, the Company paid an additional $1,295,528
toward the remodeling costs and a further $518,790 to pay for lab equipment. In
addition, in April 2008, an additional $288,474 was paid for the completion of
the facility. The Company took possession of the manufacturing facility in
October, 2008.
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Celscisci Corp has a market cap of $115.8 million; its shares were traded at around $0.71 with and P/S ratio of 1428.6.
Highlight of Business Operations:
During the three-month period ended December 31, 2008 and 2007, the Company usedcash totaling $612,311 and $1,653,800, respectively. For the three months ended
December 31, 2008 and 2007, cash used in operating activities totaled $1,159,800
and $1,440,094. For the three months ended December 31, 2008 and 2007, cash
provided by financing activities totaled $114,922 and cash used by financing
activities totaled $180,597, respectively. Private placement proceeds of
$499,982 and receipt of the short-term loan of $100,000 provided funds. The
repayment of convertible notes ($270,000), financing costs (15,060) and the
repayment of the short-term loan ($200,000) was used in financing activities
during the three months ended December 31, 2008. For the three months ended
December 31, 2007, cash was provided by financing was from the exercise of
employee options ($14,403). Repayment of convertible notes of $195,000 used cash
in financing activities. Cash provided by investing activities was $432,567 and
$33,109 was used in investing activities for the three months ended December 31,
2008 and 2007, respectively. The use of cash in investing activities consisted
of purchases of equipment and legal costs incurred in patent applications and,
for the three months ended December 31, 2008, the sale of the final $200,000 in
ARPs.
The Company has two partners who have agreed to participate in and pay for part
of the Phase III clinical trial for Multikine. However in light of the current
capital market environment, the Company believes it is prudent not to start the
Phase III clinical trial until it has firm commitments in the form of
partnerships and/or money raised for a substantial amount of cash to support the
Phase III clinical trial. In the meantime, the Company will operate at
significantly reduced cash expenditure levels and additional cash may be raised
by offering contract manufacturing services to the pharmaceutical industry in
its new manufacturing facility. The Company expects that it will need to raise
additional capital in fiscal year 2009 in the form of corporate partnerships
and/or equity financings to support its operations at its current rate. The
Company is currently working towards a transaction which it expects to complete
in fiscal 2009 which will finance its Phase III clinical trial of Multikine. The
Company believes that it will be able to obtain additional financing since
Multikine is a Phase III product designed to treat cancer, an area that
pharmaceutical companies are increasingly targeting. The Company is working on a
sale-leaseback program for the equipment it owns which would provide the Company
approximately $1.5 million in additional cash. It is important to note that the
Company's expenditures for fiscal year 2008 included several very large
non-recurring expenses that amounted to several million dollars, mostly related
to the build out of the manufacturing facility. These expenses will not recur in
fiscal year 2009, thereby reducing the Company's expenditures significantly.
Beyond those savings the Company has also made other very significant cuts in
its expenditures. In addition, the Company has put in place a $5 million Equity
Line of Credit (see Note E). With this Equity Line of Credit in place the
Company believes it will have the required capital to continue operations into
March 2010. However, if necessary the Company can make further reductions in
expenditures by a reduction in force or by implementation of a salary reduction
program.
The Company has determined that the convertible debt holders of the Series K
Notes may require repayment of the entire remaining principal balance at any
time after August 4, 2009. This debt can be paid in stock and may not require a
cash payment. In addition, in December 2008, CEL-SCI was not in compliance with
certain lease requirements (i.e., failure to pay an installment of Base Annual
Rent). However, the landlord has not declared the Company formally in default
under the terms of the lease and has renegotiated the lease. The landlord
currently has the right to declare the Company in default if the Company fails
to pay any installment of the Base Annual Rent when such failure continues for a
period of 5 business days after the Company's receipt of written notice thereof
from the Landlord, provided that if the Company fails to pay any of the
foregoing within 5 business days more than two (2) times in any twelve (12)
month period during the lease term, the Landlord shall not be required to
provide the Company with any further notice and the Company shall be deemed to
be in default. Per the renegotiated lease (see Note L), the landlord has agreed
to defer 3 months (December - February) of rent which will be paid back
incrementally only after future financings. CEL-SCI then will begin paying basic
annual rent starting in March 2009 and failure to pay the entire monthly
installment thereafter shall constitute a material default under the lease. In
return, CEL-SCI extended 3,000,000 warrants by one year and repriced these
warrants from $1.25 to $0.75 and the landlord was issued an additional 787,000
warrants at $0.75. Both warrants expire on January 26, 2014.
During the three-month period ended December 31, 2008, general and
administrative expenses decreased by $730,623 compared to the three-month period
ended December 31, 2007. This decrease is caused by the Company having extended
and repriced options during the three-month period ended December 31, 2007 of
$465,008 and the expensing of stock issued to employees in the three-month
period ended December 31, 2007 of $378,350 compared to a cost of employee stock
issued in prior periods but expensed in the three-month period ended December
31, 2008 of only $40,686, a decrease of $337,664. This decrease from December
31, 2007 to December 31, 2008 was partially offset by higher insurance costs of
approximately $16,500.
The interest expense of $84,616 for the three months ended December 31, 2008 was
composed of three elements: 1) amortization of the Series K discount ($43,649),
2) interest paid and accrued on the Series K debt ($40,154) and 3) margin
interest ($813). This is a decline of approximately $59,400 from the three
months ended December 31, 2007 because of the lower balance of Series K debt.
$3,150,000 towards the remodeling costs, which will be recouped by reductions in
the annual base rent of $303,228 in years six through twenty of the lease. In
January 2008, the Company signed a second amendment to the lease. In accordance
with the lease, on February 8, 2008, the Company paid an additional $1,295,528
toward the remodeling costs and a further $518,790 to pay for lab equipment. In
addition, in April 2008, an additional $288,474 was paid for the completion of
the facility. The Company took possession of the manufacturing facility in
October, 2008.
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