PART I FINANCIAL INFORMATION
| Item 1. | Page |
| Condensed Balance Sheets at March 31, 2023 (unaudited) and September 30, 2022 | 3 |
| Condensed Statements of Operations for the six months ended March 31, 2023 and 2022 (unaudited) | 4 |
| Condensed Statements of Operations for the three months ended March 31, 2023 and 2022 (unaudited) | 5 |
| Condensed Statement of Stockholders’ Equity for the three and six months ended March 31, 2023 and 2022 (unaudited) | 6 |
| Condensed Statements of Cash Flows for the six months ended March 31, 2023 and 2022 (unaudited) | 8 |
| Notes to Condensed Financial Statements (unaudited) | 10 |
| Item 2. | Management's Discussion and Analysis of Financial Condition and Results of Operations | 21 |
| Item 3. | Quantitative and Qualitative Disclosures about Market Risks | 25 |
| Item 4. | Controls and Procedures | 25 |
| PART II |
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds | 26 |
| Item 6. | Exhibits | 26 |
| Signatures | 27 |

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| CEL-SCI CORPORATION |
| CONDENSED BALANCE SHEETS |
| MARCH 31, | SEPTEMBER 30, |
| ASSETS | 2023 | 2022 |
| (UNAUDITED) |
| Current assets: |
| Cash and cash equivalents | $ | 10,046,344 | $ | 22,672,138 |
| Prepaid expenses | 598,377 | 762,063 |
| Supplies used for R&D and manufacturing | 1,893,683 | 2,001,715 |
| Deposits | 35,622 | - |
| Total current assets | 12,574,026 | 25,435,916 |
| Finance lease right of use assets | 10,034,892 | 10,937,797 |
| Operating lease right of use assets | 1,793,399 | 1,884,464 |
| Property and equipment, net | 11,179,697 | 11,889,029 |
| Patent costs, net | 192,231 | 212,201 |
| Deposits | 2,319,101 | - |
| Supplies used for R&D and manufacturing | 101,897 | 164,299 |
| Total assets | $ | 38,195,243 | $ | 50,523,706 |
| LIABILITIES AND STOCKHOLDERS' EQUITY |
| Current liabilities: |
| Accounts payable | $ | 1,888,911 | $ | 1,618,290 |
| Accrued expenses | 1,064,007 | 842,492 |
| Due to employees | 509,286 | 471,488 |
| Lease liabilities, current portion | 1,849,749 | 1,731,481 |
| Total current liabilities | 5,311,953 | 4,663,751 |
| Finance lease obligations, net of current portion | 10,855,289 | 11,721,368 |
| Operating lease obligations, net of current portion | 1,755,401 | 1,850,380 |
| Other liabilities | 125,000 | 125,000 |
| Total liabilities | 18,047,643 | 18,360,499 |
| Commitments and contingencies |
| STOCKHOLDERS' EQUITY |
| Preferred stock, $ 0.01 par value; 200,000 shares authorized; 0 shares issued and outstanding | - | - |
| Common stock, $ 0.01 par value; 600,000,000 shares authorized; 43,787,825 and 43,448,317 shares issued and outstanding at March 31, 2023 and September 30, 2022, respectively | 437,878 | 434,484 |
| Additional paid-in capital | 490,803,133 | 486,625,816 |
| Accumulated deficit | ( 471,093,411 | ) | ( 454,897,093 | ) |
| Total stockholders' equity | 20,147,600 | 32,163,207 |
| TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ | 38,195,243 | $ | 50,523,706 |
| See notes to condensed financial statements. |

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| CEL-SCI CORPORATION |
| CONDENSED STATEMENTS OF OPERATIONS |
| SIX MONTHS ENDED MARCH 31, 2023 and 2022 |
| (UNAUDITED) |
| 2023 | 2022 |
| Operating expenses: |
| Research and development | $ | 11,476,034 | $ | 12,606,984 |
| General and administrative | 4,350,761 | 5,788,250 |
| Total operating expenses | 15,826,795 | 18,395,234 |
| Operating loss | ( 15,826,795 | ) | ( 18,395,234 | ) |
| Gain on derivative instruments | - | 366,791 |
| Other non-operating losses | - | ( 30,793 | ) |
| Interest expense, net | ( 311,852 | ) | ( 546,862 | ) |
| Other expense | ( 57,671 | ) | - |
| Net loss | ( 16,196,318 | ) | ( 18,606,098 | ) |
| Modification of warrants | ( 171,552 | ) | - |
| Net loss available to common shareholders | $ | ( 16,367,870 | ) | $ | ( 18,606,098 | ) |
| Net loss per common share – basic and diluted | $ | ( 0.38 | ) | $ | ( 0.43 | ) |
| Weighted average common shares outstanding – basic and diluted | 43,513,571 | 43,100,070 |
| See notes to condensed financial statements. |

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| CEL-SCI CORPORATION |
| CONDENSED STATEMENTS OF OPERATIONS |
| THREE MONTHS ENDED MARCH 31, 2023 and 2022 |
| (UNAUDITED) |
| 2023 | 2022 |
| Operating expenses: |
| Research and development | $ | 6,083,488 | $ | 6,523,817 |
| General and administrative | 2,092,758 | 3,028,042 |
| Total operating expenses | 8,176,246 | 9,551,859 |
| Operating loss | ( 8,176,246 | ) | ( 9,551,859 | ) |
| Gain on derivative instruments | - | 2,195 |
| Interest expense, net | ( 159,063 | ) | ( 273,828 | ) |
| Other expense | ( 7,500 | ) | - |
| Net loss | ( 8,342,809 | ) | ( 9,823,492 | ) |
| Net loss available to common shareholders | $ | ( 8,342,809 | ) | $ | ( 9,823,492 | ) |
| Net loss per common share – basic and diluted | $ | ( 0.19 | ) | $ | ( 0.23 | ) |
| Weighted average common shares outstanding – basic and diluted | 43,588,381 | 43,122,671 |
| See notes to condensed financial statements. |

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CEL-SCI CORPORATION
STATEMENTS OF STOCKHOLDERS’ EQUITY
(UNAUDITED)
| Additional |
| Common Stock | Paid-In | Accumulated |
| Shares | Amount | Capital | Deficit | Total |
| BALANCES AT SEPTEMBER 30, 2022 | 43,448,317 | 434,484 | 486,625,816 | ( 454,897,093 ) | 32,163,207 |
| Warrant exercises | 217,752 | 2,177 | 445,114 | - | 447,291 |
| Equity based compensation - employees | - | - | 1,703,931 | - | 1,703,931 |
| 401(k) contributions paid in common stock | 21,331 | 213 | 49,965 | - | 50,178 |
| Stock and options issued to nonemployees for service | 40,236 | 402 | 91,221 | - | 91,623 |
| 2014 Incentive Stock Forfeited | ( 2,000 ) | ( 20 ) | ( 11,080 ) | - | ( 11,100 ) |
| Net loss | - | - | - | ( 7,853,509 ) | ( 7,853,509 ) |
| BALANCES AT DECEMBER 31, 2022 | 43,725,636 | 437,256 | 488,904,967 | ( 462,750,602 ) | 26,591,621 |
| Equity based compensation - employees | - | - | 1,743,288 | - | 1,743,288 |
| 401(k) contributions paid in common stock | 23,627 | 236 | 54,629 | - | 54,865 |
| Stock and options issued to nonemployees for service | 38,562 | 386 | 100,249 | - | 100,635 |
| Net loss | - | - | - | ( 8,342,809 ) | ( 8,342,809 ) |
| BALANCES AT MARCH 31, 2023 | 43,787,825 | 437,878 | 490,803,133 | ( 471,093,411 ) | 20,147,600 |

See notes to condensed financial statements.
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| Additional |
| Common Stock | Paid-In | Accumulated |
| Shares | Amount | Capital | Deficit | Total |
| BALANCES AT SEPTEMBER 30, 2021 | 43,207,183 | 432,072 | 474,298,566 | ( 418,196,412 | ) | 56,534,226 |
| Warrant exercises | 19,705 | 197 | 157,757 | - | 157,954 |
| Equity based compensation - employees | - | - | 3,262,296 | - | 3,262,296 |
| 401(k) contributions paid in common stock | 7,605 | 76 | 52,479 | - | 52,555 |
| Stock and options issued to nonemployees for service | 18,020 | 180 | 142,980 | - | 143,160 |
| Option exercises | 6,500 | 65 | 29,770 | - | 29,835 |
| Share issuance costs | - | - | ( 45,965 | ) | - | ( 45,965 | ) |
| Net loss | - | - | - | ( 8,782,606 | ) | ( 8,782,606 | ) |
| BALANCES AT DECEMBER 31, 2021 | 43,259,013 | 432,590 | 477,897,883 | ( 426,979,018 | ) | 51,351,455 |
| Warrant exercises | 5,500 | 55 | 13,805 | - | 13,860 |
| Equity based compensation - employees | - | - | 3,392,706 | - | 3,392,706 |
| 401(k) contributions paid in common stock | 14,614 | 146 | 57,371 | - | 57,517 |
| Stock and options issued to nonemployees for service | 25,475 | 255 | 139,797 | - | 140,052 |
| Share issuance costs | - | - | ( 4,550 | ) | - | ( 4,550 | ) |
| Net loss | - | - | - | ( 9,823,492 | ) | ( 9,823,492 | ) |
| BALANCES AT MARCH 31, 2022 | 43,304,602 | 433,046 | 481,497,012 | ( 436,802,510 | ) | 45,127,548 |

See notes to condensed financial statements.
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| CEL-SCI CORPORATION |
| CONDENSED STATEMENTS OF CASH FLOWS |
| SIX MONTHS ENDED MARCH 31, 2023 and 2022 |
| (UNAUDITED) |
| 2023 | 2022 |
| Net loss | $ | ( 16,196,318 | ) | $ | ( 18,606,098 | ) |
| Adjustments to reconcile net loss to |
| net cash used in operating activities: |
| Depreciation and amortization | 1,973,982 | 1,867,192 |
| Non-cash lease expense | 9,545 | 43,594 |
| Share-based payments for services | 285,722 | 402,270 |
| Equity-based compensation | 3,436,119 | 6,655,002 |
| Common stock contributed to 401(k) plan | 105,043 | 110,072 |
| Gain on short-term investments | - | ( 615 | ) |
| Loss on patent impairment | - | 30,793 |
| Gain on derivative instruments | - | ( 366,791 | ) |
| Loss on Receivables | - | 54,922 |
| (Increase)/decrease in assets: |
| Prepaid expenses | 180,222 | 2,552 |
| Supplies used for R&D and manufacturing | 170,434 | 1,288 |
| Deposits | ( 2,354,723 | ) | 1,910,917 |
| Increase/(decrease) in liabilities: |
| Accounts payable | 102,841 | 46,033 |
| Accrued expenses | 111,515 | 89,149 |
| Due to employees | 37,798 | 222,112 |
| Net cash used in operating activities | ( 12,137,820 | ) | ( 7,537,608 | ) |
| CASH FLOWS FROM INVESTING ACTIVITIES: |
| Proceeds from maturity of US treasury bills | - | 6,152,000 |
| Purchases of property and equipment | ( 165,032 | ) | ( 550,861 | ) |
| Expenditures for patent costs | - | ( 22,741 | ) |
| Net cash (used in) provided by investing activities | ( 165,032 | ) | 5,578,398 |
| CASH FLOWS FROM FINANCING ACTIVITIES: |
| Payments of stock issuance costs | ( 9,010 | ) | ( 45,965 | ) |
| Proceeds from exercises of warrants | 447,291 | 101,225 |
| Proceeds from the exercises of options | - | 29,835 |
| Proceeds from landlord funding of lease improvements | - | 786,454 |
| Payments on obligations under finance leases | ( 761,223 | ) | ( 689,615 | ) |
| Net cash (used in) provided by financing activities | ( 322,942 | ) | 181,934 |
| NET DECREASE IN CASH AND CASH EQUIVALENTS | ( 12,625,794 | ) | ( 1,777,276 | ) |
| CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD | 22,672,138 | 36,060,148 |
| CASH AND CASH EQUIVALENTS, END OF PERIOD | $ | 10,046,344 | $ | 34,282,872 |
| See notes to condensed financial statements. |

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| CEL-SCI CORPORATION |
| CONDENSED STATEMENTS OF CASH FLOWS |
| SIX MONTHS ENDED MARCH 31, 2023 and 2022 |
| 2023 | 2022 |
| SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: |
| Property and equipment purchases included in current liabilities | $ | 176,743 | $ | 32,549 |
| Finance lease obligation included in accounts payable | $ | 1,402 | $ | 374 |
| Prepaid consulting services paid with issuance of common stock | $ | 192,258 | $ | 354,853 |
| Exercise of derivative liabilities | $ | - | $ | 70,589 |
| Modification of finance leases | $ | - | $ | 16,268 |
| Financing costs included in current liabilities | $ | - | $ | 4,550 |
| Accrued consulting services to be paid with common stock | $ | 165,000 | $ | 165,000 |
| Cash paid for interest | $ | 547,765 | $ | 578,837 |
| See notes to condensed financial statements. |

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CEL-SCI CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
SIX MONTHS ENDED MARCH 31, 2023 AND 2022 (UNAUDITED)
A. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation
The accompanying condensed financial statements of CEL-SCI Corporation (the Company) are unaudited and certain information and footnote disclosures normally included in the annual financial statements prepared in accordance with accounting principles generally accepted in the United States of America have been omitted pursuant to the rules and regulations of the Securities and Exchange Commission. While management of the Company believes that the disclosures presented are adequate to make the information presented not misleading, these interim condensed financial statements should be read in conjunction with the financial statements and notes included in the Company’s annual report on Form 10-K for the year ended September 30, 2022.
In the opinion of management, the accompanying unaudited condensed financial statements contain all adjustments necessary for a fair presentation of the Company’s financial position as of March 31, 2023 and the results of its operations for the six months then ended. The condensed balance sheet as of September 30, 2022 is derived from the September 30, 2022 audited financial statements.
Due to recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty. Refer to discussion in Note B.
Summary of Significant Accounting Policies:
Cash and Cash Equivalents – Cash and cash equivalents consist principally of unrestricted cash on deposit and short-term money market funds. The Company considers all highly liquid investments with a maturity when purchased of less than three months to be cash and cash equivalents.
U.S. Treasury Bills – U.S. Treasury Bills (“T-bills”) are highly liquid short-term investments with maturity dates of greater than 3 months, but less than one year. These investments are recorded at fair value.
Property and Equipment – Property and equipment is recorded at cost and depreciated using the straight-line method over estimated useful lives of five to seven years. Leasehold improvements are depreciated over the shorter of the estimated useful life of the asset or the term of the lease. Repairs and maintenance which do not extend the life of the asset are expensed when incurred. Property and equipment is reviewed on a quarterly basis to determine if any of the assets are impaired.
Supplies used for R&D and manufacturing – Supplies are consumable items kept on hand to support the Company’s R&D and manufacturing operations. Supplies are recorded at cost and are charged to expense as they are used in operations.
Patents - Patent expenditures are capitalized and amortized using the straight-line method over the shorter of the expected useful life or the legal life of the patent (17 years). In the event changes in technology or other circumstances impair the value or life of the patent, appropriate adjustments to the asset value and period of amortization are made. An impairment loss is recognized when estimated future undiscounted cash flows expected to result from the use of the asset, and from disposition, are less than the carrying value of the asset. The amount of the impairment loss would be the difference between the estimated fair value of the asset and its carrying value.
Leases – The Company accounts for contracts that convey the right to control the use of identified property, plant or equipment over a period of time in exchange for consideration as leases upon inception. The Company leases certain real estate, machinery, laboratory equipment and office equipment over varying periods. Many of these leases include an option to either renew or terminate the lease. For purposes of calculating lease liabilities, these options are included in the lease term when it is reasonably certain that the Company will exercise such options. The incremental borrowing rate utilized to calculate the lease liabilities is based on the information available at the commencement date, as most of the leases do not provide an implicit borrowing rate. Short-term leases, defined as leases with initial terms of 12 months or less, are not reflected on the balance sheet. Lease expense for such short-term leases is not material.
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Derivative Instruments – The Company has financing arrangements that consist of freestanding derivative instruments that contain embedded derivative features. The Company accounts for these arrangements in accordance with Accounting Standards Codification (ASC) 815, Accounting for Derivative Instruments and Hedging Activities. In accordance with ASC 815, derivative instruments and hybrid instruments are recognized as either assets or liabilities on the balance sheet and are measured at fair value with gains or losses recognized in earnings or other comprehensive income depending on the nature of the derivative or hybrid instruments. The Company determines the fair value of derivative instruments and hybrid instruments based on available market data using appropriate valuation models considering all the rights and obligations of each instrument. The derivative liabilities are re-measured at fair value at the end of each interim period.
The Company adopted Accounting Standards Update (ASU) 2020-06, Debt—Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging—Contracts in an Entity’s Own Equity (Subtopic 815-40): Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity effective October 1, 2021. The amendments in this Update simplify and clarify the guidance in Subtopic 815-40. There was no financial impact in the period of adoption.
Stock-Based Compensation – Compensation cost for all stock-based awards is measured at fair value as of the grant date in accordance with the provisions of ASC 718, Compensation – Stock Compensation. The fair value of stock options is calculated using the Black-Scholes option pricing model. The Black-Scholes model requires various judgmental assumptions including volatility and expected option life. The stock-based compensation cost is recognized using the straight-line allocation method as expense over the requisite service or vesting period.
The Company has Incentive Stock Option Plans, Non-Qualified Stock Option Plans, Stock Compensation Plans, Stock Bonus Plans and an Incentive Stock Bonus Plan. These Plans are collectively referred to as the "Plans". All Plans have been approved by the Company’s stockholders.
The Company’s stock options are not transferable, and the actual value of the stock options that an employee may realize, if any, will depend on the excess of the market price on the date of exercise over the exercise price. For options issued with service conditions only, the Company has based its assumption for stock price volatility on the variance of daily closing prices of the Company’s stock. The risk-free interest rate assumption is based on the U.S. Treasury rate at the date of grant with the term equal to the expected life of the option. Forfeitures are accounted for when they occur. The expected term of options represents the period that options granted are expected to be outstanding and has been determined based on an analysis of historical exercise behavior. If any of the assumptions used in the Black-Scholes model change significantly, stock-based compensation expense for new awards may differ materially in the future from that recorded in the current period.
Restricted stock granted under the Incentive Stock Bonus Plan and options granted under the 2021 and 2020 Non-Qualified Stock Option Plan are subject to service, performance and market conditions and meet the classification of equity awards. These awards were measured at fair value on the grant dates using a Monte Carlo simulation for issuances where the attainment of performance criteria is uncertain. The total compensation cost will be expensed over the estimated requisite service period.
Research and Development Costs - Research and development costs are expensed as incurred. Management accrues Clinical Research Organization (“CRO”) expenses and clinical trial study expenses based on services performed and relies on the CROs to provide estimates of those costs applicable to the completion stage of a study. Estimated accrued CRO costs are subject to revisions as such studies progress to completion. The Company records revisions to estimated expense in the period in which the facts that give rise to the revision become known.
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Net Loss Per Common Share – The Company calculates net loss per common share in accordance with ASC 260, Earnings Per Share (ASC 260). Basic and diluted net loss per common share was determined by dividing net loss applicable to common shareholders by the weighted average number of common shares outstanding during the period. The Company’s potentially dilutive shares, which include outstanding common stock options, unvested restricted stock and common stock warrants, have not been included in the computation of diluted net loss per share for all periods as the result would be anti-dilutive.
Income Taxes – The Company accounts for income taxes in accordance with the provisions of ASC 740, "Income Taxes" ("ASC 740"), on a tax jurisdiction basis. Deferred tax assets and liabilities are recognized for future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases and operating and tax loss carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance to reduce the deferred tax assets to the amount that is more likely than not to be recognized. A full valuation allowance was recorded against the deferred tax assets as of March 31, 2023 and September 30, 2022.
The Company adopted ASU No. 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes effective October 1, 2021. The new standard includes several provisions that simplify accounting for income taxes by removing certain exceptions to the general principles in Topic 740 and increasing consistency and clarity for the users of financial statements. The adoption of ASU 2019-12 had no impact on the Company’s financial statements.
Use of Estimates – The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying disclosures. These estimates are based on management’s best knowledge of current events and actions the Company may undertake in the future. Estimates are used in accounting for, among other items, inventory obsolescence, accruals, stock options, useful lives for depreciation and amortization of long-lived assets, right of use assets and lease liabilities, deferred tax assets and the related valuation allowance, and the valuation of derivative liabilities. Actual results could differ from estimates, although management does not generally believe such differences would materially affect the financial statements in any given year. However, in regard to the valuation of derivative liabilities determined using the Black-Scholes option pricing model, significant fluctuations may materially affect the financial statements in a given year. Additionally, in calculating the right of use assets and lease liabilities, estimates and assumptions were used to determine the incremental borrowing rates and the expected lease terms.
New Accounting Pronouncements - The Company has considered all recently issued accounting pronouncements and does not believe the adoption of such pronouncements will have a material impact on its financial statements.
B. LIQUIDITY
The Company has incurred significant costs since its inception for the acquisition of certain proprietary technology and scientific knowledge relating to the human immunological defense system, patent applications, research and development, administrative costs, construction and expansion of manufacturing and laboratory facilities and participation in clinical trials. The Company has funded such costs primarily with proceeds from loans and the public and private sale of its securities. The Company will be required to raise additional capital or find additional long-term financing to continue with its efforts to bring Multikine to market. The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to obtain approval from the U.S. Food and Drug Administration (FDA) for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. The Company believes there is a high likelihood that it will continue to receive funds from private and public offerings similar to the way it has funded operations in the past. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.
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To finance the Company through marketing approval, the Company plans to raise additional capital in the form of corporate partnerships, and debt and/or equity financings. The Company believes that it will be able to obtain additional financing because it has done so consistently in the past and because it showed great survival benefit in the Phase 3 study in one of the two treatment arms for advanced primary head and neck cancer. However, there can be no assurance that the Company will be successful in raising additional funds on a timely basis or that the funds will be available to the Company on acceptable terms or at all. If the Company does not raise the necessary amounts of money, it may have to curtail its operations until such time as it is able to raise the required funding.
Due to the Company’s recurring losses from operations and future liquidity needs, there is substantial doubt about the Company’s ability to continue as a going concern. The financial statements do not include any adjustments that might result from the outcome of this uncertainty.
C. STOCKHOLDERS’ EQUITY
Equity Compensation
Underlying share information for equity compensation plans as of March 31, 2023 is as follows:
| Name of Plan | Total Shares Reserved Under Plans |
| Incentive Stock Option Plans | 138,400 |
| Non-Qualified Stock Option Plans | 13,787,200 |
| Stock Bonus Plans | 783,760 |
| Stock Compensation Plans | 634,000 |
| Incentive Stock Bonus Plan | 640,000 |

Stock option activity:
| Six Months Ended March 31, |
| 2023 | 2022 |
| Options granted | 4,500 | 252,500 |
| Options exercised | - | 6,500 |
| Options forfeited | 122,332 | 20,166 |
| Options expired | 45,404 | - |

| Three Months Ended March 31, |
| 2023 | 2022 |
| Options granted | 2,000 | 1,500 |
| Options exercised | - | - |
| Options forfeited | 25,500 | 7,166 |
| Options expired | 4 | - |

During the quarter ended December 31, 2021, the Company granted 250,000 performance-based stock options from the 2020 Non-Qualified Stock Option Plan to officers. Each option entitles the holder to purchase one share of the Company’s common stock at a price of $ 10.48 per share, the fair value on the date of issuance. The stock options will vest 100 % upon approval of the first marketing application for any pharmaceutical based upon the Company’s Multikine technology in any of the USA, Canada, UK, Germany, France, Italy, Spain, Japan, or Australia. All options which have not vested as of November 18, 2031 will be canceled. On the grant date, the options were valued using a Monte Carlo Simulation approach. A Monte Carlo Simulation is a statistical technique that is used to model probabilistic systems and establish the probabilities for a variety of outcomes. However, because attainment of the performance condition cannot be considered probable, no compensation cost was recognized relating to these options as of March 31, 2023. Management will re-assess the probability of achieving the performance condition at each reporting date.
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Stock-Based Compensation Expense
| Six months Ended March 31, |
| 2023 | 2022 |
| Employees | $ | 3,436,119 | $ | 6,655,002 |
| Non-employees | $ | 285,722 | $ | 402,270 |

| Three months Ended March 31, |
| 2023 | 2022 |
| Employees | $ | 1,743,288 | $ | 3,392,706 |
| Non-employees | $ | 136,864 | $ | 183,952 |

Employee compensation expense includes the expense related to options and restricted stock that is expensed over the vesting periods. Non-employee expense includes the expense related to options and stock issued to consultants expensed over the period of the related service contracts.
Warrants and Non-Employee Options
The following chart represents the warrants and non-employee options outstanding at March 31, 2023:
| Warrant/Options | Issue Date | Shares Issuable upon Exercise of Warrants/ Options | Exercise Price | Expiration Date | Reference |
| Series N | 8/18/2008 | 85,339 | $ 3.00 | 8/18/2024 | * |
| Series UU | 6/11/2018 | 93,603 | $ 2.80 | 6/30/2024 | * |
| Series X | 1/13/2016 | 120,000 | $ 9.25 | 7/13/2024 | * |
| Series Y | 2/15/2016 | 26,000 | $ 12.00 | 8/15/2024 | * |
| Series MM | 6/22/2017 | 333,432 | $ 1.86 | 6/22/2024 | * |
| Series NN | 7/24/2017 | 200,087 | $ 2.52 | 7/24/2024 | * |
| Series RR | 10/30/2017 | 234,009 | $ 1.65 | 10/30/2024 | * |
| Series TT | 2/5/2018 | - | $ 2.24 | 2/5/2023 | 2 |
| Consultant Options | 7/28/2017 | 10,000 | $ 2.18 | 7/27/2027 | * |

* No current period changes for these warrants
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1. Derivative Liabilities
The table below presents the gains on the warrant liabilities for the six months ended March 31:
| 2023 | 2022 |
| Series Z warrants | $ | - | $ | 64,787 |
| Series AA warrants | - | 274,635 |
| Series CC warrants | - | 24,372 |
| Series HH warrants | - | 1,597 |
| Net gain on warrant liabilities | $ | - | $ | 366,791 |

The table below presents the gains on the warrant liabilities for the three months ended March 31:
| 2023 | 2022 |
| Series AA warrants | $ | - | $ | 1,400 |
| Series HH warrants | - | 795 |
| Net gain on warrant liabilities | $ | - | $ | 2,195 |

The Company reviews all outstanding warrants in accordance with the requirements of ASC 815. This topic provides that an entity should use a two-step approach to evaluate whether an equity-linked financial instrument (or embedded feature) is indexed to its own stock, including evaluating the instrument’s contingent exercise and settlement provisions. The warrant agreements provide for adjustments to the exercise price for certain dilutive events. Under the provisions of ASC 815, the warrants are not considered indexed to the Company’s stock because future equity offerings or sales of the Company’s stock are not an input to the fair value of a “fixed-for-fixed” option on equity shares, and equity classification is therefore precluded.
In accordance with ASC 815, derivative liabilities must be measured at fair value upon issuance and re-valued at the end of each reporting period through expiration. Any change in fair value between the respective reporting dates is recognized as a gain or loss.
Changes in Warrant Liabilities
As of March 31, 2023, no warrant liabilities were outstanding.
During the six months ended March 31, 2022, 15,205 Series CC warrants were exercised at an exercise price of $ 5.00 for gross proceeds of $ 76,025 . No Series CC warrants were exercised during the three months ended March 31, 2022.
In February 2022, 100,000 Series AA warrants with, an exercise price of $ 13.75 and 200 Series HH warrants with an exercise price of $3.13, expired. In December 2021, 640 Series CC warrants, with an exercise price of $ 5.00 , expired. In November 2021, 184,800 Series Z warrants, with an exercise price of $ 13.75 , expired.
2. Equity Warrants
Changes in Equity Warrants
On February 5, 2023, 600 Series TT warrants, with an exercise price of $ 2.24 , expired.
During the six months ended March 31, 2023, 17,752 Series RR warrants at an exercise price of $ 1.65 and 200,000 Series SS warrants at an exercise price of $ 2.09 were exercised for gross proceeds of $ 447,291 . No series RR or SS warrants were exercised during the three months ended March 31, 2023.
During the six months ended March 31, 2022, 10,000 Series NN warrants were exercised at an exercise price of $ 2.52 for gross proceeds of $ 25,200 . During the three months ended March 31, 2022, 5,500 Series NN warrants were exercised at an exercise price of $ 2.52 for gross proceeds of $ 13,860 .
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On October 28, 2022, the expiration date of the Series RR warrants was extended two years from October 30, 2022 to October 30, 2024. The incremental cost of this extension was approximately $ 172,000 , which was recorded as a deemed dividend. The Series RR warrants are held by Geert Kersten, Patricia Prichep (current Officers of the Company) and the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary.
3. Options and Shares Issued to Consultants
During the six months ended March 31, 2023 and 2022, the Company issued 78,798 and 43,495 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $ 2.47 and $ 7.05 during the six months ended March 31, 2023 and 2022, respectively. During the three months ended March 31, 2023 and 2022, the Company issued 38,562 and 25,475 shares, respectively, of restricted common stock to consultants for services. The weighted average grant date fair value of the shares issued to consultants was $ 2.42 and $ 5.00 , respectively, during the three months ended March 31, 2023 and 2022. The aggregate values of the issuances of restricted common stock and common stock options are recorded as prepaid expenses and are charged to general and administrative expenses over the periods of service.
During the six months ended March 31, 2023, 5,000 options with an exercise price of $ 11.61 issued to a consultant expired.
As of March 31, 2023, 10,000 options issued to consultants remained outstanding, all of which were issued from the Non-Qualified Stock Option plans. All 10,000 options are vested as of March 31, 2023.
During the six months ended March 31, 2023 and 2022, the Company recorded total expense of approximately $ 285,000 and $ 402,000 , respectively, relating to the share-based compensation under these consulting agreements. On March 31, 2023 and September 30, 2022, consulting fees of approximately $ 311,000 and $ 295,000 , respectively, are included in prepaid expenses and will be amortized over the remaining service periods.
D. FAIR VALUE MEASUREMENTS
In accordance with ASC 820-10, Fair Value Measurements, the Company determines fair value as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Company generally applies the income approach to determine fair value. This method uses valuation techniques to convert future amounts to a single present amount. The measurement is based on the value indicated by current market expectations with respect to those future amounts.
ASC 820-10 establishes a fair value hierarchy that prioritizes the inputs used to measure fair value. The hierarchy gives the highest priority to active markets for identical assets and liabilities (Level 1 measurement) and the lowest priority to unobservable inputs (Level 3 measurement). The Company classifies fair value balances based on the observability of those inputs. The three levels of the fair value hierarchy are as follows:
| ● | Level 1 – Observable inputs such as quoted prices in active markets for identical assets or liabilities |
| ● | Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active and amounts derived from valuation models where all significant inputs are observable in active markets |
| ● | Level 3 – Unobservable inputs that reflect management’s assumptions. Assumptions from market participants are used when pricing the asset or liabilities, given there is no readily available market information. |

For disclosure purposes, assets and liabilities are classified in their entirety in the fair value hierarchy level based on the lowest level of input that is significant to the overall fair value measurement. The Company’s assessment of the significance of an input to the fair value measurement requires judgment and may affect the placement within the fair value hierarchy levels.
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The following sets forth a reconciliation of beginning and ending balances related to fair value measurements using significant unobservable inputs (Level 3) for both the six and three months ended March 31, 2023 and 2022:
| Six months ended March 31, 2023 | Six months ended March 31, 2022 |
| Beginning balance | $ | - | $ | 437,380 |
| Issuances | - | - |
| Exercises | - | ( 70,589 | ) |
| Realized and unrealized (gains) and losses | - | ( 366,791 | ) |
| Ending balance | $ | - | $ | - |
| Three months ended March 31, 2023 | Three months ended March 31, 2022 |
| Beginning balance | $ | - | $ | 2,195 |
| Issuances | - | - |
| Exercises | - |
| Realized and unrealized (gains) and losses | - | ( 2,195 | ) |
| Ending balance | $ | - | $ | - |

The fair values of the Company’s derivative instruments disclosed above under Level 3 are primarily derived from valuation models where significant inputs such as historical price and volatility of the Company’s stock, as well as U.S. Treasury Bill rates. At March 31, 2023 and September 30, 2022, the Company did not have any Level 3 derivative instruments.
E. RELATED PARTY TRANSACTIONS
On October 28, 2022, the expiration dates of the Series RR warrants held by Geert Kersten, Patricia Prichep (current Officers of the Company) and the de Clara Trust, of which the Company’s CEO, Geert Kersten, is a beneficiary were extended by two years. The incremental cost of these modifications was $ 172,552 and was recorded as a deemed dividend in the financial statements for the six months ended March 31, 2023.
F. COMMITMENTS AND CONTINGENCIES
Clinical Research Agreement
Under co-development and revenue sharing agreements with Ergomed, Ergomed agreed to contribute up to $ 12 million towards the Company’s Phase 3 Clinical Trial in the form of discounted clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specific maximum amount. The Company accounted for the co-development and revenue sharing agreements in accordance with ASC 808 “Collaborative Arrangements”. The Company determined the payments to Ergomed are within the scope of ASC 730 Research and Development. Therefore, the Company records the discount on the clinical services as a credit to research and development expense on its statements of operations. Since the inception of the agreement with Ergomed, the Company has incurred research and development expenses of approximately $ 35.6 million for Ergomed’s services. This amount is net of Ergomed’s discount of approximately $ 11.8 million. During the six months ended March 31, 2023 and 2022, the Company recorded, net of Ergomed’s discount, approximately $ 0.1 million and $ 0.4 million, respectively, as research and development expense related to Ergomed’s services. During the three months ended March 31, 2023 and 2022, the Company recorded, net of Ergomed’s discount, approximately $ 0.0 million and $ 0.2 million, respectively, as research and development expense related to Ergomed’s services.
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Lease Agreements
The Company leases a manufacturing facility near Baltimore, Maryland (the San Tomas lease). The building was remodeled in accordance with the Company’s specifications so that it can be used by the Company to manufacture Multikine for the Company’s Phase 3 clinical trial and sales of the drug if approved by the FDA. The lease is for a term of twenty years and requires annual base rent to escalate each year at 3%. The Company is required to pay all real estate and personal property taxes, insurance premiums, maintenance expenses, repair costs and utilities. The lease allows the Company, at its election, to extend the lease for two ten-year periods or to purchase the building at the end of the 20-year lease, which expires in October 2028. The renewal options are not included in the calculation of the right of use asset and lease liability because exercise of those options is not reasonably certain.
On March 31, 2023 and September 30, 2022, the net book value of the finance lease right of use asset is approximately $ 10.0 million and $ 10.9 million, respectively and the balance of the finance lease liability is approximately $ 12.5 million and $ 13.3 million, respectively, of which approximately $1.6 million is current in each quarter. These amounts include the San Tomas lease as well as several other smaller finance leases for office equipment. The finance right of use assets are being depreciated using the straight-line method over the underlying lease terms. Total cash paid related to finance leases during the six months ended March 31, 2023 and 2022 was approximately $ 1.3 million for both periods, respectively, of which approximately $ 0.6 million was for interest in each six-month period. As of March 31, 2023, the weighted average discount rate of the Company’s finance leases is 8.45 % and the weighted average time to maturity is 5.6 years.
In August 2020, the Company entered into an amendment to the San Tomas lease under which the landlord agreed to allow the Company to substantially upgrade the manufacturing facility in preparation for the potential commercial production of Multikine. The project was finished and the improvements were placed in service in October 2021. Total cost was $ 11.1 million, of which the landlord agreed to finance $ 2.4 million. The landlord financing is being repaid through increased lease payments which started in March 2021 and extend over the remaining lease term. The repayment includes a base rent which escalates at 3% each year plus interest that accrues at 13.75% per year . The Company remeasured the lease liability to account for the modified payments using a 8.4 5% implicit interest rate. The rate was determined using a synthetic credit rating analysis prepared by an outside valuation specialist. Additionally, this financing is considered to be a lease incentive from the landlord and has been included in the calculation of the lease liability as it is realized. The entire $2.4 million was received from the landlord as of September 30, 2022. The leasehold improvements are recorded in property and equipment, were deemed to be placed in service in October 2021 and are being amortized over the remaining lease term.
On January 11, 2023, the Company was required to deposit approximately $ 2.3 million to its landlord, equivalent to one year’s rent, for falling below the stipulated cash threshold in accordance with the San Tomas lease. The amount will be included as an asset on the balance sheet until the Company meets the minimum cash balance required and the deposit is returned.
Approximate future minimum lease payments under finance leases as of March 31, 2023 are as follows:
| Six months ending September 30, 2023 | $ | 1,291,000 |
| Year ending September 30, |
| 2024 | 2,655,000 |
| 2025 | 2,741,000 |
| 2026 | 2,832,000 |
| 2027 | 2,923,000 |
| 2028 | 3,015,000 |
| Thereafter | 252,000 |
| Total future minimum lease obligation | 15,709,000 |
| Less imputed interest on finance lease obligations | ( 3,189,000 | ) |
| Net present value of finance lease obligations | $ | 12,520,000 |

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The Company leases two facilities under operating leases. The lease for the Company’s office headquarters will expire on November 30, 2025. The lease for its research and development laboratory was renewed in September 2021 for an additional ten years and will expire on February 29, 2032. The renewal was considered a modification for accounting purposes and the right of use asset and liability were remeasured as of the date of the renewal. This resulted in an increase of approximately $ 1.1 million to the operating lease right of use asset and liability. The operating leases include escalating rental payments. The Company is recognizing the related rent expense on a straight-line basis over the terms of the leases. As of March 31, 2023 and September 30, 2022, the net book value of the operating lease right of use assets is approximately $ 1.8 million and $ 1.9 million, respectively. As of March 31, 2023 and September 30, 2022, the balance of the operating lease liabilities is approximately $ 1.9 million and $ 2.0 million, respectively, of which approximately $ 0.2 million, is current as of each reporting date. The Company incurred lease expense for operating leases of approximately $ 0.1 million and $ 0.2 million for the six months ended March 31, 2023 and 2022, respectively. Total cash paid related to operating leases during the six months ended March 31, 2023 and 2022 was approximately $ 0.2 and $ 0.1 million, respectively. The weighted average discount rate of the Company’s operating leases is 10.2 % and the weighted average time to maturity is 8.14 years.
As of March 31, 2023, future minimum lease payments on operating leases are as follows:
| Six months ending September 30, 2023 | $ | 176,000 |
| Year ending September 30, |
| 2024 | 357,000 |
| 2025 | 366,000 |
| 2026 | 287,000 |
| 2027 | 277,000 |
| 2028 | 285,000 |
| Thereafter | 1,040,000 |
| Total future minimum lease obligation | 2,788,000 |
| Less imputed interest on operating lease obligation | ( 849,000 | ) |
| Net present value of operating lease obligation | $ | 1,939,000 |

G. PATENTS
During the six months ended March 31, 2023 and 2022, the Company recorded approximately $ 0 and $ 31,000 in patent impairment charges. No patent impairment charges were recorded during the three months ended March 31, 2023 and 2022. For the six months ended March 31, 2023 and 2022, amortization of patent costs totaled approximately $ 20,000 and $ 27,000 , respectively. For the three months ended March 31, 2023 and 2022, amortization of patent costs totaled approximately $ 10,000 and $ 13,000 , respectively. Approximate estimated future amortization expense is as follows:
| Six months ending September 30, 2023 | $ | 18,000 |
| Year ending September 30, |
| 2024 | 30,000 |
| 2025 | 28,000 |
| 2026 | 24,000 |
| 2027 | 21,000 |
| 2028 | 17,000 |
| Thereafter | 54,000 |
| Total | $ | 192,000 |

H. LOSS PER COMMON SHARE
Basic loss per share is computed by dividing net loss available to common shareholders by the weighted average number of common shares outstanding during the period.
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The following tables provide the details of the basic and diluted loss per-share computations:
| Six months ended March 31, | Three months ended March 31, |
| 2023 | 2022 | 2023 | 2022 |
| Loss per share – basic and diluted |
| Net loss available to common shareholders – basic and diluted | $ | ( 16,367,869 | ) | $ | ( 18,606,098 | ) | $ | ( 8,342,809 | ) | $ | ( 9,823,492 | ) |
| Weighted average shares outstanding – basic and diluted | 43,513,571 | 43,100,070 | 43,588,381 | 43,122,671 |
| Basic and diluted loss per common share | $ | ( 0.38 | ) | $ | ( 0.43 | ) | $ | ( 0.19 | ) | $ | ( |

Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
The Company has completed its 9.5 year pivotal Phase 3 study for its immunotherapy Multikine® (Leukocyte Interleukin, Injection) in the treatment of advanced (stages III and IV) primary (previously untreated) squamous cell carcinoma of the head and neck (SCCHN). The results have been posted on www.clinicaltrials.gov. The Phase 3 study results showed a long-term 5-year overall survival (OS) benefit in the treatment arm that received Multikine treatment followed by surgery and radiation. This survival benefit was robust and durable, with no safety issues, something not commonly seen with cancer drugs. In fact, the survival benefit increased over time and at 5 years the overall survival benefit reached an absolute 14.1% advantage for the Multikine treated arm over control (n=380, total study patients treated with surgery plus radiation), control arm 48.6%, Multikine arm 62.7% survival.
The study used the standard of care treatment for advanced primary head and neck cancer patients as a comparison. The patients received surgery followed by either radiation or chemoradiation (chemotherapy and radiation at the same time), as determined by the physician based on pathology from surgery. This meant that there were 2 distinctly different treatment arms, 1) surgery plus radiation or 2) surgery plus chemoradiation. The arm that received Multikine treatment followed by surgery and radiation showed great survival benefit, but when chemotherapy was added in the second treatment arm, the immunological effect of Multikine was negated. Therefore, when the two treatment arms were combined the study did not achieve its primary endpoint of a 10% improvement in overall survival.
The analysis of the separate treatment arms (radiation and chemoradiation) was prespecified in the protocol and carried out prior to the Company becoming unblinded. The OS benefit of 14.1% at 5 years for the surgery plus radiation treatment arm exceeded the 10% OS benefit set out for the study population as a whole. The OS results for this treatment arm are significant (two-sided p=0.0236, HR=0.68) and the effect is robust, durable and increasing over time, and advanced primary head and neck cancer represents an unmet medical need. The Company believes that these results for one treatment arm in the Phase 3 cancer study of Multikine are very meaningful and is working on the best way to bring Multikine to market in the United States and other countries.
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Multikine (Leukocyte Interleukin, Injection) is the full name of this investigational therapy, which, for simplicity, is referred to in this report as Multikine. Multikine is the trademark that the Company has registered for this investigational therapy, and this proprietary name is subject to FDA review under the Company’s future anticipated regulatory submission for approval. Multikine has not been licensed or approved by the FDA or any other regulatory agency. Neither has its safety or efficacy been established for any use.
The Company also owns and is developing a pre-clinical technology called LEAPS (Ligand Epitope Antigen Presentation System). The Company is using its LEAPS technology platform to investigate its lead peptide-based immunotherapy (CEL-4000) as a potential therapeutic vaccine treatment of rheumatoid arthritis.
All of the Company’s projects are under development. As a result, the Company cannot predict when it will be able to generate any revenue from the sale of any of its products.
Liquidity and Capital Resources
Since inception, the Company has financed its operations through the issuance of equity securities, convertible notes, loans and certain research grants. The Company will likely continue to generate net operating losses as it continues the development of Multikine and brings other drug candidates into clinical trials. Until such time as the Company becomes profitable, any or all of these financing vehicles or others may be utilized to assist the Company’s capital requirements.
Capital raised by the Company has been expended primarily for patent applications, research and development, administrative costs, and the construction and upgrade of the Company’s manufacturing and laboratory facilities. The Company does not anticipate realizing significant revenues until entering into licensing arrangements for its technology and know-how or until it receives regulatory approval to sell its products (which could take several years). Thus, the Company has been dependent upon the proceeds from the sale of its securities to meet all of the Company’s liquidity and capital requirements and anticipates having to do so in the future.
The Company will be required to raise additional capital or find additional long-term financing to continue with its research efforts. The ability to raise capital may be dependent upon market conditions that are outside the control of the Company. The ability of the Company to complete the necessary clinical trials and obtain FDA approval for the sale of products to be developed on a commercial basis is uncertain. Ultimately, the Company must complete the development of its products, obtain the appropriate regulatory approvals and obtain sufficient revenues to support its cost structure. However, there can be no assurance that the Company will be able to raise sufficient capital to support its operations.
Since the Company launched its Phase 3 clinical trial for Multikine, the Company has incurred expenses of approximately $64.1 million as of March 31, 2023 on direct costs for the Phase 3 clinical trial and the filing of the clinical study report to the FDA. The Company estimates it will incur additional expenses of approximately $0.8 million for the remainder of the Phase 3 clinical trial and the filing of the clinical study report to the FDA. It should be noted that this estimate is based only on the information currently available from the CROs responsible for managing the Phase 3 clinical trial and does not include other related costs, e.g., the manufacturing of the drug.
The Company uses two CROs to manage the global Phase 3 study; ICON and Ergomed, who are both international leaders in managing oncology trials.
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Under a co-development agreement, Ergomed agreed to contribute up to $12 million towards the study where it will perform clinical services in exchange for a single digit percentage of milestone and royalty payments, up to a specified maximum amount. Approximately $11.8 million of the committed $12 million contribution has been realized as of March 31, 2023.
During the six months ended March 31, 2023, the Company’s cash decreased by approximately $12.6 million. The significant component of this decrease included cash used to fund the Company’s regular operations of approximately $12.1 million, which includes the approximate $2.3 million deposit made to the Company’s landlord as a result of falling below certain cash requirements per the San Tomas lease. Other components of this decrease include approximately $0.2 million used to make leasehold improvements and acquire research and development equipment, and approximately $0.8 million in payments on the Company’s finance leases.
During the six months ended March 31, 2022, the Company used approximately $7.9 million in cash, after considering the maturity and transfer to cash of the remaining $6.2 million in U.S. Treasury bills (T-bills). Significant components of this decrease include cash used to fund the Company’s regular operations, including its Phase 3 clinical trial, of approximately $7.5 million, leasehold improvement costs of approximately $0.6 million and approximately $0.7 million in lease payments. These outflows are offset by approximately $0.8 million in lease incentives received from the landlord to partially offset costs of the manufacturing facility upgrade and approximately $0.1 million in proceeds from the exercise of options and warrants.
Prepaid expenses decreased by approximately $0.2 million, or 22%, at March 31, 2023 as compared to September 30, 2022 primarily due to a decrease in the amounts prepaid in personal property tax on the San Tomas facility.
During the six months ended March 31, 2023, 217,752 warrants were exercised at a weighted average exercise price of $2.05 for total proceed of approximately $0.5 million. During the six months ended March 31, 2022, 25,205 warrants were exercised at a weighted average exercise price of $4.02 for total proceeds of approximately $0.1 million.
Results of Operations and Financial Condition
The Company incurred a net operating loss of approximately $15.8 million for the six months ended March 31, 2023. This net operating loss consists of significant non-cash expenses including approximately $3.4 million in stock-based employee compensation and approximately $2.0 million in depreciation and amortization expense. The Company incurred a net operating loss of approximately $8.2 million for the three months ended March 31, 2023. This net operating loss consists of significant non-cash expenses including approximately $1.7 million in stock-based employee compensation and approximately $1.0 million in depreciation and amortization expense.
During the six months ended March 31, 2023, research and development expenses decreased by approximately $1.1 million, or 9%, compared to the six months ended March 31, 2022. Major components of this decrease include approximately $1.6 million decrease in employee stock compensation expense, and approximately $0.5 million decrease in expenses related to the Phase 3 study. These decreases were offset by an increase of approximately $0.9 million of costs incurred to prepare for the potential commercial sale of Multikine and a net increase of approximately $0.1 million in other research and development costs. During the three months ended March 31, 2023, research and development expenses decreased by approximately $0.4 million, or 7%, compared to the three months ended March 31, 2022. Major components of this decrease include approximately $0.8 million decrease in employee stock compensation expense and $0.1 million in costs related to the Phase 3 clinical study. These decreases are offset by increases in costs incurred to prepare for the potential commercial sale of Multikine of approximately $0.4 million and other research and development costs of approximately $0.1 million.
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During the six months ended March 31, 2023, general and administrative expenses decreased by approximately $1.4 million, or 25%, compared to the six months ended March 31, 2022. This decrease is primarily due to a decrease in employee stock compensation expense of approximately $1.6 million offset by a $0.2 million net increase in other general and administrative expenses. During the three months ended March 31, 2023, general and administrative expenses decreased by approximately $0.9 million, or 31%, compared to the three months ended March 31, 2022. A major component of the decrease is an approximate $0.9 million decrease in employee stock compensation expense.
During the six months ended March 31, 2023 and 2022, the Company recorded derivative gains of approximately $0 million and $0.4 million, respectively. This variation was the result of the change in fair value of the derivative liabilities during the period which was caused by fluctuations in the share price of the Company’s common stock. No derivative gains or losses were recorded during the three months ended March 31, 2023. During the three months ended March 31, 2022 the Company recorded a derivative gain of $2,195.
During the six months ended March 31, 2023, net interest expense decreased by approximately $0.2 million compared to the six months ended March 31, 2022. While the amount of interest paid on the Company’s lease liabilities, remained relatively constant at approximately $0.6 million for the six months ended March 31, 2023 and March 31, 2022, the Company earned approximately $0.2 million more in interest income during the six months ended March 31, 2023 compared to the six months ended March 31, 2022. During the three months ended March 31, 2023 net interest expense decreased by approximately $0.1 million compared to the three months ended March 31, 2022. While the amount of interest paid on the Company’s lease liabilities remained relatively constant at approximately $0.3 million for the three months ended March 31, 2023 and March 31, 2022, the company earned approximately $0.1 million more in interest income during the three months ended March 31, 2023 compared to the three months ended March 31, 2022.
Research and Development Expenses
The Company’s research and development efforts involve Multikine and LEAPS. The table below shows the research and development expenses associated with each project.
| Six months ended March 31, | Three months ended March 31, |
| 2023 | 2022 | 2023 | 2022 |
| MULTIKINE | $ | 11,258,629 | $ | 11,995,302 | $ | 5,964,252 | $ | 6,203,883 |
| LEAPS | 217,405 | 611,682 | 119,236 | 319,934 |
| TOTAL | $ | 11,476,034 | $ | 12,606,984 | $ | 6,083,488 | $ | 6,523,817 |

Clinical and other studies necessary to obtain regulatory approval of a new drug involve significant costs and require several years to complete. The extent of the Company’s clinical trials and research programs are primarily based upon the amount of capital available to the Company and the extent to which the Company has received regulatory approvals for clinical trials. The inability of the Company to conduct clinical trials or research, whether due to a lack of capital or regulatory approval, will prevent the Company from completing the studies and research required to obtain regulatory approval for any products which the Company is developing. Without regulatory approval, the Company will be unable to sell any of its products. Since all of the Company’s projects are under development, the Company cannot predict when it will be able to generate any revenue from the sale of any of its products.
Critical Accounting Estimates and Policies
Management’s discussion and analysis of the Company’s financial condition and results of operations is based on its unaudited condensed financial statements. The preparation of these financial statements is based on the selection of accounting policies and the application of significant accounting estimates, some of which require management to make judgments, estimates and assumptions that affect the amounts reported in the financial statements and notes.
The Company believes some of the more critical estimates and policies that affect its financial condition and results of operations are in the areas of leases and stock-based compensation.
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The measurement of the finance and operating lease right-of-use asset and lease liabilities requires the determination of an estimated lease term and an incremental borrowing rate, which involves complex judgment by management. Significant judgment is required by management to develop inputs and assumptions used to determine the incremental borrowing rate for lease contracts. The fair value of the stock options is calculated using the Black-Scholes option pricing model which requires various judgmental assumptions including volatility and expected option life. The compensation cost is recognized as expense over the requisite service or vesting period. Performance-based options are valued using a Monte-Carlo simulation model, which requires inputs based on estimates, including the likelihood of the occurrence of performance and market conditions, volatility and expected option life.
For more information regarding the Company’s critical accounting estimates and policies, see Part II, Item 7 of the Company’s Annual Report on Form 10-K for the year ended September 30, 2022. The application of these critical accounting policies and estimates has been discussed with the Audit Committee of the Company’s Board of Directors.
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISKS
The Company does not believe that it has any significant exposure to market risk.
Item 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures
Under the direction and with the participation of the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, the Company carried out an evaluation of the effectiveness of the design and operation of its disclosure controls and procedures as of March 31, 2023. The Company maintains disclosure controls and procedures that are designed to ensure that information required to be disclosed in its periodic reports with the Securities and Exchange Commission is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and regulations, and that such information is accumulated and communicated to the Company’s management, including its principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure. The Company’s disclosure controls and procedures are designed to provide a reasonable level of assurance of reaching its desired disclosure control objectives.
The Company’s Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were not effective as of March 31, 2023 due to the material weaknesses described in the Company's Annual Report on Form 10-K for the year ended September 30, 2022.
Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting that occurred during the three months ended March 31, 2023 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
During the six months ended March 31, 2023, the Company issued 78,798 restricted shares of common stock to consultants for investor relations services.
The Company relied upon the exemption provided by Section 4(a)(2) of the Securities Act of 1933 with respect to the issuance of these shares. The individuals who acquired these shares were sophisticated investors and were provided full information regarding the Company’s business and operations. There was no general solicitation in connection with the offer or sale of these securities. The individuals who acquired these shares acquired them for their own accounts. The certificates representing these shares bear a restricted legend which provides they cannot be sold except pursuant to an effective registration statement or an exemption from registration. No commission or other form of remuneration was given to any person in connection with the issuance of these shares.
Item 6.
Exhibits
| Number | Exhibit |
| 31 | Rule 13a-14(a) Certifications |
| 32 | Section 1350 Certifications |

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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 thereunto duly authorized.
| CEL-SCI CORPORATION |
| Date: May 12, 2023 | By: | /s/ Geert Kersten |
| Geert Kersten |
| Principal Executive Officer* |

* Also signing in the capacity of the Principal Accounting and Financial Officer.
| 27 |
| Tacle of Contents |


Question: What is the annualized post-tax Return on Equity (ROE) for the fiscal year 2022 using balances at the end of September 2021 and March 2022, considering a tax rate of 28.5%?

Solution:
def solution():
    #Define variables name and value
    equity_sept_2021 = 56534226
    equity_march_2022 = 45127548
    net_loss_2021 = -8782606 
    net_loss_2022 = -9823492 
    # Tax rate
    tax_rate = 0.285

    #Do math calculation to get the answer
    #Calculate average equity for year 2022
    avg_equity_2022 = (equity_sept_2021 + equity_march_2022) / 2
    #Calculate total net income for year 2022
    total_net_income_2022 = net_loss_2021 + net_loss_2022
    #Post-tax net income
    post_tax_net_income = total_net_income_2022 * (1 - tax_rate)
    #Calculate annualized post-tax ROE
    roe_2022 = (post_tax_net_income / avg_equity_2022) * 100
    return roe_2022


Answer: -26.171803907336894