A Risky Biotech Investment: Cel-Sci Corporation
Cel-Sci Corporation (CVM), a clinical-stage company is focused on developing immunotherapy treatments for cancer and other diseases. Its primary investigational therapy is Multikine, a locally administered injection designed to stimulate the immune system against tumors.
However, the company’s prospectus paints a concerning picture for potential investors. Cel-Sci acknowledges the substantial risks associated with its business strategy, operating results, and financial constraints, warning that it might exhaust its funds before successfully developing any products.
Meyer Wilson and our team of dedicated investment fraud attorneys are committed to investor protection, with the situation revolving around Cel-Sci Corporation being no different. If you or anyone you love invested in Cel-Sci, it’s important to reach out to a qualified FINRA Arbitration lawyer to consider your recovery options.
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Navigating the Risks: A Closer Look at Cel-Sci Corporation
One of the most significant risks highlighted in Cel-Sci Corp.‘s prospectus is the immediate and substantial dilution in the net tangible book value of shares. As of September 30, 2019, this dilution amounted to a staggering $8.80 per share, resulting in an adjusted net tangible book value of just $0.27 per share. This substantial dilution could significantly impact the value of existing shareholders’ investments.
Furthermore, the prospectus reveals the existence of outstanding warrants and options held by investors, allowing for the purchase of millions of additional shares. This situation exacerbates the dilution of existing stockholders’ ownership interests, potentially leading to a further decrease in their stake in the company.
Managerial Discretion and Funding Concerns
The prospectus highlights another critical risk: Cel-Sci and its management team have broad discretion in the use of proceeds from the stock offering. This discretion raises concerns about potential negative impacts on the company’s financial condition, operating results, and cash flow. Investors may question the transparency and accountability of management’s decisions regarding the allocation of funds.
Moreover, the prospectus states that the net proceeds from the offering will not be sufficient to complete clinical trials and other studies required for product approval. This revelation underscores the company’s need for additional capital raising efforts, which could further dilute existing shareholders’ ownership interests or strain the company’s financial resources.
As investors navigate these risks, it is crucial to carefully evaluate the potential implications on their investments and the company’s long-term prospects. Thorough due diligence and a comprehensive understanding of the prospectus are essential for making informed decisions.
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The Role of Aegis Capital Corp. with Cel-Sci
Aegis Capital Corp., the underwriter for Cel-Sci‘s offering, played a pivotal role in facilitating the sale of these risky stocks and warrants. As a securities law firm, Meyer Wilson is dedicated to fighting for investors against broker misconduct and unsuitable investment recommendations. If you have suffered financial losses due to an unsuitable recommendation from your broker regarding Cel-Sci or any other high-risk investment, it is crucial to seek professional assistance.
At Meyer Wilson, our team of experienced attorneys is committed to protecting investor rights and ensuring that brokers and financial advisors uphold their fiduciary duties. We understand the complexities of the legal landscape and are well-equipped to navigate the intricacies of securities litigation.
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If you believe you have been a victim of an unsuitable investment recommendation, do not hesitate to take action. Visit investorclaims.com or call 866-938-2021 for a free case evaluation. Our professionals will carefully review your situation and provide you with the guidance and representation you need to seek justice and recover your losses.
Written By: Courtney Werning
Recovering Losses Caused by Investment Misconduct.