CEL SCI CORP Commitments Disclosure

10. COMMITMENTS AND CONTINGENCIES

Clinical Research Agreements

In August 2024 the Company entered into an agreement, pursuant to which the Company engaged Ergomed Clinical Research, Inc. to provide clinical development services related to the Company’s upcoming confirmatory registration study in exchange for fees. Since the Company entered into this agreement it has incurred research and development expenses of approximately $0.7 million as of September 30, 2025. 

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 III clinical trial and sales of the drug if approved by the FDA or regulators in Canada, the UK or Europe. 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.  

As of September 30, 2025 and 2024, respectively, the net book value of the finance lease right-of-use asset is approximately $5.5 million and $7.4 million and the balance of the finance lease liability is approximately $8.0 million and $10.0 million, of which approximately $2.3 million and $2.0 million is current. These amounts include the San Tomas lease as well as other smaller finance leases for office equipment. During the years ended September 30, 2025 and 2024, the finance right-of-use assets are being depreciated using a straight-line method over the underlying lease terms and depreciation expense totaled approximately $1.8 million in both periods, which is included in research and development expense on the accompanying statements of operations. Total cash paid related to finance leases during the years ended September 30, 2025 and 2024 was approximately $2.7 million in both periods, of which approximately $0.8 million and $0.9 million, respectively, was for interest. The total cash paid related to finance lease principal payments is included in cash flows from financing activities on the accompanying statements of cash flows. The total cash paid related to finance lease interest expense is included in cash flows from operating activities on the accompanying statements of cash flows. As of September 30, 2025, the weighted average discount rate of the Company’s finance leases is 8.46% and the weighted average remaining lease term is 3.09 years. As of September 30, 2024, the weighted average discount rate of the Company’s finance leases was 8.46% and the weighted average remaining lease term was 4.09 years. During the years ended September 30, 2025 and 2024, total finance lease costs were approximately $2.6 million and $2.7 million, consisting of approximately $1.8 million of lease asset amortization in both periods, and approximately $0.8 million and $0.9 million of interest on the finance lease liabilities, respectively. Variable lease expenses, such as maintenance costs, utilities, and real property taxes are not included in right of use assets or lease liabilities but rather are expensed as incurred.  During the year ended September 30, 2025 and 2024, there were approximately $1.0 million and $0.9 million, respectively, of variable finance lease costs.

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 September 30, 2025 are as follows: 

The Company leases two facilities under operating leases.  The lease for the Company’s office headquarters will expire on November 30, 2025 which has been extended through an amendment to May 31, 2031 in October 2025. Refer to Note 16 for further details.  The lease for its research and development laboratory will expire on February 29, 2032. The operating leases include escalating rental payments. The Company is recognizing the related lease expense on a straight-line basis over the terms of the leases.

As of September 30, 2025 and 2024, respectively, the net book value of the operating lease right-of-use asset is approximately $1.3 million and $1.5 million and the balance of the operating lease liability is approximately $1.4 million and $1.7 million, of which approximately $0.2 million is current in both periods. During both the years ended September 30, 2025 and 2024, the Company incurred lease expense under operating leases of approximately $0.4 million. Total cash paid related to operating leases during the years ended September 30, 2025 and 2024 was approximately $0.4 million in both periods. The total cash paid related to operating leases is included in cash flows from operating activities on the accompanying statements of cash flows. As of September 30, 2025, the weighted average discount rate of the Company’s operating leases is 8.93% and the weighted average remaining lease term is 6.34 years. As of September 30, 2024, the weighted average discount rate of the Company’s operating leases was 9.0% and the weighted average remaining lease term was 6.98 years.

As of September 30, 2025, future minimum lease payments on operating leases are as follows:

Notes Payable

On May 8, 2025, the Company entered into a promissory note agreement with an unrelated third party for a principal amount of $350,000 (the “Note Payable”). The Note Payable bears interest at a fixed rate of 10% per annum. The Note Payable was repaid in full on May 23, 2025.