Flaherty Financial News Newsletter #50

CEL-SCI's Unique Phase III Cancer Immunotherapy Trial Advances.

"We are in the home stretch," says CEL-SCI's CEO Geert Kersten about its $50 million, 24 countries, unique Phase III global head and neck cancer immunotherapy treatment trial. In 2017 when the 298th enrolled patient dies a 10% improvement in overall survival of Multikine-treated patients versus non-Multikine treated patients only receiving the current standard of cancer care could send the stock price soaring by $1 billion. August 27, 2015

Bob Flaherty Rides Again!

Bob Flaherty Rides Again! Welcome to our 50th Flaherty Financial News Newsletter. If you have not already done so, please join our financial family. Simply go to our website http://www.flahertyfinancialnews.com/ and opt in as a reader to receive your next FREE issues of Flaherty Financial News and our sister Flaherty Special Situations. You can opt out any time.

Farewell to Larry Rader, the Go-Go Kid. With a tear I said my last goodbye to dear friend Larry Rader during his crowded service at Westchester Reform Temple in Scarsdale, NY. For over two decades Larry contributed his emerging growth stock ideas to our annual Favorites of the Famous feature. He gave readers decades of winners.

That thought makes me smile. Initially Larry became famous for the wrong reasons. In the speculative Soaring Sixties he was known as "the Go-Go Kid." Practicing shoot- from- the- hip wild momentum investing akin to gambling, he was written up in Playboy as a financial boy genius. He enjoyed working in his boxer shorts. When his momentum stocks crashed he became infamous.

Never again ignoring risk, Larry proved to be a rare person who learned from his mistakes. Becoming one of the best growth stock investors of our time, he went on to head that niche for Merrill Lynch. Sticking like glue to the CEOs of his portfolio stocks, Larry backed his carefully thought out ideas with solid research. He was the only person to grace our past Equities Magazine cover three different times.

Successful living - becoming the best we can be- takes courage. We must face our inner self to change and to grow. After we see and accept our flaws, we must find the determination to correct them. I salute a valiant friend who learned to put serving investors first and himself last. Larry left our financial world a little better place for his presence and I shall miss him.

CEL-SCI Corporation (NYSE:CVM- 0.49) is featured in our Flaherty Special Situation Newsletter #38. This cancer immunotherapy pioneer continues to be "the most undervalued Phase III biotech" as its global clinical trial continues to advance while management battles "the mother of all credibility gaps."

Micro-cap stocks are being trampled as panicky investors stampede into safe havens in the flight to safety. When the herd was selling blindly, our late contrarian guru Sir John Templeton loved such opportunities. Calmly he would buy bargains at their moment of maximum pessimism. He preached that you only find a bargain when others don't see it. After CEL-SCI shares traded at a 12 month low in the recent market tumble it certainly meets that criteria. Now is the moment to stick to our guns.

Bob's Best Bargain: While its share price may be down over 90% CEL-SCI continues advancing forward with its global Phase III trial in 24 countries to treat newly diagnosed head and neck cancer patients with its unique Multikine treatment regimen. If the trial succeeds Multikine could become the fourth procedure to treat cancer. It should be adopted worldwide, taking its place by being injected first, and then followed by the current standard of care of surgery, radiation and/or chemotherapy. This is a big idea and an enormous multi-billion dollar opportunity! It will turn what is done to cancer patients today upside down.

A unique approach. Put simply CEL-SCI wants to boost the immune system of newly identified cancer patients for three weeks during the brief four week window before current global standard of care mandates that surgery plus radiation and/or chemotherapy commence. In contrast, all its rival cancer immunotherapy peer group aim to boost the immune system afterwards when the immune system has been debilitated or even destroyed by the toxicity from radiation and chemotherapy.

CEL-SCI has all the elements to become a big stock winner. Achieving success should not only make big money for investors but improve how cancer patients are treated and how long they live after initial diagnosis.

How? For example, some may be able to open their mouths again to eat and gain weight; some may not have their tongues cut out.

The goal of a Flaherty Special Situation is a gain of 50% to 100% over two years. We believe our CEL-SCI pick will surpass our usual targets and for patient investors go on to become one of our biggest winners ever.

If CEL-SCI's global Phase III head and neck cancer immunotherapy trial progresses successfully, CEL-SCI stock, recently at $0.49 per share for a total stock market cap of only $55 million, would have to jump 1,720% for its market cap to even reach $1 billion and 3,543% to reach $2 billion.

Impossible? As we explain in the following profile either valuation would be a reasonable for a cancer immunotherapy treatment, especially one with the potential to become the fourth standard of care for solid cancers. Read along and see if you agree.-RJF

CEL-SCI's Unique Phase III Cancer Immunotherapy Treatment Trial Advances.

CEL-SCI is on track to enroll 880 head and neck cancer patients in its global Phase III trial in over 100 sites in 24 countries by next March 31st. The goal is to prove injecting its three week Multikine drug regime during the four week window before surgery, radiation and/or chemotherapy will benefit many more patients than is possible today. A trio of upcoming major events could de-risk shares. Any could result in a stock market valuation reset.

By Robert J. and Brian D. Flaherty

In New York City's Princeton Club each presenting CEO at the AFund's summer session spoke extemporaneously and from the heart. Unlike highly- scripted stiff presentations, the emphasis was on sharing with friends. The impact was stronger.

In our annual March 30th Favorites of the Famous feature I picked CEL-SCI Corporation (NYSE:CVM- recently 0.49) as my favorite stock as "the most undervalued Phase III biotech working to turn around the mother of all credibility gaps." I also selected CVM as a BUY for our sister Flaherty Special Situation Newsletter #38.

What follows are the comments from AFund presenter CEL-SCI CEO Geert Kersten. For clarity, insights from the question period, news updates and background from our existing Flaherty Special Situation report were added.

A Story of Persistence: "My name is Geert Kersten. I'm CEO of CEL-SCI Corporation, which is completely different. Biotechnology takes a long cycle. You must pass through Phases I and II even to reach Phase III clinical drug trials.Then at last you can see an overall survival readout from final clinical statistics. Ours is a story of persistence. We are doing something that has never been done!

"Our stock is listed on the New York Stock Exchange. We are under $1 and that is not an issue for our stock staying on the NYSE. We are a Phase III cancer immunotherapy company! For 22 years people told us we were wrong. A screener for a famous broker said, "Never bring me cancer immunotherapy again." Now suddenly it is in vogue; it's hot.

"Either way we continue on our journey. We're almost at the end. We are about two years from knowing the results of our massive global Phase III trial. Yet we are poorly valued by total stock market capitalization (recently about $55 million) even though we just raised $16 million. We trade a couple of hundred thousand shares a day (503,289 average 3 months daily trading volume). We are located in the Washington D. C. area which actually has been very beneficial. We have a lot of government collaborations. A lot of our expenses are paid for by the government programs.

"Every single other cancer immunotherapy being developed today that you read about is all being used for dying cancer patients because that is the normal developed model. That's the norm.

"It doesn't make any sense in the case of the immune system. What does your immune system look like after you undergo the current standard of care- surgery, radiation and/or chemo?

"Assume you are diagnosed with cancer. Your best chance of boosting the immune system is when it is still strong - before it is impaired. That's why we want to go first. By combining our Multikine drug regimen first to be followed by existing treatment you get a higher chance of being cured. That is what we showed in our final Phase II study. That is what we are trying to prove in our current global Phase III study in 24 countries with our partners."

Phase III Partners: If the trial is successful, positive results will be used to support applications which will be submitted to regulatory agencies in order to receive commercial marketing approvals around the world. CEL-SCI has retained key rights in lucrative North America and Europe where the biggest profits are typically booked. Teva Pharmaceuticals has marketing rights in Israel, Turkey, Serbia and Croatia and is enrolling Phase III patients in Israel. Taiwan-based Orient Europharma has nine centers in Taiwan and is setting up centers for Malaysia, Philippines and Thailand. Ergomed, U.K. is performing spectacularly enrolling new Phase III patients. National Institutes of Health is trying to figure out what patients are most likely to benefit from Multikine therapy. Many other top medical research institutes, universities and hospitals around the world are also participating.

"As of July 31st we have 521 cancer patients enrolled in the study around the world. Enrolled just means you have entered into the study and are treated as part of the trial. We expect to be fully enrolled by March 31, 2016. Then we will have to wait for 298 people to die because only then can we measure and obtain an overall survival readout to show if we have 10% improvement in overall survival. Sometime in 2017 in two years or two years and 3 months we should have the necessary 298 events. That shows how messed up our business is. We call deaths "events."

The Gold Standard of Overall Survival. "Advanced primary, which means not- yet- treated head and neck cancer, is an unmet medical need. The last approval FDA gave was over 50 years ago. Since then, there has been no new approval. The regulators want to approve something helpful for these patients. That's important. We hope to produce results as good as we saw in the Phase II level studies."

A final Phase II study approximated a 33% increase in overall survival for patients who had been administered Multikine followed by the current standard of care over other patients who just received the existing standard of care at 3.5 years after surgery. For Phase III the FDA indicated it would be satisfied with a 10% improvement.

Upon the 298th death of at least 680 measureable patients enrolled overall survival can be measured. Only then will CEL-SCI learn if it has succeeded or failed to achieve the Gold Standard for approving cancer drugs in its global Phase III trial.

"For a Phase III study you must have consistent results so you can measure outcomes in a statistically significant manner. Initially we were treating patients for two weeks as opposed to three weeks now. Two of those patients had no tumor in just two weeks. In another study one out of 9 patients had a complete tumor response in two weeks; two out of 9 had partial response. In just two weeks!

"We then took all the best components of the various studies which we combined in a study which is intended to be identical to the Phase III. What we saw in that study after only three weeks of Multikine treatment is that about 11% of the people had not a single cancer cell left. Others had 50% less cancer cells and the overall response rate was 42%. There were also important improvements in the quality of life of the patients. Head and neck cancer patients often cannot eat. After treatment with Multikine many could open their mouths again, could move tongues again and gained weight.

"Then we did a follow up on these patients and we saw a substantial increase in overall survival. We took all this to the FDA who agreed this is an unmet need. Essentially they indicated we must show a 10% increase in overall survival which is what our Phase III global study is designed to do."

How Multikine works: Multikine is a defined mixture of 14 cytokines, which are proteins which send signals to other cells, especially to the immune system. Hopefully your body is making the same product now. By injection the Multikine treatment regimen supplies from the outside those cytokines that a patient should naturally be able to produce when rejecting a tumor. The main goal is not to eliminate the tumor since that is an unrealistic goal in only 21 days even though that happened in about 11% of the patients in the final Phase II trial. The aim is to eliminate as many as possible of the small tumor cells outside of the tumor, thereby reducing local and regional cancer recurrence and so increasing patient survival.

"The obstacle is not that the immune system is weak. The obstacle is that the immune system does not know that you have a tumor which makes itself invisible to escape the immune system's killer cells. When the Multikine regimen makes the tumor visible to what is still a healthy immune system (because it has not yet been debilitated by surgery, radiation and/or chemotherapy), some or all micro metastases and tumors in the lymph nodes can be cleaned up in only three weeks.

"We think by giving Multikine upfront in the very first treatment you should be much more successful. We think that it would be best to activate a healthy immune system to fight cancer, that means before the immune suppressive radiation and chemotherapy treatments are given. We want to increase the chance of a patient actually being cured."

Other solid cancers too. "We believe that Multikine's immune response is not limited to head and neck cancer. We've tested it in other cancers and produced anti-tumor immune responses. Logically Multikine should be used also for other solid tumors. Of course, that would lie in the distant future.

"We have these 14 pro inflammatory cytokines that comprise Multikine. We have those which are required to reject the tumor and some more. We believe the other ones are necessary to give you complete immune response. It is injected around the tumor and below the ear five times a week for three weeks on an out- patient basis.

"I'm going to talk about head and neck cancer but the concept I'm now explaining is true in almost all solid tumors. That's 90% of cancers. People think you die from the tumor but you generally do not. The Egyptians cut tumors out 4,000 years ago- we just do a better job of it. Surgeons know that micro metastases, known to exist around the tumor and in the lymph nodes, are the real reason for the recurrence. So surgeons will cut wide in order to get all of them. And they will take out any lymph nodes they suspect of being involved. Yet no matter what they do about half of the patients will be dead after two or three years after surgery, radiation and/or chemo. There has been little recent progress in head and neck cancer.

"We postulate that if you can actually help the immune system see the tumors, the immune system can then eliminate these micro metastases and increase survival. We inject Multikine around the tumor to kill the micro metastases and clean the margins as much as possible. Then you should have fewer recurrences. If you don't have recurrence you don't die from cancer. That's what we saw in the Phase II clinical studies. That's what we hope to replicate in our Phase III global clinical trial.

"The Multikine manufacturing process cost $80 million to develop and then we built a $25 million manufacturing facility in Maryland. That facility has been inspected twice by European regulators. The FDA does not come in until the very end."

Human Papilloma Virus too: "We also with the exact same medicine -don't think of our Multikine as a head and neck cancer medicine-it's the new immune system medicine that helps your body seize the disease and become more effective about it."

Here is why so many people are fascinated by CEL-SCI's other separate Multikine study. "We're running a Phase I study for the treatment of peri -anal warts in HIV/HPV co-infected patients with the U.S. Navy at the San Diego Naval Base (and added a second site at the University of California San Francisco). These are not little warts. It can result in massive growths more like cauliflower.

"If you are HIV infected you have difficulty in controlling the HPV virus. This was less of a problem 10 years ago because patients tended to die before slow growing HPV caused problems. Now with new HIV treatments extending lives, unless they never have sex, many are going to catch HPV in their lifetime."

Because their immune system is not strong enough to kill HPV this virus causes all kinds of HPV related diseases including cancer. It affects about 25% of the HIV infected population, 300,000 in the U.S. and 500,000 in Europe. There are no approved therapies for the HIV/HPV co-infected patients and CEL-SCI appears to be in a lead position.

In addition, over 2% of women also cannot control HPV. They require continued cutting, scrapping or burning. This can affect the ability to have children and potentially lead to cancer. People think with the new HPV vaccine HPV will no longer be a problem. Alas only 32% of U.S. girls actually receive the three required shots that protect against all strains. Most guys skip it. There have been reports from Holland and Japan of adverse side effects from the vaccine. HPV, the #1 sexually transmitted disease, will continue to be a serious national problem.

"We just announced that Dr. Joel Palefsky, world renowned scientist and key opinion leader in human papilloma virus research and the prevention of anal cancer, has joined the study as principal at the University of California San Francisco. He is the founder and President of the International Anal Neoplasia Society and President-elect of the International Human Papilloma Virus Society."

Success here would broaden the potential future market for Multikine from cancer to viruses too. Treating co-infected HIV/HPV patients is another multibillion market opportunity!

CEL-SCI also is developing its Ligand Epitope Antigen Presentation System (LEAPS). This patented T-cell modulation process stimulates the immune system to fight bacterial, viral and parasitic infections, as well as autoimmune, allergies, transplant rejection and cancer. One program aims at developing a treatment of pandemic influenza. A Phase I SBIR Grant from National Institutes of Health is being used to develop a potential vaccine for rheumatoid arthritis with researchers from Rush University Medical Center.

"We are the only game in town!" Because the Multikine drug regime takes only three weeks CEl-SCI has a unique competitive advantage. It fits nicely into the four week window when you are scheduled for your initial surgery, radiation and/or chemo after an initial diagnosis of cancer.

"It is absolutely unacceptable ethically to ever delay your proven cancer therapies, surgery radiation and/or chemo to try something experimental. No regulator, no hospital, no medical doctor will allow you to delay the proven treatment because it might cause harm to the patient.

"There has been a lot of talk about check point molecule inhibitor drugs that have also shown very good results in cancer patients. (Check point inhibitor is the name for the antibody class of PD-1 and PDL-1 drugs.) Many investors believe that these drugs are competition to CEL-SCI's Mutlikine. They are not. First, Multikine is given right after the initial cancer diagnosis, in the short four week window before surgery. In contrast, the check point inhibitor drugs are given for a period of 12 weeks. Giving them upfront as CEL-SCI does, would delay the surgery for a long time, something that is ethically not acceptable. In fact, Merck and AstraZeneca are running Phase III studies in head and neck cancer, but only in recurrent patients. These have failed the initial treatments and had tumor recurrences. That's a very different stage and patient population.

"Second someday in the future Multikine and these new more weeks to administer drugs could be combined or coordinated to create an even better treatment way for cancer patients. Right now, we don't see how because of their timing problem.

"Delaying empowering the immune system is not the right way to develop cancer immunotherapy treatment. We think immunotherapy should be about trying to make the first treatments as successful as possible. Our Multikine is a three week treatment regimen so we fit into the four week window. By the way, that happens to be the largest commercial market there is and we are the only game in town."

Orphan Drug Status: "We also have orphan drug status. Statistically speaking, the chances of being successful with an orphan drug is somewhere around 75%. If we are successful then we could become standard of care first treatment for what is about 6% of the world's cancer patients. That's about 650,000 cases annually.

"As I said you cannot delay the surgery, radiation and/or chemo as the initial treatments. You also cannot change them. In our study even if the tumor is gone in three weeks that patient must have the same surgery as was planned before the Multkine administration. For the moment we cannot eliminate the surgery, radiation and chemo, but I'd like to think that this is the first step in that direction.

How much more money does CEL-SCI need to reach an end point? Spending roughly $2 million a month CEL-SCI will need to raise more capital. About $20 million to $25 million in 2016 and a similar sum in 2017 when the moment of truth in the global trial is reached.

These are not huge amounts for a typical late stage Phase III biotech. But they are difficult for CEL-SCI with a tiny battered down stock market cap. Having raised $56 million in the last 21 months, CEL-SCI has shown it can raise capital. The question is at what price? Unless there is an upward stock market valuation reset shareholder dilution will be significant.

The really juicy stuff! "Now let me take you to the really juicy stuff. It reads like a trashy beach novel and everybody likes that. In 2010 we hired this great CRO, which stands for Clinical Research Organization, to run our global clinical trial for our Multikine drug treatment regimen for newly diagnosed head and neck cancer patients. In 2011 we started the trial. Then in 2011 the CRO was acquired in a private equity financed buyout of this CRO and combined in a roll up of other CROs. Many of the key employees in the CRO we had hired didn't like it and started leaving. With their exodus the CRO lost the expertise to run our study.

"The CRO's performance enrolling patients for the study was terrible. A new team was brought in and didn't have a clue. Then new people and yet more new people! No study can survive that. During that period our share price fell by over 90% because it looked as if the Phase III study would never be finished.

"We suffered an amazing reputational loss which is the explanation for our pitifully low present stock valuation. Delayed trials are always tarnished. Can you believe that as a late stage Phase III company our stock is near an all -time low share price? At a time when cancer immunotherapy is considered to be the future of cancer treatment! We didn't have a product failure. Only our stock is broken, not the science.

"Once we realized that the old CRO was unwilling or unable to move our study along we brought in a new CRO (Ergomed, U.K.) who not only was a great CRO outfit but also invested $10 million of their own money. They will only get it back in the form of royalties with a cap."

July sets a new monthly Phase III enrollment record! "It's amazing how when you invest your own money and do a lot of work you get fantastic results. When we fired the old CRO in April 2013 we were enrolling between zero and two new patients per month. It's completely understandable that Wall Street gave up on us, figuring we would never finish our study because we couldn't enroll enough cancer patients.

"Once the new CRO took over monthly patient enrollment took off. Now we are enrolling one patient a day." (In July enrollment set a new monthly record of 33.)

"Two years ago Wall Street people said, "Your company is dead. You'll never finish Phase III. There's some kind of problem we don't know about. Look at us now. How is it possible that the first group could not find more than 117 patients in over 2 years and the second group enrolled that same number of patients in just a few months?

"Looking at stock market examples from 2014, successful Phase III immunotherapy studies seem to be worth about $7 billion. That's real money. We're moving in that direction. We are in the home stretch."

Specifically the stock of Puma Biotechnology (NYSE:PBYI) added almost $5 billion on July 23, 2014, producing a spectacular one day stock gain. Subsequently on October 30, 2014 Bristol-Myers Squibb (NYSE:BMY) stock jumped about $7 billion on that day after announcing successful Phase II results for its own cancer immunotherapy drug. This sector is hot.

"I'm a lawyer by training. I don't usually bring law suits. My wife is also a lawyer (a former crime-fighting Assistant U.S. Attorney) so we're a very legal household. This failure in the initial study enrollment was so bad I decided to bring a $50 million arbitration case against the fired CRO. We filed in October 2013. It's going to trial in New York City this fall. I believe and feel very comfortable that we have a good case.

"Winning is important because #1 it would pay for the remainder of our Multikine drug development with non -dilutive funds and #2 it will restore our credibility with investors with a reputational reset and lead to a higher share valuation. We have fallen off the radar screen. Cancer immunotherapy is the hottest spot out there. Phase I drug trial companies are trading for billions and we are Phase III doing a global study in 24 countries and we have a total stock market valuation (recently $55 million). That is less than many pre- clinical trial companies.

"I think it will take a major event to screw Wall Street analysts' heads on right again. We have an undervaluation. The fact is we had a study where patients didn't enroll. We fell off the radar screen. We're just history. But you know something? The Phase III study is going very well, the potential market is huge and we are not too far from the finish line. I think our credibility gap will be turning around.

"Any of three independent upcoming events over the next nine months could gain us recognition and put us back on the radar screen. One is the $50 million arbitration suit scheduled to start this fall. Two is full enrollment in the Phase III trial by March 2016. Three is human data in the Multikine anal warts study in HIV/HPV infected patients.

"And quite honestly I use logic. The six peer cancer immunotherapy companies we compare ourselves to were recently valued from a high of $3.8 billion to a low of $505 million. In contrast, we are currently ridiculously valued at only $55 million. That is lower than a pre-clinical start up and we are a Phase III immunotherapy company.

"As we move closer to the final trial data readout of cancer survival shouldn't the value gap close as we become more interesting to the investment community? Maybe you agree with my logic; maybe you don't. You will have to make that judgement. Thank you very much!" - RJF

RISKS

All of CEL-SCI's current momentum is riding on executing its disruptive global Phase III trial for using its lead drug Multikine regimen to strengthen newly diagnosed cancer patients' immune systems for three weeks before the existing global Standard of Care treatment for head and neck cancer is administered. Any unexpected toxicity or negative clinical results especially a disappointing extension of overall survival of Multikine trial patients by fewer than 10% would be a major setback. Like any development stage biotech regulatory approval cannot be taken for granted. Breakthroughs by competitors are always a threat. Losing its $50 million binding arbitration law suit against the fired clinical research organization would be disappointing. Uncertainties are part of building a biotech. If CEL-SCI achieves its major Phase III trial milestones in 2015 and 2016 the future looks very bright.

COMPANY CONTACT INFORMATION

CEL-SCI Corporation

Gavin de Windt

Associate Director of Operations

8229 Boone Boulevard, Suite 802

Vienna, VA 22182

Phone: (703) 506-9460

For more information please visit http://www.cel-sci.com/

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Disclaimer and Safe Harbor Statements

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Disclaimer: This Flaherty Financial News Newsletter contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, and actual circumstances, events or results may differ materially from those projected. We caution readers not to place undue reliance on any forward-looking statements and to supplement this newsletter with specific company SEC filings and their own research. Before purchasing any shares or making an investment, readers should review the company's SEC filings, including the most recent 10-K and 10-Q, available at www.sec.gov

. Please be aware that there is risk in every company stock that you buy. Coverage or other mention of a stock or fund in this newsletter is neither an offer nor solicitation to buy or sell any securities mentioned. We are not investment dealers or investor advisers registered with the SEC or State Security Authorities. We do not guarantee all the information in this newsletter is correct or will be updated. Remember some errors are inevitable. Reproduction without written permission is forbidden. Flaherty Financial News, Inc. received $10,000 in cash and 20,000 restricted 144 shares from CEL-SCI Corporation for an editorial writing and online distribution fee for CEL-SCI to be featured in this issue. Our own policy forbids editorial from buying or selling a featured stock until this issue is out at least 10 business days after its issue date, which in this case would be September 11, 2015. In cases where a report or profile is subsidized, readers should consider such subsidized articles as paid advertorials and understand that sponsored material will not be as objective as non-sponsored editorial.

As Flaherty Financial News editor I always reserve "Final Copy Responsibility" on what to include and what to leave out of every issue. The buck stops here. We have tried to be objective, but may have failed. We are not security analysts or stockbrokers engaged in buying or selling, but financial journalists with all the many failings of that profession. You readers must decide the merits of each investment yourself and whether to invest. -Bob Flaherty, Editor

Flaherty Financial News Inc. (FFN) and its newsletters Flaherty Financial News and Flaherty Special Situations are not registered as broker dealers or investment advisers with the U.S. Securities and Exchange Commission or any state securities authority. Our newsletters and their information and content providers make no representations or warranties of any kind in connection with the subject matter, performance or suitability of the information contained in the publications for any purpose and are not liable for the timeliness, accuracy or completeness of the information. The information is provided for general information purposes and is not a substitute for obtaining professional advice from a qualified person or entity familiar with your personal circumstances. Please seek the help and advice of professionals as appropriate regarding the evaluations of any specific security, report, opinion, advice or other content. FFN is not responsible for trades placed by recipients. All opinions expressed, information and data provided are subject to change without notice. FFN, its officers and its employees may have positions in and may from time to time make purchases or sales of the securities discussed or mentioned by FFN. (However, we will avoid front running and the buying or selling of any security about to be discussed until ten business days after our particular report is released to the public.) FFN shall have no liability for any newsletter that is lost, intercepted or not received in a timely manner, or not received at all, for any reason. -RJF

Dear Friends: During "the Moment of Maximum Pessimism" our friend Sir John Templeton used to calmly note that the lower stocks fell the higher they could go when positive investor sentiment returned. In spite of the global turmoil set off by China's beggar-my-neighbor currency devaluation we expect 2015 will end up with a rebound for U.S. equities. With bonds yielding a pittance where else can the trillions sloshing around the globe be put to work profitably?

Bob and Brian Flaherty
Flaherty Financial News Inc.